A (Slightly Longer) History Of Neoliberalism

David Harvey’s book A Brief History Of Neoliberalism is the modern classic Marxist mid-range study of the emergence of neoliberalism as an attempt to reconsolidate class power lost after the brief WWII period of Keynesian embedded liberalism and progressive social democracy. The following is offered as a attempt to fill in the gaps that Harvey omits, critique a few elements of his work and provide notes on other fascinating literature in this field.

As a mid-range work it suffers from omissions of certainly complexities, as well as detailed studies of the development of local ‘actually existing neoliberalisms’ as is becoming increasingly common in the literature and is utterly necessary in describing how local populations were and were not able to resist changed[1]. The books deficiencies are ably described in Philip Mirowski’s fair but critical review[2], which I will sumarise and supplement.

Firstly, Harvey makes the same mistake as numerous others in over indentifying neoliberalism with neoclassical economics; where the neo in neoliberalism signals their adherence to the advances in economic theory proposed (for Harvey) by Alfred Marshall and his peers (p. 20-21). Though it is the case that neoclassical economics forms a component of the neoliberal ideological arsenal, providing advanced economic models and ‘scientific’ justifications of the efficiency of neoliberal policy (which as mathematiced ‘science’ are thus incontestable) in certain contexts[3], this neglects the interdisciplinary nature of the neoliberal project, that encompassed multiple and sometimes contradictory forms of economics as well as discourses regarding politics and law and, indeed, religion, with considerable disagreement within the intellectual vanguard, making it difficult to point to a single and pristine moment of genesis, as Jamie Peck has noted[4]. For example, neoliberalism drew economics from both the scientifically inclined Chicago School of Economics and Law, whose scientific methodological inclinations towards Popperian style ‘falsifiablility’[5] can be evidenced in Friedman’s much discussed paper ‘The Methodology of Positive Economics’[6]. Yet neoliberalism simultaneously made use of arguments from the anti-scientific and anti-positivistic Austrian economics. Austrian economics, from their founder Carl Menger onwards, was a priori allergic to empirical verification of its principles and, indeed, this was the subject of the 19^th century methodenstreit between Austrian and German Historical economists. This is an attitude evidenced in Hayek’s book The Counter-revolution of science[7], which emphases the limits of scientific discovery and found also in the sometimes theologically utilised work of Michael Polanyi, who stressed the importance of ‘tacit knowledge’ that is empirically untestable yet grounds all forms of knowledge[8]. In the latter case, ‘scientific’ economics seemed far too close to the ‘scientific socialism’ of Marxism that Hayek and Von Mises had faced down in the socialist calculation debates of Red Vienna[9].

Secondly, there is the interdisciplinary nature of the neoliberal project. It is not so much than in the 1970s business leaders flailed about for a new justification for their own power, but as I have already noted, that neoliberals had been simply waiting for the crisis of capital accumulation at this time to present their arguments in a politically expedient form. Neoliberalism has it roots futher back and a peculiar method of informing others of its ideas. The Mont Pelerin Society, a semi-secret debating society established in 1947 to consider the futures of liberalism represents a central hub from which neoliberal think tanks, policy institutes and university departments were formed in order to seed neoliberal ideas throughout society and set the terms of important debates.

Finally, Harvey’s claim that the various student led European insurrections in the late 1960s, eulogised under the banner of 1968, with their emphasis on personal freedom too some extent played all too well into the hands of the neoliberals with their similar concerns, and set the cultural ground for their similarly ‘pro-freedom’ rhetoric (p 41-44). This is an analysis repeated and radicalised by Phillip Blond, where a ‘secret alliance’ between Left and libertarian Right, where both emphasied freedom, lead to the dissolution of civil society as such and that “in the post-1968 embrace of the individual it became thoroughly libertarian way before Mrs Thatcher. The new Left thus created the conditions for Thatcherite economics, through which the Right also betrayed society”. Outside the academy and from a pro-neoliberal perspective, this is also the clear agenda of France’s president Nicholas Sarkozy to ‘liquidate the legacy of 1968’, rallying his troops around the slogan ”I want to turn the page on May 1968”[10]. For Sarkozy, 1968 ushered in a form of pernicious relativism. The analysis, that 1968 was a turn for the worse, or played into the hands of the system it attempted to critique, is neither original nor true. Régis Debray on the tenth anniversary of the uprising claimed that ’68 had provided the conditions for a new mode of decadent American capitalism, “the cradle of a new bourgeois society”[11]. Luc Ferry and Alain Renaut wrote in 1985 La pensée 68[12], claiming the origin of all manner of (supposedly) horrifying anti-humanisms as a result of 1968 on shaky historical grounds[13]. In the first instance, freedom as a definite neoliberal object for some time, but it was a particular form of freedom specifically opposed by the 1968 protesters, maximisation of rational self-interest recommended by capitalism, though Harvey does acknowledge this to some extent. The split alluded to by Harvey, between the Communist Party and the student protesters, was not one between those concerned with issues of solidarity and social justice on one hand, and those emphasing personal freedom on the other. Rather it was a split between those who had links to the Stalinistic manoeuvres of the PCF and the unions that they controlled (who later colluded with the de Gaulle regime in restoring order), who were still at this point aligned with Soviet state socialism, and the libertarian socialist and anarchist groups who opposed this oppressive bureaucratic faux socialism. Indeed, Harvey’s argument here fails to recognise the unprecedented alliances between workers and student and even radical religious groups before and during 1968 that were established precisely along principles of social justice and solidarity: the workers councils, the factory occupations, the general strike, the call for direct democracy and non-hierarchy, all tended towards a struggle towards autonomous power outside the usual politics of statehood recommended by orthodox Marxist-Leninism but centred on a call for justice as primary, and a justice opposed to market conceptions of such. As one slogan would have it “Power to the workers councils. (an enragé)”, to which the reply was “Power to the enragés councils (a worker)”. Even if it is the case that the ‘postmodern’ turn in French philosophy are all the descendents of 1968, it is hardly the case that any of them emphased individualism. For example, when Foucault declared the death of man at the conclusion of the Order of Things it was not a call for individualism, but rather the idea that the liberal as such was a fiction.

Despite these problems, for an outline of the growth of neoliberalism, and in particular the neoliberal reformation of the Chinese economy, Harvey’s work is indispensable.

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[1] Harvey’s book does mention the internal structural re-adjustment of New York, which has been the subject of a number of studies. See (2002, December). Spaces of Neoliberalism: Urban Restructuring in North America and Western Europe (Antipode Book Series). WileyBlackwell, Chase, J. (2002, April). The Spaces of Neoliberalism: Land, Place and Family in Latin America. Kumarian Press.Moody, K. (2007, May). From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present. The New Press., Hackworth, J. (2006, November). The Neoliberal City: Governance, Ideology, and Development in American Urbanism (illustrated edition ed.). Cornell University Press. Fitch, R. (1996, February). Assassination of New York. Verso., Roberts, K. M., P. Oxhorn, and J. Burdick (2009, February). Beyond Neoliberalism in Latin America?: Societies and Politics at the Crossroads (Studies of the Americas). Palgrave Macmillan.

[2] Mirowski, Philip. “Review of David Harvey a Brief History of Neoliberalism.” Economics and Philosophy 24, no. 1 (2008): 111-17. Philip Mirowski’s on excellent contribution to the debate Mirowski, P. (2009, June). The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective. Harvard University Press.

[3] In particular, Chicago School economists were central to the neoliberal restructuring of the Chilean economy under Pinochet. For an account of this see Valdes, J. G. (2008, June). Pinochet’s Economists: The Chicago School of Economics in Chile. Cambridge University Press.. For a popular level but affective personal account see Perkins, J. (2005, December). Confessions of an Economic Hit Man. Plume.

[4] Peck, Jamie. “Remaking Laissez-Faire.” Progress In Human Geography 31, no. 1 (2008): 3-43.

[5] Whether or not Friedman’s methodological pronouncements were directly influenced by Popper, gained by ‘philosophical osmosis’ or, in fact, actually misunderstood Popper has been the subject of much debate. For a brief pro-Friedman summary see Boland, Laurence A. “Criticizing the Critiques of Friedman’s 1953 Essay.” In Critical Economic Methodology: a Personal Odyssey, 15-42. 1997., For an extended and more critical discussion of the impact of the paper see Mäki, Uskali, (ed.) The Methodology of Positive Economics. Cambridge: Cambridge University Press, 2009. The paper is doubtless the most read, cited and influential paper in 20^th century economic methodology.

[6] Friedman, Milton. “The Methodology of Positive Economics.” In Essays in Positive Economics, 3-46. London: University of Chicago Press, 1953..

[7] Hayek, F. A. (1980, June). The Counter Revolution of Science. Liberty Fund Inc.

[8] For this concept, see Polanyi, Michael. Personal Knowledge: Towards a Post-Critical Philosophy. Chicago: University of Chicago Press, 1974.  and Polanyi, Michael. The Tacit Dimension. Chicago: University Of Chicago Press, 2009. This is often incorporated theologically into an argument for the necessity of faith in all judgements as a form of apologia. See, for example Moleski S.J., Martin X. Personal Catholicism: the Theological Epistemologies of John Henry Newman and Michael Polanyi. Washington D.C.: The Catholic University of America Press, 2000. Michael Polanyi is the brother of the guild socialist Karl Polanyi.

[9] See Rod Hull’s incredibly interesting article Hull, R. The Great Lie: Markets, Freedom and Knowledge, pp. 141-155. in Plehwe, D., Bernhard, and G. Neunhöffer (2006, February). Neoliberal Hegemony: A Global Critique (1 ed.). Routledge.

[10] I owe much of the following analysis to Alberto Toscano’s internet article ‘Liquidate ‘68, or, the obscure subject of French politics’, http://www.re-public.gr/en/?p=230

[11] Debray, R. (1979). A modest contribution to the rites and ceremonies of the tenth anniversary. New Left Review 1 (115).

[12] Ferry, L. and A. Renaut. La Pensée 68 ([Nouv. éd.] ed.). Gallimard.

[13] For an excellent overview of recent reactionary responses to 1968 see Audier, S. (2008, March). La pensée anti-68 : Essai sur une restauration intellectuelle. Editions La Découverte., thoroughly reviewed at http://www.laviedesidees.fr/From-revolution-to-restoration.html by Samuel Moyn.