November 2nd class is canceled, due to instructor illness (I sent out emails to you all with updated reading schedule; am also changing web page syllabus, so you can check there, as well).
For Monday, November 9th, please read:
- David Harvey, A Brief History of Neoliberalism, Chapters 3, 4, & 5.
Post your blog responses for this reading here by November 9th. Same presenters as originally scheduled.
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November 9, 2009 at 12:31 pm
Though I had thought I understood the general theory of neoliberalism, especially after discussions from my GLOA 101 class, through reading these chapters by David Harvey, I seem to have emerged with more questions than answers. In chapter 3, Harvey outlines the basic contradictions between theory and the actual practice of the economic model. The theory raves that neoliberalism will increase productivity and bring out higher standards of living and ultimately eliminate poverty. I understand how this seems to be a large stretch and how neoliberalism seems to do more harm than good. However, I haven’t fully grasped his main point throughout all arguments that neoliberalism was established only to help the elites. He comes back to the idea of “restoring class structure” numerous times. Neoliberalism was invented to aid the upper class to become more of an elite group. I don’t necessarily see how this works… I understand that neoliberalism brings out competition which makes it so that some companies come out on top and others do not add up. But can this be tied back directly to the theory? One of the examples used was Mexico. Its economic crisis in the 1970s led it to borrow from the American banks and then turn to privatization and opening Mexico to foreign investment. As a consequence, Carlos Slim emerged as Mexico’s richest and one of the most prominent in the world as well. I feel like elites, or the upper classes are going to exist and continue to exist regardless of neoliberalism. I understand that Harvey is trying to be more of an advocate for the little people, those who are harmed by the economic model and whose rights continue to be impeded upon. However, at the same time, I don’t think the problem would be solved if the system were to be discontinued.
If neoliberalism is the bad egg and the embedded liberalism of the past did not succeed, what is the economic medium that can be implemented? “Each individual is held responsible and accountable for his or her actions and well-being,” Harvey says of the system on p 65. This is supposedly a bad thing but what else is the government to do? I have heard my parents talk of growing up in the Soviet Union and getting free health care and college tuition. They were not reminiscing of the good times when they said this. With having these social welfare programs also came the costs of personal freedoms: living in a place where leaders are not elected, the general public does not have much of a chance to voice its opinions and virtually all forms of protest are oppressed. They are happier with conditions here where even if people have to look out for themselves, their liberties are guaranteed. Obviously there are other, more modern welfare states such as those in Europe that compensate for these problems so should the U.S. implement such a policy? The Keynesian policy also included a strong welfare net but proved to be unsuccessful in the long run.
I do think Harvey is right in many aspects when it comes to neoliberalism. In creating free market and trade, trade unions and social movements have been heavily suppressed all over the world. It made me think back to No Logo, where Klein talked about the export zones in the Philippines where the city was built upon factory production but no labor unions could be established to help the workers with their problems. She mentioned the Workers’ Assistance Center that was created and brought workers together to help them cope. Shown in this book and in the China Blue documentary, workers are hired young when they are vulnerable so they are docile and remain obedient to authorities. As for China itself, chapter five detailed the ways in which inequality is growing rapidly in the country. “Neoliberalism requires a large, easily exploited and relatively powerless labor source,” Harvey states. Once again elite power is brought up when he gives the example of there being a market for $900,000 cars while millions of people make meager wages in the factories. Though neoliberalism promises prospects for a better future, the workers can afford very little outside in the real world.
I think this is a subject that can lead many to become cynical. Though I want to be more of an advocate for human rights and be against the inequalities that exist in globalized labor, being just a teenager, I don’t possess a lot of power. I remember someone mentioning “paying for your conscience” in order to buy things that are created in sweat-shop free zones. I understand Naomi Klein’s rage against what is happening with branding, consumerist culture and terrible working conditions. But as awful as it sounds, it seems like there will always be a nation that comes out on top and those that do not add up to it. Though it’s a horrible reality, exploitations will continue to occur.
“The liberal theory of political economy is dominant among Western elites. It holds that free trade in open markets yields the most efficient production and exchange of goods and ultimately makes everyone wealthier than if governments interfere.” I got this preceding quote while reading a section on economics in my government textbook. It implies that neoliberalism is the right path but then again history is written from the winner’s side. I am now beginning to understand that Harvey is mostly pointing to nations and organizations as the elites that have benefited from neoliberalism. IMF and the World Bank try to help economically suffering countries by giving out loans and eventually creating a relationship of dependency. If the theory only benefits a small population at the expense of many, what is the answer? Harvey has laid out the history of the theory and how it has been implemented in various ways but I’m eager to see the solutions he hopefully proposes in the next chapters.
November 9, 2009 at 7:04 pm
The first thing I noticed while reading chapter three, four and five, were the easy written structure of them comparing to chapter one or two, in another word, much more understandable and straight forward as oppose to the previous chapters. Harvey goes into more dept with the explanations of the neoliberal theory and its role on the state. I again had a hard time to figure our weather he is a proponent or opponent of neoliberalism because he constantly brings out positive points that a neoliberalism can have on the development of a state. “Privatization and deregulation” is the key to success, according to neoliberal theory. I agree with these two terms bringing benefits and more money only to elite groups; however I don’t agree that others do not benefit from this. The rich who are the initiators of a particular corporation are putting their own capital to start off, regardless of however or wherever they have earned the capital from. Once they open a corporation, the rest lies on the hand of the middle class or the working class, who are putting their effort and time to work for the corporation, and in return they get paid by these corporations and that is how the middle class survive in the bottom line. If these corporations are not built or ran by elites, then I don’t think there is going to be left any hope for the middle class, so one cannot justify that only the “elites” benefit, as a matter of fact in my view, we all benefit from a neoliberal state, but that benefit may not be equal for everybody. The great example for that are the recent layoffs due to current economic recession. Many of the middle class including myself in America have lost their very decent jobs, which they had at different corporations, but now that those corporations are not doing well and are not reaching their daily goals, they had no choice but to lay people off, because they no longer can afford to pay them. So what does these incidents tell us about corporations ran by elites? It is clear that the elites are not doing well so as a result the middle class have lost jobs as well. The equations adds up at the end, and the result is that if elites are benefiting from rules that neoliberalsim have to offers, then the rest of us are benefiting just as much if not equal.
In chapter tow Harvey explains the geographic affect of neoliberalims. It was initiated in US and UK , by Thatcher in UK and Reagan in US. I honestly appreciate their dedication and enlighten views on this concept because if we think as an individual we don’t see that neoliberal theories have helped each of us, but if we look at the whole population it has definitely helped us to get where we are today, “ a well progressed nation. “ Successful state or regions put pressure on everyone else to follow their leads” pg. 87). At one point all the regions were encouraged to practice neoliberalsim, the ones who did it the right way are barely facing any economic pressures, but the ones who did not allow the markets left alone, without any governmental intervention, are facing many economic issues. I think the reason as to why countries were under pressure to follow neoliberalsim goes back to the same concept of, neoliberalism benefitting “everybody”, if the counties were encouraged to open their borders for free and open market with other countries is because that the others who already are advancing due to free market, wanted to do business with the rest, and in this case each one gain something out of it. I must say the advocacy for free market and deregulation is worthy of debating that It truly brings freedom to individual and as well as to a region or state. Then those freedoms, in the circle of neoliberal theory, are used for the betterment of economy and social structures, through the means of free market and no government intervention. Whether Harvey is an advocate of neoliberalsim or fighting against it, to me the points about his thoughts on “deregulations” or privatizations” make sense, but it doesn’t make sense as to how or why it merely benefits the “elites” ?. I am really looking forward in reading further, because it gets very clear as you it goes further, and I am also looking forward to find out the answer to my question.
November 9, 2009 at 7:40 pm
In chapters three and four David Harvey provides a globalization cynic’s presentation on the paradoxes and contradictions within the policies on neoliberalism itself. Harvey probably took the extreme perspective on each argument, as although each can be “attributed” to neoliberalism in some manner, it’s not just the policies themselves that lead to the issues he describes. Expounding success among the elite upper classes and exploitation of the work force, among others, may be facilitated by liberal trade reform but would probably be the case in many situations anyway.
He brings up many illuminating points, but not many are new or “profound” announcements. While neoliberals claim policy will defend individual freedom and eliminate poverty, there has been a history of failure and damage from states instituting these reforms. What I did not know and found interesting was the particular information from the states that did and did not agree to IMF and World Bank requirements. In the Asian Market crisis of the 90s the countries which ceded to the regulations and stipulations set forth by the IMF, all of which seemed to be in the IMF’s interest more than the country in need, resulted in states either further falling into recession or having an extremely difficult time recovering. The countries which did not have open (neoliberal) markets recovered much quicker. And this seemed to be indicative of other examples such as in South America. So, the lessen to be learned here it would seem, would be that these countries in, their own self interest, should most likely ignore the reforms imposed by Neoliberal guidelines. Watching as Malaysia completely ignored IMF advice, South Korea followed suit and soon recovered much quicker than most likely would have been they case if they chose to agree with the IMF. This basis of thought was perhaps further evidenced by the simple example of the US simply refusing aid to countries in need just based on the simple aspect of profit alone. During the Cold War, the need for the US to provide security and aid in order to maintain Western Interests around the globe was paramount. However, after the Cold War ended the incentive to assist countries, such as a staunch supporter like Thailand, was superceded by the interest to assure profit over a lost investment. After its market collapsed, the US found that following Wall Street guidelines didn’t align with providing assistance to South Korea. Oddly enough considering America still has enough of its own interest in the area to maintain some 36,000 American soldiers in the same country. Another point Harvey mentions related to this argument is the assessment that a strong State is necessary to ensure success when installing wide sweeping neoliberal policy. This, of course, is contrary to the policy itself which Harvey seemingly spent an entire chapter discussing, but is still valid. The nations that choose to accept IMF/World Bank assistance typically do so begrudgingly. Not just because of the stipulations and demands to open markets to foreign ownership and investment, but because these nations had previously chosen not to follow the neoliberal route. The nations that willingly do so, tend to have unstable or weak governments to begin with and as a result, recovery is either very difficult or does not happen.
One other thing I found particularly interesting was his references to Stiglitz in the readings. As a former head of the World Bank, Stiglitz is now a globalization critic and has since written books concerning many of the issues Harvey mentioned in Chapter three, such as exploitation, impoverishment, a widening class gap and the resulting perpetual debt IMF/World Bank regulations stress on failed markets. However, Harvey chooses to attack Stiglitz’ assessments of the Neoliberal agenda. Harvey may not agree with the specifics of his perspective, but perhaps aligning himself with him or maybe choosing to aim his disagreement at a neoliberal supporter would be more productive. In either case, after he lists his example of the contradictions he somewhat cryptically mentions a possible alternative later in the book. I’m interested to see what he offers.
November 9, 2009 at 8:02 pm
While reading “The Neoliberal State” I got the feeling that in a neoliberal state, the country was more concerned with money rather than the quality of life of its citizens or whether or not it was destroying the environment. “..the typical neoliberal state will tend to side with a good business climate as opposed to either the collective rights (a quality of life) of labour or the capacity of the environment to regenerate itself” (Page 70). Why would a state want to care about what will make them rich than rather focus on making people happy? People that are happy will drive the economy forward with a good attitude and good work ethic. If the citizens of a neoliberal state are not happy then they will not make good business with other markets around the globe. Another aspect that is startling is the lack of care for an environment and the destruction of it in order to prosper financially. We need to think of the environment and use it to our advantage in a positive way because without it, then the human race will no longer exist. Markets that cut down trees in the Amazon or other deforestation projects will cease to exist after they destroy the environment and no money will be made. In a neoliberal society people are not worried about long-term goals, but more concentrated on short term goals. In chapter 3 another confusing concept is present. In 1994 about eighteen countries were forgiven for about 60 billion dollars debt. How can a country be forgiven for so much money and not be required to pay any of it back? Don’t the people that they owe money to need the money? It states that the countries were required to reform into a neoliberal institution. And later it states that countries like Mexico, Brazil, and Argentina had economic crashed that were predictable. The countries that forced these countries to become a neoliberal state are the cause for these economic crashes. They were forced to reform to a type of “institution” that they were not familiar with and therefore were not able to handle this new type of economic strategy.
Neoliberalization has started to progress around the globe. In the beginning of chapter 4 it says, “To begin with, most states that have taken the neoliberal turn have done so only partially” (Page 87). Looking at this from a realistic standpoint, the states that have not fully reformed to a neoliberal state are not a neoliberal state. This makes it appear that a country does not need to reform totally to neoliberalization in order to become a successful nation. Also, neoliberalization is being forced in parts of the world for example in Latin America. “…the result was for the most part a whole ‘lost decade’ of economic stagnation and political turmoil” (Page 88). Countries are different and seek other political and economic gains, which means that neoliberalization does not work for all economies. If a certain policy is forced then it could have a bad outcome like in Latin America. The problem with neoliberalization is that the United States and Britain are the leaders of this movement. They are both powerful nations that have the influence to pressure other countries to adapt to this new economic reform. Rich countries like the U.S. and Britain can afford to have a few mistakes because they have the money to back it up, whereas Latin America does not have all the resources that these rich countries have.
In chapter 5 neoliberalization is discussed in regards to the Chinese economy. China is such a large country that has a lot of influential power in the rest of Asia. Therefore if they lead towards neoliberalization then other countries will follow. Deng focused on the four modernizations such as agriculture, industry, education, and science and defence to build the Chinese economy. These are all driving forces that help strength a country and with the amount of people in China it can make a long lasting impression on the country. This wave of neoliberal ideas began the end of China’s isolation from the world market. Now we can see this is evident because of the amount of items assembled in the country as a result of cheap labor. One reason China will not be as successful with neoliberalization is because of incidents like Tiananmen Square. Deng used violent force to oppress protestors in the fields of human, civil, and democratic rights. Deng was not listening to the people of China, which is the driving force of any nation. One needs to consider not only what it needs to accomplish as a nation, but it needs to care about the democratic aspect such as the rights of its citizens.
November 9, 2009 at 8:08 pm
Harvey has pretty much introduced me to neoliberalism, so most of my opinion will be based on his book. I know that neoliberalism was suppose to be this new economic trend for the globolization, but the way it was forced upon other countries seems almost manipulating on our part. Some countries did fine without crossing over to neoliberal lines, such as Japan, Korea and Sweden. They didn’t need improvement and it seemed if they never crossed over to neoliberalism, they probably would have still survived any turn for the worst. Harvey made it seem that these when countries’ suffered from a downfall economy that they were brainwashed into thing “neoliberalism” was the only answer. Neoliberalism seemed to be al the was taught in economic institutes and it was advertised everywhere and in order for most countries to use WTO standardized trade arrangments for efficent and timely globalization. Harvey made it seem that many countries had to surrender to neoliberalism one way or another. The sad part is that most countries didn’t get any success to submitting to neoliberalism and some are in alot of debts with the US. Mexico barely owns it’s land do to privatization of foreign ownership which made them billionaires. US had hegde funds to bail out Asian counties and didn’t even give them a dime! They just waited until their businesses went bankrupt so they could buy them. Harvey has a very negative imput on neoliberalism and perhaps all of it isn’t true. It might of just been a bad idea because the US’s economy is also suffering as well.
November 16, 2009 at 6:52 pm
In Chapter 6, Harvey is looking at post 2001, and sees it having some Keynesian thoughts as the recession, as he sees it, tends to prove Neo-liberal thought wrong. He also makes a point to talk about how when in a recession, the poor typically suffer while the rich can sometimes make a profit and notes the imbalance in this. He then talks about the degree that neo-liberal thought has succeeded in stimulating capital accumulation. He talks about rates and how they show that economies growth’s have been steadily declining and that world economies have seemed to worsen as a result in terms of growth. He then presents the question of what is the alternative and that most people see Neo-liberalization as the alternative. He states that Neo-liberalization has uneven geographical development and that there are increased social inequalities. He also talks about how Information Technology is seen as a privileged technology of neo-liberalization. Then he talks about how Neo-liberalization has redistributed not generated wealth which pulls more on his claim that neo-liberalization is stagnating growth. Next he talks about Accumulation by dispossession, and has 4 main features about this argument. First is Privatization and Commodification, which is finding a profit by normally government subsidized areas, in a way an opening of the world market. Second is financialization defined as deregulation, redistributive activity, and frequent trading with high turnovers. Third is Management and manipulation crisis and uses two examples “The Debt Crisis” and “Volcker’s interest rate crisis”. Fourth is state redistributions which reverse the flow from upper class to lower class to the opposite. Next he goes into corporate tax and how it is falling and talks about the commodification of everything from culture, heritage, sexuality and other things. These are examples of what he says Neo-liberalization is stripping the protective coverings off of. His next topic he talks about is disposable workers and their rights and where they fit into the system, which as he states later, they don’t they are outsiders of the “market” and hence usually do not benefit. Next he talks about the Environmental degradation due to Neo-liberalization which is summed up as “Neo-liberalization has a rather dismal record when it comes to the exploitation of natural resources.” He finishes the chapter by talking about rights. Rights he talks about is Individual rights and freedoms. He talks about the good of NGO’s and about universalism, and how it can be a double edged sword where it works well with some policies like concerning the ozone but bad when it comes to human rights.
Chapter 7 Begins by talking about rhetoric when it comes to 2 key persons. Roosevelt post depression and George Bush. Bush’s politics that he talks about the most can be categorized as 3 things which are to Cease to regulate private enterprises, State withdrawal from social provisions, and State foster universalization of the market freedoms and ethics. He then asks the question of what is the concept of freedom that is appropriate for our time? He goes to Amartya Sen to say that “without liberal-style market, no other freedoms can work. Our freedoms today are the only alternative.” He brings this up later, but before he talks about “Disposable People” and how they benefit poorly being outside the neo-liberalized market and how those that take advantage of the market have no time for creativity or emancipitory principles. He then comes back to the idea of alternatives and talks about the many movements today, that most are radical and to deny the use of the market and calls for a Keynesian return and an idea on global governance. The next question is how do you establish this and challenge the roots of neo-liberalization. His answer is to confront the power of finance and to roll back class privileges, while noting there is no sign of this and predicts a major crisis would have to happen in the neo-liberal system. What kind of crisis would it take? He states there is 1 main type that could do it. One is a financial crisis that America has shown 3 out of the 7 traits for. Why this would be so important is that economic instabilities in America affect the global stability of the market. What he wants to know is that in a neo-liberal system the market is to do justice to the offenders, problem is America is its biggest proponent so will others discipline us? He talks about how America is increasingly being bought up, and that a financial turmoil is the only time to attack standards of living and ruffle the feathers of the rich. So his next question was, what crisis might serve the US best? There are 2 he talks about, the first being a short burst of hyper inflation that deletes outstanding international and consumer debt and the us dollar would lose all credibility as a global resource currency. The second is a long drawn out period of deflation like Japan with the main problem being who would assume control, china?, most likely not as they are far too in debt and imbalanced and states that Social Amenities would be the first to go like social security and Medicare. The next question he presents is how do we handle it? In big words he says consolidation of neoconservative authoritarianism, but in other words, a strong push for Nationalism, of which as 2 brances, a good and a bad. The good branch is the one every state admires and strives to be, the bad is the fear of attacks, outsiders, and terrorists. He then argues that US hegemony is crumbling before moving into his final point in the book which is about Alternatives. 2 alternatives is what he sees with the first being to engage in already opposition groups or secondly, engage theory and practical enquires. Most of the ideas around this are radical changes that require the masses to question the situation and rise up for themselves. Besides summing up his book, he presents an interesting question which will hopefully be a staple of tonight’s debate, what alternatives work the best? What would work the best? Have we started this with the election of president Obama? The big point he ends on though is that there needs to be a return, not to democratic golden age, but the ideals held by democracy that inspired the USA nationalism of the past.