For Monday, October 26th, please read:
- David Harvey, A Brief History of Neoliberalism, Chapters 1 & 2
Please take your time reading through these chapters carefully (your understanding of the concept of neoliberalism will be crucial come final exam time). Also make sure that you consider the arguments/points made and respond thoughtfully with questions, problems, and/or how these pieces add to the conversation (around globalization and culture) that we’ve already engaged (in other readings and/or in class).
I also encourage you, as usual, to provide links to other sites (news stories, magazine articles, advertisements, etc.) that help us to better understand some of the points made within the readings (i.e. an example of a main point or argument made or something that contradicts or peripherally supports). I also encourage connections to your personal experiences, but be sure to make those connections explicit and/or support with quotes from the text.
October 26, 2009 at 12:34 am
To begin, I guess I’ll start by saying that I have not been significantly exposed to the concepts and principles of neoliberalism. By simply breaking apart the word, I expected neoliberalism to be very similar to the principles of liberalism, a term I am more familiar with after taking a few government classes. My assumption was that neoliberalism would essentially hold all the basic liberal principles true, but would be more “custom-fitted” to apply to modern times since neoliberalism is a newer theory. Essentially, after reading chapters one and two of A Brief History of Neoliberalism, I determined that my outlook on neoliberalism was way off.
The concepts of liberalism that I expected neoliberalism to echo were as follows: a strong emphasis on human rights, a priority set on the welfare of others in order to improve civilization, and the idea that human beings are good by nature. Although it can be inferred that, to some degree, neoliberalism assumes that human beings are good by nature-if you look at neoliberalism’s emphasis on personal and economic freedom as a sign of no need for intervention to ensure people make righteous choices because they innately do- I otherwise see no major common ground between both schools of thought.
Although, yes, liberalism can be applied to economic principles, such as how liberalism retains that global change and cooperation are not only possible but pervasive, neoliberalism strikes me as a much more economics-centered theory. Whereas liberalism screams “human rights, human rationality, and cooperation” neoliberalism screams “free markets, capitalism, and unrestricted trade.” One striking quote from the beginning of chapter one, “Freedom’s Just Another Word…” which really framed my opinion of neoliberalism was “the assumption that individual freedoms are guaranteed by freedom of the market and of trade is a cardinal feature of neoliberalism.” This statement immediately caused me to sense that this was the major debate around neoliberalism, or at least one of them- the idea that although markets are free under neoliberalism, people are not necessarily free in the same way, nor are their lives significantly improved.
This sense essentially continues to be echoed throughout the entirety of chapters one and two. Further on in the reading, it is said that “neoliberalization has succeeded in restoring and or creating the power of an economic elite.” Harvey argues that neoliberalism’s emphasis on free markets and deregulation of trade has been consistently touted as necessary in order to create wealth in and between nations by those high up in the government, those who represent the richest population, and/or those most likely to benefit from markets where they can more easily integrate and sell products. Neoliberalism, according to Harvey, benefits those who are already rich, whose “income, leisure, and security need no enhancing, leaving a pittance for the rest of us.”
Based on what we’ve discussed in class so far, it seems that the argument against neoliberalism can essentially be tied in or viewed as semi-synonymous with the argument against globalization. That an open, globalized economy is not really beneficial to the masses, that such a phenomenon increases the disparity between the rich and the poor, and that global integration is more like Western domination. In my opinion, to try to determine whether or not you are a believer in the benefits of having free markets and international free trade, or essentially if you are pro or con neoliberalism, you could look at the IMF or the World Bank. Since the 1980s, these two organizations have adopted neoliberal principles. Have they done the world any good? Have they helped certain nations more than others? What I think of is the 1997 Asian Financial Crisis, and how neoliberalism was forced and proved to be more detrimental to the region than beneficial. I also think of, however, how without the International Monetary Fund or the World Bank, we would be much worse off and international development would not be nearly as feasible or transparent- two issues critical for maintaining international order and progressing as nations.
I am still torn in regards to neoliberalism as a positive or negative contribution, and in effect as a positive or negative influence on globalization and culture. I am really looking forward to class discussion on these two chapters and reading more in order to establish a firmer stance on how I view neoliberalism.
October 26, 2009 at 12:22 pm
!!! PLEASE HELP !!!!
Dear Class,
To spare you all of germs (I may have the flu-bug) I will not attending class today (October 26). However, I have been struggling with ‘Neoliberalism’ and I understand that we are currently reviewing chapters 1 & 2.
If anyone could be so very kind as to send me any notes from class it would be SO GREATLY APPRECIATED.
Balance & Energy to you all,
Samantha
smay3@gmu.edu
October 26, 2009 at 3:33 pm
The author begins by being very critical about the motives of invading Iraq in 2003. The lofty, unwarranted assertion of “freedom” has become the precursor for modern-day imperialism by the United States, justifying unilateral action to “liberate” the Iraqi people. A direct quote I think necessary to entertain discusses the “liberalization” plan for Iraq; “the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi businesses, full repatriation of foreign profits and the opening of Iraq’s banks to foreign control, and national treatment for foreign companies and the elimination of nearly all trade barriers.” This plan, which is under direct influence of the Washington Consensus, is antithetical to creating any type of economic liberty or freedom for the country. First, allowing foreign ownership of domestic firms results into both capital flight and the impossibility of the country retaining any sort of benefits from domestic production. Second, allowing foreigners to control banks reduces the government’s autonomous ability to set any type of monetary or fiscal policy insofar as the banks are allowed to operate the way they want. Moreover, the elimination of trade barriers permits foreign companies to flood the markets with their cheaper goods because they operate at lower costs because their industries are not in the infancy stage or the obvious comparative advantage from experience. Thus, infant industries and entrepreneurs cannot develop crippling the country not only in the short term, but from any long-term international and domestic competition. One of the best economic indicators for economies is their rise in private sector, or how many small businesses and medium sized businesses are forming. The United States would not function as an economy if it were not for the production of 24.7 million small businesses that keep the domestic economy running. This neoliberal agenda and “consensus” impairs these domestic economies from ever reaching a point of developing. In addition, the IMF hands out loans with a ridiculous interest rate attached and force countries to repay the debts without allowing the countries even a decent amount of time to develop. The high interest rates attached deplete whatever capital the country had, bringing them one step forward and two steps back.
The author points out this is not a new development seeing as the same thing happened in Chile and Latin America (1970’s) until today. The U.S. as occupiers did not allow labor unions or strikes; two principles “free” societies embrace and are upheld at almost ever level of their legal systems.
The shift between Keynes (social equality) to Hayek (individuals) worldwide since Reagan and Thatcher illustrates the dominance of neoliberalism, but it isn’t the rosy picture proponent’s paint. Hayek in the Constitution of Liberty explicitly states that society needs to form materialism as a goal and value in society. Liberty and freedom are necessary, but the sufficient goal is materialism. This admission is not only culturally insensitive, especially in the East, but this goal is only attainable to a select few. Although the middle class in the U.S. can afford Apple computers, to become as materially interested as Hayek would suggest can only be achieved by the top percentage of the population. What’s worse when we are to apply this to other countries, that not only may culturally or religiously reject this notion, but their middle class is non-existent. This ideology is at worst ignorant to be applied as a blanket recommendation for transitioning economies.
The construction of consent gives two different avenues for neoliberalism becoming mainstream. The author posits the idea that Chomsky has coined the “propaganda model.” This model is that there are three tiers of government; business, congress, and the media. Each part of the triangle relies on the other with reciprocal benefits. An example is that the media loses money by distributing newspapers, but gains money by corporate advertisement. Corporations and PACs give money to congressmen and women that will defend their interests and ideology. In turn, the media is not as critical about the government because corporations will pull their money if they say anything against their interests. Moreover, the governments subsidies or gives other benefits to corporations. At the very least, the government may deregulate or give a company contracts (Halliburton in Iraq to name one).
Although Britain’s route was much trickier, because of the existence of the welfare state, this neoliberal ideology was able to succeed under direction of Thatcher. She cut funding for many programs that did a majority of the public well, and also increased subsidies and deregulated for many corporation.
The one question I would pose to the author is about Obama’s health care system. In Chapter 2, he specifically calls out the Democratic Party for not creating a national health care system, saying Clinton fell to the whims of corporations. I am interested to find out if the author would change his views or if he would just point to another issue. It almost seems like he picks one issue per idea, but never acknowledges the existence to the other side of the argument (not even paying them lip service).
October 26, 2009 at 3:51 pm
China Blue is an eye-opening documentary on the conditions for the workforce in China. The existence of the movie is dangerous in many ways. One, I’m sure the movie was a feat to make. The hidden cameras and quiet interviews help express to the audience that the dark side of this industry is very hush-hush. Going into the trenches and making it past the walls (literal and figurative) used to cover up the conditions must have taken a lot of wit and tact. Knowledge is powerful. On one side, the buyer of this incredibly marked-up expensive denim might have a change of heart if they knew the blood and sweat that literally went into the production of their favorite pair of an American classic. On the other side, the worker may not be so willing to be worked to the bone for the little amount of money they earn to survive if they knew of working conditions in more ‘advanced’ parts of the world. Basically, I think that if the workers knew the basic rights that they were missing, they would not think their position to be so normal.
This movie is dangerous because if widely spread, I believe that it would change the way this industry works. Since buyers simply threaten to move to a different country if this particular one doesn’t lower their price, countries do not have very much choice. Those who have decision-making abilities are faced with a tough choice: retain jobs (however crappy) for your citizens, or watch them leave to a cheaper, neighboring country. China Blue puts a face to the conditions with Jasmine. Because we are following her 18-hour work schedule and seeing the effect of not being able to visit her family, this situation is now personalized. The director held great balance in representing the industry in general and allowing us insight into one worker’s personal battle for life.
The concept that this is a stepping-stone for any country that is experiencing industrialization is new to me. I hadn’t really considered this until taking this class and now that I have, I can say that it’s changed my viewpoint. Not only do I have more sympathy for the workers, but I am more inclined to question those who believe this is true and fair. If Americans (and ‘the West’) are so sensitive to our own Industrialization and Great Depression and all the repercussions, then why aren’t we helping the rest of the world learn from our mistakes? If we have already experienced the hardships and shantytowns and hunger that came with industrialization, shouldn’t we have a better way? I understand competition and the desire to be the best and the strongest and the least vulnerable. These things are important, but are they more important than the quality of life for millions of people around the world? It seems as if there is very little balance concerning Jasmine, who’s entire life revolves around creating denim, and the people in another hemisphere who blow their ‘hard-earned’ paychecks on these clothes.
October 26, 2009 at 5:13 pm
China Blue (extra credit blog response)
The other half of the world that most of us avoided from seeing is what I think China Blue represent. In one way or the other, part of us do realize the present of the issues but we choose to not recognize it as something we should prioritize.
On one hand, I sympathize with the young girl for having to endure the harsh condition of work at such an early age. Most of us would still be in school and getting allowance, but she already has to worry about family finance, give up family time and take care of her self. The problems arised in blamed of globalization, the multicorporation wants profit, consumer wants cheaper price, the one that have to give up these dollars to satisfy the consumer and corporation would be the factory workers’ paycheck. Comparing the working condition between US and China will raise an alarm regarding human right violation. On the other hand, the girl is actually not too upset about the situation because of the amount of money, event if little, she could help her family.
The question is why do they accept these conditions? It is because given the conditions, the factory workers actually have a job and a source of income in the harsh economic condition. If you have to decide between jobless and badjob, what would you pick? In this sense, I could relate it back to the US: teenager work at McDonald for minimum wage because they want to have a job, not because that is the ideal type of job that they want to do.
Also, on the aspect of why big corporation decided to leave Japan, S.Korea, and Taiwan to come to China, it is because the other nations have moved on to the next level of economy, labor union operate and public awareness of human right, labor rights. China is still on the developing stage of industrial economy, and the large number of the population will require a much longer time before the entire population realize that they could demand for more instead of just giving up and giving out.
October 26, 2009 at 5:30 pm
A couple key things I picked up from the reading that grabbed my attention, was the tie between the Republican Party and the Christian right.
There was a reference to Jerry Falwell and the ‘moral majority’ that I didn’t understand, so I decided to look it up. I found that Falwell was the founder of the Moral Majority, which was a political action umbrella group. Like Falwell this group was opposed to women’s rights, legalized abortion, and homosexuals. Falwell was notorious for his criticism of people who he thought were homosexual, and blamed AIDs on the fact that god was punishing homosexuals and punishing the society for tolerating them.
http://www.nndb.com/people/558/000022492/
I had never really thought about the alliance that the Republican Party has with the Christian right until reading it. It was interesting to me to see that aligning themselves with Christians was a strategic move in order to secure a strong electoral base. This in turn would allow them the power to maneuver however they wanted. I was thinking back to when George W. Bush was running against John Kerry, and the issues of gay marriage and banning a women’s right to choose—entered the race. At the time I felt it was a sad attempt of the Republican Party to try to gain support by appealing to people’s moral beliefs. It was obvious to me, that bringing those types of issues to the forefront of the political campaigns would alleviate some of the heat the Republicans were receiving about the current status of the war, and Bush’s decisions. Obviously, the trick worked, as Bush was reelected for another term. Was he reelected because it is never good to change Presidents during a war, or did the majority of people truly believe in his beliefs? There is no way to tell, but it isn’t until now that I realize the tactics the Republican Party used, aren’t new ones. In fact, it is a card they play a lot. Leaving Democrats in the odd place of looking not quite as cohesive with their beliefs, and therefore not as trusting.
Another point that stuck out to me, was what the actual consequences were when New York was restructured and created into ‘a good business climate’. What that actually happened was that the city was manipulated in whatever ways the money wanted it to be. The people, in general, were screwed. They had to adapt themselves to the new New York or get out of the way. Since the booming businesses and businessmen didn’t look back and see desolation of people’s livelihoods, they didn’t understand nor empathize with new poor, working class folk that inhabited the shadows of the city. With poverty came disease, AIDS, crime and death. These were all the symptoms of system based on class power, that took away from the social needs of its people.
What’s interesting is that the elites contributed to these problems and has no desire to fix them. Now, these problems are far below them, and are someone else’s. As long as the business is booming, then out of sight, out of mind.
October 26, 2009 at 5:40 pm
Neoliberalism has been invented by Western super powers, particularly the U.S and the U.K, in order to keep full control of capitalistic states over all other societies it has been experienced that any financial tigers would go beyond the planned progress they will have to suffer from unexpected crisis. All of this to become dominant and to control the financial institution. The great values of civilization such as human dignity and individual freedom were used to attract other nations and pressure them to implement the ideas of neolibersalism. This has been mildly mentioned by the author, David Harvey, in most of ch.1 and ch.2. For example what happened in East Asia, mainly in Thailand, Indonesia and Korea. While China and Malaysia had not been hit badly by this financial storm, they were able to recover without much damage to their financial institutions and status.
I fully agree with the author regarding the unprecedented role of world financial institutions namely IMF and the World Bank, which they played a major role in persuading other nations to follow the principals of neoliberalism by having no barriers or market restrictions. It is also true to mention that the IMF intervened positively to stop the financial collapse of South Asian countries after the 1980′s financial crisis.
In my opinion there is room for international co-operations based on human dignity and mutual understanding in order to benefit all of the countries of the world. There are advantages for movements of capital to see positive changes as was the case of China.
In ch 2 the author discussed how the U.S and U.K worked actively to construct a consent in relation of neoliberalism, furthermore “the state apparatus made the neoliberal term to use its powers of persuasion, co-operation, bribery, and threat to contain the climate of consent necessary to perpetuate its power”(40).
While searching the world wide web I ended up on youtube. In youtube there were various videos on neoliberalism, but this one video caught my attention (http://www.youtube.com/watch?v=HfgwryiEygM). It made a lot of sense, it called neoliberalism the contemporary form of globalization. It mentioned that IMF and World Bank, are joking the people and making poor countries like a detention center. Through the video it displayed peoples thought and what is going wrong in the world. It emphasizes the impact neoliberal policies leading to more poverty of the poor, and enriching more of the rich. Basic human services particularly health, education and food, are not available for the majority. And only a few percentage of the population got more wealthy. There is a call in that video to abolish the three financial institutions and organizations namely, IMF, World Bank and WTO, and instead to be replaced with more just international institutions that are helpful to everyone, bringing more resources to the poor.
I believe that for neoliberalism to succeed is to see that essential human approaches leading to the welfare of the majority of each countries population and to avoid pushing hard to enrich the few opulent group of the population. It is also important not to enrich the wealthy super powers on the cost of the misery of developing nations.
October 26, 2009 at 6:52 pm
Even Harvey says neoliberalism benefits only those already rich, and just keeps taking away from the poor. As stated in the book, Harvey writes, ” Neoliberalization has….succeeded remarkably well in restoring, or in some instances (as in Russia and china) creating, the power of an economic elite.” This does tie into our discussion about globalization. Both are seen as an economic force and hegemonic. Globalization and Neoliberalism don’t benefit all but the countries that they do benefit, benefit them well. Globalization and neoliberalism seem to be western-dominance of the world and is very controversial.
Neoliberalism deals with free markets, capitalism and the elimination of trade barriers. It can be seen as good and beneficial because the more countries seem to eliminate their borders to trade, the higher their economies rise as in the case of China during the mid-1970s. China’s economy is booming because of free trade and their participation in a free market economy. However, they have resources. Other developing countries, will never have that opportunity because they simply don’t have enough resources and they are struggling.
David Harvey, on page 34-35, said “the assets of the top three billionaires [were by then] more than the combined GNP of all least developed countries and their 600 million people.” That quote is shocking to me and makes me sad considering its now 2009 and i’m sure, it’s a lot worse.
I also watched the You Tube video posted above (by Balqis Makki), globalization and neoliberalism interact because the rich are getting wealthier and the poor are getting even more poor. The video supports that there should be no IMF, WTO or World Bank, and we should set up genuine trade intuitions that are accountable, but that’s very complicated because every state has equal sovereignty. Or at least, supposed to have equal sovereignty. The countries most powerful do get their way most of the time, if not all but exclude the smaller, less important countries.
I tried my best to get the most out of the readings because I am curious to find out more about this topic. It is a little confusing but I do feel like this topic is exactly like globalization.
October 26, 2009 at 7:14 pm
Throughout both chapters of David Harvey’s dedicated anti-neoliberalism novel, he makes several things clear: dignity and individual freedom come at a debilitating cost more often than not, hegemonic influence can be forced with and without bloodshed, and economic imperialism will continue to find new victims. Harvey did a really good job expressing the indecency that neoliberal practices promote among the common person. His analysis of the invasion of Iraq was similar to what I have thought, but been unable to provide as fact. However, that goes to be the same for every other country that has its economic position changed. Countries such as Iraq, Chile, Mexico, (much of Central and Southern America actually), Eastern Europe, Southeast Asia and others have fallen to the corporate/state aligned ventures that have turned most publicly (nationally) owned enterprises into unregulated, non-tarrifed, privatized sectors such as manufacturing, services, transportation, finance, social security and construction. This gives the common workers less and less representation and often leads them to settle for less. From there Harvey describes how Nixon and Reagan and Thatcher implement their ideas into the economy to stimulate growth and “develop” countries so that they can they can become valued trading partners, while keeping the common populous weak and futile. His descriptions of the overturn of unions, the rise of middle and upper class echelons, the denunciation of welfare systems, the rise of corporate, political, and Christian symbiosis, lack of public representation, exploitation of social justice and individual freedoms, and so forth and so on are all part of the “counterrevolution from above” that stretches toward a liberal and neoliberal utopian. However, this utopian can only be “sustained by force, violence, and authoritarianism”. The elite class has become the only true beneficiary through corporate invasion, leading the way via coercion of the losing class by dropping all forms of regulation, social justice and common-sense. A corporatacracy has saturated itself as the leading dynamo in Western culture and politics and forced itself to successfully uproot many other nations’ methods so that free trade remains dominant with calamitous intent.
October 26, 2009 at 7:14 pm
extra-credit:
I’m very glad I got to see the documentary China Blue. It was a real eye-opener. In class and at home, you would always either read about these kind of stories or talk about them but to actually watch it, made me want to do something about it. It was heartbreaking to watch at times because the workers are so young and so innocent. They are younger than me, some even 14 years old, working long, dangerous hours for such little pay. I, myself, complain about working maybe 5 hours, 4 times a week but I do not have to work under such hard conditions like these men and women. I can’t imagine doing the same thing everyday for 12 hours a day or longer, meeting harsh deadlines and being watched over constantly. These young women are basically slaves to these corporations and it makes me want to put an end to supporting these businesses allowing this. I think if the buyers of these companies knew, and were put in that situation themselves, it would be another story.
Not only did these girls have to leave their home, alone, to go somewhere hours away, they have to basically live there and only get to visit their families if they happen to have money left over. They are forced to pay for food out of their own pocket with the three or four days worth of working. Also, if they happened to be a minute late, there would be a penalty. It’s not right. I know every country has to suffer for some time until more people are aware, even the U.S. did with their human rights violations when there were children working in dangerous factories. I don’t think it would be a problem if the big corporations didn’t set such strict deadlines for shipments. All material objects are in such a high demand, that these girls are there working constantly by the hour to supply these. It’s like you want to help them by buying these items so they could support their families, but then again, you don’t want them working so much just for a pair of jeans that you could probably live without.
If these young girls don’t meet the deadline, they could be out of a job because these corporations could go out easily and find someone else willing to do the job, for even less pay.
October 27, 2009 at 10:23 pm
Chapter one of A Brief History of Neoliberalism maps the neoliberal project over last thirty years. Neoliberalism is a political movement beginning in the 1960s that blends traditional liberal concerns for social justice with an emphasis on economic growth. It describes how the founding figures of neoliberal thought took political ideals of human dignity and individual freedom as fundamental; these were considered the central values of civilization. Neoliberalism favored privatization, deregulation, structural unemployment, corporate tax breaks. These values were being threatened by fascism, dictatorships, communism and all forms of state interventions putting in danger the freedom of choice. The restructuring of state forms and international relations after the Second War was designed to prevent a return to the catastrophic conditions that had terrorized the capitalist order in the 1930s. To ensure that domestic peace and tranquility, they had to create a compromise between capital and labor. This was the only way to construct the right blend of state, market and democratic institutions and it will guarantee peace, inclusion, well-being and stability. A new world was constructed through the Bretton Woods agreements, and various institutions such as the United Nations, the World Bank, the IMF, and the Bank of International Settlements in Basle. These institutions were set up to help stabilize international relations. Also, free trade was encouraged under a system of fixed exchange rates anchored by the US.
Chapter 1 was also very interesting because it analyzes the economic aspect of what happened in Iraq after the US invaded this country. It describes how the US began the neoliberal economy in Iraq. In 2003, the US appointed a sovereign government that would continue the capital agenda of the US in Iraq. The head of the Coalition Provisional authority promulgated four orders that included the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi businesses, full repatriation of foreign profits and the elimination of all trade barriers. These orders were argued in violation of the Geneva and Hague conventions. The interim government appointed by the US, that took over in June 2004 was declared sovereign therefore; all the laws were kept and they added more laws to specify free-market and free-trade rules. The assumption that individual freedoms are guaranteed by freedom of the market and trade is a fundamental feature of neoliberal thinking, and it has long dominated the US attitude towards the rest of the world. The US evidently wanted to impose by main force on Iraq was a state whose fundamental mission was to facilitate conditions for profitable capital accumulation on the part of both domestic and foreign capital. This state apparatus is called the neoliberal state. The freedoms of a neoliberal state reflect the interests of private property owners, businesses, multinational corporations and financial capital. This also happened in Chile and Chile was a US experiment of Neoliberalism.
Super powers would find ways to always make profits. Neoliberalism shows how and what they have been doing to retain profits and expand their profits. This economic movement concentrates in economic growth and that is their primary goal. The invasion of Iraq made it easier for the US to make profits in domestic and foreign capital. Of course they were other reasons why the US got involved with Iraq but there were other underlying reasons as well. Many super powers would not get involve in conflicts that will not be profitable.
November 9, 2009 at 4:58 pm
The following quotations have been pulled from the text, ‘A Brief History of Neoliberism,’ Chapter 5.
Internal Transformations
“China began to move towards neoliberalism & the reconstruction of class power in the late 7o’s. (p.151) This economic transformation was a parallel shift between the typical institutional arrangements with a capitalist economy. (p.122) In 1978, when Xiaoping launched programs of economic reform, it was not to directly implement neoliberal developments, but rather to ensure economic security, and raise the reputation of China within the global market. The four areas of reformation he focused on were agriculture, industry, education, and science and defense. (p.120) Agriculture was at the base of the neoliberal shift. When this process of reform was first initiated, almost everything of significance in China was within state control. These State Owned Enterprises were reasonably profitable, offered security of employment, and a wide range of welfare and pension benefits. Some State Owned Enterprises were even under local control. (p.125) A more open market was developed around the State Owned Enterprises by dissolving agricultural communes into Township & Village Enterprises. These new enterprises, functioning under a ‘personal responsibility system,’ became centers for entrepreneurialism, more flexible labor practices, and open market competition. However, these Township & Village Enterprises was often paid low wages, with no benefits, and no legal protections. Some Township & Village Enterprises provided such, but were still rather limited. (p.129) Though laboring peasants couldn’t formally own land, they could lease, rent, hire labor, and sell products at market prices. As a result, rural incomes increased at an astonishing rate between 1978 – 1984.”
“The 1980’s mark the neoliberal turn of china as it entered into the world market. At this point the whole Chinese economy moved towards a neoliberal structure. (p.126) In the early 1980’s most State Owned Enterprises did not flourish. Many fell into debt and had to be supported by state-owned banks. (p.129) When the agricultural communes were dissolved their political powers and industrial assets were given to the Township & Village Enterprises, workers lost the few weak social rights that had been established within the communes. This meant burdensome user charges for schools, medical care, etc. The gap between rural and urban incomes was increasing rapidly. For example, rural residents held limited property rights, while urban residents held real-estate ownership rights. (p.127) Since peasant cultivators didn’t hold titles to lands, they could easily be disposed and land converted to lucrative urban uses, leaving cultivators with nowhere to work or live, and with relatively no money (compensation offered to farmers for their land was often only a small fraction of the lands worth.) As many as 70 million farmers have lost their land this way in the past decade. (p.146) Forced to seek work elsewhere rural immigrants, many of them woman, have flooded to the cities to form an immense labor pool which is vulnerable to super-exploitation and puts pressure an the wages of urban residents. (CHINA BLUE) These people have usually migrated illegally and therefore cannot claim rights of residency. China is now in the midst of one of the largest mass migrations the world has ever seen. (p.127) We observe a similar pattern of migration and wage stresses happening between the US and Mexico. Supporter of globalization say that the type of globalization that influences the rapid expansion of urbanization provides one way to absorb these massive labor reserves. (p.132) In 1987 the state committed to the idea that development should be export lead. (p.128)
By the early 90’s the flow of foreign currency into China was gathering momentum. (p.126) By 1995 grassroots experimentation and functioning provided grounds for reform that slowly raised standard of living for a significant portion of the population for 20years. But these reforms let to environmental destruction, social inequality, and what looks like the reconstruction of capitalist class power. China had now established a reputation in the global market. Credit here is due to Japan, from which China learned about modernizations in education and science, and the development of research strategies in both military and civilian areas. From the late 90’s onward foreign corporations began to take greater interest in China because of it’s growing importance, sophistication as a market for technology, it’s reservoir of skilled but inexpensive scientists and it’s consumers (still relatively poor but growing richer and eager for new technology.) (p.122)”
External Relations
“The incredible advantage of cheap labor gave China the opportunity to compete with other low-cost locations such as Mexico, Indonesia, Vietnam, and Thailand – Mexico lost 200,000 jobs in two years as a result of China taking over as the main supplier of the US. (p.138) China’s dramatic growth has made it more dependent on foreign sources of raw materials and energy. For example, massive purchases of soy beans from Brazil and Argentina have breathed new life in to these economies; the Chinese demand for scrap metal became so enormous as to raise prices all over the globe. (p.139)”
Conclusion
“When Xiaoping began the reformation of China in 1978, some had deemed him to be a secret capitalist. But his reforms created a social sys. Where capitalist enterprises could form and function freely. In doing so in has achieved rapid growth and alleviated the poverty of many by providing employment, however the working conditions were often below regulatory standards. Also, the greatest concentrations of wealth remained in the upper end of the social scale. (p.150)
This wealth was accumulated through a combination of corruption, hidden arrangements, the skewing of rights and assets across the social board, and privileged relationships between party members, government officials, private enterprises, and banks.
Conflicts, petitions, and protests over the issues of inequality are rising across China. Chinese laborers have put up with a lot – low wages, little to no rights, poor working conditions, etc – but the current pattern of non-payment is something the laborers will not stand for. (CHINA BLUE) (p.148)
Before the reformation the communist employers stood alongside the workers in their fight against capitalist exploitation, whereas today the communists are standing shoulder to shoulder in their struggle against the workers. (p.150)
If neoliberalism requires a large, easily exploited and relatively powerless labor force, then china qualifies as a neoliberal stare with ‘chinese characteristics.’ (p.144) ”