A Brief History Of Neoliberalism

A Brief History of Neoliberalism (2005) by British economic geographer and Marxist, David Harvey, is a history of neoliberalism as both a theory and a set of policies implemented around the world. Harvey traces the concept of neoliberalism beginning from its conception in the 1970s to its establishment as mainstream economic theory in the 1980s and through its entrenchment through the 1990s and early 2000s. Throughout, Harvey argues that neoliberalism’s stated goals—to provide freedom and prosperity globally—obscure its actual goal, the creation and/or consolidation of elite class power. A Brief History of Neoliberalism relies on a combination of intellectual history, economic statistics, and case studies to demonstrate how the financial and political crises of this 40-year time period are tied to this hegemonic economic theory.

This guide uses the 2007 paperback edition of A Brief History of Neoliberalism published by Oxford University Press.

Content Warning: This guide references the source text’s discussion of state-sponsored racism and anti-gay bias and discrimination. In addition, the source text also mentions sexual assault and offensive terms for women.

Summary

A Brief History of Neoliberalism is comprised of seven chapters that cover the origins of neoliberal economic theory, its adoption by the United States and the United Kingdom, its exportation and implementation abroad, and its effects. Throughout, David Harvey weaves in the contemporary context of 2005—the George W. Bush presidency, the rise of neoconservatism, and the American invasion of Iraq.

In Chapter 1, “Freedom’s Just Another Word…,” Harvey discusses the concept of “freedom” and its redefinition and co-optation by proponents of neoliberalism. He describes how President George W. Bush declared that the United States brought “freedom” to the people of Iraq, arguing that this freedom came in the form of free markets and increased openness to global trade. Harvey compares this to one of the first examples of the establishment of a neoliberal state, Pinochet’s Chile in 1975. Then, Harvey assesses the transition of the global economy from liberal to neoliberal policies. Harvey relies on the analysis of Hungarian political theorist Karl Polanyi to critique this narrow concept of freedom as free and open markets, pointing out that the freedom of capitalism contains both good and bad elements.

After laying out the stakes of his argument, Harvey turns to an intellectual history of neoliberalism in Chapter 2, “The Construction of Consent.” He analyzes how this theory was appealing across the political spectrum in the 1960s and 1970s. Those advocating for civil rights and justice were hoping for more individual freedoms of expression, which seemed to be promised by free markets. Harvey describes how the elite business class developed and promoted neoliberalism throughout the institutions of civil society to create a broad consensus for the theory. He details how neoliberal policies were applied in the United States, particularly under President Reagan, and in the United Kingdom, under Prime Minister Thatcher, in the late 1970s and throughout the 1980s.

In Chapter 3, “The Neoliberal State,” Harvey describes how the actual implementation of neoliberal policies differs from neoliberal theory. He argues that, in places where neoliberal theory may harm the economic elite, such as in allowing labor to organize, the policy is modified in favor of the wealthy. Harvey also analyzes the extent to which neoconservative politics represent a continuation of and a deviation from neoliberal theory.

Chapter 4, “Uneven Geographical Developments,” assesses neoliberal policies in countries outside of the United States and the United Kingdom, particularly Mexico, Argentina, South Korea, and Sweden. The global reach of these policies, particularly the expansion of foreign direct investment (FDI) is a signal of the extent to which world economies are increasingly interlinked. Harvey argues that there are some commonalities in the forms of neoliberal policies pursued by each of these countries, but that the policies are also shaped by their historical political realities.

The entirety of Chapter 5, “Neoliberalism ‘with Chinese Characteristics’” is devoted to an assessment of China’s economy. Under Deng Xiaoping’s leadership following the death of Mao Zedong in 1976, China began to open its markets to free trade and implement some neoliberal economic policies. Harvey analyzes the effect these policies have had on China’s growing economy and class structure. He concludes that, like other neoliberal states, China has increasing economic inequality.

Chapter 6, “Neoliberalism on Trial,” is an overall assessment of the effects of neoliberal policies on workers, the environment, society, and the economy. Harvey argues that the positive effects of these policies in most cases have been limited. Neoliberalism’s greatest success has been in limiting inflation. Harvey contrasts these positive effects with its failures, including poor working conditions for precarious workers, environmental problems, and a narrowing of human rights.

In the final chapter, “Freedom’s Prospect,” Harvey presents an alternative definition of freedom, one that is not tied to the free market. He also speculates about the future of neoliberal policy and its sustainability, ultimately concluding that it may be facing a major crisis in the near future. He discusses potential methods for opposing or limiting neoliberalism and alternative modes of organizing society that result in less inequality and better outcomes for ordinary people. He ends with a call to action that encourages progressives to understand the elite class as a group operating collectively to obtain power under neoliberalism.