Tamara Ortega-Uribe
Department of Politics, University of California, Santa Cruz
Neoliberalism is often related to economic policies to opening national markets and liberalizing economies in the global markets with the minimized role of nation-states. Free markets, free trade, and a sort of economic dominion over the political sphere (states included). However, considering the term from its economic theory origin, and its practical implementation through specific policies, neoliberalism is a polysemic concept and a multifaceted reality that has been challenged and become more complex over time. A considerable amount of literature has been written about neoliberalism and its multiple definitions. From the earlier theoretical ideas about neo-liberalism contended by the Mont Pelerin Society since the forties to the neoliberal policies implemented from different nation-states in the seventies onwards. Indeed, the seventies is the crucial period of time when neoliberalism was carried out, having one of the most successful experiments during the dictatorship of Augusto Pinochet in Chile, which Milton Friedman called the “miracle of Chile”. But it was during 1978 and 1980 with Margaret Thatcher and Ronald Reagan when the neoliberal principles of economic thought were implemented, based on the idea of Margaret Thatcher that “there is no alternative” (TINA). As a result, neoliberalism was spread as the only path to guide the new global order, through international institutions (the International Monetary Fund, the World Bank, the World Trade Organization), which made neoliberal policies as the hegemonic consensus. In this sense, the Washington Consensus, through structural reforms that increased the liberalization of developing countries’ economies, allowed neoliberalism to become the new political economic arrangements throughout the western world.
According to Harvey (2005, 2), “neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade”. Based on this definition, the nation-states have a specific role to play in this particular political and economic arrangement. Following the same author, “the role of the state is to create and preserve an institutional framework appropriate to such practices…it must also set up those military, defence, and legal structures and functions required to secure private property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, if markets do not exist (in areas such as land, water, education, health care, social security, or environmental pollution) then they must be created, by state action if necessary.” (Harvey 2005, 2). However, the role of the state is limited, and it has to intervene at a minimum level because, according to Hayek (1945), the state only has a small fraction of knowledge and information of all members in the society. Then, a free-market society means decentralized planning and price-fluctuations instead of a centralized and planned economy by the state, which cannot achieve a rational and efficient economic organization. Additionally, this brings to the center of neoliberalism’s definition the problem of freedom.
Certainly, the ideal of freedom, and specifically individual freedom, were part of the common claims during the second half of the twentieth century, where the promoters of the free market offered a compelling theoretical framework that sought to pursue this ideal as fundamental values of the neo-liberal societies. The Mont Pelerin Society pointed out:
The central values of civilization are in danger…In some countries, freedom has disappeared entirely; in others it is under constant menace. Even freedom of thought and expression is being curbed. Freedom is being sacrificed to a view of history which denies all absolute moral standards and questions the desirability of the rule of law. This requires study on several fronts: explaining the crisis of the time; redefining the functions of the state; reaffirming the rule of law; establishing minimum standards that are compatible with the market; combating the misuse of history; and safeguarding international peace, liberty, and trade…The group does not aspire to conduct propaganda…it is politically unaligned, aiming only to help preserve and improve the free society by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common. (Mont Pelerin Society)
Nevertheless, the theory does not always correspond with reality. As David Harvey has pointed out, there is gap between the theory and practice of neoliberalism, where the failures of the market, the differentiated freedom between the members of society, and the role of state in market crisis have shown that the neoliberal theory acquires different processes of neoliberalization (Harvey 2005). The multifaceted nature of neoliberalism and neoliberalization processes also materializes in the fact that the role of state would acquire different relevance to guarantee free market and competition according to neoliberalism or ordoliberalism, which have overlapping origins and definitions[1]. At the end, the critical point is what Sparke (forthcoming) points out, “neoliberalism is never automatic in practice…The anti-state state requires all sorts of active pro-market state-making and re-regulation.” (3).
In this regard, neoliberalism is not only an economic configuration, as the Document Index of Paul Treanor suggests “neoliberalism is not just economics: it is a social and moral philosophy”. Following Harvey (2005), it can be understood that neoliberalism was adopted as an economic method, but with a clear political goal: the restoration of class power. Thus, neoliberalism as a political project has been quite effective modifying all human relations, challenging the state sovereignty, designing new social and political arrangements throughout the world, and achieving a certain level of consensus (Harvey 2005). Neoliberalism as a political domain works through concrete neoliberal policies, practices and discourses (Brand & Sekler 2009) that, among other things, undermine the basis for organized class struggle and the channels for the effective mobilization of popular discontent (Portes & Hoffman 2003). Similarly, Wendy Brown (2015) contends that neoliberalism eliminates the people’s sovereignty and the homo politicus, imposing the homo oeconomicus over the political capacity of the demos, and overestimating the economic definition of neoliberalism. While this definition focuses on the distinction between economic and polity, and the common idea of economy reigning over polity, Foucault highlights the differences between neo-liberalism and liberalism. Neoliberalism is a redefinition of the relation between the state and the economy, where the market is the organizational principle for the state and society (Foucault, Lecture 31 January 1979; Lecture 7 February 1979).
In addition, neo-liberalism creates a new type of government that places freedom as a rational principle for economic-rational individuals (Lemke 2001, 200). In other words, neoliberalism can be understood as a specific form of governmentality, which is more than an ideological rhetoric, and a political-economic reality, it is a political project that endeavors to create a social reality that it suggests already exists. Thus, this definition allows us to pay attention to the biopolitical nature of neoliberalism as a new paradigm of power (Lemke 2002), and as a political regime, where individuals are experiencing neoliberalism through a sort of everyday neoliberalism (Mirowski 2014). In this sense, Sparke (forthcoming) offers seven self-making practices as market-modeled behavior: responsibilization, entrepreneurialization, self-capitalization, self-commodification, personalization, fragmentation, and externalization. Nevertheless, while Sparke and others have emphasize that these types of behavior would configure the homo oeconomicus and neoliberal subjectivity that transform citizenship toward a depoliticization, precarity, and cruelty (Brown 2015; Sparke forthcoming), Gago (2017) observes that the self-involvement practices on neoliberalism and its contestation are creating something she calls neoliberalism from below, as a proliferation of forms of life that reorganize notions of freedom, calculation, and obedience, projecting a new collective affectivity and rationality within the very center of neoliberal realities.
On the other hand, recent works have pointed out the critical juncture that neoliberalism is facing in current societies, where the lack of legitimacy of neoliberal policies has brought the interest to think of it from new theoretical debates, even considering the need to dismiss the concept, but at the same time recognizing that the term has become truly heterogeneous and diverse (Slobodian & Plehwe 2020). Therefore, neoliberalism is not a monolith, on the contrary, it has the capacity for improvisation and flexible responses to policy problems, as the key to understand the different forms that neoliberal ideologies have taken recently, such as conservative-neoliberal, progressive neoliberal (Slobodian & Plehwe 2020; Fraser 2019), and authoritarian “Frankenstein” neoliberalism (Brown 2018). This multifaceted and flexible nature of neoliberalism highlights the relevance of analyzing concrete and historical placed realities. Following Gago’s claim, “the character of neoliberalism makes it impossible to define it in a homogenous way because it depends on its landings and connections with concrete situations” (Gago & Brown 2020).
The polysemic nature of neoliberalism as well as the crisis of hegemony and legitimacy of neoliberal political institutions (Sader 2009; Gago & Sztulwark 2009) show an open debate about its definition, also considering the need to understand theoretical and political paths of a transitional stage known as postneoliberalism that could take the form of anti-neoliberalism or not, depending precisely on the different perceptions of neoliberalism (Brand & Sekler 2009).
(See Governmentality, Ordoliberalism, The Capitalist State, Neoliberalism)
Bibliography
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