Thinking through David Harvey’s theorisation of neoliberalism

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David Harvey is the most significant Marxist theorist of the neoliberal era and his conceptual framework is developed, chiefly, in his works The New Imperialism (2003) and A Brief History of Neoliberalism (2005). Harvey’s work is a materialist analysis of neoliberalism, locating it in the shifts in capitalist social relations and the crisis of accumulation of the 1970s and marked by its application of Marxist categories. He focuses attention on the class nature of the neoliberal project and rejects utopian claims made for it by liberals and many social democrats.

Harvey is also attentive to the spatial diversity of neoliberalism, emphasising its variegated forms. I will address in a forthcoming post however, the dominant narrative as to neoliberalism’s origins within his work. I recently wrote about Connell and Dados’ analysis of dominant narratives of neoliberalism as they relate to the Global South. My concerns about a dominant narrative differ to some extent, but I would argue that a dominant account as to the origins and form neoliberalism takes in the Global North has narrowed our understanding by creating an ‘ideal’ type of political-economic transformation based on the experiences of the US and UK. The dominant narrative I identify, also present in the work of Naomi Klein and others, posits neoliberalism as: a project of the right, adopted only subsequently (and often reluctantly) by social democratic formations; and a project that has been significantly coercive in its implementation. Such a narrative runs counter to the construction of neoliberalism in Australia by the centre left ALP, and in the context of a 13-year consensual social contract.

While the materiality, breadth and complexity of Harvey’s historical narrative is compelling, two key theorisations require closer examination — his explanation that neoliberalism is ‘the restoration of class power’ and his conception of ‘accumulation by dispossession’. This post will focus on those two conceptions within his work.

A project to achieve the restoration of class power’

Harvey argues that neoliberalism is ‘a project to achieve the restoration of class power’ in the wake of the economic crisis of the 1970s (2005, 16; see also 2007, 28–29). He contends that we can ‘interpret neoliberalisation either as a utopian project to realise a theoretical design for the reorganisation of international capitalism or as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites’ (Harvey 2005, 19). He sees the processes of this era as purposive and intentional, even if experimentation occurred to determine preferred paths. Harvey argues that neoliberalism is ‘in the first instance 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’. Harvey argues that neoliberal state’s role is to institute and maintain an institutional structure to ensure this occurs. He argues that ‘state interventions in markets (once created) must be kept to a bare minimum’ to avoid market failure and distortions (2005, 2).

He argues that neoliberalism is a distinct and new phenomenon involving an ‘emphatic turn…in political-economic practices and thinking’ (ibid). While he places political economic change (in particular problems of capital accumulation) at the centre of understanding the contemporary era, he partly foregrounds neoliberalism as synonymous with, and deriving supremacy from, its ideology – even while deploying ‘a class-based analytical lens’ (Cahill 2013, 72). This is problematic because it leads to aligning neoliberalism with its ideological façade, both in terms of its roots in neoclassical economic theory and in how the state should function.

Harvey also argues that the ruling class had less power in the long post-WWII boom, and therefore that neoliberalism was a successful effort to re-establish class power. He presents two key arguments for his ‘restoration of class power’ thesis: firstly, economically, that there was a drastic shift in the share of income and wealth away from labour; and secondly, politically, that neoliberalism was a reaction to the rising social movements of the 1960s and 1970s. The key piece of evidence Harvey mobilises in support of this first argument is the shift in share in national income of the top 0.1 per cent of the population in the United States. His graphical representation of this data bears the title ‘The restoration of class power’ (Harvey 2005, 17). He deploys the work of Duménil and Lévy on income shifts, quoting positively their argument ‘that neoliberalism was from the very beginning an endeavour to restore class power to the richest strata in the population’ (Harvey 2007, 28). Neoliberalism is, in this way, seen as an articulation of particular class interests in response to economic and social changes, which drove the transformation from the post-WWII era to the superficially market-based neoliberal hegemonic framework that emerged in the 1970s (Duménil and Lévy 2012). He argues there was significant economic threat to the ruling class in the form of the crisis and the efforts of organised labour to maintain wages and conditions. The crisis threatened the viability of sectors of capital and the fiscal integrity of government budgets, the latter through declining taxes, and so the ruling class sought the restoration of accumulation and power in restructuring production and attacking workers’ wages and conditions. The second part of Harvey’s argument is premised on the growing strength of social movements and their threat to capitalism, in particular that the ‘conjoining of labour and urban social movements throughout much of the advanced capitalist world augured a socialist alternative to the social compromise between capital and labour that had grounded accumulation so successfully in the postwar period’ (Harvey 2007, 27).

There is a difficulty in Havey’s class power formulation, however, in that it suggests that the ruling class was without power in the preceding period of the long boom or that capitalism was constrained by civil society. It is problematic to suggest that the most successful period of capitalist accumulation in history was also one where the ruling class was ultimately without or declining in power, although Harvey is not the only one to argue this (see also Klein and Smith 2008; Duménil and Lévy 2011). While rising social movements in the 1960s and 1970s unsettled the hegemony of particular governments and forms of rule, this could also be said of the effects of neoliberalism itself. A shift in the share of profits and wages is not the same as shifts in the power of the ruling class, and the crisis of social democracy and the rise of anti-politics in a number of countries can be seen as further evidence of a collapse of neoliberal hegemony — a process not confined to the post-2008 era but building through the 1980s and 1990s.  By this I mean things like the detachment of voter bases from their parties, declining membership of traditional political parties, increasing voter volatility (or the growth of swing voters and voters for ‘minor’ parties), the rise of ‘anti-political’ politicians and rhetoric, and declining participation in elections (both in countries with voluntary or, like Australia, compulsory voting).

While ‘the hegemony of neoliberalism is demonstrated precisely by the fact that its policies survived the electoral defeat of the parties that inaugurated it’ (Callinicos 2001, 7), it is also important to understand how its hegemony has been undermined by its antinomies. The question of whether neoliberalism has been successful, even in narrow terms of resolving a crisis of accumulation for the capitalist elites, can throw light on the particular nature of neoliberalism/neoliberalisation as a relentless, never-completed, mutating process of the restructuring of social life (Peck, Theodore, and Brenner 2009; Peck 2010b). When viewed in this way, the formulation of ‘restoration of class power’ lacks specificity as a way to explain the particular form neoliberalism has taken and mythologises the long boom as one of declining ruling class power.

‘Accumulation by dispossession’

Harvey’s second key concept, of accumulation by dispossession, begins from the observation that neoliberalism was ‘redistributive rather than generative’ and as such had to find concrete ways in which to ‘transfer assets and channel wealth and income either from the mass of the population towards the upper classes or from vulnerable to richer countries’ (Harvey 2007, 34). Harvey’s notion arises from his examination of the inner workings of neoliberalism, and has origins in Capital: Volume 1 (Marx 1976, 873–940). He also ‘explicitly invokes Luxemburg in his reinterpretation of primitive accumulation’ seeing that process expressed today ‘in the relentless commodification of the world in accordance with the demands of the Washington’ (Callinicos 2006, 53).

While Harvey rejects Luxemburg’s explanation of crisis as a result of underconsumption, he argues that the concept of there being a necessary ‘outside’ to capitalism (that can subsequently be incorporated into the system) to ensure continued stable accumulation is relevant (2003, 141) — in particular through the incorporation of labour or resources from the under-developed world or by pushing labour outside of the system and into unemployment in order to create a pool of cheap labour able to be incorporated at a later date (ibid 2003, 141). According to Harvey it is only with the use of this ‘outside’ that capitalism can avoid a crisis of overaccumulation, by incorporating the commons into capitalism and, via privatisation, ‘transferring public assets to the private sector at knock-down prices [a]s a means of devaluing capital and thereby of increasing the profit rate’ (Ashman and Callinicos 2006, 116).  The ‘outside’ finds a release for the overaccumulation of capital, whether it is in the form of money capital, commodity capital or productive capital. Harvey argues that features of primitive accumulation have remained part of capitalism processes and geography up until now (op cit 2003, 144). In order to delineate this from primitive accumulation, Harvey refers to them as ‘accumulation by dispossession’ and sees privatisation as a key element — where the ‘enclosure and the assignment of private property rights is considered the best way to protect against the so called “tragedy of the commons’” ’ (2005, 65).

Harvey argues that ‘accumulation by dispossession entails a very different set of practices from accumulation through the expansion of wage labour in industry and agriculture. … Dispossession entails the loss of rights, dignity, sustainable ecological practices, environmental rights, and the life, as the basis for a unified oppositional politics’ (ibid 2005, 178). He argues there are four processes in which shifts occur: privatisation; financialisation; management and manipulation of crisis; and state redistributions. (2007, 35). He includes within these processes things such as the commodification and privatisation of land, conversion of other property rights (common, collective, state) into private property rights; seizure of assets and natural resources through colonial, neo-colonial and imperial processes; usury, national debt, and credit as a radical means of primitive accumulation; and the removal of communal property rights via the abolition or reduction of pensions, paid leave, education, and health care.

While it is true these processes and policies facilitated a shift in wealth to the ruling class, the reach of Harvey’s concept is so wide-ranging that it fails to assist a more specific analysis of the processes under consideration. The inclusions are so broad as to include ‘the privatisation of housing, through Soviet shock therapy, to all forms of privatisation, quite apart from the territorial fixes on the global stage’ (Fine 2004, 143). This problem of breadth is also the case for Harvey’s meta-practices of neoliberalisation — privatisation, financialisation, management and manipulation of crisis, and state redistributions. As Robert Brenner notes, ‘accumulation by dispossession [is] a virtual grab bag of processes…that are quite normal aspects of by-products of the already well-established sway of capital’ (2006, 100). Thus, other than suggesting these things are occurring ‘all at once’, we may not be any clearer on what neoliberalism is.

Moreover, it is misleading to argue that neoliberalism has been a process of bringing that which is outside to inside. As Ashman and Callinicos note, ‘it is not that they have moved from being ‘outside’ capital to becoming part of it but that they have moved from being state to private capitals’ (2006, 23) — a move sideways from one form of capitalism to another. Harvey’s schema confuses the relationship between what is internal and external to capitalism (Humphrys 2012, 112–113), and does not have the functional specificity of Marx’s original concept of primitive accumulation (Fine 2004, 143). Such an approach risks simply providing a list of generic political economic changes that have been implemented at various times under capitalism, including in the neoliberal era, rather than identifying the mechanisms and context in which these took place. How to deal with this dilemma will be addressed in an upcoming blog post.

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Ashman, Sam, and Alex Callinicos. 2006. “Capital Accumulation and the State System: Assessing David Harvey’s ‘The New Imperialism’.” Historical Materialism 14 (4): 107–131.

Brenner, Robert. 2006. “What Is, and What Is Not, Imperialism?” Historical Materialism 14 (4): 79–105.

Cahill, Damien. 2013. “Ideas-Centred Explanations of the Rise of Neoliberalism: A Critique.” Australian Journal of Political Science 48 (1): 71–84.

Callinicos, Alex. 2001. Against The Third Way:: An Anti-Capitalist Critique. Cambridge: Polity Press.

———. 2006. “David Harvey and Marxism.” In David Harvey: A Critical Reader, edited by Noel Castree and Derek Gregory. Malden: Blackwell Publishing.

Duménil, Gérard, and Dominique Lévy. 2011. The Crisis of Neoliberalism. Cambridge, MA: Harvard University Press.

———. 2012. “The Crisis of Neoliberalism as a Stepwise Process: From the Great Contraction to the Crisis of Sovereign Debts.” In Neoliberalism: Beyond the Free Market, edited by Damien Cahill, Lindy Edwards, and Frank Stilwell. Cheltenham: Edward Elgar.

Fine, Ben. 2004. “Debating the New Imperialism.” Historical Materialism 14 (4): 241–278.

Gamble, Andrew. 1994. The Free Economy and the Strong State: The Politics of Thatcherism. Second. Basingstoke: MacMillan Press.

Harvey, David. 2003. The New Imperialism. Oxford: Oxford University Press.

———. 2005. A Brief History of Neoliberalism. Oxford: Oxford University Press.

———. 2007. “Neoliberalism as Creative Destruction.” Annals of the American Academy of Political and Social Science 610: 22–44.

Humphrys, Elizabeth. 2012. “The Birth of Australia: Non-Capitalist Social Relations in a Capitalist Mode of Production?” Journal of Australian Political Economy 70: 110–129.

Klein, Naomi, and Neil Smith. 2008. “The Shock Doctrine: A Discussion.” Environment and Planning D: Society and Space 26 (4): 582–595.

Marx, Karl. 1976. Capital I: A Critique of Political Economy. London: Penguin.

Peck, Jamie. 2010. “Neoliberal Worlds.” In Constructions of Neoliberal Reason. Oxford: Oxford University Press.

Peck, Jamie, Nik Theodore, and Neil Brenner. 2009. “Postneoliberalism and Its Malcontents.” Antipode 41 (S1): 94–116.

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