For Monday, November 16th, please read:
- David Harvey, A Brief History of Neoliberalism, Chapters 6 & 7.
Also – to see updated presentation schedule, please click here.
November 9, 2009
November 9, 2009
For Monday, November 16th, please read:
Also – to see updated presentation schedule, please click here.
November 9, 2009 at 8:03 pm
So reading more about Neoliberalism, I’ve started to see how everyone it ‘stands’
for and wants to protect is contradictory
to the means and practices in which to obtain these objectives for the American people.
As Harvey quotes..”Neoliberal theorists are, however profoundly suspicious of democracy…Neoliberals therefore tend to favour governance by experts and elites (p.66).
Democracy by definition, is for the people by the people. But what neoliberals see
as their form of democracy consists of eliminating any threats of power by the common people for the common people. As Harvey addresses, individuals are given the freedom to organize and choose organizations in order to construct collective institutions, but if these associations aim to intervene in the market and with the alliances between the corporate sector and the government then it simply cannot exist. Neoliberals therefore must rely heavily on undemocratic means
for influencing politics, and in some instances intervene, oppressively at times, to deny the very same freedoms from the people that they are fighting to uphold. As Harvey addresses “The freedom of the masses would be restricted to favour the freedoms of the few. (p.70)
The neoliberals have found a clever way to incorporate the capital interests of the elites into legislative power.Businesses and corporations play heavy roles into legislation that benefits their enterprise.
As Harvey addresses, there was great suspicion of the group who helped to formulate legislation in 2002 involving energy policy. Accused was Enron, after they were thought to have deliberately caused an energy crisis. This marks, as Harvey suggests, ‘The shift from government to governance..(p.77).’ What matters, in all actuality is corporate interests. After all, America literally lives and dies
by capitalism’s heavy sword. With such an emphasis on the market, no wonder corporations can twist the arm of the government. The allowance of this legal corruption reaffirms the notion that politics is a dirty game, and the government cannot be trusted.
In relation to politics today, many people have mentioned many opinions about the Health Care debate. With the rise of ‘testing’ and flu vaccinations, and the introduction of quick-fix medicines that (TamaFlu)that are supposed to work—is it all just yet another perversion of the power the corporate (money-maker)
producers of these products have on the American people and government as a whole? Who is really benefiting here?
A contradiction that Harvey points out is about how virtues of competition are placed up front. He gives the example of Pepsi vs. Coke, and how the corporations run a monopolistic industry on all the world’s soft drinks. After all, these two corporations own most beverages sold today. In fact, Coca Cola currently offers over 400 brands worldwide. Products Americans recognize such as Dasani (water), Minute Maid (juices), Full Throttle (energy drink), Powerade, and many more. Coca-Cola has introduced over even has over 19 variations of actual ‘Coke’ product since 1982, many of which are still on the market today. Looking at the information, I realized, practically everything I drink whether it be the water I take to the gym, the juice I have with my breakfast, the energy drink I use to pull an all nighter—even if I’m not drinking ‘Coke’, I’m still contributing so the multi-billion dollar industry, or should I say monopoly. So we have the ‘freedom’ to choose what we drink, what we wear, what we eat–but do we really? When the government allowing the entire monopoly of markets–are we really as independent as we thought?
http://en.wikipedia.org/wiki/Coca-Cola_Company
http://www.thecoca-colacompany.com/
November 11, 2009 at 6:36 pm
Neoliberal states should, favor individual private property right, the rule of law, and the institutions of freely functioning markets.
Throughout chapter three the author gives points for advantages and disadvantages of neoliberalism.
Positive aspects of neoliberalism are:
• The Guarantee of individual freedom in the market place.
• The Increasing geographical mobility of capital between sectors, regions and countries.
• The Increase productivity leading to higher living standards to everyone.
• The Removal of all barriers, except those areas crucial to the national interest.
And finally
• The Stimulated technological innovation.
Negative aspects of neoliberalism are:
• The Increase of social inequality.
• Individuals and firms avoid paying the full costs attributable to them by shedding their liabilities outside the market which may lead to pollution and dumping noxious wastes free of charge into the environment. Productive eco systems maybe degraded or destroyed as a result.
• Also, putting strong limits on democratic governments, relying instead on undemocratic and unaccountable institutions (IMF, and Federal Reserve) to make key decisions.
• And the High rates of remuneration of federal CEOs and creation of a new wave of entrepreneurs’ financiers’ criticism.
Other points mentioned in chapter three:
• Civil service being under threat in the course of neoliberalization.
• And that Neoliberalizations leading to the destruction of forms of social solidarity reduce the control resulting in the spread of Anti social behaviors, such as criminality, pornography, and virtual enslavement of others.
• Also that the Cut backs in state welfare and infrastructural expenditures diminished the quality of life for many.
• And lastly the Unemployment was raised high in all western countries; the overall result was an awkward mix of law growth and increasing income in equality.
In addition, Neoliberalization has lead to the formation of tiger economies in East Asia, Germany, Latin America, and China, however in countries where there was no government control resulted in economic stagnation and political turmoil, particularly in Latin America in 1980s, and the economic crisis of the Asian tigers in 1997-1998 and the U.S and the rest of the west in 2008.
So to sum it all up, Capitalism and communism have actually failed, and I believe that there is a need to consider having a system, which combine the positive aspects of neoliberalism as adapted by U.S, Europeans and Japan but with government essential control on its financial institutions and governance as adapted by China to protect its rising financial power and to avoid the consequences of devastating recent financial crisis.
Sometimes in a person’s mind they ask:
1. What would be the best financial system which will benefit all communities in a nation and all nations in the world?
2. What is the impact of Globalization and neoliberalism put together?
3. How to assist poor developing nations to achieve a better well being for their nations?
November 16, 2009 at 4:31 pm
Why does there have to be a single financial system that will benefit everyone? Because…there can’t be. It’s impossible. Why can’t states and communities make use of systems that they find beneficial to their own particular situation? Isn’t that what neoliberalism has gotten so wrong? That it tries to makes everyone do the same thing, regardless of the unique problems and qualities of different markets/states/situations?
November 15, 2009 at 9:59 pm
On chapter six, Harvey starts with an introduction on how neoliberalism had contributed to the separation of social classes, making the upper classes the elites of societies and leaving the lower classes behind struggling to have a decent life. Also, he states how information technology is a key aspect on the spreading of neoliberalism and how the achievement of neoliberalism had mainly caused redistribution of wealth instead of generation of fair wealth. Yet, Harvey’s main points are the key features of ‘accumulation by dispossession’ which is one of the mechanisms of neoliberalism that helps to feed the system of capitalism.
The first feature is the privatization and commodification of public assets in order for corporations to gain more territory for capital accumulation and profitability. For instance, several neoliberal countries had privatized most of the public services, such as education, transportation, utilities, health and social welfare. Besides, neoliberalism had also supported the commodification of natural resources, history and culture. Though, these processes are achieved if the power of state is used to force the population to give up their rights in order to reposition assets that are available to the public to the realm of the elites able to afford private goods and services.
The second feature is financialization, which have been based on the market and financial transactions. Deregulation has been one of the main motives of the financial system boost which at the end had mainly benefited the interest of capital owners. According to Harvey, neoliberalism financial manipulation has often been speculative and fraudulent.
The third feature is the management and manipulation of crises, which is one of the main means of accumulation by dispossession. Mainly, crisis had been generated by the mismanagement of neoliberalism and the spreading of loans in poor countries causing the deliberated redistribution of wealth from these poor countries to the rich ones. The IMF and World Bank together with corrupted governments had been keys players on either the success or failure of countries development and the good or bad management of economic and social crises worldwide.
Finally, the four feature is state redistribution, which in neoliberalized states can bring either positive or negative results. In most cases, state’s redistribution of wealth ends benefiting the upper classes. For instance, states give subsidies and tax breaks to corporations in order to enhance capitalism, but reduce social welfare or individual benefits to common citizens.
Of all the features of accumulation by dispossession is commodification. According to Harvey, almost everything have been commodified since commodifiaction is the existance of property rights over product, processes, services and so on. And, it is this commodification of everything that have denigrated the value of human labor value and the environment.
On chapter seven Harvey gives a deep description of the freedom perspective. He mainly points out that excessive market freedom does not necessarily leads to freedom. On the other hand, the people that are left out of this free market system usually become slaves of the system and fall into severe poverty, hunger and despair. They are left with no state protection and are manipulated by the capitalistic market. Because of the several side effects of neoliberalism, Harvey conclusion is that neoliberalism has primarily functioned as a mask for practices that are all about the maintenance, reconstitution and s restoration of elite class power (188). This uneven redistribution of power and wealth had caused discomfort of oppositional movements to neoliberalism that have tried to find alternatives to this theory and system that for some has resulted as an evil force. According to Harvey, the US had been a key player in trying to impose the ideal that American neoliberal values of freedom must be universal and supreme (206). However, facts show that neoliberalism may be facing struggles to maintain its almighty power. In some countries neoliberalism may function perfectly but in other it may not, so new alternatives are develop according to necessities. Though, Harvey’s last point is that the new theory or systems main target should be social equality, along with economic, social and political justice (206).
Countries should try to find the best system that benefits all sectors. Neoliberalism may be good if there is also control that sets regulations for fair and good labor and environmental standards. Also, there should be a balance of wealth that will allow low class to benefit as well of the market exploitation, but there should also be regulations that will set limits in order to avoid excessive exploitation of individual purchasing power. I consider that a good option, especially for Less Developed Countries, to avoid a very marked division of classes, meaning that only the rich have the means to become richer and the poor lack means to succeed, is to give micro-loans to the lower class so they can start small business; promote entrepreneurship and give more opportunities for business development to the low social class instead of only the big corporations usually owned by elites. I consider that this option will at least in some way help to diminish monopoly and will give more choices to costumers. Low class will benefit by increasing their income and improving their lifestyles, plus common citizens will have more opportunities to find products at lower cost since they will no longer be able to get products and services only from superstores.
November 16, 2009 at 12:21 pm
“Neoliberalism on trial” strayed further from the definition of the ideal: Neoliberalism and explored deeper into the consequences and alternatives of the theory. Harvey used some extreme measures such as Marxism and neoconservative to convey his message of how neoliberalism has turn out to be. Marxism ideals of common wealth, public domain, anti-capitalism somehow being used to pursue neoliberalism in states such as China: everything is controlled by the central government but the state by itself is a neoliberalism advocate.
The main focus is laid on who is actually benefiting from this theory and why is the benefiters got criticized? Harvey pointed to the upper classes, the multinational corporation leaders as the target. By advocating neoliberalism ideal under the name of freedom: free trade, tax relief and anti-trade barriers policy, they actually are making more profit and heading to the monopolization pathway after eliminating the smaller competitors. The neoliberal achievements have always been preached by the IMF, World Bank, and US treasury to the so called periphery and in-debt nations to make believe that neoliberalism is the only way to liberate from poverty and strive to become a wealthy nation. The example of the Asian Tigers is so appealing that many states had fallen into the trap and fail miserably, such as Indonesia, Mexico, post-Soviet Union states. On the opposite end, which further proven the neoliberalism ideal, countries which declined neoliberalism offers become much well better off (such as S. Korea, Sweden, Poland).
“Freedom’s Prospect” retouched on foundation of neoliberalism. The public is easily sold on topics related to the term freedom, especially in the US. Thus neoliberalism got a great foundation within its name for a good start. But as time pass by and the results showed numerous bleach of human rights and the protruding of anarchy in term of trade, financial, and social welfare because of the lack of intervention by the political power to protect the weak and the less well off portion of society. On page 188, Harvey’s bolded headline of “The end of neoliberalism?” made one to question about the reality of the society. If there is an end to neoliberalism, what’s to follow? Neoconservative? Marxism? Keynesian?
“Freedom’s Prospect” touched mainly on the economical issues of neoliberalism where , repeatedly, the core issue is laid on the imparity of wealth distribution and the lack of protection for small private enterprise to compete on a fair ground with the multinational corporate. The chapter also touched on the issue of nationalism, especially US nationalism, and why the US accepted or imposed on the role of being the beacon and ideal society hence must be followed by the rest of the world.
As an end note to the book, Harvey did a great job in using the history of a Neoliberalism to alter the reader view about Neoliberalism as well as introducing some the negative end to the theory. Neoliberalism is not a bad theory, the people who twisted the theory to their advantage is actually the people that need to be criticized. I remember a discussion in economy class which given the example of common property vs. Privatization of grass land and grazing. The result is the demise of grass land in common property and the prosperity in the privatization sector. If the theory could be contained to the good aspects with some restriction on the large corporate and a little booster for the smaller competitor, I don’t think we need to go as far as Marxism to gain our right.
November 16, 2009 at 12:41 pm
A Brief History of Neoliberalism continued with the last few remaining chapters about the economic theory that has been spreading worldwide for the past three decades. Author David Harvey finished up the tale of how neoliberalism has come to dominate on the world stage. These chapters brought up some interesting points that stuck with me more than anything of the past readings. Through finishing up this book, my mindset slowly began to change… Though I was not a fanatical supporter of neoliberalism, I was generally tolerant of it. I had figured that the theory, though it has its many flaws and even more critics, just kind of makes sense. Like Harvey stated at one point, it’s like Darwinism; only the fittest survive in this harsh world. However, it is very easy to make this judgment from my standpoint, living in the wealthiest nation on earth, and never having been a serious victim of its economic conditions. So what if western nations have dominance? And inequalities exist? My view was that it’s just inevitable to have a substantial divide between the rich and the poor, because it’s just the way this unfair world works. However, the example of Sweden illuminated a few key points for me. (p. 156) It showed that not all countries have such a huge gap between the upper and lower classes. Comparing the data to statistics in the UK, life expectancy and incomes are said to be much higher and inflation lower. This is because of its circumscribed neoliberalism where some elements of Keynesian policies such as welfare provisions still exist along with more open trade, like traditional neoliberal states. This made me realize that not everyone is paying the same price as the United States is. In a way, Sweden is getting the best of both worlds. A less strenuous and more peaceful way is possible.
While reading chapter six, another thing that stuck with me was Harvey’s statement about the concern for “short term over long term commitments in pursuit of profit.” This appears to be one of the underlying themes of neoliberalism. Everything seems to work for the time being and little thought is given to the far future. Exploiting worker to get the needed profits quickly. Industrializing in order to compete but then be faced with environmental consequences. Using the rhetoric of freedom to push policies that are actually contradicting to liberty and autonomy. All of these manipulative actions are carried out, and no serious thoughts are given to the future and what will become of the world after this era of neoliberalism.
In chapter seven, I also found it very interesting but contradicting what Harvey said about the state of U.S. and China’s economies in the early 2000s. They were both experiencing serious deficits, which included rising inflation, unemployment and falling wages. If the combination of these factors had happened elsewhere, in any other country, the IMF would have surely come running in order to propose a solution and lock nations into its usual relationship of dependency. This demonstrated that all nations go through economic difficulties and maybe it’s not so vitally pressing to target states while they are going through hard times. The examples from the past chapter about how nations who actually refused neoliberal proposals recovered more quickly also display a good point.
Throughout it all, Harvey talked about the misunderstood praise that goes around for neoliberalism. “Why, then, are so many persuaded that neoliberalization through globalization is the ‘only alternative’ and that it has been so successful?” (p 156). He attributes this to the fact that there is success in some places but definitely not everywhere (uneven geographical development). Also he talks about the success it brings for the upper classes. Growing up in the culture of the United States, and a well-off area of it, ignoring issues of the kind we study in this class is not very hard. It’s not something you’d happen on unless you go looking for it directly. It’s very easy to live in a perfect bubble and ignore the realities outside.
It seems like citizens and governments everywhere need to make a difficult choice. I remember writing a paper for a different class where the question that we had answer was, Who is responsible for the inequities that exist in globalized labor? Corporations or governments? It’s easy to blame one or the other. Corporations are just greedy for profit. Governments don’t care about the well being of their citizens. But companies will most definitely go out of business if they decide to create their goods in safe environments while their competitors are using cheap labor. Governments will be accused of being against free trade for refusing to allow factories within their borders. Going back to short term versus long-term commitments, this seems like a choice where people need to unite and come up with a long-term answer. I was hoping Harvey would finish up the book by providing more of a concrete solution. Under the last section, titled “Alternatives” he merely summarizes oppositional movements that have occurred against the theory. Mostly, I think he just wanted to inform the public about the rhetoric versus the realization of neoliberalism. The former preaches the benefit for all while the latter admits that it will help only a small class. Like I was saying in my last entry, there does not seem to be a clear cut solution which makes me feel a bit hopeless about the whole situation, thinking these conditions will always be present. Ultimately, what’s more important, the gains of the present or the needs of the future?
November 16, 2009 at 1:31 pm
This book has not only further educated me on the subject of Neo-liberalism, but it has also provided me with stronger arguments to make against it. Growing up, I saw Marx as the only solution to a world so rotten with injustice and so blind to the millions of people suffering from poverty and lack of basic needs [Maslow's definition]. This system did not support tolerance and kindness or even self-actualization, but just a constant struggle to the top and blinders in terms of all else.
In Chapter Seven, from page 184 to 185, she talks of how politics and governance are completely out of touch with thinkers and philosophy from both ends of the spectrum. They give the example of Marx, which still has the Devil connotation after the Cold War, and his “radical” notion that freedom does not equate to some starving to death. What I liked was that Adam Smith, “Eta Bob” [Russian for "the God" with a hint of sarcasm] of the US and it’s curriculum is also used as an example against neo-liberalism and how “Eta Bog” would consider the current state of affairs and governance an utter failure. By tying in Malthus, who for a time was the ultimate authority of population control but is now scoffed at, she makes a powerful point about the state of violence and how some people dying as a result of violence and lack of basic needs was thought to be an obsolete idea…yet it carries on in front of our eyes.
Now, past my personal gratitude for this book and my feelings that every single person should want to read it, comprehend it, and change their minds, the biggest issue has yet to be tackled. There is a problem but how do we fix it? The latest trend is grassroots change. Do we turn to small chapters spreading the news, hoping people catch on and change their mind, and this moves upwards until Congress decides to make a change? Assuming this is possible, what is the change? How do we go about deciding how and what needs to be changed? Doesn’t this New Change have the possibility of inventing a new system that could harm just as badly if not worse? Is that a reason to not change?
Under “The End of Neoliberalism?”, Harvey mentions many issues that “surely” compel people to come to the conclusion that Neoliberalism is not working. The problem is, the issues bought up regarding unstable economics and war, are ones people do not follow themselves or try to comprehend, rather allowing themselves to be spoonfed the twisted words of politicians. I am not sure what it will take to wake people up, but I do not think what Harvey mentions is enough yet.
Under Alternatives, I see the biggest problem with the need to overturn Neoliberalism. The problem with Harvey’s alternatives are that they are barely staying above water in a Neoliberal world. The change that needs to happen must be of a foundation-to-the-tops-of-government change that either displays the fallacies of neoliberalism and/or brings about a new thought process. Unfortunately, all the past political philosophies have had major flaws. What Harvey did not address, but what I believe is most important, is education about the topic and a mass personal decision to look for alternatives. As ideal as this sounds, I do not believe in the continuation of a government that makes the decisions for its citizens and keeps them in the dark. It is only an educated, active citizenry that will bring about the kind of change needed.
November 16, 2009 at 4:48 pm
I’m going to focus on the two points that Harvey makes on page 156 of chapter 6 in response to the question he poses: “Why, then, are so many persuaded that neoliberalization through globalization is the ‘only alternative’ and that it has been so successful?” This question is posed in response to his argument that… neoliberalism hasn’t really resulted in anything good outside of reducing and controlling the growth of inflation (which I agree with, but I need to assert my bias: I despise neoliberalism, so this post is going to be fairly one-sided.)
Harvey highlights two reasons for this almost universal adoption of neoliberalism: “First, the volatility of uneven geographical development has accelerated, permitting certain territories to advance spectacularly (at least for a time) at the expense of others.” And “Secondly, neoliberalism, the process rather than the theory, has been a huge success from the standpoint of the upper classes.”
These are basically the same point: that the elite benefits from neoliberalism and that’s why as a policy and a theory it continues to be influential. The only difference is who the elite is, and in many ways there doesn’t need to be such a distinction made between social elites within states and the states themselves which are in many ways ‘social elites’ on the international playing field. There is both a growing discrepancy between the poor and the rich, between social classes and between states.
I guess I just don’t think these two points should really be two separate points.
I also agree with Sayyara’s comment about how one of the main themes of neoliberalism seems to be “short term over long term commitments in pursuit of profit.” This assertion can be tied into the growth in wealth distribution discrepancy, and the four features that Harvey attributes to accumulation by dispossession: Privatization and commoditization, financialization, management and manipulation of crises, and state redistributions. People start to not matter, they in essence become commodities themselves, with the focus becoming more and more focused on profit no matter what, the government loses power in order for private groups to gain more and what power they do retain is focused away from protecting the rights of the commons towards promoting the benefit of the private wealthy sector. The problem is the short-term aspect: ‘how long can this go on for?’ which may be Harvey’s main point. How long until this doesn’t work anymore? And then what?
November 16, 2009 at 6:57 pm
Chapters 6 and 7 of “A Brief History of Neoliberalism” is concerned with some of the success and failing’s neolibersim ideology causes or brings on nations around the globe and specially what and how it can effects the United States in long run.
As the author puts it the world’s economic power US and China today are the root cause of the global economic crisis. Both of whom embraces the neoliberasim rules. US today is in massive deficit mainly because its consumerism attitude while China carries a debt- financing with non performing banks. The biggest issue confronted is that both these countries merely follow the economic theorist ideology believed in these areas. A good example for this issue in the United States would be the Housing market melts-down. Loans were provided by banks to people with very poor credit or loans approved to people who could not afford the payments. In a sense US is in a continues battle with capitalism and restoration of ruling class power. It is here where the distinction between rich and poor becomes very vivid (Rich get richer and poor get poorer). So it is the ordinary people who get the big hit. A good example to would be the conditions in Argentina. The fear rich had was revolutionary violent but it was the rest of the people below the rich spectrum who starve, suffer when things go wrong in a capitalist crises happens.
The author also talks about some of the Neoliberalism failure and success that comes with it. He mentions that it has failed to stimulate global growth. This has caused nations much hardship. He mentions that male life expectancy dropped by 5 year in Russia during the 1990s. In relation to this topic I would like to further give an example of Latin America it should come as no surprise to anybody that neoliberal free trade policies many not be as helpful to Latin America as many people argued they would, and the “ Nafta produced results that were exactly the opposite of what was promised.” A policy that has effectively helped rich companies get even richer while paying less, ravaging workers rights and living conditions, with economic, social and political results that economists naively didn’t see coming because the real world didn’t actually fit into the Model. Shocking, I know but it does sum up a lot of what has been wrong with US economic policy in Latin America in the last several decades.
The success of Neoliberals is that control of inflation. But attention in this matter should not be focused on one place around the globe. And if different placed would be studied for example England and Sweden there are many difference in the poverty, life expectancy and growth ratedamong these nations. Then the question to be asked that why it is so widely believed that globalization is achieving its goals everywhere and is the only solution to prosperity?
Some places that have advanced very quickly are due to the geographic acceleration but with the cost for others. Asia is a good example in the 1980s. On the other hand, neoliberalization is a process but some approach it more as a theortically. So again Neoliberism is failing to stimulate growth everywhere. And of course there are certain trends and shifts that give neolibralism a perfect outlook. The rise of financial and technology services employment in these sectors has flourished very well in social and physical infrastructures.
Another achievement of neoliberalization is the distribution of income. The writer also puts light on the four sectors of Marxist Theory, privatization and commoditization, financialization, manipulation of crises and state re- distribution.
Privatization and commoditization of public assets has been the most object- able among the neoliberal aspects. Sum up they could be characterized as a process of transferring property from public to private. Manipulation of crisis on the other hand is like by manipulating crises suddenly, for example interest rates poorer nations can be suddenly forced into bankruptcy. Financialization allows for stock promotions, structure assets and so on. Finally, the neoliberalism nations are the most important actors for such redistributive policies. Even if privatization and commoditization appear to be profitable for the lower class it can affect the economy in the long run negatively. These issues can be link to examples from the real world. The neoliberal modernity is thus, according to Harvey, a modernity in which dispossession plays a large role, and where the capital class is gaining power at the expense of the labour class. Another down side to neoliberalization is the social consequences. And especially this comes down most of the time on women and children in societies like China or India.
The end to neoliberism would not be impossible with the uncertainty of today’s economic and political struggles such as the global economic crises to the war in Iraq. If alternatives are not consider it seems not impossible that US will end up like Argentina but with a much more higher consequence not only for US but worldwide.
As I read this book I came to the believe and understanding that neoliberasim has failed to combat extreme power. It has also intensified social inequality, and is hampering international aide and development efforts. There is a huge discrepancy between the measurable result of economic globalization and its proposed benefits. Neoliberal policies have unarguably generated massive wealth for some people, but most crucially, they have been unable to benefit those living in extreme poverty who are most in need of financial aid. Finally, neoliberal ideology embodies an outdated, selfish model of economy. It has been formulated by the old imperial powers and adopted by economically dominant nations. Given the state of the global trade and finance structures, wealthy countries can maintain their economic advantage by pressurizing developing countries to adopt neo-liberal policies – even though they themselves do not. I found these sites very useful in order to gain more about neoliberal policies.
http://www.stwr.org/reports-by-stwr/
http://www.stwr.org/special-features/cost-of-war-calculator.html
http://www.stwr.org/economic-sharing-alternatives/featured-articles
http://www.stwr.org/the-un-people-politics/featured-articles
November 16, 2009 at 7:02 pm
In Chapter 6 “Neoliberalism on Trial Harvey discusses how each country has the opportunity to set boundaries on things that they sell. In the beginning of the chapter it said that China and the United States were the two nations that powered the world through the global recession after 2001. Harvey stated, “True blue neoliberals will doubtless claim that the recession is a sign of insufficient or imperfect neoliberalization” (Page 152). The reason for the recession was not because every country did not practice neoliberalism. Every country has a certain policy or policies that work for their specific nation. It depends on the country’s history and relations with other nations. China and the United States were able to do well considering the economic situation because China had the population to help stabilize and even increase the economy. The United States was able to do the same because of their previous domination of economic policies world wide. Even though “true blue neoliberals” believe the economy went down hill because the neoliberalization is imperfect. Not every country needs to practice neoliberalization. As seen through history Argentina’s economy collapsed and other countries in Latin America had a “lost decade” in the 1980s (Page 154). Neoliberalization has seen positive changes in Africa. “…followed now to some extent by India, has neoliberaliztation been associated with any positive record of growth, and there the not very neoliberal developmental states played a very significant role” (Page 154). This makes it seem that even though India is referred to as neoliberal it has seen positive changes due to the help from other non-neoliberal sources. In the middle of the chapter Harvey talks about commodification. This refers to a country that puts restrictions on the things that can be sold. “In practice, of course, every society sets some bounds on where commodification begins and ends” (Page 165). Therefor a society deems what is legal and what is not. For example, the Netherlands has legalized the smoking of marijuana but countries like the U.S. have outlawed the drug. This gives a lot of power to states. They can decide what can be sold within its own borders creating this idea of sovereignty, which means the particular country is the supreme authority and nothing is deemed higher.
The last chapter is entitled “Freedom’s Prospect” and deals with the so called “end of neoliberalism” (Page 188). In the part were Harvey explains about the two power houses of the global economy, China and the United States he says that neoliberalism is in trouble in ensuring the future of capital accumulation (Page 188). As long as China and the U.S. are both the two power houses of the global economy, their policies will be established world wide. Countries like BRIC (Brazil, Russia, India, and China) are seeing great economic development. If these countries see more economic increase they too will have some say in how the global economy will run. With this type of diversity there will be more competition and better quality of products. This in return will help boost the global economy not only for rich continents like North America, but other developing continents like Latin America and Asia. Also, Harvey says, “It is unthinkable but not impossible that the U.S. will become like Argentina in 2001 overnight” (Page 189). With the collapse of the U.S. economy it will not only effect the U.S. but the entire world. The U.S. has so many relations with other countries and is an economic power house and world leader in terms of economics. This collapse could pave the way for new economic ideas and policies and a complete change of how we see economics.
November 16, 2009 at 7:07 pm
Harvey discusses the social consequences of neoliberalism in chapters six and seven, in six he mentions issues such as labor movements, environmental movements and social movements. He addresses these in particular to their relation to the “hegemonic” states of the US and China’s market globalism. He continues his argument that neoliberalism has had overwhelmingly adverse effects on much of the world’s population, and while many of his points are intriguing, they are extreme nonetheless.
I found it very interesting that at one point in chapter seven he seems to exactly predict the current economic crisis both in the Unites States, and the resulting effect globally. From debt payment crisis and currency depreciation to unstable property market value and a giant Ponzi scheme Harvey accurately lists many imbalances which contributed to or continue to exacerbate our current calamity. He highlights an interesting irony in that the United States (is currently) was, at the time of print, beginning to display these issues which if were happening in any other country would have immediately and resiliently demanded the attention of the IMF and World Bank. Because the West, and specifically the US, manipulates the IMF/World Bank, any intervention would be punishing the self. What, for example, would the IMF/World Bank demand and suggest to not only alleviate or situation, but also more align with the neoliberal viewpoint?
In that regard, it is also ironic that the World Trade Organization, whose agreement pronouncement Harvey mentions in chapter six lists raising living and income standards as some of its goals, also happens to be an organization which lists protective trade unions as a block to free trade. Despite the fact that labor uses trade unions as an effort to protect themselves and their job security, the WTO describes it as a hinderance to free trade, and as a result many governments outlaw their formation. This leads me to yet another twist I find not only ironic in and of itself, but that Harvey doesn’t emphasize here, that proponents of market globalism and deregulation insist the state and the world’s governments are no longer important. It is the state specifically which enforces these anti-trade union laws and in the example of China, do so severely. Also, the state is the structure which enforces and limits immigration. That fact alone is the key to the “race to the bottom” as far as labor wages and is exactly what limits low wage workers from being able to remove themselves from exploitative working situations.
Some of his points I still find a little too excessive though. Surely neoliberal ideals have become “normalized” in Western society. But to say that most of society has accepted neoliberlism as the only alternative, as Harvey states is unnecessary. To suggest as he does toward the end of chapter seven that the Bush administration was intentionally turning a blind eye to an unavoidable financial catastrophe because the ruling elite would come out further on top in the end is too much. This, along with other random issues he addresses in chapter seven, point to him losing his way in his argument in order to bash the Bush administration. It may be true that the last, best “weapon” the United States still has in global domination is its military might, but saying that it is merely in a technological manner and that the military has met its limits strength wise with boots on the ground in Iraq is ridiculous. Measuring the might of a Nation’s military by its effort to construct and entire nation’s infrastructure and government is irrelevant to combat potency. Furthermore, it is completely inappropriate when referring to the faults and paradoxes of neoliberalism. And lastly, where does he come up with the idea that “a substantial proportion of the US populace views the US bill of rights as a communist-inspired document?”
November 16, 2009 at 7:22 pm
(My previous comment was intended for last week’s discussion)
The first statement in Chapter 6 that Harvey makes is ‘The two economic engines that have powered the world through the global recession that set in after 2001 have been the United States and China (p.152).’ Upon reading that, I immediately started to think about ‘The War for Wealth’, and how Steingart mentions the staggering growth rates China has made over the past decade and how the United States is losing it’s place–and fails to notice why. I just thought it was interesting how China, once again, is mentioned in the world economic power arena.
Harvey mentions how it is rarely the elites that actually feel the burden an economic recession puts upon society. It is the ordinary people that suffer through it, lose their homes, can’t afford to feed their children, or survive in general. The elites, may feel a slight loss, but they are not the ones that are applying for welfare, and filing for bankrupcy. In fact, the only thing that neoliberalism has done successfully has redistributed wealth to the already wealthy elites. Wealthy elites believe that the failures of the working class, ordinary public is for personal/cultural reasons. These losses that are usually undertaken by the lower classes show a sign of weakness. Or as Harvey points out ‘In a Darwinian neoliberal world, the argument went, only the fittest should and do survive (p. 157).’ That is idea that neoliberalists are buying into-that a loss cannot be blamed on the system, it must be on the individual. However, every so often you hear a success story. Someone has climbed out of the situation they were born into, to be self made, successful–live the American dream. But why are there these struggles to begin with? We simply accept that poor people will have poor kids that will grow up to be poor adults and the cycle will continue. We accept that children are born in to bad, underpriveledged neighborhoods and that the odds are against them. So-only the fittest can survive and break out of the system–that we created? The system, designed by elites, has built in struggles, afterall, without the severe hardships to break out of the cycle–there would be more rich people than any elites could bear. The wealth would be dispersed–and the bubble that he elites so comfertably live in would sadly, burst.
Does the government even really exist anymore? ‘The coporatization, commodification and privatization of hitherto public assets has been a signal feature of the neoliberal project (p.160).’ Let’s see- we rely on private contractors to help us fight a war in Iraq–paying them ungodly amounts of money. This war has become more than a ‘War on Terrorism’, or an attempt to defend our countries security and freedoms–it is a pay check for anyone that wants to take a piece. Don’t get me wrong, I am thankful for the men and women serving our country each and every day. But, the privatization of something thought of as a concrete example of American spirit and servitude, doesn’t quite sit right with me. Some people are getting rich of this war and that disqusts me. The government is paying private people to help fight this war. Why not put that money from our tax dollars into better veteran services for when the troops return? Oh wait, that would be a social service.
Harvey also mentions derugulation of our financial systems leading to even more societal disparity as far as wealth is concerned. The stock market, in general, is a rich man’s hobby. Between the stock options, fraud, and stockbrokers making a profit off a transaction that doesn’t even benefit the customer- it is a market that can bring immense wealth (of poverty) to very few elites, at the expense of many ordinary people.
One main concept that really caught my eye, was the idea that there has been a transformation into making everything a commodity. As Harvey says ‘Commodification presumes that existence of property rights over processes, things, and social relations, that a price can be put on them, and that they can be traded subject to legal contract. I thought of an example, when a couple divorces there is a division of the assets which can include-house, cars, dogs, even children. Placing a value on parental obligations is kind of sick, yet we do it all the time. Getting a divorce racks up tons of costs- divorce lawyers, filing paperwork, selling assets, breaking a pre-nup. All sorts of agreements are made and amended when you enter into the ‘contract’ of marriage. Marriage as Harvey mentions, has changed in the eyes of people. To two people falling in love, it is a not a contract to stay together, it is the desire to spend their lives with one another. To capitalists, it is a short term contract. The point is, there is a serious social order breakdown going on here. Value is the monetary sense, is being placed on social institutions such as marriage. People are considered as a commodity as well. People are assessed for what they can offer when they are applying for a job. They are considered ‘human capital’, and you want to get the most for you money. Everything now is so competitive. Workers are hired on contract (preferably short term), and are assessed in terms of skills and strengths and what they can add to the means of production. People are simply part of the machine that is capitalism.
November 16, 2009 at 8:11 pm
I have elected to focus on chapter 6 because it is jam packed with information that needs to be discussed further and applied to the current world we live in. To start, it is mind numbing to see economist and even Harvey predict the global economic collapse to a “T” without much recognition from the government. Harvey begins by speaking of the global economic collapse stating that the ruling class rarely gives up power until they are forced to. The paradox he points out is that a working-class movement in the U.S. (i.e.-Labor party in U.K., generally very socialist) would be able to restore capitalism in the U.S. as opposed to the agents that claim to embrace it. Harvey does not discuss this in great detail, but I believe he is saying this would happen because of how heavily subsidized U.S. corporations are and the infinite tax breaks that have been given to these corporations and that a labor party would put an end to that. Harvey states what he wrote was speculative (2005), but his worries have now been realized. This is where Chapter 6 begins to get interesting.
The issues with Soviet Russia becoming a capitalist society under “shock therapy” are many, and he cites that income declined at a rate of 3.5 percent annually. In fact, the USSR output levels from 89 to 95 declined by 50% percent as a whole, with would-be bankrupt companies being subsidized under direction of the IMF, Jeffery Sachs, and the World Bank. The reason is that the U.S. and West benefited greatly by the wealth moving from the old red directors to the new oligarchs that controlled the country. We can see now that Russian Oligarchs are beginning to buy U.S. companies and even NBA Basketball teams. Poland’s success can be DIRECTLY attributed to the number of small businesses they have and how they truly disregarded the Washington Consensus and the “capitalist” advice from the IMF.
Harvey then makes a very interesting argument about the shift to service industry. Our generation is being embraced and championed being called the “Information Age,” yet Harvey says there is a huge problem with this. Western countries are able to exploit Eastern countries under this ruse, being able to impose restrictions and charges on populations. China and many Eastern countries have embraced this ideology, levying huge user fees in many rural areas. Moreover, corporations have a very real monopoly on this information seeing as most of it is privileged. The greatest fear is that brown/black countries will now have access to this technology (see Iran) and become competitive in a market. The other problem Harvey points out is that main arenas of production are films, videos, video games, music, advertising, and T.V. shows. This past week, Call of Duty outsold any movie, video game, music album, and all of their past sales by TEN TIMES in the first week. This hype has allowed us to ignore physical and social infrastructure. Even Jeffery Sachs made this argument in The End of Poverty by stating that developing countries need to focus on the agricultural and manufacturing industries because that is how developed countries largely have produced their wealth. Although his motives my not be the same, Harvey takes this one step further by articulating that these real industries are neglected.
Harvey then makes four brilliant arguments about accumulation by dispossession. The first argument is privatization and commodification. Public utilities, social welfare provisions, public institutions, and warfare have now been privatized at a level unseen in human history. There are more mercenaries in Iraq then actual soldiers of countries. (and, as Harvey indicated earlier in Chapter 6, this should be unsettling to the ruling class). Even China has adopted many of these ways. Water, a resource that is essential and plentiful (in many areas at least) that was always considered public has become privatized. The second argument is financialization. He targets brokers that get commissions for each transaction (more service fees) and discusses the effects of stock and credit manipulation. The very issue of manipulation that the U.S. was overly critical about with the Eastern World (transparent currency in China or manipulation of information back to the USSR) is the same acts committed by the government and the corporations. Enron is a perfect example in the U.S.
The third and most interesting argument to was the management and manipulation of crises. Harvey contends that fraudulent activity and debt is a way corporations make money. His argument sounds very similar to Foucault’s threat construction argument. The government is able to keep the citizenry in line by constructing threats that control the population. This line of thinking can be extended to economics. Corporations and governments have run developing countries into the ground but have received a significant amount wealth from these countries. The fact that the IMF forces countries to eliminate restriction in trade allows U.S. corporations to flood markets; in turn they are able to accumulate all the wealth because they can bankrupt existing domestic companies because they cannot compete. One of the first things we learn in economics is debt is a positive thing because it forces other countries to invest to guarantee a return on their previous investment. The argument Harvey uses is that of labor surpluses in these developing countries. This creates an environment where valuable assets are thrown out of use or lose their value. This argument was very interesting to me because Harvey is contending that U.S. corporations are able to control the assets and wealth domestically and abroad. Although they are not constructing “threats”, this is very much like the Foucault argument because the U.S. corporations and Government has an omnipresent control of foreign populations.
Finally, Harvey speaks of state redistributions. He speaks of Thatcher’s program for the privatization of social housing in Britain allowed bribes and coercion upon the lower class to force them out. A great example both in the U.K. and U.S. is the use of eminent domain. This constitutionally guaranteed ability for the state to coercively seize your proper with “just compensation” is the very mechanism that Britain and the U.S. have seized a lot of property for private purposes. Although there are stipulations for “public good,” this is very often outsourced to private companies so that they can generate wealth for themselves.
In specific to private property arguments, I agree with Hernando DeSoto in The Five Mysteries of Capital when he says that private property is a must. This is because there is a lot of “dead” capital in developing countries that are primarily owned by the poor. The example is Haiti, where dead capital is literally eight times their GDP. What Harvey warns us is that there must be protection where bribes and coercion do not force the poor to give up their private property that they do own. This is a very big downfall of neoliberalism.
Finally, I will group the issues of environment and rights. The “green movement” going on today is yet another example of where corporations have capitalized on advertising rather than actual change. The Prius, championed to be environmentally friendly, creates more environmental damage to make than the lifespan of a Land Rover. The issue with “universal” human rights discourse is the same problem that Harvey talked about in Chapter 2. The discourse happens on an elitist level with very little input from the public. These ideas and goals they artificially create are ones that suit the ruling class and not the general population. Furthermore, this discourse they claim to care about is very often not followed. From Abu Ghrab and torture to continued and strengthened business connections with China and their human rights issues, this discourse is only paid lip service. Corporations only care when they decide to care instead of upholding standards that they claim to embrace. As the video we watched in class detailed, even when Nike comes into the sweatshops to check up, the employees are coached as to what they should say.