Neoliberalism

Photo from Guebara Graphics photo stream

Here are a few paragraphs on neoliberalism taken from a great Egypt-focused article called “The Revolution against Neoliberalism” by Walter Ambrust:

“Although neoliberalism is now a commonly used term, it is still worth pausing a moment and think[ing] about what it means. In his Brief History of Neoliberalism[1] social geographer David Harvey outlined “a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.”

Neoliberal states guarantee, by force if necessary, the “proper functioning” of markets; where markets do not exist (for example, in the use of land, water, education, health care, social security, or environmental pollution), then the state should create them. Guaranteeing the sanctity of markets is supposed to be the limit of legitimate state functions, and state interventions should always be subordinate to markets. All human behavior, and not just the production of goods and services, can be reduced to market transactions.

The market becomes an end in an of itself, and since the only legitimate function of states is to defend markets and expand them into new spheres, democracy is a potential problem insofar as people might vote for political and economic choices that impede the unfettered operation of markets, or that reserve spheres of human endeavor (education, for example, or health care) from the logic of markets. Hence a pure neoliberal state would philosophically be empowered to defend markets even from its own citizens. As an ideology neoliberalism is as utopian as communism. The application of utopian neoliberalism in the real world leads to deformed societies as surely as the application of utopian communism did.”

So take a moment and ponder what neoliberalism means, what it implies, and what its effects have been. Apparently it’s not exactly working in a lot of places. I mean, look at Haiti, Central America. Egypt and its neighbors. Look at the United States.

When it comes to the world of aid and development, I get really nervous when I hear people talking about eliminating aid and allowing markets to take over, as if that will just solve everything.  This complete bowing down to the market in every way, shape and form is obviously not working. Aid in its present form is also not exactly working. And the two things are pretty intertwined, feeding off each other….

I don’t have any solutions, just a lot of questions. But what if instead of eliminating “aid”, we eliminated “neoliberalism”? Or we eliminated both and came up with something totally new; something that actually works for the majority.

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About Shotgun Shack

INGO worker hailing from the crossroads of America, and so far from home in so many ways. I blog about life and the depths and ironies of INGO work. View all posts by Shotgun Shack

One response to “Neoliberalism

  • Ian Thorpe

    Any single idea whether it be communism, neoliberalism or aid for that matter is dangerous when taken as a complete recipe for solving the ills of the world, even if it contains useful ideas.

    It’s also the case that the implementation of these ideas is always disappointing in practice when compared to the idea in theory. I don’t think any of the countries you mention has actually implemented anything close to a neoliberal state – but then it’s perhaps as well, since it’s not sure the results would be any better.

    There is a fairly large body of evidence and opinion on the idea that well functioning markets are an essential ingredient for economic growth and poverty reduction, and for individual freedom and dignity for that matter. But most also agree that there are limits on what markets can do, and so the role of government is not only to enforce markets but also to step in to deal with “market failures”. When and how best to do this and what is the role of government in setting up, fostering, regulating or enforcing markets is far from clear though.

    I don’t think it makes sense to put aid in competition with markets. They can both work together (aid can be a way to foster markets, or to deal with market failures). But also all modern economies have markets guaranteed in some way by the state, but not all countries receive aid, and in the end surely the goal is that none of them should need it.

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