Neoliberalism As Creative Destruction Author(S): David Harvey Reviewed Work(S): Source: Annals of the American Academy of Political and Social Science, Vol

American Academy of Political and Social Science

Neoliberalism as Creative Destruction Author(s): David Harvey Reviewed work(s): Source: Annals of the American Academy of Political and Social Science, Vol. 610, NAFTA and Beyond: Alternative Perspectives in the Study of Global Trade and Development (Mar., 2007), pp. 22-44 Published by: Sage Publications, Inc. in association with the American Academy of Political and Social Science Stable URL: http://www.jstor.org/stable/25097888 . Accessed: 22/08/2012 11:49

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http://www.jstor.org has a with Neoliberalism become hegemonic discourse effects on of and pervasive ways thought political economic to it is now practices the point where part of commonsense we the way interpret, live in, and under stand the world. How did neoliberalism achieve such an exalted status, and what does it stand for? In this article, the author contends that neoliberalism is above a to restore to sectors all project class dominance that saw ascent of their fortunes threatened by the social democratic endeavors in the aftermath of the Second World War. Although neoliberalism has had limited as an for economic it has Neoliberalism effectiveness engine growth, in wealth from subordinate succeeded channeling ones as Creative classes to dominant and from poorer to richer countries. the of This process has entailed dismantling institutions narratives more and that promoted egalitar Destruction ian measures in era. distributive the preceding

Keywords: neoliberalism; globalization; fiscalization; class dominance; subordination By DAVID HARVEY a eco is theory of political Neoliberalismnomic practices proposing that human can maxi well-being best be advanced by the an mization of entrepreneurial freedoms within institutional framework characterized by pri vate unen property rights, individual liberty, cumbered markets, and free trade. The role of the state is to create and preserve an institu tional framework appropriate to such practices. The state has to be concerned, for example, It must with the quality and integrity of money. also set up military, defense, police, and juridi to secure cal functions required private prop to erty rights and support freely functioning markets. Furthermore, ifmarkets do not exist (in areas such as education, health care, social or security, environmental pollution), then they

David Harvey is Distinguished Professor in the Graduate Center of the City University ofNew York. He is author of several books, includingA BriefHistory New of of Neoliberalism, The Imperialism, Spaces Limits to and The Condition of Hope, The Capital, Postmodernity.

DOI: 10.1177/0002716206296780

22 ANNALS, AAPSS, 610, March 2007 NEOLIBERALISM AS CREATIVE DESTRUCTION 23 must state action But be created, by if necessary. beyond these tasks the state not venture. in should State interventions markets (once created) must be kept to a state cannot bare minimum because the possibly possess enough information to second-guess market signals (prices) and because powerful interests will state inevitably distort and bias interventions (particularly in democracies) for their own benefit. For a of variety reasons, the actual practices of neoliberalism frequently diverge from this an template. Nevertheless, there has everywhere been emphatic turn, ostensibly led by the Thatcher/Reagan revolutions in Britain and the United in States, political-economic practices and thinking since the 1970s. State after new ones state, from the that emerged from the collapse of the Soviet Union to as old-style social democracies and welfare states such New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive some pressures, version of neoliberal theory and adjusted at least some of their policies and practices accordingly Postapartheid South Africa quickly adopted even the neoliberal frame and contemporary China appears to be headed in that now direction. Furthermore, advocates of the neoliberal mindset occupy posi tions of considerable influence in education (universities and many "think in in rooms tanks"), the media, corporate board and financial institutions, in key state institutions (treasury departments, central banks), and also in those inter institutions as national such the International Monetary Fund (IMF) and the commerce. World Trade Organization (WTO) that regulate global finance and in as a Neoliberalism has, short, become hegemonic mode of discourse and has on to pervasive effects ways of thought and political-economic practices the point where it commonsense we has become incorporated into the way interpret, live in, and understand the world. Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven no can geographical development, place claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of now established WTO engagement through the (governing international trade) IMF and by the (governing international finance) instantiate neoliberalism as a set on global of rules. All states that sign to theWTO and the IMF (and who can afford not to a to?) agree abide (albeit with "grace period" to permit smooth or severe adjustment) by these rules face penalties. The creation of this neoliberal has entailed much not system destruction, only of institutional frameworks and as prior powers (such the supposed prior state over sovereignty political-economic affairs) but also of divisions of labor, social relations, welfare provisions, technological mixes, ways of life, attachments to the habits of land, of the heart, ways thought, and the like. Some assessment of the positives and negatives of this neoliberal revolution is called for. In what follows, I in some as therefore, will sketch preliminary arguments to how to both under stand and evaluate this transformation in the is way global capitalism working. This that we come to terms with the requires underlying forces, interests, and agents that have propelled the neoliberal revolution forward with such relentless 24 THE ANNALS OF THE AMERICAN ACADEMY

To turn we intensity. the neoliberal rhetoric against itself, may reasonably ask, In a whose particular interests is it that the state take neoliberal stance and inwhat ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

In whose particular interests is it that the state take a neoliberal stance, and in what

ways have those interests used neoliberalism to as is benefit themselves rather than, claimed, everyone, everywhere?

The "Naturalization" of Neoliberalism

For any system of thought to become dominant, it requires the articulation of so in commonsense fundamental concepts that become deeply embedded under are For this to standings that they taken for granted and beyond question. occur, to not any old concepts will do. A conceptual apparatus has be constructed that to our intuitions to our values and our appeals almost naturally and instincts, as as to seem to in we desires, well the possibilities that inhere the social world inhabit. The founding figures of neoliberal thought took political ideals of indi as sacrosanct?as civilization. vidual liberty and freedom the central values of so are and And in doing they chose wisely and well, for these indeed compelling were not greatly appealing concepts. Such values threatened, they argued, only but also all of state inter by fascism, dictatorships, and communism, by forms set to vention that substituted collective judgments for those of individuals free diffused initiative choose. They then concluded that without "the power and it is to associated with (private property and the competitive market) difficult a imagine society inwhich freedom may be effectively preserved."1 ofthe necessar Setting aside the question of whether the final part argument can no doubt that the of individual ily follows from the first, there be concepts are in own even those terrains liberty and freedom powerful their right, beyond where the liberal tradition has had a strong historical presence. Such ideals movements in Eastern and the Soviet Union empowered the dissident Europe before the end ofthe cold war as well as the students in Tiananmen Square. The to student movement that swept the world in 1968?from Paris and Chicago in the for freedoms Bangkok and Mexico City?was part animated by quest greater NEOLIBERALISM AS CREATIVE DESTRUCTION 25

to of speech and individual choice. These ideals have proven again and again be a mighty historical force for change. not to It is surprising, therefore, that appeals freedom and liberty surround the at turn manner United States rhetorically every and populate all of contemporary true in recent political manifestos. This has been particularly ofthe United States now as years. On the first anniversary ofthe attacks known 9/11, President Bush an a wrote op-ed piece for the New York Times that extracted ideas from U.S. "A National Defense Strategy document issued shortly thereafter. peaceful world even as to to war of growing freedom," he wrote, his cabinet geared up go with Iraq, "serves American long-term interests, reflects enduring American ideals and unites America's allies." "Humanity," he concluded, "holds in its hands the over opportunity to offer freedom's triumph all its age-old foes," and "the United its to in more States welcomes responsibilities lead this great mission." Even is emphatically, he later proclaimed that "freedom the Almighty's gift to every man and woman in this world" and "as the greatest power on earth [the United an to States has] obligation help the spread of freedom."2 reasons a war So when all of the other for engaging in preemptive against Iraq were or at proven fallacious least wanting, the Bush administration increasingly to was an appealed the idea that the freedom conferred upon Iraq in and of itself for the war. But sort of was adequate justification what freedom envisaged here, as critic since, the cultural Matthew Arnold long ago thoughtfully observed, a "Freedom is very good horse to ride, but to ride somewhere."3 To what desti were so nation, then, the Iraqi people expected to ride the horse of freedom self to lessly conferred them by force of arms? answer was on The U.S. spelled out September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that "the full included privatization of public enterprises, full ownership rights by for U.S. . . . eign firms of Iraqi businesses, full repatriation of foreign profits the to opening of Iraq's banks foreign control, national treatment for foreign compa nies . . . were and the elimination of nearly all trade barriers."4 The orders to to areas apply all ofthe economy, including public services, the media, manufac and construction. oil was turing, services, transportation, finance, Only exempt. A tax a was regressive system favored by conservatives called flat tax also insti tuted. The to was right strike outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced impo sition of "free market it as fundamentalism," describing "a flawed logic that Yet interim ignores history."5 the Iraqi government appointed at the end of June 2004 was accorded no to or write new power change laws?it could only confirm the decrees already promulgated. United States to was a What the evidently sought impose upon Iraq full state fledged neoliberal apparatus whose fundamental mission was and is to facil itate conditions for profitable capital accumulation for all comers, Iraqis and The in foreigners alike. Iraqis were, short, expected to ride their horse of free dom into the corral of to straight neoliberalism. According neoliberal theory, Bremer's decrees are both necessary and sufficient for the creation of wealth and 26 THE ANNALS OF THE AMERICAN ACADEMY

therefore for the of are improved well-being the Iraqi people. They the proper foundation for an rule adequate of law, individual liberty, and democratic gover nance. The insurrection that followed can in as part be interpreted Iraqi resis tance to driven into the of free being embrace market fundamentalism against their own free will. It is useful to recall, however, that the first great experiment with neoliberal state formation was Chile after s Augusto Pinochet coup almost thirtyyears to the before Bremer's were on day decrees issued, the "little September 11th" of 1973. The coup, against the democratically elected and leftist social democratic gov ernment of Salvador was CIA Allende, strongly backed by the and supported by U.S. of State It Secretary Henry Kissinger. violently repressed all left-of-center social movements and and political organizations dismantled all forms of popular such as centers in organization, community health poorer neighborhoods. The labor market was or "freed" from regulatory institutional restraints?trade union for But power, example. by 1973, the policies of import substitution that had for in merly dominated Latin American attempts at economic regeneration, and that had succeeded to some in degree Brazil after the military coup of 1964, had into fallen disrepute. With the world economy in the midst of a serious recession, new was something plainly called for.A group of U.S. economists known as "the Chicago boys," because of their attachment to the neoliberal theories of Milton then at the of were to Friedman, teaching University Chicago, summoned help reconstruct so the Chilean economy They did along free-market lines, privatiz resources to ing public assets, opening up natural private exploitation, and facili investment tating foreign direct and free trade. The right of foreign companies to from their Chilean was repatriate profits operations guaranteed. Export-led was over growth favored import substitution. The subsequent revival of the Chilean in terms economy of growth, capital accumulation, and high rates of return on investments foreign provided evidence upon which the subsequent turn to more open neoliberal policies in both Britain (under Thatcher) and the United States (under Reagan) could be modeled. Not for the first time, a brutal in a experiment creative destruction carried out in the periphery became model in for the formulation of policies the center.6 The fact that two such obviously similar restructurings of the state apparatus occurred at such different times in quite different parts of the world under the coercive as influence ofthe United States might be taken indicative that the grim reach U.S. lie of imperial power might behind the rapid proliferation of neolib state eral forms throughout the world from the mid-1970s onward. But U.S. power and recklessness do not constitute the whole story. It was not the United after that to in States, all, forced Margaret Thatcher take the neoliberal path 1979. was a more And during the early 1980s, Thatcher far consistent advocate ever to was of neoliberalism than Reagan proved be. Nor it the United States that in to over forced China 1978 follow the path that has time brought it closer and closer to the embrace of neoliberalism. It would be hard to attribute the moves in in to toward neoliberalism India and Sweden 1992 the imperial reach of the uneven on United States. The geographical development of neoliberalism the NEOLIBERALISM AS CREATIVE DESTRUCTION 27

a world stage has been very complex process entailing multiple determinations a and not little chaos and confusion. So why, then, did the neoliberal turn occur, were it to it now and what the forces compelling onward the point where has a become hegemonic system within global capitalism?

Why theNeoliberal Turn?

was Toward the end of the 1960s, global capitalism falling into disarray. A sig in nificant recession occurred early 1973?the first since the great slump of the in 1930s. The oil embargo and oil price hike that followed later that year thewake war ofthe Arab-Israeli exacerbated critical problems. The embedded capitalism of its on an the postwar period, with heavy emphasis uneasy compact between capital an state to and labor brokered by interventionist that paid great attention the social was no (i.e., welfare programs) and individual wage, longer working. The Bretton was Woods accord set up to regulate international trade and finance finally aban in rates in 1973. doned favor of floating exchange That system had delivered high rates in some of growth the advanced capitalist countries and generated spillover to across to benefits?most obviously Japan but also unevenly South America and some in other countries of South East Asia?during the "golden age" of capitalism the 1950s and early 1960s. By the next decade, however, the preexisting arrange were a new was ments exhausted and alternative urgently needed to restart the of How and process capital accumulation.7 why neoliberalism emerged victorious as an answer a seem as to that quandary is complex story. In retrospect, itmay if at time no one or neoliberalism had been inevitable, but the really knew under stood with any certainty what kind of response would work and how. a The world stumbled toward neoliberalism through series of gyrations and chaotic motions that on the so-called Consensus" eventually converged "Washington in uneven the 1990s. The geographical development of neoliberalism, and its one to partial and lopsided application from country another, testifies to its ten in tative character and the complex ways which political forces, historical tradi tions, and existing institutional arrangements all shaped why and how the process on actually occurred the ground. There is, however, one element within this transition that deserves concerted attention. The crisis of capital accumulation of the 1970s affected everyone the combination of through rising unemployment and accelerating inflation. was Discontent widespread, and the conjoining of labor and urban social move ments much ofthe advanced a throughout capitalist world augured socialist alter native to the social compromise between capital and labor that had grounded so in capital accumulation successfully the postwar period. Communist and social ist were across even parties gaining ground much of Europe, and in the United States were popular forces agitating forwidespread reforms and state interven tions in from to everything ranging environmental protection occupational safety consumer and health and protection from corporate malfeasance. There was, in 28 THE ANNALS OF THE AMERICAN ACADEMY

a to in this, clear political threat ruling classes everywhere, both advanced capi in talist countries, like Italy and France, and many developing countries, like Mexico and Argentina. Beyond political changes, the economic threat to the position of ruling classes was now in becoming palpable. One condition of the postwar settlement almost all countries was to restrain the economic power of the upper classes and for to a In labor be accorded much larger share of the economic pie. the United States, for example, the share of the national income taken by the top 1 percent earners a to of fell from prewar high of 16 percent less than 8 percent by the end to ofthe Second World War and stayed close that level for nearly three decades. was to While growth strong such restraints seemed not matter, but when growth in even as collapsed the 1970s, real interest rates went negative and dividends to move and profits shrunk, ruling classes felt threatened. They had decisively if were they to protect their power from political and economic annihilation. in The coup d'etat in Chile and the military takeover Argentina, both one fomented and led internally by ruling elites with U.S. support, provided kind of solution. But the Chilean experiment with neoliberalism demonstrated that were the benefits of revived capital accumulation highly skewed. The country investors and its ruling elites along with foreign did well enough while the peo in a ple general fared poorly. This has been such persistent effect of neoliberal over as a policies time to be regarded structural component of the whole project. so as to was Dumenil and Levy have gone far argue that neoliberalism from the an to restore to strata in very beginning endeavor class power the richest the pop ulation. They showed how from the mid-1980s onwards, the share of the top earners 1 percent of income in the United States soared rapidly to reach 15 percent 0.1 by the end of the century. Other data show that the top percent of income earners increased their share of the national income from 2 percent in 1978 to more measure ratio than 6 percent by 1999. Yet another shows that the of the median compensation of workers to the salaries of chief executive officers over to one in to more to one increased from just thirty 1970 than four hundred tax cuts now by 2000. Almost certainly, with the Bush administration's taking effect, the concentration of income and of wealth in the upper echelons of soci ety is continuing apace.8 earners And the United States is not alone in this: the top 1 percent of income in Britain doubled their share of the national income from 6.5 percent to 13 per we we see cent over the past twenty years.When look further afield, extraordinary a concentrations ofwealth and power within small oligarchy after the application of in a in income neoliberal shock therapy Russia and staggering surge inequalities in as it are to and wealth China adopts neoliberal practices. While there exceptions this trend?several East and Southeast Asian countries have contained income inequal itieswithin modest bounds, as have France and the Scandinavian countries?the turn in some to some asso evidence suggests that the neoliberal is way and degree or reconstruct ciated with attempts to restore upper-class power. as a We can, therefore, examine the history of neoliberalism either Utopian a of project providing theoretical template for the reorganization international NEOLIBERALISM AS CREATIVE DESTRUCTION 29

or as a at the for capitalism political scheme aimed reestablishing conditions cap ital accumulation and the restoration of class power. In what follows, I shall argue not that the last of these objectives has dominated. Neoliberalism has proven in effective at revitalizing global capital accumulation, but it has succeeded a restoring class power. As consequence, the theoretical utopianism ofthe neolib more as a eral argument has worked system of justification and legitimization. are abandoned conflict The principles of neoliberalism quickly whenever they with this class project.

not at Neoliberalism has proven effective revitalizing gfobal capital accumulation, but it has succeeded in restoring class power

Toward the Restoration of Class Power

were movements to restore If there class power within global capitalism, then were answer how they enacted and by whom? The to that question in countries as was a such Chile and Argentina simple: swift, brutal, and self-assured military coup backed by the upper classes and the subsequent fierce repression of all soli darities created within the labor and urban social movements that had so threat as in in ened their power. Elsewhere, Britain and Mexico 1976, it took the gentle a not to prodding of yet fiercely neoliberal International Monetary Fund push countries no means toward practices?although by policy commitment?to cut on to back social expenditures and welfare programs reestablish fiscal probity. In a Britain, of course, Margaret Thatcher later took up the neoliberal cudgel with in 1979 it to even never over vengeance and wielded great effect, though she fully came her own never opposition within party and could effectively challenge such of the welfare state as it centerpieces the National Health Service. Interestingly, was in a only 2004 that the Labour Government dared to introduce fee structure into education. The of has higher process neoliberalization been halting, geo graphically uneven, and heavily influenced by class structures and other social or forces moving for against its central propositions within particular state forma tions even or and within particular sectors, for example, health education.9 It is to more at informative look closely how the process unfolded in the case was as an more United States, since this pivotal influence on other and recent transformations. Various threads of power intertwined to create a transi tion that culminated in the mid-1990s with the takeover of Congress by the 30 THE ANNALS OF THE AMERICAN ACADEMY

in a Republican Party. That feat represented fact neoliberal "Contract with America" as a program for domestic action. Before that dramatic denouement, were however, many steps taken, each building upon and reinforcing the other. or was a sense To begin with, by 1970 so, there growing among the U.S. upper classes that the antibusiness and anti-imperialist climate that had emerged toward the end of the 1960s had gone too far. In a celebrated memo, Lewis to to Powell (about be elevated the Supreme Court by Richard Nixon) urged the a American Chamber of Commerce in 1971 to mount collective campaign to was was demonstrate that what good for business good for America. Shortly a was thereafter, shadowy but influential Business Round Table formed that still exists a in and plays significant strategic role Republican Party politics. Corporate political action committees, legalized under the post-Watergate campaign activities finance laws of 1974, proliferated like wildfire. With their protected as a a under the First Amendment form of free speech in 1976 Supreme Court as a instrument decision, the systematic capture of the Republican Party class of or collective (rather than particular individual) corporate and financial power But a and that more began. the Republican Party needed popular base, proved to problematic achieve. The incorporation of leaders of the Christian right, as a depicted moral majority, together with the Business Round Table provided to A of a and the solution that problem. large segment disaffected, insecure, was to vote its own largely white working class persuaded consistently against material interests on cultural (antiliberal, antiblack, antifeminist and antigay), had nationalist and religious grounds. By the mid-1990s, the Republican Party a lost almost all of its liberal elements and become homogeneous right-wing resources a machine connecting the financial of large corporate capital with pop was in U.S. ulist base, the Moral Majority, that particularly strong the South.10 The second element in the U.S. transition concerned fiscal discipline. The a recession of 1973 to 1975 diminished tax revenues at all levels at time of rising as a demand for social expenditures. Deficits emerged everywhere key problem. crisis of the the restoration of Something had to be done about the fiscal state; was conviction financial institu monetary discipline essential. That empowered tions that controlled the lines of credit to government. In 1975, they refused to to A roll over New York's debt and forced that city the edge of bankruptcy. pow state to control over the erful cabal of bankers joined together with the tighten meant of in city. This curbing the aspirations municipal unions, layoffs public cutbacks in social employment, wage freezes, provision (education, public health, user was introduced in and transport services), and the imposition of fees (tuition entailed con the CUNY university system for the first time). The bailout the new to tax revenues in order to struction of institutions that had first rights city was essential ser pay off bond holders: whatever leftwent into the city budget for was a unions invest their vices. The final indignity requirement that municipal in ensured that unions moderate their demands to pension funds city bonds. This avoid the danger of losing their pension funds through city bankruptcy. a institutions the Such actions amounted to coup d'etat by financial against New York and were bit as democratically elected government of City, they every NEOLIBERALISM AS CREATIVE DESTRUCTION 31

as in effective the military overtaking that had earlier occurred Chile. Much of was the city's social infrastructure destroyed, and the physical foundations (e.g., or even the transit system) deteriorated markedly for lack of investment mainte nance. The management of New York's fiscal crisis paved the way for neoliberal practices both domestically under Ronald Reagan and internationally through a the International Monetary Fund throughout the 1980s. It established princi event a ple that, in the of conflict between the integrity of financial institutions on one on and bondholders hand and the well-being of the citizens the other, the former would be given preference. It hammered home the view that the role of was a government to create good business climate rather than look to the needs and well-being of the population at large. Fiscal redistributions to benefit the in a crisis. upper classes resulted the midst of general fiscal in Whether all the agents involved in producing this compromise New York it at time as a an understood the tactic for the restoration of upper-class power is tomaintain is a matter concern open question. The need fiscal discipline of deep in own not to to its right and does have lead the restitution of class dominance. It is unlikely, therefore, that Felix Rohatyn, the key merchant banker who brokered the deal between the city, the state, and the financial institutions, had the rein statement in was in of class power mind. But this objective probably very much was the thoughts of the investment bankers. It almost certainly the aim of then-Secretary ofthe Treasury William Simon who, having watched the progress events in to to of Chile with approval, refused give aid New York and openly to so no stated that he wanted that city suffer badly that other city in the nation ever on would dare take similar social obligations again.11 in an The third element the U.S. transition entailed ideological assault upon the and institutions. media upon educational Independent "think tanks" financed by wealthy individuals and corporate donors proliferated?the Heritage Foundation in an the lead?to prepare ideological onslaught aimed at persuading the public ofthe commonsense A character of neoliberal propositions. flood of policy papers a and proposals and veritable army of well-paid hired lieutenants trained to pro mote neoliberal ideas coupled with the corporate acquisition of media channels effectively transformed the discursive climate in the United States by the mid 1980s. The to to project "get government off the backs ofthe people" and shrink to the it in a was government point where could be "drowned bathtub" loudly pro claimed. With to the new a respect this, promoters ofthe gospel found ready audi ence in that of the 1968 movement was wing whose goal greater individual liberty and freedom from state and the power manipulations of monopoly capital. The libertarian for a argument neoliberalism proved powerful force for change. To the to a degree that capitalism reorganized both open space for individual entrepre and switch its to neurship efforts satisfy innumerable niche markets, particularly those defined sexual were out an by liberation, that spawned of increasingly indi vidualized consumerism, so it could match words with deeds. This carrot of individualized was entrepreneurship and consumerism backed by the big stickwielded by the state and financial institutions against that other 32 THE ANNALS OF THE AMERICAN ACADEMY

of the 1968 movement wing whose members had sought social justice through collective negotiation and social solidarities. Reagan's destruction ofthe air traf in fic controllers (PATCO) 1980 and Margaret Thatcher's defeat of the British in were moments in miners 1984 crucial the global turn toward neoliberalism. as The assault upon institutions, such trade unions and welfare rights organiza to was as as tions, that sought protect and furtherworking-class interests broad it was in deep. The savage cutbacks social expenditures and the welfare state, and the of for to passing all responsibility their well-being individuals and their families proceeded apace. But these practices did not and could not stop at now to national borders. After 1980, the United States, firmly committed neolib and a mix eralization clearly backed by Britain, sought, through of leadership, economics a persuasion?the departments of U.S. research universities played major role in training many of the economists from around the world in neolib to eral principles?and coercion export neoliberalization far and wide. The purge of Keynesian economists and their replacement by neoliberal monetarists in the International Monetary Fund in 1982 transformed the U.S.-dominated IMF into a its vis prime agent of neoliberalization through structural adjustment programs state were in ited upon any (and there many the 1980s and 1990s) that required was in its help with debt repayments. The Washington Consensus that forged the 1990s and the negotiating rules set up under theWorld Trade Organization in turn 1998 confirmed the global toward neoliberal practices.12 new recon The international compact also depended upon the reanimation and figuration ofthe U.S. imperial tradition. That tradition had been forged in Central in as a America the 1920s, form of domination without colonies. Independent republics could be kept under the thumb of the United States and effectively act, as in the best of cases, proxies forU.S. interests through the support of strongmen? a like Somoza in Nicaragua, the Shah in Iran, and Pinochet in Chile?and coterie was of followers backed by military assistance and financial aid. Covert aid available to it to promote the rise power of such leaders, but by the 1970s became clear that was new something else needed: the opening of markets, of spaces for investment, a and clear fields where financial powers could operate securely. This entailed a much closer integration of the global economy with well-defined financial archi new as set out tecture. The creation of institutional practices, such those by the IMF convenient which financial and and the WTO, provided vehicles through market power could be exercised. The model required collaboration among the top into capitalist powers and the Group of Seven (G7), bringing Europe and Japan to alignment with the United States shape the global financial and trading system in nations to defined ways that effectively forced all other submit. "Rogue nations," as to those that failed to conform these global rules, could then be dealt with by or even In sanctions coercive and military force ifnecessary. thisway, U.S. neolib were a of eral imperialist strategies articulated through global network power rela was exact tions, one effect of which to permit the U.S. upper classes to financial a tribute and command rents from the rest ofthe world as means to augment their already hegemonic control.13 NEOLIBERALISM AS CREATIVE DESTRUCTION 33

Neoliberalism as Creative Destruction

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. at or so in even Aggregate growth rates stood 3.5 percent the 1960s and during to rates the troubled 1970s fell only 2.4 percent. The subsequent global growth a of 1.4 percent and 1.1 percent for the 1980s and 1990s, and rate that barely 1 since to touches percent 2000, indicate that neoliberalism has broadly failed we stimulate worldwide growth.14 Even if exclude from this calculation the cata some strophic effects of the collapse of the Russian and Central European in economies the wake of the neoliberal shock therapy treatment of the 1990s, economic global performance from the standpoint of restoring the conditions of general capital accumulation has been weak. nor Despite their rhetoric about curing sick economies, neither Britain the United States achieved high economic performance in the 1980s. That decade to as belonged Japan, the East Asian "Tigers," and West Germany powerhouses of countries were the global economy. Such very successful, but their radically differ ent institutional arrangements make it difficult to pin their achievements on neoliberalism. The West German Bundesbank had taken a strong monetarist line more a (consistent with neoliberalism) for than two decades, fact suggesting that no se there is necessary connection between monetarism per and the quest to restore class power. InWest Germany, the unions remained strong and wage levels a stayed relatively high alongside the construction of progressive welfare state. One effects of this was to a rate ofthe combination stimulate high of technological inno in vation that keptWest Germany well ahead the field of international competition. as a Export-led production moved the country forward global leader. In unions were or Japan, independent weak nonexistent, but state investment in technological and organizational change and the tight relationship between institutions corporations and financial (an arrangement that also proved felicitous inWest an Germany) generated astonishing export-led growth performance, very much at the of other economies as expense capitalist such the United Kingdom as was and the United States. Such growth there in the 1980s (and the aggregate rate in was even of growth the world lower than that of the troubled 1970s) did not on depend, therefore, neoliberalization. Many European states therefore resisted neoliberal reforms and increasingly found ways to preserve much of their social democratic while in some cases heritage moving, fairly successfully, toward theWest German model. In the Asia, Japanese model implanted under authori tarian of in systems governance South Korea, Taiwan, and Singapore also proved viable and consistent with reasonable was equality of distribution. It only in the 1990s that to neoliberalization began pay off for both the United States and Britain. This in the of a happened midst long-drawn-out period of deflation in and relative in a Japan stagnation newly unified Germany. Up for debate is the recession as a whether Japanese occurred simple result of competitive pres sures or itwas whether engineered by financial agents in the United States to humble the Japanese economy. 34 THE ANNALS OF THE AMERICAN ACADEMY

not so So why, then, in the face of this patchy if dismal record, have many been a persuaded that neoliberalization is successful solution? Over and beyond the stream from persistent of propaganda emanating the neoliberal think tanks and reasons suffusing the media, two material stand out. First, neoliberalization has success been accompanied by increasing volatility within global capitalism. That was was tomaterialize somewhere obscured the reality that neoliberalism gener ally failing. Periodic episodes of growth interspersed with phases of creative as severe was destruction, usually registered financial crises. Argentina opened to in was up foreign capital and privatization the 1990s and for several years the to into as darling ofWall Street, only collapse disaster international capital with at was drew the end of the decade. Financial collapse and social devastation a crisis. over quickly followed by long political Financial turmoil proliferated all some as the developing world, and in instances, such Brazil and Mexico, repeated waves to of structural adjustment and austerity led economic paralysis. a success On the other hand, neoliberalism has been huge from the standpoint as ofthe upper classes. It has either restored class position to ruling elites, in the or as United States and Britain, created conditions for capitalist class formation, in China, India, Russia, and elsewhere. Even countries that have suffered exten seen massive structures sively from neoliberalization have the reordering of class wave came to internally. The of privatization that Mexico with the Salinas de Gortari administration in 1992 spawned unprecedented concentrations ofwealth in a for who took over the state the hands of few people (Carlos Slim, example, an instant telephone system and became billionaire). With the media dominated by upper-class interests, the myth could be propa were not gated that certain sectors failed because they competitive enough, even more thereby setting the stage for neoliberal reforms. Increased social was inequality necessary to encourage entrepreneurial risk and innovation, and these, in turn, conferred competitive advantage and stimulated growth. If condi was tions among the lower classes deteriorated, it because they failed for personal reasons own and cultural to enhance their human capital through education, the acquisition of a protestant work ethic, and submission towork discipline and flexi arose of or bility. In short, problems because of the lack competitive strength In a because of personal, cultural, and political failings. Spencerian world, the argu ment survive. were masked went, only the fittest should and do Systemic problems a a of crises. under blizzard of ideological pronouncements and plethora localized If the main effect of neoliberalism has been redistributive rather than genera tive, then ways had to be found to transfer assets and channel wealth and income mass or from vulnera either from the of the population toward the upper classes an account these ble to richer countries. I have elsewhere provided of processes I mean the continu under the rubric oi accumulation by dispossession.15 By this, Marx had as ation and proliferation of accretion practices that designated "primitive" or These include the commodification "original" during the rise of capitalism. (1) in and privatization of land and the forceful expulsion of peasant populations (as Mexico and India in recent times); (2) conversion of various forms of property into rights (common, collective, state, etc.) exclusively private property rights; NEOLIBERALISM AS CREATIVE DESTRUCTION 35

to (3) suppression of rights the commons; (4) commodification of labor power and the suppression of alternative (indigenous) forms of production and consumption; (5) colonial, neocolonial, and imperial processes of appropriation of assets (includ ing natural resources); (6) monetization of exchange and taxation, particularly of in sex land; (7) the slave trade (which continues, particularly the industry); and (8) most use usury, the national debt, and, devastating of all, the of the credit system as means radical of primitive accumulation. a cru The state,with itsmonopoly of violence and definitions of legality, plays we cial role in backing and promoting these processes. To this list of mechanisms, now a as may add raft of additional techniques, such the extraction of rents from or erasure patents and intellectual property rights and the diminution of various as forms of communal property rights?such state pensions, paid vacations, access to care?won a or more education, and health through generation of social democratic struggles. The proposal to privatize all state pension rights (pioneered in one Chile under Augusto Pinochet's dictatorship) is, for example, of the cher in ished objectives of neoliberals the United States. cases it to to recent In the of China and Russia, might be reasonable refer events in "primitive" and "original" terms, but the practices that restored class are power to capitalist elites in the United States and elsewhere best described as an ongoing process of accumulation by dispossession that grew rapidly under neoliberalism. In what follows, I isolate four main elements.

1. Privatization

The and corporatization, commodification, privatization of hitherto public assets have been signal features of the neoliberal project. Its primary aim has to new in been open up fields for capital accumulation domains formerly to regarded off-limits the calculus of profitability. Public utilities of all kinds (water, telecommunications, transportation), social welfare provision (public as housing, education, health care, pensions), public institutions (such universi even ties, research laboratories, prisons), and warfare (as illustrated by the contractors in "army" of private operating alongside the armed forces Iraq) have to some all been privatized degree throughout the capitalist world. Intellectual property rights established through the so-called TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement within the WTO manner as defines genetic materials, seed plasmas, and all of other products pri vate use can property. Rents for then be extracted from populations whose prac tices a in had played crucial role the development of such genetic materials. is and Bio-piracy rampant, the pillaging of the world's stockpile of genetic resources iswell under to the of a way benefit few large pharmaceutical compa nies. The commons escalating depletion of the global environmental (land, air, and water) proliferating habitat degradations that preclude anything but capital intensive modes of agricultural production have likewise resulted from the wholesale commodification of nature in all its forms. The commodification (through tourism) of cultural forms, histories, and intellectual creativity entails 36 THE ANNALS OF THE AMERICAN ACADEMY

wholesale dispossessions (the music industry is notorious for the appropriation and exploitation of grassroots culture and creativity). As in the past, the power of state is to even the frequently used force such processes through against popular to will. The rolling back of regulatory frameworks designed protect labor and the environment reversion from degradation has entailed the loss of rights. The of common won to a property rights through years of hard class struggle (the right state pension, to welfare, to national health care) into the private domain has one in been of the most egregious of all policies of dispossession pursued the name of neoliberal orthodoxy.

The corporatization, commodification, and assets privatization of hitherto public have been signal features ofthe neoliberal project.

All of these processes amount to the transfer of assets from the public and to popular realms the private and class-privileged domains. Privatization, to of Arundhati Roy argued with respect the Indian case, entails "the transfer assets state to assets productive public from the private companies. Productive include natural resources: earth, forest, water, air. These are the assets that the ... state holds in trust for the people it represents. To snatch these away and sell a on a them as stock to private companies is process of barbaric dispossession no in scale that has parallel history."16

2. Financialization

wave The strong financial that set in after 1980 has been marked by its specu turnover financial transactions in lative and predatory style. The total daily of international markets that stood at $2.3 billion in 1983 had risen to $130 billion turnover in 2001 to the estimated by 2001. This $40 trillion annual compares to trade $800 billion thatwould be required support international and productive to one of investment flows.17 Deregulation allowed the financial system become the main centers of redistributive activity through speculation, predation, fraud, structured asset destruction and thievery. Stock promotions; Ponzi schemes; asset and the through inflation; stripping through mergers and acquisitions; pro even in the motion of debt incumbency that reduced whole populations, to of fraud advanced capitalist countries, debt peonage?to say nothing corporate as the of funds and their decimation and dispossession of assets, such raiding pension NEOLIBERALISM AS CREATIVE DESTRUCTION 37

by stock and corporate collapses through credit and stock manipulations?are all features ofthe capitalist financial system. on arose The emphasis stock values, which after bringing together the interests owners of and managers of capital through the remuneration of the latter in stock as we now in options, led, know, tomanipulations themarket that created immense a at was wealth for few the expense ofthe many. The spectacular collapse of Enron a emblematic of general process that deprived many of their livelihoods and pen we must at out sion rights. Beyond this, also look the speculative raiding carried by instruments hedge funds and other major of finance capital that formed the real on even as cutting edge of accumulation by dispossession the global stage, they sup to posedly conferred the positive benefit the capitalist class of "spreading risks."

3. The management and manipulation of crises

Beyond the speculative and often fraudulent froth that characterizes much of a neoliberal financial manipulation, there lies deeper process that entails the as a means springing of the debt trap primary of accumulation by dispossession. on Crisis creation, management, and manipulation the world stage has evolved into the fine art of deliberative redistribution of wealth from poor countries to rates in the rich. By suddenly raising interest 1979, Paul Volcker, then chairman ofthe U.S. Federal Reserve, raised the proportion of foreign earnings that bor countries to to rowing had put debt-interest payments. Forced into bankruptcy, countries to to like Mexico had agree structural adjustment. While proclaiming its as a to role noble leader organizing bailouts keep global capital accumulation on to stable and track, the United States could also open the way pillage the con Mexican economy through deployment of its superior financial power under crisis. was ditions of local This what the U.S. TreasuryAVall Street/IMF complex at became expert doing everywhere. Volker's successor, Alan Greenspan, resorted to similar tactics several times in the 1990s. Debt crises in individual countries, uncommon in the 1960s, became frequent during the 1980s and 1990s. Hardly in some as any developing country remained untouched and cases, in Latin were to America, such crises frequent enough be considered endemic. These were debt crises orchestrated, managed, and controlled both to rationalize the to assets system and redistribute during the 1980s and 1990s. Wade and Veneroso the essence of wrote captured this trend when they of the Asian crisis?provoked of initially by the operation U.S.-based hedge funds?of 1997 and 1998:

Financial crises have caused transfers of and to those who always ownership power keep own assets intact are in a to create their and who position credit, and the Asian crisis is no . . . there is no doubt thatWestern and are the exception Japanese corporations big winners. . . .The combination of massive devaluations pushed financial liberalization, and IMF-facilitated even the transfer of recovery may precipitate biggest peacetime assets from domestic to owners in the in foreign past fifty years anywhere the world, the transfers from to U.S. owners in Latin in or in dwarfing domestic America the 1980s Mexico after 1994. One recalls the statement attributed to Andrew Mellon: "In a assets return to depression their rightful owners."18 38 THE ANNALS OF THE AMERICAN ACADEMY

The to the deliberate creation to a analogy of unemployment produce pool of low-wage surplus labor convenient for further accumulation is precise. Valuable assets are out use thrown of and lose their value. They lie fallow and dormant to new until capitalists possessed of liquidity choose seize upon them and breathe into can life them. The danger, however, is that crises spin out of control and or become generalized, that revolts will arise against the system that creates them. One ofthe prime functions of state interventions and of international insti tutions is to orchestrate crises and devaluations inways that permit accumulation to occur without a or by dispossession sparking general collapse popular revolt. The structural adjustment program administered by theWall Street/Treasury/ IMF takes care of the first It is complex function. the job of the comprador neoliberal state assistance apparatus (backed by military from the imperial pow to ensure occur ers) that insurrections do not in whichever country has been raided. Yet signs of popular revolt have emerged, firstwith the Zapatista uprising inMexico in 1994 in and later the generalized discontent that informed antiglob alization movements such as the one that culminated in Seattle in 1999.

4. State redistributions

The state, once transformed into a neoliberal set of institutions, becomes a prime agent of redistributive policies, reversing the flow from upper to lower era. classes that had been implemented during the preceding social democratic in It does this the first instance through privatization schemes and cutbacks in meant government expenditures to support the social wage. Even when privati zation as to can appears beneficial the lower classes, the long-term effects be neg ative. At first blush, for example, Thatcher's program for the privatization of in as a social housing Britain appeared gift to the lower classes whose members now convert to a could from rental ownership at relatively low cost, gain control over a valuable asset, and augment their wealth. But once the transfer was over in accomplished, housing speculation took particularly prime central loca or out to tions, eventually bribing forcing low-income populations the periphery in cities like London and turning erstwhile working-class housing estates into centers intense in areas of gentrification. The loss of affordable housing central commutes produced homelessness for many and extraordinarily long for those service who did have low-paying jobs. The privatization ofthe ejidos (indigenous common in property rights land under the Mexican constitution) in Mexico, which a set became central component of the neoliberal program up during the on 1990s, has had analogous effects the Mexican peasantry, forcing many rural into cities in a dwellers the search of employment. The Chinese state has taken series measures whole of draconian through which assets have been conferred upon a small elite to the detriment ofthe masses. a means The neoliberal state also seeks redistributions through variety of other such as revisions in the tax code to benefit returns on investment rather than as incomes and wages, promotion of regressive elements in the tax code (such state access to user sales taxes), displacement of expenditures and free all by fees NEOLIBERALISM AS CREATIVE DESTRUCTION 39

on a vast tax (e.g., higher education), and the provision of array of subsidies and now breaks to corporations. The welfare programs that exist in the United States to a at federal, state, and local levels amount vast redirection of public moneys for as case corporate benefit (directly in the of subsidies to agribusiness and indi as in case in same rectly the of the military-industrial sector), much the way that as a mas the mortgage interest rate tax deduction operates in the United States sive to owners construction subsidy upper-income home and the of industry. in case of Heightened surveillance and policing and, the the United States, the in a more incarceration of recalcitrant elements the population indicate sinister to role of intense social control. In developing countries, where opposition can neoliberalism and accumulation by dispossession be stronger, the role of the assumes even neoliberal state quickly that of active repression to the point of low can now conve level warfare against oppositional movements (many of which as terrorist to niently be designated garner U.S. military assistance and support) as or such the Zapatistas inMexico landless peasants in Brazil. seven In effect, reported Roy, "India's rural economy, which supports hundred is too are in million people, being garroted. Farmers who produce much distress, too are in farmers who produce little distress, and landless agricultural laborers are out as estates of work big and farms lay off theirworkers. They're all flocking to in at the cities search of employment."19 In China, the estimate is that least half a to over billion people will have be absorbed by urbanization the next ten years if rural mayhem and revolt is to be avoided. What those migrants will do in the remains vast now cities unclear, though the physical infrastructural plans in the some to works will go way absorbing the labor surpluses released by primitive accumulation. tactics are The redistributive of neoliberalism wide-ranging, sophisticated, fre quently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative across destruction neoliberalization has visited the globe is unparalleled in the a history of capitalism. Understandably, it has spawned resistance and search for viable alternatives.

Alternatives

a of movements Neoliberalism has spawned swath oppositional both within its are and outside of compass, many ofwhich radically different from theworker based movements that dominated before 1980.1 saymany but not all. Traditional worker-based movements are no means even in by dead the advanced capitalist countries where have been much weakened they by the neoliberal onslaught. In South Korea and South movements arose Africa, vigorous labor during the 1980s, and inmuch of Latin America are working-class parties flourishing. In Indonesia, a labor movement is to putative of great potential importance struggling be heard. The for labor unrest in is immense potential China though unpredictable. 40 THE ANNALS OF THE AMERICAN ACADEMY

mass And it is not clear either that the of the working class in the United States, over own which has this past generation consistently voted against its material reasons interests for of cultural nationalism, religion, and opposition to multiple into a social movements, will forever stay locked such politics by the machina no reason to tions of Republicans and Democrats alike. There is rule out the a in resurgence of worker-based politics with strongly antineoliberal agenda future years. are But struggles against accumulation by dispossession fomenting quite dif con ferent lines of social and political struggle. Partly because of the distinctive ditions that give rise to such movements, their political orientation and modes of in organization depart markedly from those typical social democratic politics. The not to over or accom Zapatista rebellion, for example, did seek take state power a a more to plish political revolution. It sought instead inclusive politics work in an through the whole of civil society open and fluid search for alternatives that to would consider the specific needs of different social groups and allow them it improve their lot. Organizationally, tended to avoid avant-gardism and refused to on a It to a take the form of political party. preferred instead remain social to a in movement within the state, attempting form political power bloc which to indigenous cultures would be central rather than peripheral. It sought thereby to a of accomplish something akin passive revolution within the territorial logic state power. to The effect of such movements has been shift the terrain of political organi a zation away from traditional political parties and labor organizing into less across soci focused political dynamic of social action the whole spectrum of civil in ety. But what they lost in focus they gained relevance. They drew their in in strengths from embeddedness the nitty-gritty of daily life and struggle but so to doing often found it hard extract themselves from the local and the partic ular to understand the macro-politics of what neoliberal accumulation by dispos was was is session and is all about. The variety of such struggles and simply even were stunning. It is hard to imagine connections between them. They and are a movements all part of volatile mix of protest that swept the world and move increasingly grabbed the headlines during and after the 1980s.20 Those ments and revolts were sometimes crushed with ferocious violence, for the most state in the name of order and Elsewhere part by powers acting stability. they wars as accumulation produced interethnic violence and civil by dispossession intense rivalries in a world dominated divide and produced social and political by on states or in rule tactics the part of capitalist forces. Client supported militarily some the instances with special forces trained by major military powers (led by a minor in a United States with Britain and France playing role) took the lead sys tem to activist movements chal of repressions and liquidations ruthlessly check lenging accumulation by dispossession. movements an ideas The themselves have produced abundance of regarding to or alternatives. Some seek de-link wholly partially from the overwhelming envi powers of neoliberalism and neoconservatism. Others seek global social and or institutions such as the ronmental justice by reform dissolution of powerful NEOLIBERALISM AS CREATIVE DESTRUCTION 41

a IMF, theWTO, and theWorld Bank. Still others emphasize reclaiming of the as commons, thereby signaling deep continuities with struggles of long ago well as with struggles waged throughout the bitter history of colonialism and imperi a or a alism. Some envisage multitude in motion, movement within global civil society, to confront the dispersed and de-centered powers ofthe neoliberal order, more new while others modestly look to local experiments with production and consumption systems animated by different kinds of social relations and ecologi are inmore cal practices. There also those who put their faith conventional polit as one ical party structures with the aim of gaining state power step toward global currents now come reform ofthe economic order. Many of these diverse together at theWorld Social Forum in an attempt to define their shared mission and build an structure organizational capable of confronting the many variants of neoliber is to to alism and of neoconservatism. There much here admire and inspire.21

Though ithas been effectivelydisguised, we a have lived through whole generation of on sophisticated class struggle the part ofthe upper strata to restore or, as in China and Russia, construct class dominance.

sorts can an But what of conclusions be derived from analysis of the sort here constructed? To begin with, the whole history of the social democratic compro mise turn to and the subsequent neoliberalism indicates the crucial role played in or by class struggle either checking restoring class power. Though it has been we a effectively disguised, have lived through whole generation of sophisticated on as class struggle the part of the upper strata to restore or, in China and Russia, construct class dominance. This occurred in decades when many progressives were was a theoretically persuaded that class meaningless category and when those institutions from on which struggle had hitherto been waged behalf of the were we working classes under fierce assault. The first lesson must learn, there is if it acts we fore, that looks like class struggle and like class struggle, then have to name it for it is. mass to to what The ofthe population has either resign itself the historical and geographical trajectory defined by this overwhelming class or in power respond to it class terms. To it is not towax some put thisway nostalgic for lost golden age when the pro was inmotion. Nor mean ever letariat does it necessarily (if it should have) that 42 THE ANNALS OF THE AMERICAN ACADEMY we can to some as appeal simple conception of the proletariat the primary (let no alone exclusive) agent of historical transformation. There is proletarian field to we can to of Utopian Marxian fantasy which call. To point the necessity and not to is inevitability of class struggle is say that the way class is constituted deter or even in movements mined determinable advance. Class make themselves, though not own under conditions of their choosing. And analysis shows that those condi are intomovements tions currently bifurcated around expanded reproduction?in are which the exploitation of wage labor and conditions defining the social wage movements central issues?and around accumulation by dispossession?in which everything from classic forms of primitive accumulation through practices destructive of cultures, histories, and environments to the depredations wrought are by the contemporary forms of finance capital the focus of resistance. Finding an the organic link between these different class currents is urgent theoretical occur in an and practical task. Analysis also shows that this has to historical is in con geographical trajectory of capital accumulation that based increasing across uneven nectivity space and time but marked by deepening geographical unevenness must as developments. This be understood something actively pro no duced and sustained by processes of capital accumulation, matter how impor tant the signs may be of residuals of past configurations set up in the cultural landscape and the social world. Analysis also points up exploitable contradictions within the neoliberal agenda. The gap between rhetoric (for the benefit of all) and realization (for the benefit a over movements of small ruling class) increases space and time, and social have on done much to focus that gap. The idea that the market is about fair competi tion is increasingly negated by the facts of extraordinary monopoly, centralization, and internationalization on the part of corporate and financial powers. The star in states as tling increase class and regional inequalities both within (such China, as as a Russia, India, Mexico, and in Southern Africa) well internationally poses can no as serious political problem that longer be swept under the rug something on a transitional the way to perfected neoliberal world. The neoliberal emphasis use state to upon individual rights and the increasingly authoritarian of power a more sustain the system become flashpoint of contentiousness. The neoliberal ism is as a ifnot recognized failed disingenuous and Utopian project masking the more a mass restoration of class power, the it lays the basis for resurgence of economic fair movements voicing egalitarian political demands, seeking justice, trade, and greater economic security and democratization. nature that But it is the profoundly antidemocratic of neoliberalism should enormous lever surely be the main focus of political struggle. Institutions with are age, like the Federal Reserve, outside any democratic control. Internationally, over institu the lack of elementary accountability let alone democratic control tions such as the IMF, theWTO, and theWorld Bank, to say nothing ofthe great a concern private power of financial institutions, makes mockery of any credible about democratization. To bring back demands for democratic governance and is not to some for economic, political, and cultural equality and justice suggest a in instance to return to golden past since the meanings each have be reinvented NEOLIBERALISM AS CREATIVE DESTRUCTION 43

to deal with contemporary conditions and potentialities. The meaning of democ we racy in ancient Athens has little to do with the meanings must invest itwith as as today in circumstances diverse Sao Paulo, Johannesburg, Shanghai, Manila, across San Francisco, Leeds, Stockholm, and Lagos. But right the globe, from China, Brazil, Argentina, Taiwan, and Korea to South Africa, Iran, India, and Egypt, and beyond the struggling nations of Eastern Europe into the heartlands movements are to of contemporary capitalism, groups and social rallying reforms a now expressive of democratic values. That is key point of many ofthe struggles emerging. more The clearly oppositional movements recognize that their central objec to so tive must be confront the class power that has been effectively restored more under neoliberalization, the theywill be likely to cohere. Tearing aside the so neoliberal mask and exposing its seductive rhetoric, used aptly to justify and restoration a to in contem legitimate the of that power, has significant role play to set porary struggles. It took neoliberals many years up and accomplish their can no march through the institutions of contemporary capitalism. We expect less a in of struggle when pushing the opposite direction.

Notes

1. See theWeb site http://www.montpelerin.org/mpsabout.cfm. 2. G. W. Bush, "Securing Freedoms Triumph," New York Times, September 11, 2002, p. A33. The State America can on National Security Strategy ofthe United of be found theWeb site www.whitehouse.gov nsc/nss. See G. W. the Nation in Prime Time Press also Bush, "President Addresses Conference," April 13, 2004, http://www.whitehouse.gov/news/releases/2004/0420040413-20.html. 3. Matthew Arnold is cited in Robin Williams, Culture and Society, 1780-1850 (London: Chatto and Windus, 1958), 118. 4. Antonia Juhasz, "Ambitions of Empire: The Bush Administration Economic Plan for Iraq (and Beyond)," Left Turn Magazine 12 (February/March 2004): 27-32. on 5. Thomas Crampton, "Iraqi Official Urges Caution Imposing Free Market," New York Times, October 14, 2003, p. C5. 6. Gabriel Pinochet's Economists: The in Juan Valdez, Chicago School Chile (New York: Cambridge University Press, 1995). 7. Andre and since War II: Philip Armstrong, Glynn, John Harrison, Capitalism World The Making and Breaking ofthe Long Boom (Oxford, UK: Basil Blackwell, 1991). 8. Gerard Dumenil and "Neoliberal A New Dominique Levy, Dynamics: Phase?" (Manuscript, 2004), 4. See also Task Force on an Inequality and American Democracy, American Democracy in Age of Rising Inequality (Washington, DC: American Political Science Association, 2004), 3. 9. Daniel and Yergin Joseph Stanislaw, The Commanding Heights: The Battle between Government and Marketplace That Is Remaking theModern World (New York: Simon & Schuster, 1998). 10. Thomas The New Byrne Edsall, Politics of Inequality (New York: Norton, 1984); Jamie Court, Corporateering: How Corporate Power Steals Your Personal Freedom (New York: Tarcher Putnam, 2003); and Thomas Frank, What's theMatter with Kansas: How Conservatives Won the Heart of America (New York, Metropolitan Books, 2004). 11. K. William Tabb, The Long Default: New York City and the Urban Fiscal Crisis (New York, Review and E. Monthly Press, 1982); Roger Alcaly and David Mermelstein, The Fiscal Crisis of American Cities (New York, Vintage, 1977). 12. Joseph Stiglitz, Globalization and Its Discontents (New York: Norton, 2002). 13. David Harvey, The New Imperialism (Oxford, Oxford University Press, 2003). 44 THE ANNALS OF THE AMERICAN ACADEMY

on 14. World Commission the Social Dimension of Globalization, A Fair Globalization: Creating Opportunities for All (Geneva, Switzerland: International Labor Office, 2004). 15. Harvey, The New Imperialism, chap. 4. 16. Arundhati Roy, Power Politics (Cambridge, MA: South End Press, 2001). 17. Peter Dicken, Global Shift: Reshaping the Global Economic Map in the 21st Century, 4th ed. (New York: Guilford, 2003), chap. 13. versus 18. Robert Wade and Frank Veneroso, "The Asian Crisis: The High Debt Model theWall Street Treasury-IMF Complex," New Left Review 228 (1998): 3-23. 19. Roy, Power Politics. 20. Barry K. Gills, ed., Globalization and the Politics of Resistance (New York: Palgrave, 2001); Ton a Mertes, ed., A Movement ofMovements (London: Verso, 2004); Walden Bello, Deglobalization: Ideas for New World Economy (London: Zed Books, 2002); Ponna Wignaraja, ed., New Social Movements in the South: Empowering the People (London: Zed Books, 1993); and Jeremy Brecher, Tim Costello, and Brendan Smith, Globalization from Below: The Power of Solidarity (Cambridge, MA: South End Press, 2000). a 21. Mertes, A Movement ofMovements; and Walden Bello, Deglobalization: Ideas for New World Economy (London, Zed Books, 2002).