NEO-LIBERALISM AS CREATIVE DESTRUCTION NEO-LIBERALISM AS CREATIVE DESTRUCTION by David Harvey Harvey, D., 2006: Neo-liberalism as creative destruction. Geogr. sons. Nevertheless, there has everywhere been an Ann., 88 B (2): 145–158. emphatic turn, ostensibly led by the Thatcher/Re- agan revolutions in Britain and the US, in politi- ABSTRACT. Neoliberalization has swept across the world like a vast tidal wave of institutional reform and discursive adjustment, cal-economic practices and thinking since the entailing much destruction, not only of prior institutional frame- 1970s. State after state, from the new states that works and powers, but also of divisions of labor, social relations, emerged from the collapse of the Soviet Union to welfare provisions, technological mixes, ways of life, attachments old-style social democracies and welfare states to the land, habits of the heart, ways of thought, and the like. To turn the neoliberal rhetoric against itself, we may reasonably ask: such as New Zealand and Sweden, have em- in whose particular interests is it that the state take a neoliberal braced, sometimes voluntarily and in other in- stance and in what ways have these particular interests used neo- stances in response to coercive pressures, some liberalism to benefit themselves rather than, as is claimed, every- version of neoliberal theory and adjusted at least one, everywhere? Neoliberalism has spawned a swath of oppositional move- some of their policies and practices accordingly. ments. The more clearly oppositional movements recognize that Post-apartheid South Africa quickly embraced the their central objective must be to confront the class power that has neoliberal frame, and even contemporary China been so effectively restored under neoliberalization, the more they appears to be heading in this direction. Further- will likely themselves cohere. more, the advocates for the neoliberal way now Key words: neoliberalism, creative destruction, class power, ac- occupy positions of considerable influence in ed- cumulation by dispossession, privatization, financialization, re- ucation (the universities and many ‘think tanks’), distribution, democratic alternatives in the media, in corporate boardrooms and finan- Neoliberalism is in the first instance a theory of po- cial institutions, in key state institutions (treasury litical economic practices which proposes that hu- departments, the central banks) and also in those man well-being can best be advanced by the max- international institutions such as the IMF and the imization of entrepreneurial freedoms within an in- WTO that regulate global finance and trade. Neo- stitutional framework characterized by private liberalism has, in short, become hegemonic as a property rights, individual liberty, free markets and mode of discourse, and has pervasive effects on free trade. The role of the state is to create and pre- ways of thought and political-economic practices serve an institutional framework appropriate to to the point where it has become incorporated into such practices. The state has to be concerned, for the common-sense way we interpret, live in and example, with the quality and integrity of money. It understand the world. must also set up those military, defence, police and Neoliberalization has in effect swept across the juridical functions required to secure private prop- world like a vast tidal wave of institutional reform erty rights and to support freely functioning mar- and discursive adjustment, and while there is plenty kets. Furthermore, if markets do not exist (in areas of evidence of its uneven geographical develop- such as education, health care, social security or en- ment, no place can claim total immunity (with the vironmental pollution) then they must be created, exception of a few states such as North Korea). Fur- by state action if necessary; but beyond these tasks thermore, the rules of engagement now established the state should not venture. State interventions in through the WTO (governing international trade) markets (once created) must be kept to a bare min- and by the IMF (governing international finance) imum because the state cannot possibly possess instanciate neoliberalism as a global set of rules. enough information to second-guess market sig- All states that sign on to the WTO and the IMF (and nals (prices), and because powerful interests will who can afford to stay out?) agree to abide (albeit inevitably distort and bias state interventions (par- with a ‘grace period’ to permit smooth adjustment) ticularly in democracies) for their own benefit. by these rules or face severe penalties. The actual practices of neoliberalism frequent- The creation of this neoliberal system has ob- ly diverge from this template for a variety of rea- viously entailed much destruction, not only of pri- © The author 2006 Journal compilation © 2006 Swedish Society for Anthropology and Geography 145 DAVID HARVEY or institutional frameworks and powers (such as rains where the liberal tradition has had a strong the supposed prior state sovereignty over politi- historical presence. Such ideals empowered the cal-economic affairs) but also of divisions of la- dissident movements in Eastern Europe and the So- bour, social relations, welfare provisions, techno- viet Union before the end of the Cold War as well logical mixes, ways of life, attachments to the as the students in Tianenmen Square. The student land, habits of the heart, ways of thought, and so movement that swept the world in 1968 – from Par- on. Some assessment of the positives and nega- is and Chicago to Bangkok and Mexico City – was tives of this neoliberal revolution is called for. In in part animated by the quest for greater freedoms what follows, therefore, I will outline some pre- of speech and of individual choice. These ideals liminary arguments as to how to both understand have proven again and again to be a powerful his- and evaluate this transformation in the way global torical force for change. capitalism is working. This requires that we come Hardly surprisingly, therefore, appeals to free- to terms with the underlying forces, interests and dom and liberty surround us rhetorically at every agents that have propelled the neoliberal revolu- turn and populate all manner of contemporary po- tion forward with such relentless intensity. To turn litical manifestos. This has been particularly true of the neoliberal rhetoric against itself, we may rea- the United States in recent years. On the first anni- sonably ask: In whose particular interests is it that versary of the attacks now known as ‘9/11’, Presi- the state takes a neoliberal stance and in what dent Bush, for example, wrote an op-ed piece for ways have these particular interests used neolib- the New York Times that extracted ideas from the eralism to benefit themselves rather than, as is US National Defense Strategy document issued claimed, everyone, everywhere? shortly thereafter. ‘A peaceful world of growing freedom,’ he wrote (as the US geared up to go to war with Iraq), ‘serves American long-term inter- The ‘naturalization’ of neoliberalism ests, reflects enduring American ideals and unites For any system of thought to become hegemonic America’s allies.’ ‘Humanity,’ he concluded, requires the articulation of fundamental concepts ‘holds in its hands the opportunity to offer free- that become so deeply embedded in common-sense dom’s triumph over all its age-old foes’ and ‘the understandings that they become taken for granted United States welcomes its responsibilities to lead and beyond question. For this to occur not any old in this great mission.’ Even more emphatically, he concepts will do. A conceptual apparatus has to be later proclaimed that ‘freedom is the Almighty's constructed that appeals almost ‘naturally’ to our gift to every man and woman in this world’ and ‘as intuitions and instincts, to our values and our de- the greatest power on earth (the US has) an obliga- sires, as well as to the possibilities that seem to in- tion to help the spread of freedom.’2 here in the social world we inhabit. The founding So when all the other reasons for engaging in a figures of neoliberal thought took political ideals of pre-emptive war against Iraq were proven falla- individual liberty and freedom as sacrosanct, as cious or at least wanting, the Bush Administration ‘the central values of civilization’ , and in so doing appealed increasingly to the idea that the freedom they chose wisely and well, for these are indeed conferred upon Iraq was in and of itself an adequate compelling and great attractors as concepts. These justification for the war. But what sort of ‘freedom’ values were threatened, they argued, not only by was envisaged here, since, as the cultural critic fascism, dictatorships and communism, but by all Mathew Arnold long ago thoughtfully observed: forms of state intervention that substituted collec- ‘freedom is a very good horse to ride, but to ride tive judgements for those of individuals set free to somewhere (cited in Wliiliams, 1958, p. 118).’ To choose. They then concluded that without ‘the dif- what destination, then, were the Iraqi people ex- fused power and initiative associated with (private pected to ride the horse of freedom so selflessly do- property and the competitive market) it is difficult nated to them by force of arms? to imagine a society in which freedom may be ef- The US answer was spelled out on 19 Septem- fectively preserved’.1 ber, 2003, when Paul Bremer, head of the Coalition Leaving aside the question of whether the final Provisional Authority, promulgated four orders part of the argument necessarily follows from the that included ‘the full privatization of public enter- first, there can be no doubt that the concepts of lib- prises, full ownership rights by foreign firms of Ira- erty and freedom of the individual are powerful and qi businesses, full repatriation of foreign prof- appealing in their own right, even beyond those ter- its…the opening of Iraq’s banks to foreign control, © The author 2006 146 Journal compilation © 2006 Swedish Society for Anthropology and Geography NEO-LIBERALISM AS CREATIVE DESTRUCTION national treatment for foreign companies and…the military coup of 1964) had fallen into disrepute.