Publics and Markets. What's Wrong with Neoliberalism?

12 Publics and Markets. What’s Wrong with Neoliberalism? Clive Barnett THEORIZING NEOLIBERALISM AS A egoists, despite much evidence that they POLITICAL PROJECT don’t. Critics of neoliberalism tend to assume that increasingly people do act like this, but Neoliberalism has become a key object of they think that they ought not to. For critics, analysis in human geography in the last this is what’s wrong with neoliberalism. And decade. Although the words ‘neoliberal’ and it is precisely this evaluation that suggests ‘neoliberalism’ have been around for a long that there is something wrong with how while, it is only since the end of the 1990s neoliberalism is theorized in critical human that they have taken on the aura of grand geography. theoretical terms. Neoliberalism emerges as In critical human geography, neoliberal- an object of conceptual and empirical reflec- ism refers in the first instance to a family tion in the process of restoring to view a of ideas associated with the revival of sense of political agency to processes previ- economic liberalism in the mid-twentieth ously dubbed globalization (Hay, 2002). century. This is taken to include the school of This chapter examines the way in which Austrian economics associated with Ludwig neoliberalism is conceptualized in human von Mises, Friedrich von Hayek and Joseph geography. It argues that, in theorizing Schumpeter, characterized by a strong com- neoliberalism as ‘a political project’, critical mitment to methodological individualism, an human geographers have ended up repro- antipathy towards centralized state planning, ducing the same problem that they ascribe commitment to principles of private property, to the ideas they take to be driving forces and a distinctive anti-rationalist epistemo- behind contemporary transformations: they logy; and the so-called Chicago School of reduce the social to a residual effect of more economists, also associated with Hayek but fundamental political-economic rationalities. also including leading monetarist economist Proponents of free markets think that people Milton Friedman. David Harvey’s definition should act like utility-maximizing rational of neoliberalism condenses a set of emphases 55316-Smith-12.indd316-Smith-12.indd 226969 66/22/2009/22/2009 33:53:03:53:03 PPMM 270 THE SAGE HANDBOOK OF SOCIAL GEOGRAPHIES that characterize accounts of this object of and deployed by left-wing academics and analysis more generally: political activists’ (2006: 450). As a critics’ term, neoliberalism is presented as an idea- Neoliberalism is in the first instance a theory of political economic practices that proposes that tional project and political programme that human well-being can best be advanced by liberat- seeks to supplant collective, public values ing individual entrepreneurial freedoms and skills with individualistic, private values of market within an institutional framework characterized by rationality as the guiding principles of state strong private property rights, free markets and policy, economic governance and everyday free trade. The role of the state is to create and preserve an institutional framework appropriate life. It should be said that there is no single to such practices. The state has to guarantee, for critical conceptualization of neoliberalism example, the quality and integrity of money. It must circulating in human geography. Neoliberalism also set up those military, defence, police and legal is sometimes conceptualized as a policy para- structures and functions required to secure private digm; sometimes more broadly as a hegem- property rights and to guarantee, by force if need be, the proper functioning of markets. Furthermore, onic ideology; and sometimes as a distinctive if markets do not exist (in areas such as land, water, form of governmentality (Larner, 2000). education, health care, social security, or environ- Linking these three different approaches is mental pollution) then they must be created, by an overwhelming emphasis on the guiding state action if necessary. But beyond these tasks force of explicit forms of knowledge in shap- the state should not venture. State interventions in markets (once created) must be kept to a bare ing social change. minimum because, according to the theory, the The explicit conceptual elaboration of state cannot possibly possess enough information critical theories of neoliberalism and neo- to second-guess market signals (prices) and because liberalization has been pioneered by human powerful interest groups will inevitably distort and geographers and spatially sensitive socio- bias state interventions (particularly in democracies) for their own benefit (Harvey, 2005: 2) logists. Neoliberalism is understood as an ideology that is shaped in a few centres and The ascendancy of this ‘ideology’ is recounted then diffuses outwards, and a political project through a standardized narrative that touches that aims to reorder the territorial framing of on a series of focal points (Hoffmann et al., capital accumulation. The resulting process 2006): a period of economic crisis that shook of neoliberalization is understood to be geo- the foundations of the post-Second World graphically uneven. The basic outlines of War, Keynesian settlement as the conjuncture neoliberalism as an object of critical analysis in which previously marginal neoliberal include the following: economic theories were translated into real- world policy scenarios; the role of economists ● Neoliberalism is understood as an ideology from the University of Chicago in Pinochet’s that encompasses various forms of free-market Chile in the 1970s, Reagonomics in the USA fundamentalism. in the 1980s, and so-called Thatcherism in ● Neoliberalism is diffused and translated across the UK in the 1980s; the role of key inter- contexts very quickly. ● Neoliberalism is operative at various spatial scales. national agencies, such as the International ● Neoliberalism displaces established models of Monetary Fund (IMF) and World Bank as welfare provision and state regulation through being responsible for diffusing neoliberalism policies of privatization and deregulation. globally through the so-called Washington ● Neoliberalism brings off various changes in sub- Consensus in development and foreign aid jectivity by normalizing individualistic self-interest, policy; and the taken-for-granted claim that entrepreneurial values, and consumerism. neoliberalism has, over time, been trans- formed from an ideology into hegemonic In the constitution of neoliberalism as an common sense. object of critical analysis, the overwhelm- Wendy Larner observes that ‘the concept of ing emphasis is upon neoliberalism as an neoliberalism is overwhelmingly mobilized ‘ideational project’. It is from this emphasis 55316-Smith-12.indd316-Smith-12.indd 227070 66/22/2009/22/2009 33:53:03:53:03 PPMM PUBLICS AND MARKETS. WHAT’S WRONG WITH NEOLIBERALISM? 271 that the agenda for geographical research critical, but at a cost. Critical theorists of follows: neoliberalism are condemned to invoke their favoured positive values (e.g. the public realm, ● tracking the diffusion of this ideology through collective solidarity, equality, democracy, care, different geographical contexts; social justice) in a moralistic register without ● mapping the variable articulation of this ideology addressing normative problems of how practi- with other processes in different places; ● examining the normalization of this ideology in cally to negotiate equally compelling values. spatial practices of subject formation. And in so far as theories of neoliberalism dismiss considerations of rational action, If thetheoretical constitution of neoliberal- motivation, and decentralized coordination ism as an ideological project generates an as so much ‘ideology’, they remain chroni- automatic agenda for geographical research, cally constricted in their capacity to reflect then it also constructs the task of critical seriously on questions of institutional design, analysis in a distinctive way. If neoliberali- political organization and economic coordi- zation is assumed to work through the natu- nation which, one might suppose, remain an ralization of market rationalities and the important task for any critical theory. normalization of individualistic egoism, then Section 2 introduces the basic outlines of the critical task becomes one of exposing the conceptualizations of neoliberalism in geogra- various dimensions of neoliberalization as phy and related fields. This section considers social constructs. how neoliberalism and neoliberalization have Critical theories of neoliberalism and neo- been conceptualized in Marxist political econ- liberalization provide a compelling moral omy. Neoliberalism is understood as a revival narrative in which recent history is under- and renewal of laissez-faire economic libe- stood in terms of a motivated shift away from ralism, holding to principles of free markets public and collective values towards private and the minimal state. Section 3 looks at how and individualistic values. Critical narratives Foucault’s ideas about liberal governmentality of neoliberalism reinforce the image of there are used to bolster these narratives of political being a clear-cut divide between two sets of economy. Section 4 argues that it is worth values – those of private, individualistic self- taking seriously the way in which public interest on the one hand, and those of public, rationalities are problematized in a family of collective interests on the other. There

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