Neoliberalism
Neoliberalism -- the ideological doctrine that market exchange is an ethic in itself, capable of
acting as a guide for all human action -- has become dominant in both political thought and practice
throughout much of the world since 1970 or so. It helped to crush communism in the USSR
and largely displaced Marxism.
The shift toward neoliberalism occurred in the 1970s because businesses and the super-rich began a process
of political self-organization in the early 1970s that enabled them to pool their wealth and influence
to achieve dominant political power and to capture administration. As David Swan noted in his
review (E.
David Swan's review of A Brief History of Neoliberalism)
From its founding America's wealthy have feared democracy recognizing that the majority, being
poor and middle class, could vote to redistribute wealth and reduce the control held by the elites.
After World War II, the middle class in the United States grew dramatically somewhat flattening
the countries power base. As a reaction to this dispersal of power the early 1970's saw the formation
of groups like The Business Roundtable, an organization of CEO's who were `committed to an aggressive
pursuit of political power for the corporation'. As the author writes,
`neoliberalization was from
the very beginning a project to achieve the restoration of class power'. T
he neoliberal plan was
to dissolve all forms of social solidarity in favor of individualism, private property, personal
responsibility and family values. It fell on well funded think tanks like The Heritage Foundation
to sell neoliberalism to the general public using political-philosophical arguments.
Money pouring into lobbying firms, political campaigns, and ideological think tanks created the organizational
muscle which mimics the Bolsheviks organizational muscle. And Repugs got a bunch of Trotskyite turncoats
such as James Burnham, who knew the political technology of bolshevism from the first hands, were probably
helpful in polishing this edifice. All that gave the Republicans a formidable institutional advantage
since 1980s.
Carter and Clinton sold Democratic Party to the same forces.
This rise of special interests politics has been at the expense of the middle class. In this sense
already in 1994 the USA became very unhealthy society although the crisis of 200 was still six years
ahead. Collapse of the USSR and subsequent looting of the territory by Clinton administration slowed
down this process, but now it's by-and-large over (with the USA failing to prevent reelection of Putin)
and "latin-americanization" of the USA is again in full force.
There are no sizable countervailing forces on the horizon, although the level of public debt might
be an implicit limiting factor for neoliberalism. It will be interesting to see how and by what political
forces neoliberal regime in the USA ends. Some people suggest that the USA might eventually disintegrate
along the lines of Civil War alliances. I think much depends how "peak oil" crisis unfolds. And will
the wars with terrorism continue to give the USA elite the required level of the national unity and
meaning. Rise of separatist movements in Texas, Alaska and other states is pretty indicative here.
There are several notable books on the subject
- Dumenil and Levy
- David Harvey in his A Brief History of Neoliberalism
Dumenil and Levy
According to Dumenil and Levy
the historical tendencies of capitalism are radically mediated by politics and social class configurations
(i.e. alliances between social classes and stratas). They argue capitalistic development, since 1880s,
has gone through four primary stages and corresponding crises. They emphasize these developments
are not historically necessary, but contingent on politics and social class configurations.
The tendency of the rate of profit to fall in capitalistic economies does not work uniformly.
In different periods, because politics and social class alliances can change, so can the profitability.
The current crisis was only partially caused by falling rates of profits.
It is more result of self-organizing of the top 1%. According to Dumenil and Levy the basic
story goes like this: following the Great Depression of 1930 a strong social
political alliance emerged between the management class and "popular classes" (this popular
class includes blue and white collar workers, including quasi-management, clerical, and professional,
which cannot be reduced to the traditional "working-class"). In the 1970s there was a severe profitability
crisis, the legislative and institutional response to this crisis caused a fracture between management
and popular classes, and a re-alliance between management and capitalist
classes (which includes ownership and financial classes).
David Harvey A Brief History of Neoliberalism
David Harvey in his A Brief History of Neoliberalism
gives slightly different perspective. Here are some insightful Amazon reviews:
R. Albin (Ann Arbor, Michigan United States), February 4, 2012
A good way to discuss this concise and clearly written book is to compare it with some recent
discussions of politics and economics in the USA, notably the analysis published by the political
scientists Paul Pierson and Jacob Hacker in their book Winner Take All Politics. Pierson
and Hacker point to the increasing concentration of wealth and political power in the USA, the
decline in social mobility, the impressive ability of the very wealthy to influence Congress
and elections, and how these phenomena have arisen over the past generation. Readers interested
in a concise discussion of their conclusions can easily find a nice review article by Hacker
and Pierson using Google Scholar or similar search services. Other recent relevant issues include
the decline in American manufacturing, the increasing role of the financial services sector,
and the dangerous economic fluctuations introduced by a global and relatively unregulated financial
system. Harvey, however, identified and discussed all these themes insightfully several years
ago.
Beyond his prescience, Harvey's particular contributions are three-fold.
- First, he is particularly interested in the relationship between these phenomena
and the ideology of neoliberalism. Harvey defines that latter as the idea that markets
and private property rights are both essential to human freedom and the best method of public
policy. As he points out, the neoliberal era is defined not only by withdrawal of state
intervention in markets but also by state creation of markets in areas where they did not
previously exist. Once the state creates such markets, the state maintains a hands off posture.
Harvey contrasts neoliberalism with what he called "embedded liberalism," the mixed
economies of post-WWII European social democracy (whose policies often implemented by right
of center parties) and New Deal Liberalism and its successors in the USA. The economic
and political corollary of neoliberalism is increasing concentration of economic and political
power; essentially the justification of an upper class assertion of power with the consequences
of enriching and empowering the most wealthy and impoverishing others by the reduction of
social services that benefit the poor and middle class. In true and insightful Marxian fashion,
neoliberalism is the ideological superstructure and figleaf of class conflict.
- Harvey's second interesting contribution, at least for American readers, is his attention
to international aspects of neoliberalism. This discussion has two dimensions.
- The first is a discussion of neoliberal implementation in other advanced capitalist
countries, notably Harvey's native Britain, where events parallel much that has been
observed in the USA. Harvey also has good discussion of often destructive neoliberal
policies in the global financial system and economy carried out by institutions such
as the World Bank, the IMF, the WTO, and major banks. Its fair to say that Harvey's
critique is matched by that of individuals who are definitely not Marxists in orientation
such as Joseph Stiglitz.
- Harvey also has an interesting discussion of neoliberalism in relationship to China.
Harvey points out that neoliberal international policies considerably facilitated
the ability of the state led (which some astute commentators term Market Leninism) growth
of the Chinese economy to become a major economic power. Harvey points out that
this somewhat ironic phenomenon is accompanied by the development within China of a
powerful capitalist class deeply embedded in Communist Party that has many of the features
of a neoliberal elite.
- Harvey is also quite interesting on the relationship between neoliberalism and other
ideologies. The emphasis on possessive individualism and what some call economism (eg, Margaret
Thatcher's famous statement that there is no such thing as society) tends to promote worrisome
social conflict. The result is upper class promotion of somewhat authoritarian ideologies
to maintain social peace. Harvey argues that various strains of neoconservatism are a manifestation
of this phenomenon. Neoliberalism and libertarianism, whose adherents claim promote
human freedom, ironically tends to promote authoritarianism.
Harvey also points to many of the other contradictions of neoliberalism. It is often
a license for the wealthy to exploit political systems in ways that undercut its central claims.
Claims that it would produce an era of enormous economic growth with a rising tide raising all
boats proved groundless. Regimes purportedly espousing neoliberalism, such as the Bush
II era USA, indulged in disguised and incompetently applied Keynesianism. Despite scientistic
claims to be based on basic features of economics, neoliberalism often ignores basic findings
of economic research.
Defects of Harvey's analysis
Defects of Harvey's analysis include a bit of overemphasis on what might be called the conspiratorial
aspects of his class based analysis. Harvey also omits an important criticism of neoliberalism
-- its failure to recognize the sources of long term economic growth. The latter depends
on technological innovation and implementation of new and improved technologies.
Two and a half centuries after the start of the Industrial Revolution, the low hanging fruit
has long been harvested and further technological change depends on substantial state investment
in research, including considerable investment in development and industrial policies, and a
large and well educated work force.
These preconditions for sustained growth aren't and probably will never be generated by neoliberal
regimes.
Izaak VanGaalen
A Critical Look at the Post-Keynesian Era June 15, 2006
The term neoliberalism is usually heard in the pejorative sense, often coming from Latin
American leaders such as Hugo Chavez and Evo Morales. The term refers to an international economic
policy that has been predominant in policy-making circles and university economics departments
since the 1970's. The four faces on the cover of this book (Reagan, Deng, Pinochet, and Thatcher)
are considered by David Harvey the primemovers of this economic philosophy. Reagnomics, Thatcherism,
Deng's capitalism with Chinese characteristics, and Pinochet's free market policies marked the
beginning of new era of global capitalism.
Neoliberalism as a philosophy holds that free markets, free trade, and the free flow of capital
is the most efficient way to produce the greatest social, political, and economic good. It argues
for reduced taxation, reduced regulation, and minimal government involvement in the economy.
This includes the privatization of health and retirement benefits, the dismantling of trade
unions, and the general opening up of the economy to foreign competition. Supporters of neoliberalism
present this as an ideal system. Detractors, such as Harvey, see it as a power grab by economic
elites and a race to the bottom for the rest.
In this short, but very well researched book, Harvey charts the capital flows of the last
thiry years. In the 1970's, there was the breakdown of the Bretton Woods system, with its fixed
exchange rates, tariff barriers, and capital controls. It gave way to floating currencies and
high trading volumes. Capital started searching the globe for comparative advantage. Proponents
claimed that this routed out corruption and inefficiencies, while opponents saw instability
and exploitation. Indeed, Harvey produces ample statistics showing how the rich got richer and
the poor stagnated. More surprisingly, he points out that the aggregate economic growth during
the years of Keynesian management (the decades between World War II and the 1970's) was greater
than during the neoliberal era (the 1970's to the present). The neoliberal era benefitted mainly
the wealthy. In the US, the richest 1% now control 15% of the wealth as opposed to 8% at the
end of World War II.
When Reagan and Thatcher came to power in the late 1970's and early 1980's they used
their control of the IMF and World Bank to impose neoliberal policies on the developing world
- especially Latin American countries. In the case of Chile, Pinochet - after violently
ousting the Allende government - instituted free market policies as prescribed by the Chicago
school, and was relatively successful. Other Latin American countries were not so successful,
and it created a backlash of populist nationalisms in the form of Hugo Chavez in Venezuela and
Evo Morales in Bolivia.
The section on China is one of the best in the book: "Neoliberalism with Chinese Characteristics".
Harvey points out that China is not a pure neoliberal state. There is still heavy state intervention
in the economy and management of the currency. And as a further criticism of neoliberalism,
he reminds us that China has produced some of the highest growth rates - 9 to 10 percent annually.
On the downside, the gap between the rich and poor is growing, and because their currency is
held artificially low they are building dangerous overcapacity.
Neither does the US, for that matter, operate according to neoliberal principles. Even
as it is urging other countries to maintain minimal government and balanced budgets, it is running
huge deficits and issuing ever more t-bills to cover its excess spending.
With China and the US - two linchpins in the world economy - not playing according to the
rules of the game a crisis is bound to happen. One country is totally geared toward producing
and exporting, while the other is content with importing, consuming, and creating more debt.
Harvey believes that the global economic readjustment that is going to take place will be
painful and possibly violent.
Harvey's excellent little book illustrates, once again, that the perfect market, presupposed
by neoliberalism and classical liberalism, does not exist. Unfortunately, he does not offer
any remedies to rectify the current situation, nor does he offer an alternative system. Nevertheless,
this book is very insightful.
Read more ›
11 Comments |
E. David Swan
On the first anniversary of 9/11 President Bush made a speech saying, `Freedom is the Almighty's
gift to every man and woman in this world... as the greatest power on earth we have an obligation
to help the spread of freedom.' Spreading freedom is the primary function of neoliberalization
but as George Lakoff stated in `Whose Freedom?' freedom can be a very subjective term. The freedom
of neoliberalism is the glory of unfettered, free market economics and the rights of corporations
and financial institutions over individuals and governments. It's the freedom to fully exploit
resources and workers.
From its founding America's wealthy have feared democracy recognizing that the majority,
being poor and middle class, could vote to redistribute wealth and reduce the control held by
the elites. After World War II, the middle class in the United States grew dramatically somewhat
flattening the countries power base. As a reaction to this dispersal of power the early 1970's
saw the formation of groups like The Business Roundtable, an organization of CEO's who were
`committed to an aggressive pursuit of political power for the corporation'. As the author writes,
`neoliberalization was from the very beginning a project to achieve the restoration of class
power'. The neoliberal plan was to dissolve all forms of social solidarity in favor of individualism,
private property, personal responsibility and family values. It fell on well funded think tanks
like The Heritage Foundation to sell neoliberalism to the general public using political-philosophical
arguments.
At the same time a group of economists were working on economic theories that developed into
the `Washington Consensus'. These followers of Hayek and Friedman just happened to create
economic blueprints for growth that matched up exactly with the goals of the wealthy business
elites. The plans were based on the superiority of the marketplace in making wise decisions
but also assumed perfect information and a level playing field for competition. As the author
writes, `...eminent economic theorists [...] argue that all would be well with the world if
only everyone behaved according to the precepts of their textbooks' The neoliberal economists
have become so focused on growth that they seem to take a decidedly amoral approach to human
suffering. Above all countries needed to focus on privatization and low taxes and definitely
avoid deficit spending. What has happened is a widening of the gap between the wealthy and poor.
The author suggests that rather than an unfortunate byproduct of neoliberalism or a temporary
situation this is the intended result.
The great irony is that the U.S., the world's number one proponent of neoliberalism,
generally finds itself breaking the rules. With high deficit spending and massive subsidizing
particularly in consumerism and defense spending the United States has generally taken a `do
as I say, not as I do' stance. With the amount of political appointee/lobbyists shuttling
back and forth between business and government Adam Smith's `Invisible Hand' looks more and
more like a crushing fist.
This was not the book I expected. This is a devastating critique of neoliberalism. I didn't
agree with everything the author wrote and there are most definitely many positives that have
come from globalization but the corporatization of the world has the potential to by an enormous
threat. Global Warming has to be the poster child for neoliberal extremism with short term economic
growth trumping the welfare of the entire world. David Harvey has a decidedly liberal stance
but he backs up his views with sobering facts. Despite being a book on economics I found it
extremely readable and recommend it wholeheartedly.
A Theory of Global Capitalism Production, Class, and State in a Transnational World (Themes in Global
Social Change) William
(Roland Robertson, University of Aberdeen)
The leading analyst of transnational class formation provides a clear, straightforward, and
convincing account of the economic, political, and social contours of contemporary
capitalism. This is essential reading for anyone who wants to understand the global
condition and prospects for its amelioration.
(Craig N. Murphy, M. Margaret Ball Professor of International Relations, Wellesley
College, and Chair, Academic Council on the United Nations System)
Yet another book on globalization? If you think you have read too many already, think again!
Here is a fresh look at the subject which shatters the illusion that globalization
has to do with either free international trade or the disappearance of the state.
Robinson expertly gathers the diverse threads that run through our world order and
unerringly hones in on class and transnational power at the heart of it.
(Ankie Hoogvelt, University of Sheffield)
Review
"William I. Robinson has earned a reputation as one of the leading critical analysts
of capitalist globalization as a system of power. This book -- both rigorous and
readable -- develops his thesis that we are witnessing a world-historical transition
into a new phase of capitalism, with new forms of power, resistance and struggle.
Whether or not you agree with Robinson's controversial thesis, you will agree that
this book represents formidable scholarship and raises crucial political questions
for the twenty-first century." -- Mark Rupert, Syracuse University
--This
text refers to an out of print or unavailable edition of this title.
Summer Gray
A correct formulation of the problem... October 7, 2008
The final chapter of Robinson's book opens with important words once written by Karl Marx: "The
correct formulation of the problem already indicates its solution." Robinson's paradigm-shifting
articulation of the problem of global capitalism as a hegemonic transnational phenomenon calls for
a transnational counter-hegemonic response -- a solution that is imaginatively new, materially realizable,
and desperately needed.
There is much to praise in this work, particularly in its move to transcend outdated frameworks
and epistemological standards to arrive a problem that spells out possible solutions. By deconstructing
the role of the nation-state in the global economy and pointing to the significance of transnational
production and the rise of a transnational class and the transnational state, Robinson opens up
the door and lets class, agency and culture back into the room.
I have engaged with a variety of critical literature that has sought to place the disempowered
at the center of analysis in order to legitimize the voice of the "other." While I still believe
that this kind of work is important, I have been frustrated with its tendency to fragment struggles
by arriving at an array of different problems and respective solutions due to a lack of agreement
on the most appropriate unit of analysis. As a critical theorist, Robinson avoids this by critiquing
nation-state-centrism and tracing class relations to the material world. He argues that the globalist
bloc
"achieved hegemony in the last twentieth century because it came to exercise a commanding
influence over material life around the world, including the ability to provide rewards and
impose sanctions, and because it achieved an ideological dominance by developing both an alternative
ideology and a viable alternative program to global capitalism" (174).
This book has major insights for anyone critical of the world in which they live. I approached
this book critically, weary of another `big picture' grand narrative story, and finished with a
heightened sense of awareness about the world in which I live. Don't be intimidated by the word
'theory' in the title. This book is for everyone.
One last note: While I was reading Robinson's book, I was reminded of a documentary called Mickey
Mouse Monopoly -- a film that takes a critical look at the Disney Company's role in shaping global
culture through its enormous corporate power (you can watch the entire documentary in ten minute
sections on youtube.com).
Robinson correctly emphasizes the importance of culture in his book, noting how such cultural
icons as Coca Cola, Mickey Mouse, Big Macs, and Nike are "symbolic of the real material domination
of TNCs" (31). As Robinson further notes "the ownership and merger of media worldwide is a major
area of transnationalization...and their tight control over the worldwide flow of information and
images are issues of cultural domination" (129). The Disney Corporation is an example of a transnational
corporation participating in a larger global capitalist hegemonic project, and demonstrates careful
attention to policing its image and representation. In the documentary the narrator describes Disney
as "a transnational media conglomerate owning TV and radio networks, cable systems, internet sites,
music studios, media production companies, magazines, sports teams, theaters and theme parks." The
narrator continues to raise questions of democracy and Disney's tendency to present a "very limited
world view skewed and dominated by corporate interests."
The documentary ends with a revealing quote from Disney's own Michael Eisner in an internal memo:
"we have no obligation to make history, we have no obligation to make art, we have no obligation
to make a statement, to make money is our only objective."
Dr. Gail Dines, professor of Women's Studies at Wheelock College, poses the following concerns:
"What kind of society do we want to live in? Do we want to live in a society were seven global
corporations control our culture? At the moment the only people at the table are the holders
of corporate power. That's not a democracy."
So, what kind of society do you want to live in? Read Robinson's book and let's talk.
useful contribution to Marxist theories of international relations
April 23, 2012
Although the author is William I. Robinson, who teaches sociology and IR at UC Santa Barbara, this
book is the very opposite of a Robinsonade - in fact, it deals with the global convergence of the
capitalist class and its interests. Robinson's thesis in this book is that rather than conceiving
of globalization as increasing internationalization, i.e. increasing trade and political connections
between nation-states and proceeding from that political level, it should instead be understood
as an increasing transnationalization. In other words, it means that there is now a secular tendency
for the formation of a global, transnational capitalist class, which operates on the basis of the
interests of global capital and increasingly forms a transnational state apparatus (from UN to WTO
to IMF) to exercise its power. This global capitalist class is in opposition to the old national
bourgeoisies, which are ever more succumbing to this struggle, and dominates global production in
terms of volume - as Robinson aptly demonstrates with some choice statistics from the 1990s (surely
even more true now). This global capitalist class has not made the nation-states obsolete, but restructures
their organizations and institutions of power according to its needs and tries to pave the way for
the total domination of this class over all state power by programmes of austerity, privatization,
'structural adjustment', and so forth. In other words, according to Robinson, the neoliberal order
is the political mode of appearance of the interests of the global capitalist class.
So far, so good. Much of this is plausibly argued, and the author makes a number of valuable points.
First is the importance of seeing the current transformation of capitalism not as a struggle between
nations, such as the US and China, at the fundamental level, but rather as the rise to hegemony
of the global capitalist class. Its opponents are those capitals that have purely national or regional
interests to maintain specifically against the interests of the global capitalist class, and of
course the proletariats of the world, which are (if much more slowly) also globalizing. Second,
that it is in the interests of the global capitalist class to maximize the mobility of capital,
but to minimize the corresponding mobility of labor, insofar as this would allow the development
of a global proletarian opposition. The forces of globalization require ever more social containment
on the part precisely of the territorial state powers, in order to prevent the Polanyian counter-movement
from appearing (my words, not his).
Finally, this has only been possible because every part of the globe has now been formally subsumed
under the capitalist order; there is no extensive form of 'original accumulation' possible any more
on any serious scale. Robinson argues that therefore the global capitalist class' main interest
in international relations is to overcome the opposition not just of the various working classes,
but also of the national capitals that stand in the way; and that it seeks to supplant these by
introducing everywhere 'polyarchy', i.e. the hollow form of 'liberal democracy' that channels civil
society and oppositional forces into the periodic election of one or another branch of the elite.
He implies it is precisely the status of petty dictators and the like as representatives of the
interests purely of their national capitals and their nation-state territorial position that makes
them undesirable in the eyes of the global capitalist class, however willing they may be to trade
with them if they have to. This would then explain the neo-imperialist adventurist turn of many
of the richer countries, including many not previously participants in such undertakings.
There are some problems with the argument nonetheless. Firstly, Robinson's economic historical explanation
as well as his crisis theory are somewhat shoddy and in many cases questionable. For example, as
Marx himself already pointed out, to explain a crisis by stating that there is overproduction and
underconsumption is to explain precisely nothing - that is how a crisis appears under capitalism.
Similarly, his reading of the social-democratic consensus is surely too rosy. It is not likely that
neoliberalism appeared solely as a way for globalizing capital to escape the clutches of this consensus;
the consensus itself was deeply limited in scope and intensity to certain parts of Europe and the
Anglo-American countries, and it was two rapid crises that brought it down at least as much as its
success.
This also fits Robinson's main weakness in the otherwise excellent and essential global outlook
on political economy - namely, a serious understatement of the significance of previous imperialism
and the contradiction between the First and the Third World, so-called. I agree that there is a
long-term secular tendency now towards the creation of an 'equalized' global proletariat and Robinson
is certainly right against Arrighi c.s. that this tendency is a victory of global capitalism rather
than of East Asian capitalism. Yet this does not mean that we are yet anywhere near this situation
of equalization, and precisely the distinction in existing wealth creates strong counter-globalizing
forces including among the Western working classes, who have much to lose by this turn of events.
By all accounts, they would prefer returning to the rosy social-democratic consensus based on the
post-imperial dominance of the West, and for this reason the response to globalizing capital has
been explicitly right-wing, not left-wing. Robinson is too optimistic, or too naive, when he implies
that the (white) working class of the US or Europe is close to an objective or subjective position
of being in the same predicament as the workers of Mexico or the Philippines. They are moving there,
but are doing everything they can to prevent it, at the expense of the global proletariat as much
as anything.
That said, this book is an important contribution at the political and strategic level to a truly
global understanding of capitalist processes in the postwar period and today. So far, much of the
initiative in this has proceeded solely from Maoist or post-Maoist sources and authors like Samir
Amin. It is good to see this trend being more widely followed, and the significance of this perspective
being increasingly appreciated among Marxists more widely. We cannot leave world system thinking
to the followers of Frank and Arrighi, great as their contributions have been; let alone such people
as Niall Ferguson or Joseph Stiglitz. "A Theory of Global Capitalism" should help put us on the
right path.
William I. Robinson`s Invaluable Theory of Global Capitalism., July 7, 2013
By Colin Burgess - See all my reviewsAmazon Verified Purchase(What's this?)
This review is from: A Theory of Global Capitalism: Production, Class, and State in a Transnational
World (Themes in Global Social Change) (Paperback)
I gave William Robinson`s book a five star rating because he has provided me with a theoretical structure
which fits the last two chapters of my book. I say "fits" because the concepts he uses are in many cases
the same as mine but from a transnational viewpoint rather than a national one. Consequently I have
learnt a lot by bringing the two perspectives together. In this way Robinson is more basic than Sklair,
whose work I can also use in bringing together the work of many other empirical and theoretical writers.
Whether this is of any interest or use to anyone else I don`t know, but this is how it is helpful to
me.
Zombie Capitalism Global Crisis and the Relevance of Marx Chris Harman 9781608461042 Amazon.com Books
Diziet
The Runaway System, March 1, 2011
Chris Harman's 'Zombie Capitalism' is a closely argued, fully referenced and indexed indictment
of Capitalism from it's inception in the late 18th century up to today's current crises.
It starts with a general but detailed round up of Marx's concepts: commodities, labour value,
surplus value etc. There then follows a comparison of Marx's ideas with those of his critics - neoclassical,
Keynsian and Marxist variations.
Once this grounding is complete, and he has demonstrated the appropriateness of using Marx's
analytical tools, he moves on to a discussion of how Capitalism works. This is a fairly generalised
approach but lays the foundations for later chapters.
Once these basics are out of the way, Harman moves on to consider how Capitalism has developed
since Marx's time and whether Capitalism has moved beyond useful Marxist analysis. He shows, pretty
convincingly to my mind, that it has not and that a Marxist approach can still shed considerable
light on the workings of the system.
Following on from that, he considers the role of the state. It is clear that states are deeply
involved in not just maintaining Capitalism but as active participants. Even in these days of international
or transnational corporations, Harman shows how rooted 'capitals' are in the nation state. In this,
he echoes
Alex Callinicos. Suggestions that nation states have outlived their usefulness are clearly false.
However, the state is not simply a provider of currencies, rules, regulations, copyright protection,
worker maintenance etc. but is also an active participant in the Capitalist enterprise. Apart from
the obvious State Capitalism (in a Keynsian sense), there are the examples of Stalinist Russia and
modern China.
The history of Capitalism in the 20th century inevitable starts with the Great Depression of
1929. This is followed by the long boom of the post-World War 2 period (the 'Golden Age'). Harman
shows how this was maintained not simply by the recovery from the 'creative destruction' of the
war, but also by the 'disposing' of surplus capital in the purchase of arms - Eisenhower's 'military-industrial'
complex - helping to maintain rates of profit. But he goes further and considers the effects of
this on Russia and the Eastern Block countries.
Then comes the end of the 'Golden Age', the crisis of Keynsianism and the turn to Milton Friedman
and Monetarism. Of course, a lot of this is simple history. But Harman provides a thoroughgoing
and, to my mind, pretty convincing Marxist analysis of this history. He considers not just the crisis
of the Western capitalist economies but also the end of Stalinist central planning.
Part Three starts with 'The New Age of Global Instability' (P227). He suggests that, in many
ways, the current era is a return to the period prior to the Second World War - in a sense, back
to 'business as usual' (i.e boom/slump). He argues against the prevailing 'globalist' theories,
again pointing out the dependence of capitals on nation states - it is simply not that easy to move
factories and their necessary supply chains across borders. However, he recognises the increasing
mobility of financial capital, as it roams the world, looking for a return on investment but, at
the same time, shows the many ways that 'productive capital' and financial capital are closely intertwined.
For example, he considers the bubble in the telecoms industry which resulted in a huge increase
in cable networks - far more than can currently conceivably be used.
The final section 'The Runaway System' (P307) looks at the likely consequences of the current
form of Capitalism and, predictably enough, it is not a happy picture. Environmental degradation,
'Peak Oil', the dangers to the world's food supply are all resulting in a runaway system:
'The runaway world is, in fact, the economic system as Marx described it, the Frankenstein's
monster that has escaped from human control; the vampire that saps the lifeblood of the living bodies
it feeds off. Its self-expansion has indeed led it to encompass the whole globe, drawing all of
humanity into its cycles of competing in order to accumulate and accumulating in order to compete.'
(P325)
Capitalism is, quite simply, insatiable.
And finally, he asks, 'Who can overcome?' (P329):
'It is the very development of capitalism that shapes and reshapes the lives of those it exploits,
creating the objective circumstances that can turn a disparate mass of people who sell their labour
power into an increasingly self-conscious class "for itself". This class is the potential agent
for challenging the chaotic and destructive dynamic of capitalism because capitalism cannot do without
it.' (P349)
Overall, this is a fascinating book. I have to admit that I found the first few sections of Marxist
economics hard going, not having any background in the subject, but once equipped with the basic
concepts involved, the analyses presented in the later sections were powerful and persuasive.
Hans G. Despain
Unique and Stimulating Account of the Great Financial Recession of 2008
June 6, 2012
This book can be highly recommended as a book on the Great Financial Crisis of 2008, and
a book of politics, political economy, class analysis, sociology, and history. Very impressive
accomplishment.
The strength of this book on the Great Financial Crisis of 2008 is that Dumenil and Levy
place the crisis in a larger historical perspective. They maintain it is a mistake to isolate
it merely in the context of the financial innovation and deregulation occurring from the late
1990s. Instead, capitalism has particular historical tendencies and specific class relations.
This is a very impressive volume published by Harvard University Press. It offers a play
by play of the Great Financial Recession of 2008, beginning from 2000 in chapters 12 - 17, the
political response and the continued stagnation in domestic economies and instability within
the international economic order in chapters 18 - 20, along with very interesting historical
policy observations and recommendations for this current crisis in chapters 21 - 25. Nonetheless
the real power of this book occurs in its historical analysis of capitalist development since
1970s described in great detail in chapters 1 - 11.
According to Dumenil and Levy the historical tendencies of capitalism
are radically mediated by politics and social class configurations (i.e. alliances).
They argue capitalistic development, since 1880s, has gone through four primary stages and corresponding
crises. They emphasize these developments are not historically necessary, but contingent on
politics and social class configurations. Moreover, their analysis is particular to the capitalistic
development in the United States and Western Europe, they are able to generalize or internationalize
their analysis because of the U.S. global hegemony (although they certainly accept there are
modes of resisting this hegemony (e.g. Iran, Venezuela, Cuba, China, etc.).
Dumenil and Levy have demonstrated in previous work the tendency of the rate of profit to
fall in capitalistic economies. However, because politics and social class alliances can
change, so can the profitability. The current crisis was not caused by falling rates of profits,
but by financial innovation, credit overextension, and the particular social class alliances
facilitating these activities. There is no single cause of the crisis, but broader social
political mechanisms at work and in the process of transformation.
The basic story goes like this: following the Great Depression of 1930
a strong social political alliance emerged between the management
class and "popular classes" (this popular class includes blue and white collar
workers, including quasi-management, clerical, and professional, which cannot be reduced to
the traditional "working-class"). In the 1970s there was a severe profitability crisis, the
legislative and institutional response to this crisis caused a fracture between management and
popular classes, and a re-alliance between management and capitalist
classes (which includes ownership and financial classes).
Once the alliance between capitalist classes and management had been forged in late 1970s
and 1980s, profitability returned and financial incentives and financial innovation reconfigured
personal incentives and corporate motivations. Most important according to Dumenil and Levy
is that these historical transformations manifested a "divorce" between ownership/finance and
the domestic economy and its actual production process. The political system did nothing to
reconcile this disconnect, indeed expedited the divorce via deregulation and financial innovation,
what the economic literature calls "financialization" (although, to repeat in several countries
the response was radically different and in specific opposition to U.S. hegemony and the neo-liberalism
which the U.S. Treasury, IMF, World Bank, and WTO exported to the rest of the world).
[Jun 06, 2013]
A Brief History
of Neoliberalism by David Harvey
R. Albin (Ann Arbor, Michigan United States) February 4, 2012
A good way to discuss this concise and clearly written book is to compare it with some recent
discussions of politics and economics in the USA, notably the analysis published by the political
scientists Paul Pierson and Jacob Hacker in their book Winner Take All Politics. Pierson
and Hacker point to the increasing concentration of wealth and political power in the USA, the
decline in social mobility, the impressive ability of the very wealthy to influence Congress
and elections, and how these phenomena have arisen over the past generation. Readers interested
in a concise discussion of their conclusions can easily find a nice review article by Hacker
and Pierson using Google Scholar or similar search services. Other recent relevant issues include
the decline in American manufacturing, the increasing role of the financial services sector,
and the dangerous economic fluctuations introduced by a global and relatively unregulated financial
system. Harvey, however, identified and discussed all these themes insightfully several years
ago.
Beyond his prescience, Harvey's particular contributions are three-fold.
- First, he is particularly interested in the relationship between these phenomena and
the ideology of neoliberalism. Harvey defines that latter as the idea that markets and private
property rights are both essential to human freedom and the best method of public policy.
As he points out, the neoliberal era is defined not only by withdrawal of state intervention
in markets but also by state creation of markets in areas where they did not previously
exist. Once the state creates such markets, the state maintains a hands off posture. Harvey
contrasts neoliberalism with what he called "embedded liberalism," the mixed economies of
post-WWII European social democracy (whose policies often implemented by right of center
parties) and New Deal Liberalism and its successors in the USA. The economic and political
corollary of neoliberalism is increasing concentration of economic and political power;
essentially the justification of an upper class assertion of power with the consequences
of enriching and empowering the most wealthy and impoverishing others by the reduction of
social services that benefit the poor and middle class. In true and insightful Marxian fashion,
neoliberalism is the ideological superstructure and figleaf of class conflict.
- Harvey's second interesting contribution, at least for American readers, is his attention
to international aspects of neoliberalism. This discussion has two dimensions.
- The first is a discussion of neoliberal implementation in other advanced capitalist
countries, notably Harvey's native Britain, where events parallel much that has been
observed in the USA. Harvey also has good discussion of often destructive neoliberal
policies in the global financial system and economy carried out by institutions such
as the World Bank, the IMF, the WTO, and major banks. Its fair to say that Harvey's
critique is matched by that of individuals who are definitely not Marxists in orientation
such as Joseph Stiglitz.
- Harvey also has an interesting discussion of neoliberalism in relationship to China.
Harvey points out that neoliberal international policies considerably facilitated
the ability of the state led (which some astute commentators term Market Leninism) growth
of the Chinese economy to become a major economic power. Harvey points out that
this somewhat ironic phenomenon is accompanied by the development within China of a
powerful capitalist class deeply embedded in Communist Party that has many of the features
of a neoliberal elite.
- Harvey is also quite interesting on the relationship between neoliberalism and other
ideologies. The emphasis on possessive individualism and what some call economism (eg, Margaret
Thatcher's famous statement that there is no such thing as society) tends to promote worrisome
social conflict. The result is upper class promotion of somewhat authoritarian ideologies
to maintain social peace. Harvey argues that various strains of neoconservatism are a manifestation
of this phenomenon. Neoliberalism and libertarianism, whose adherents claim promote
human freedom, ironically tends to promote authoritarianism.
Harvey also points to many of the other contradictions of neoliberalism. It is often
a license for the wealthy to exploit political systems in ways that undercut its central claims.
Claims that it would produce an era of enormous economic growth with a rising tide raising all
boats proved groundless. Regimes purportedly espousing neoliberalism, such as the Bush
II era USA, indulged in disguised and incompetently applied Keynesianism. Despite scientistic
claims to be based on basic features of economics, neoliberalism often ignores basic findings
of economic research.
Defects of Harvey's analysis
Defects of Harvey's analysis include a bit of overemphasis on what might be called the conspiratorial
aspects of his class based analysis. Harvey also omits an important criticism of neoliberalism
- its failure to recognize the sources of long term economic growth. The latter depends on technological
innovation and implementation of new and improved technologies.
Two and a half centuries after the start of the Industrial Revolution, the low hanging fruit
has long been harvested and further technological change depends on substantial state investment
in research, including considerable investment in development and industrial policies, and a
large and well educated work force.
These preconditions for sustained growth aren't and probably will never be generated by neoliberal
regimes.
Izaak VanGaalen
A Critical Look at the Post-Keynesian Era
The term neoliberalism is usually heard in the pejorative sense, often coming from Latin
American leaders such as Hugo Chavez and Evo Morales. The term refers to an international economic
policy that has been predominant in policy-making circles and university economics departments
since the 1970's. The four faces on the cover of this book (Reagan, Deng, Pinochet, and Thatcher)
are considered by David Harvey the primemovers of this economic philosophy. Reagnomics, Thatcherism,
Deng's capitalism with Chinese characteristics, and Pinochet's free market policies marked the
beginning of new era of global capitalism.
Neoliberlism as a philosophy holds that free markets, free trade, and the free flow of capital
is the most efficient way to produce the greatest social, political, and economic good. It argues
for reduced taxation, reduced regulation, and minimal government involvement in the economy.
This includes the privitization of health and retirement benefits, the dismantling of trade
unions, and the general opening up of the economy to foreign competition. Supporters of neoliberlism
present this as an ideal system. Detractors, such as Harvey, see it as a power grab by economic
elites and a race to the bottom for the rest.
In this short, but very well researched book, Harvey charts the capital flows of the last
thiry years. In the 1970's, there was the breakdown of the Bretton Woods system, with its fixed
exchange rates, tariff barriers, and capital controls. It gave way to floating currencies and
high trading volumes. Capital started searching the globe for comparative advantage. Proponents
claimed that this routed out corruption and inefficiencies, while opponents saw instability
and exploitation. Indeed, Harvey produces ample statistics showing how the rich got richer and
the poor stagnated. More surprisingly, he points out that the aggregate economic growth during
the years of Keynesian management (the decades between World War II and the 1970's) was greater
than during the neoliberal era (the 1970's to the present). The neoliberal era benefitted mainly
the wealthy. In the US, the richest 1% now control 15% of the wealth as opposed to 8% at the
end of World War II.
When Reagan and Thatcher came to power in the late 1970's and early 1980's they used their
control of the IMF and World Bank to impose neoliberal policies on the developing world - especially
Latin American countries. In the case of Chile, Pinochet - after violently ousting the Allende
government - instituted free market policies as prescribed by the Chicago school, and was relatively
successful. Other Latin American countries were not so successful, and it created a backlash
of populist nationalisms in the form of Hugo Chavez in Venezuela and Evo Morales in Bolivia.
The section on China is one of the best in the book: "Neoliberalism with Chinese Characteristics".
Harvey points out that China is not a pure neoliberal state. There is still heavy state
intervention in the economy and management of the currency. And as a further criticism of neoliberalism,
he reminds us that China has produced some of the highest growth rates - 9 to 10 percent annually.
On the downside, the gap between the rich and poor is growing, and because their currency is
held artificially low they are building dangerous overcapacity.
Neither does the US, for that matter, operate according to neoliberal principles. Even as
it is urging other countries to maintain minimal government and balanced budgets, it is running
huge deficits and issuing ever more t-bills to cover its excess spending.
With China and the US - two linchpins in the world economy - not playing according to the
rules of the game a crisis is bound to happen. One country is totally geared toward producing
and exporting, while the other is content with importing, consuming, and creating more debt.
Harvey believes that the global economic readjustment that is going to take place will be painful
and possibly violent.
Harvey's excellent little book illustrates, once again, that the perfect market, presupposed
by neoliberalism and classical liberalism, does not exist. Unfortunately, he does not offer
any remedies to rectify the current situation, nor does he offer an alternative system. Nevertheless,
this book is very insightful.
Malvin
Deconstructing neoliberalism's peculiar definition of 'freedom' September 28, 2006
A Brief History of Neoliberalism" by David Harvey is a concise and razor-sharp deconstruction
of the neoliberal movement. Mr. Harvey convincingly demonstrates that neoliberalism is an ideology
that has been wielded to enshrine elite privilege at the expense of people and the environment.
Assiduously researched and cogently argued, Mr. Harvey offers a jargon-free and readable text
that helps readers gain a greater understanding about the political economy of our neoliberal
world and what this might hold for us in the future.
Mr. Harvey explains that neoliberal propaganda has succeeded in fixating the public on
a peculiar definition of 'freedom' that has served to conceal a project of upper class wealth
accumulation. In practice, the neoliberal state assumes a protective role for capital while
it sheds as much responsibility for the citizenry as possible. Mr. Harvey details how neoliberal
theory is ignored whenever it comes time to bail out corporate interests from bad decision making
while the safety net for the working class has been gradually eviscerated. The author effectively
intersperses the text with graphs to illustrate how thirty years of neoliberalist policies has
resulted in rising inequality, slower economic growth, higher incomes among the upper class,
and other measures that serve to convincingly support and prove his thesis.
Mr. Harvey's history of how neoliberalism has gained ascendancy mostly treads through familiar
ground but also highlights some key events that are sometimes overlooked by others. For example,
Mr. Harvey relates the well-known stories of how the Chilean coup in 1973 opened the door for
Augusto Pinochet to implement the first national experiment in neoliberalism, followed by Margaret
Thatcher in Great Britain in 1979 and Ronald Reagan in the U.S. in 1980.
However, we also gain greater appreciation about the importance of the New York City bankruptcy
in the 1970s. We learn how the city's financial crisis allowed for the imposition of neoliberal
reforms in a manner that would prove to be a familiar template around the world:
- the rollback of labor rights,
- the privatization of public assets,
- cuts in public services,
- increased policing, surveillance and political repression of a markedly polarized population.
Mr. Harvey surveys neoliberalism around the world to discover connections and to analyze
its effects. He finds that the U.S. economy has benefited immensely from its ability to extract
tribute from other nations, including the U.S. financial community's probable engineering of
crises in developing nations in order to scoop up devalued assets on the cheap.
The author discusses how economic restructuring programs imposed on poor countries has benefited
U.S. and other foreign investors while it has bolstered or created a small but powerful class
of wealthy individuals in Mexico, South Korea, Sweden and elsewhere. In China, Mr. Harvey remarks
about the ease with which neoliberalism has found a home in an authoritarian state where the
political elite have amassed their fortunes by exploiting a defenseless working class. The author
is particularly concerned about the symbiotic relationship that has developed between the U.S.
and China and muses about the potentially catastrophic financial situation that the two countries'
mounting debts might pose for each other and the world economy.
In the final chapter, Mr. Harvey writes passionately about the need to continue building
diverse democracy movements within the U.S. that are dedicated to social and economic justice.
Although it is true that Mr. Harvey does not detail precisely what must be done, his thorough
dissection of neoliberal ideology empowers us to effectively challenge those who hide behind
false rhetorical devices in service to privilege. And for that, we should be grateful.
I give this outstanding book the highest possible rating and strongly recommend it to all.
E. David Swan
Freedom for some, crumbs for others February 19, 2007
On the first anniversary of 9/11 President Bush made a speech saying, `Freedom is the Almighty's
gift to every man and woman in this world... as the greatest power on earth we have an obligation
to help the spread of freedom.' Spreading freedom is the primary function of neoliberalization
but as George Lakoff stated in `Whose Freedom?' freedom can be a very subjective term.
The freedom of neoliberalism is the glory of unfettered, free market economics and the
rights of corporations and financial institutions over individuals and governments. It's the
freedom to fully exploit resources and workers.
From its founding America's wealthy have feared democracy recognizing that the majority,
being poor and middle class, could vote to redistribute wealth and reduce the control held by
the elites. After World War II, the middle class in the United States grew dramatically somewhat
flattening the countries power base. As a reaction to this dispersal of power the early 1970's
saw the formation of groups like The Business Roundtable, an organization of CEO's who were
`committed to an aggressive pursuit of political power for the corporation'.
As the author writes, `neoliberalization was from the very beginning a project to achieve
the restoration of class power'. The neoliberal plan was to dissolve all forms of social solidarity
in favor of individualism, private property, personal responsibility and family values. It fell
on well funded think tanks like The Heritage Foundation to sell neoliberalism to the general
public using political-philosophical arguments.
At the same time a group of economists were working on economic theories that developed into
the `Washington Consensus'. These followers of Hayek and Friedman just happened to create economic
blueprints for growth that matched up exactly with the goals of the wealthy business elites.
The plans were based on the superiority of the marketplace in making wise decisions but also
assumed perfect information and a level playing field for competition. As the author writes,
`...eminent economic theorists [...] argue that all would be well with the world if only everyone
behaved according to the precepts of their textbooks' The neoliberal economists have become
so focused on growth that they seem to take a decidedly amoral approach to human suffering.
Above all countries needed to focus on privatization and low taxes and definitely avoid deficit
spending. What has happened is a widening of the gap between the wealthy and poor. The author
suggests that rather than an unfortunate byproduct of neoliberalism or a temporary situation
this is the intended result.
The great irony is that the U.S., the world's number one proponent of neoliberalism, generally
finds itself breaking the rules. With high deficit spending and massive subsidizing particularly
in consumerism and defense spending the United States has generally taken a `do as I say, not
as I do' stance. With the amount of political appointee/lobbyists shuttling back and forth
between business and government Adam Smith's `Invisible Hand' looks more and more like a crushing
fist.
This was not the book I expected. This is a devastating critique of neoliberalism. I didn't
agree with everything the author wrote and there are most definitely many positives that have
come from globalization but the corporatization of the world has the potential to by an enormous
threat. Global Warming has to be the poster child for neoliberal extremism with short term economic
growth trumping the welfare of the entire world. David Harvey has a decidedly liberal stance
but he backs up his views with sobering facts. Despite being a book on economics I found it
extremely readable and recommend it wholeheartedly.
Published on June 15, 2006 by
Interesting argument, but evidence too wobby to be persuasive This book makes a provocative
argument: that the goal of neoliberal theory and practice is to restore wealth and power
to a ruling elite.
Unfortunately, I don't think it presents a strong enough case. It has a lot of footnotes
and a long bibliography, but (i) many footnotes refer to an entire book, without any indication
of where the fact can be found, (ii) many of the... Read the full review
Neoliberalism: A Very Short Introduction Neoliberalism: A Very Short Introduction by Manfred B. Steger
(Paperback - February 8, 2010) 4.7 out of 5 stars (3)
Buy new: $11.95 $9.50 In Stock
Prime
Diziet
Aux armes, citoyens! August 8, 2011
Colin Crouch's analysis of the continuing dominance of neoliberalism starts with a definition
and history of his terms, showing how the word 'liberal' in particular has gone through some
almost total reversals since the repeal of the Corn Laws. The ascendency of 'neo-liberalism',
however, began in the 1980s, after the perceived failure of Keynsian economics.The original
'Hayekian'
or 'Ordoliberalismus' anti-totalitarian formulation whereby competition is seen as 'a process
that would maintain in existence large numbers of firms, near-perfect markets and widespread
consumer choice' was replaced by the Chicago School's view that competition should be seen in
terms of its 'outcome' as the destruction of small firms and medium-sized enterprises, the dominance
of giant corporations and the replacement of the demotic idea of consumer choice by a paternalistic
concern for 'consumer welfare' (P16-17)
This concept of 'consumer welfare' is crucial. Unlike Hayek, this formulation accepts, even
welcomes, the idea that competition will eliminate competition:
'If there would be efficiency gains from a number of smaller firms being bought out by a
larger one, then that would be the outcome that would maximise what they called consumer 'welfare',
even if it led to reduced competition and left consumers with a reduced choice of goods. What
should therefore be the concern of the law courts in deciding antitrust cases is what outcome
would be most conducive to the maximisation of consumer 'welfare', not 'choice' as such.' (P55)
By 'welfare', the Chicago economists considered the overall wealth of the society. The fact
that the wealth may become increasingly concentrated in the hands of a small and diminishing
number of transnational corporations (or TNCs) and a stateless elite is neither here nor there.
Any redistribution of wealth should be undertaken by governments and is not the concern of the
corporation.
But then, the Chicago school has a major problem with the idea of government. Here, their
ideas fit neatly in with those of the University of Virginia. The Virginia school considers
that civil servants, politicians et al, are there purely for self-advancement - as portrayed
in Margaret Thatcher's favourite sitcom 'Yes
Minister' where the Machiavellian machinations of Sir Humphrey had little to do with the
promotion of societal good. Governments are seen as 'at best incompetent and at worst corruptly
self-seeking' (P63).
The only way to ensure any efficiency and effectiveness in government is to apply the rules
of the market. In other words, governments should act like, and learn from, firms. Thus we have
the endless setting of targets, the breakup of government agencies into competing bodies and,
most importantly, the inclusion of firms in the running of government in Public Private Partnerships
(PPP), Private Finance Initiatives et al in almost an odd sort of reversal of mercantilism.
What develops from all this is a tripartite division - firms (TNCs), national governments
and, surprisingly perhaps, the market. Here, 'the market' really refers to small and medium
sized enterprises (or SMEs). It is perhaps interesting to compare this with
Dani Rodrik's 'trilemma' where power is negotiated between the 'nation state', 'democratic
politics' and 'hyperglobalization' - here 'hyperglobalization' more or less equates with the
TNCs while the 'nation state' and 'democratic politics' conflate into national government, but
the market is not really considered. I find Colin Crouch's model more convincing.
Although Crouch doesn't use the term kleptocracy, he does refer to oligopolies. Quite frankly,
in the case of international banking in paricular, the difference is only one of degree. The
virtual merger of politics and corporations, particularly in the US, is plain to see. The revolving
door between government agencies, lobbying organisations and the corporations is notorious (see
Thomas Frank's excellent 'The
Wrecking Crew') but, at the same time, corporations consider themselves to be only responsible
to their shareholders - the maximisation of shareholder value is considered to be management's
sole aim, even though they are increasingly intimately involved in the legislative process.
It is odd, then, to see the rise of Corporate Social Responsibility (CSR). More often than
not, of course, this is simply just a marketing tool. Crouch puts it nicely in the heading of
chapter 6 - 'From Corporate Political Entanglement to Corporate Social Responsibility'. Political
power has become increasingly concentrated in firms, or governments acting like firms or firms
working for/with governments. This is hardly surprising. As Crouch says:
'a polity in which economic resources were very unequally shared would be likely to be one
in which political power was also concentrated, economic resources being so easily capable of
conversion into political ones.' (P125)
Later, he seems to echo Peter Oborne's 'The Triumph of the Political Class':
'...the state, seen for so long by the left as the source of countervailing power against
markets, is today likely to be the committed ally of giant corporations, whatever the ideological
origins of the parties governing the state.' (P145)
It seems that CSR has, then, almost taken the role of what the French aristocracy used to
refer to as 'noblesse oblige' (P150). But, suggests Crouch, the growing CSR movement might be
seen as a reaction to pressure from a fourth element outside the 'firms, state and market' -
'civil society':
'Civil society includes, though extends further than, the voluntary sector. It defines all
those extensions of the scope of human action beyond the private that lack recourse to the primary
contemporary means of exercising power: the state and the firm...States and firms do dominate
our societies, but there is a lively field of contention. Challenges to domination can be made,
concepts of public goals explored and turned into practical projects, against the state's claim
to monopoly of the legitimate interpretation of collective values, and against the firm's claim
that the conversion of values into the maximisation of shareholders' interests is as good as
life can get.' (P153-4)
Crouch considers that there are potentially five types of groups that may challenge the state
and the firm. Most of these are pretty well compromised, he feels, and I would agree. Political
parties (see Peter Oborne) and most organised religions - both seem unlikely contestants. Whether
campaigning groups, the voluntary sector and ethically motivated professionals can make the
difference and wield the 'power of the powerless' is finally what this book is about. Where
Dani Rodrik calls for a 'reining in', a deliberate limitation to 'hyperglobalization' in order
for nation states to again exert a moderating influence, Crouch sees the nation state as hopelessly
compromised and the only moderating and humanising influence coming from civil society:
'Civil society...operates in the interstices left among the great erections of political
and economic power, like little houses springing up busily and untidily, creating vitality in
a street dominated by the inaccessible security-controlled doors of skyscrapers. Since it contains
a vast array of competing groups, with different and sometimes opposed moral agendas, it also
embodies a kind of moral relativism. But this is moral relativism only at the meta-level of
the character of the system as a whole. Within it the great majority of participants act with
moral purpose. In societies that contain a plurality of rival values, where no religion or set
of beliefs has hegemony, that is all we can hope for.' (P161)
The question is, is it enough? Is this anything more than a 'post-modern relativist politics'
or a restatement of 'pressure group politics'? I'm not convinced - but the ideas just might
help fuel resistance to the neoliberal monolith. Thank-you Professor Crouch. :-)
RACKETS AND REVOLUTIONS October 31, 2011
DAVID BRYSON
TOP 1000 REVIEWER
The general public, such as myself, need to understand economics these days, supposing we
didn't before. This book is the right kind of adult reading. It explains, with severe and unflagging
concentration but without jargon or statistics, the economic theories that have dominated the
last 80 years. Professor Crouch sees neoliberalism as having stepped into the vacant space left
after the inflationary excesses of the 70's were taken as a sign that the generally Keynesian
consensus that had dominated `western' economies since the 30's was played out. I think he should
have gone one step further and made a point that would fit his later argument perfectly, namely
that the reaction was not so much against Keynesian theory as against the behaviour of the working
classes whom Keynesian demand management and deficit spending had empowered. They had created
wage-push inflation, so here was the opportunity to push back and reduce them to the statistics
that is all they constitute in market-forces economics of various varieties.
Crouch is repelled by this mentality and so am I, but he has written no kind of tract or
political pamphlet. He issues no simplistic demands to change the system or even to reform it
drastically, because however repellent it is not nonsense. There is strong economic argument
underpinning it, and Crouch states in so many words that the Chicago economic theory at least
describes the present-day economy. However it is masquerading as being some triumph of free
markets, and Crouch demonstrates powerfully that it is nothing of the sort. What has happened
behind the presentational sleight of hand is that the manipulation of the economy has reverted
into the hands of a few movers and shakers in the big corporations. It has largely obliterated
the kind of free market that Adam Smith and other such dreamers envisaged, and reduced `consumer
choice' to choice among such options as it has itself contrived through gaining a grip on legislatures
and controlling the terms of popular debate. The masquerade consists in the monstrous effrontery
of representing this oligarchical outcome as the result of untrammelled consumer choice. We
have got what we really asked for, apparently, it's just that we don't know it.
On the one hand this reduces individual consumers to statistics contained within aggregate
economic performance, on the other it places the control of the
economy in comparatively few hands; and that, I slightly suspect, may be neoliberalism's Achilles
heel. To me, it seems to follow from Crouch's arguments that while there are
some basic economic laws, such as supply and demand, that are more or less as immutable as gravity,
others depend on what people in general will accept. It is convenient
to depersonalise the behaviour of `money' or `capital' as if it moved itself without human intervention,
but they can only get away with this story if it represents some genuine mass activity.
Once it gets down to traceable individuals then sooner or later they can be traced. Technology
helped to create the problem by allowing money to move so quickly that the transactions are
done and dusted before anyone else realises, but technology can also now see into places that
were once beyond inspection, even if there is a time-lag before the scrutiny happens. Disclosure,
not by lumbering governments and regulators, but by the public at large, may yet be neoliberalism's
nemesis.
I rather wish that Crouch had separated his analysis more, putting manufacturers in one category
and the bankers and such like in another. There is surely a clear difference between firms that
produce genuine products, items that at least have a genuine cash price and value, and the manipulators
of `money' that is really no longer true money but a figment that gets progressively more fictional
as it gets wrapped in bundles containing goodness knows what supposed transactions, valued according
to what are literally bets on what the next punter, equally ignorant of what he is supposedly
buying, might be willing to pay. How this current display of human arrogance and folly may develop
obviously I have no idea, but it must be at least possible that if public outrage boils over
it will target the money barons most. Major manufacturers may have the US congress, for example,
eating out of their hands, but when the only financial reality is cash, something everyone knows
and something that no conceivable economic system can change, then the spectacle of this or
that finance house playing tricks it may not even itself understand in order to pile up phantom
finances, thereby putting real people's real finances in peril, may just come to seem a racket
too far. It takes me back to school history classes when we were required to identify the `causes
of the French Revolution'. The causes could be summarised as one
basic cause, namely that the oligarchy pushed their arrogance and presumption too far.
Obviously an international money market is a different kind of target, and any putative
onslaught on it would take different forms, but if the balloon goes up one thing for certain
is that academic niceties, such as supposed inevitable rightness as markets work out their own
impersonal logic, will be sidelined for the time being.
The international aspect is giving the whole show a breathing space, allowing, for one thing,
outrageous remuneration to be given to banking executives on specious grounds of international
comparability. That particular bluff will surely be called sooner or later, but in general Crouch's
handwringing at the way in which the money miscreants are getting away with it is a little misplaced.
It can't all be stopped in its tracks, but he should not have fallen for the simple error of
feeling he has to provide alternatives. These are bound to be easy prey for critics. The real
value of this important book is in the earlier chapters; and the answer to any supporter of
the status quo who said `You have to provide an alternative' should have been `No, you'.
Society
Groupthink :
Two Party System
as Polyarchy :
Corruption of Regulators :
Bureaucracies :
Understanding Micromanagers
and Control Freaks : Toxic Managers :
Harvard Mafia :
Diplomatic Communication
: Surviving a Bad Performance
Review : Insufficient Retirement Funds as
Immanent Problem of Neoliberal Regime : PseudoScience :
Who Rules America :
Neoliberalism
: The Iron
Law of Oligarchy :
Libertarian Philosophy
Quotes
War and Peace
: Skeptical
Finance : John
Kenneth Galbraith :Talleyrand :
Oscar Wilde :
Otto Von Bismarck :
Keynes :
George Carlin :
Skeptics :
Propaganda : SE
quotes : Language Design and Programming Quotes :
Random IT-related quotes :
Somerset Maugham :
Marcus Aurelius :
Kurt Vonnegut :
Eric Hoffer :
Winston Churchill :
Napoleon Bonaparte :
Ambrose Bierce :
Bernard Shaw :
Mark Twain Quotes
Bulletin:
Vol 25, No.12 (December, 2013) Rational Fools vs. Efficient Crooks The efficient
markets hypothesis :
Political Skeptic Bulletin, 2013 :
Unemployment Bulletin, 2010 :
Vol 23, No.10
(October, 2011) An observation about corporate security departments :
Slightly Skeptical Euromaydan Chronicles, June 2014 :
Greenspan legacy bulletin, 2008 :
Vol 25, No.10 (October, 2013) Cryptolocker Trojan
(Win32/Crilock.A) :
Vol 25, No.08 (August, 2013) Cloud providers
as intelligence collection hubs :
Financial Humor Bulletin, 2010 :
Inequality Bulletin, 2009 :
Financial Humor Bulletin, 2008 :
Copyleft Problems
Bulletin, 2004 :
Financial Humor Bulletin, 2011 :
Energy Bulletin, 2010 :
Malware Protection Bulletin, 2010 : Vol 26,
No.1 (January, 2013) Object-Oriented Cult :
Political Skeptic Bulletin, 2011 :
Vol 23, No.11 (November, 2011) Softpanorama classification
of sysadmin horror stories : Vol 25, No.05
(May, 2013) Corporate bullshit as a communication method :
Vol 25, No.06 (June, 2013) A Note on the Relationship of Brooks Law and Conway Law
History:
Fifty glorious years (1950-2000):
the triumph of the US computer engineering :
Donald Knuth : TAoCP
and its Influence of Computer Science : Richard Stallman
: Linus Torvalds :
Larry Wall :
John K. Ousterhout :
CTSS : Multix OS Unix
History : Unix shell history :
VI editor :
History of pipes concept :
Solaris : MS DOS
: Programming Languages History :
PL/1 : Simula 67 :
C :
History of GCC development :
Scripting Languages :
Perl history :
OS History : Mail :
DNS : SSH
: CPU Instruction Sets :
SPARC systems 1987-2006 :
Norton Commander :
Norton Utilities :
Norton Ghost :
Frontpage history :
Malware Defense History :
GNU Screen :
OSS early history
Classic books:
The Peter
Principle : Parkinson
Law : 1984 :
The Mythical Man-Month :
How to Solve It by George Polya :
The Art of Computer Programming :
The Elements of Programming Style :
The Unix Hater’s Handbook :
The Jargon file :
The True Believer :
Programming Pearls :
The Good Soldier Svejk :
The Power Elite
Most popular humor pages:
Manifest of the Softpanorama IT Slacker Society :
Ten Commandments
of the IT Slackers Society : Computer Humor Collection
: BSD Logo Story :
The Cuckoo's Egg :
IT Slang : C++ Humor
: ARE YOU A BBS ADDICT? :
The Perl Purity Test :
Object oriented programmers of all nations
: Financial Humor :
Financial Humor Bulletin,
2008 : Financial
Humor Bulletin, 2010 : The Most Comprehensive Collection of Editor-related
Humor : Programming Language Humor :
Goldman Sachs related humor :
Greenspan humor : C Humor :
Scripting Humor :
Real Programmers Humor :
Web Humor : GPL-related Humor
: OFM Humor :
Politically Incorrect Humor :
IDS Humor :
"Linux Sucks" Humor : Russian
Musical Humor : Best Russian Programmer
Humor : Microsoft plans to buy Catholic Church
: Richard Stallman Related Humor :
Admin Humor : Perl-related
Humor : Linus Torvalds Related
humor : PseudoScience Related Humor :
Networking Humor :
Shell Humor :
Financial Humor Bulletin,
2011 : Financial
Humor Bulletin, 2012 :
Financial Humor Bulletin,
2013 : Java Humor : Software
Engineering Humor : Sun Solaris Related Humor :
Education Humor : IBM
Humor : Assembler-related Humor :
VIM Humor : Computer
Viruses Humor : Bright tomorrow is rescheduled
to a day after tomorrow : Classic Computer
Humor
The Last but not Least Technology is dominated by
two types of people: those who understand what they do not manage and those who manage what they do not understand ~Archibald Putt.
Ph.D
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Last modified:
September, 23, 2014