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Is Neoliberalism A Force For De Democratisation Politics Essay

Is Neoliberalism A Force For De Democratisation Politics Essay

Critically discuss with reference to the writings of Wendy Brown and other theorists of your choice. I will be looking at whether this argument by Wendy Brown has any real foundation and what other theorists say about neoliberalism. Theorists that I have chosen to include in this discussion are: M. Foucault, D. Harvey and P. Bourdieu. I will venture arguments in favour and against.

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I shall start from providing a brief definition of neoliberalism. According to Brown: “…Neoliberalism is equated with a radically free market: maximized competition and free trade achieved through economic deregulation, elimination of tariffs, and a range of monetary and social policies favourable to business and indifferent toward poverty, social deracination, cultural decimation, long term resource depletion, and environmental destruction. Neoliberalism is most often invoked in relation to the Third World, referring either to NAFTA-like schemes that increase the vulnerability of poor nations to the vicissitudes of globalization or to International Monetary Fund and World Bank policies that, through financing packages attached to “restructuring” requirements, yank the chains of every aspect of Third World existence, including political institutions and social formations.” (Brown, 2006)

The product of neoliberalisation is de-democratisation. It is a very interesting process, especially when many people are not even aware of its existence. It affects human rights and the rights of workers, freedom and equality, respect for law and legal process, and citizenship. North America is a good example. De-democratisation developed almost by stealth and they failed to recognize it until some of the effects became apparent – their jobs, and job security began to disappear. De-democratisation is a process, which is a partial reversal of democratisation. An example of neoliberalism was witnessed in the years under M. Thatcher in England, or Regan’s, Clinton’s or Bush’s administrations.

I will be analysing Brown’s account of de-democratisation first.

Wendy Brown is an author of: “American Nightmare: Neoliberalism, Neoconservatism, and De-democratisation”, and “Edgework: critical essays on knowledge and politics”.

She presents a very descriptive account of how the ideology of neoliberalism exists alongside neoconservatism. According to her, those rationalities together and separately produce a process of de-democratisation.

Brown suggested that Americans are under neoconservative influence which is strongly associated with fundamental Christianity. Interestingly, fundamental Christianity reflects a basically democratic system, with elections for its leadership roles – deacons, elders, stewards, and vote selection for senior positions – bishops, elders, ministers etc. Aligning with fundamental Christianity could be seen as preserving democratic integrity. Moreover, many states in the USA reflect fundamental religious values, like the Mid West Bible belt, Amish or Mormon regions, where they can express their beliefs because they participate in a free and democratic system. Therefore, it could be argued that Brown is incorrect, and Christian Fundamentalism is not necessarily an undemocratic movement. Drawing from this a political election candidate in these states would have to secure backing from these religious quarters. This is a tactic which President Bush and others successfully developed. Her argument that neoconservatism is inherently de-democratising is not as strong as first suggested.

Brown is not trying to get us to understand whether the ideology of neoliberalism needed to occur in the USA, but she is sending a clear message of what damage its presence can do.

The first point of her argument is contrasted with Hall’s theory referring to Freud’s dreams, which suggest that neoliberalism is an accident rather than a conscious and deliberate choice. She feels that neoliberalism is not an unconscious movement and therefore dismisses Hall’s account, which others would not necessary agree with, as it could be seen that neoliberalism is a choice driven by greed, need, power and capitalism. She examines dreamwork in perspective of suitability of political analysis, which by the end she dismisses because is not coherent. She tries to understand the implications of neoliberalism from a political perspective not economic, and she briefly describes economic issues in a differently to the way that Harvey analyzed them. It should not be suggested that neoliberalism is limited to those two perspectives, as is it not. Another perspective which goes with this is environmental or political identity, which Brown does not really discuss.

In her writings she refers to Regan, Clinton and Bush as those who are responsible for neoliberalism in the USA and abroad.

In American Nightmare she asks whether democracy itself still has meaning in the modern world. She focuses on differences between neoliberalism and neoconservatism rather than trying to combine them and defining what works well and should be kept and what does not work and therefore should be challenged.

There is a lack of deep economic and historical explanation, which we can see in Harvey’s account: “A brief history of neoliberalism” and “Neoliberalism and the restoration of class power”, although she touches on this in a limited manner. There is an immediate argument against Bush’s administration, which delivers a one-sided view, effectively influencing the view rather then presenting positive and negative points in a balanced way so the reader can have an independent opinion.

She seems to not see that neoliberalism could be seen as something which is already present in human nature. I would like to contrast her work with a quote from G. Becker, whose words were used by Foucault: “Economics is the science which studies human behaviour as relationships between ends and scarce means which have alternate uses”. Therefore: “Everything for which human beings attempt to realize their ends, from marriage, to crime, to expenditures on children, can be understood “economically” according to a particular calculation of cost for benefit. This entails a massive redefinition of “labour” and the “worker.” The worker has become “human capital”. Salary or wages become the revenue that is earned on an initial investment, an investment in one’s skills or abilities. Any activity that increases the capacity to earn income, to achieve satisfaction, even migration, the crossing of borders from one country to another, is an investment in human capital” ( Foucault 2008).Because of this contrast it could be said that she might have ignored the effect on human nature or just simply omitted it in order to sustain her argument.

Foucault sees a difference between liberalism and neoliberalism in the way that each of them focuses on economy. Classical liberalism focused on an exchange but neoliberalism focuses on competition. However, they share the general idea of “homo economicus” – the consequence here is the shift between the exchange and competition, which has its own effects. Moreover, neoliberalism is not only a set of economic policies.

Neoliberalism does bring some benefits, which are visible through privatized companies, especially if they are a manufacturer of similar goods. It offers consumers price competition. Businesses have to compete in order to survive, which results in a lowering of market prices. We are a consumer society.

Brown(2006) says: “But here it is important to remember that neoconservatism is also born in part as a response to capitalism’s erosion of meaning and morality, and that the founding neoconservatives, while opposed to communism as a political and social form, were rarely ardent free marketeers”

According to Brown neoliberalism and neoconservatism go together. She suggested that Bush’s administration, which originates in the Republican Party tries “to be both the Party of Moral Values and Party of Big Business” (Brown, 2006). She also says that imposing a moral order is undemocratic. Surely though, it could be argued that a moral order, imposed by a democratically elected government, for the overall good of the populace could be deemed as democratic. Surely, neoliberalism is only going to align with certain political persuasions – not all are suitable such as extreme socialism, even if it is imposed by the IMF or World Bank or other external forces.

In her opinion this does not work. Neoconservatism and neoliberalism fight against each other openly and ostentatiously. Big business comes before human beings. There also tensions in this relationship: “about the sustainable level of federal debt generated by military expenditures: while neither rationality hews to the fiscal austerity and balanced federal checkbook promulgated by classic conservatives, neoliberals are more than a little unhappy about the military tab run up the neocons.”(Brown, 2006)

Another point that she touches on is that neoliberalism is reducing freedom of speech. Media sources such as newspapers and TV have come into the ownership of private individuals who have neoliberal persuasions. These individuals can influence media content to their own benefit. There is also a risk of media monopolisation.

If we have corporate interest and free trade on one side and moral values on the other, this can create a dangerous mix which she describes as “threats”. There are different types of “threats” identified by her, such as “threats to security” for example seen in Iran’s nuclear program.

Neoliberalism reduces human rights. She suggested China and Cuba as examples of countries who are “violators of human rights”. Of course, that is obvious, but it could be argued that human rights are being violated by the governing regime rather than neoliberalist rationality. Those countries do not value democratic ideals. The nature of the governance within those countries dictates how individuals are treated in society as a whole.

In this sense her argument misses out depth of analysis within her examples, which can be contrasted with Harvey’s account on China.

Harvey promulgates China as a strange case of neoliberalism.

Firstly, the country is run under communist rules. However, the leadership of Deng Xiaoping brought significant changes to China’s economy. Harvey (2009) says: “This coincided – and it is very hard to consider it as anything other than a conjunctural accident of world-historical significance – with the turn to neoliberal solutions in Britain and the United States. The outcome has been a particular kind of neoliberalism interdigitated with authoritarian centralized control. As the formative case of Chile had early on demonstrated, dictatorship and neoliberalism were in no way incompatible with each other.” Deng used a slogan: “the concept of an ideal society that provides well for all its citizens” in order to achieve his goal. He focused on specific areas to improve: industry, education, science, defense and agriculture.

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Harvey argues that the events which took place in China under Deng’s rule were in their own way related to the rise of neoliberalism. But, in an interview he adds: “Whether it was by an accident or design, I don’t really know, but it certainly has made a huge difference to how the global economy is working today.” (an interview with Harvey 2006).

Another significant matter to be noticed here is that there was no involvement by the IMF, as was the case in Mexico, Chile and Bolivia.

Harvey discussed many countries but for the sake of this argument I shall present the case of Mexico, as this illustrates a different type of neoliberalism to that of China. Moreover, the case of Mexico, Chile and Bolivia backs up the argument of Wendy Brown, who uses examples on how the powerful presidents of America influence other countries’ politics and economy in order to extract profit from them.

And actually, the case of Mexico is important as it is the time when neoliberalism became a practical tool for America’s economy. The economy in 1974/75 was not doing well. Because of this economic depression a solution had to be found. So, the head of Citibank at the time; W. Wriston suggested that monies should be invested in countries, for a simple reason – they cannot vanish. This seemed to be working for a time until fiscal crisis arrived. Subsequently, Volker increased interest rates. This was not everything, as the IMF was also imposing conditions which were in favour of the USA, on the countries which had taken loans. The agreement was that they will be helped out if they adopted neoliberal systems, which meant privatization and opening their markets to foreign investors. Initially, Mexico’s interest rate was set at 5% but after the Volker changes, it rose to 17%. Mexico could not afford to service debts at this level. The country approached bankruptcy in 1982.

Paradoxically, Mexico was suddenly on the Forbes list of countries with a significant number of personal billionaires. Neoliberalisation helps the rich increase their personal wealth, but at the expense of the poorer in society. Harvey is not saying that the USA forced neoliberalism on Mexico, but he says that the USA put pressure on Mexico and its elite classes, and they agreed that this is what they wanted to do. Therefore, this was a relationship between Mexico’s elite and the IMF, and for this reason they both are responsible for the neoliberalisation of Mexico.

Many years later, citizens in the Mexican city of Cochabamba faced a dilemma. In 1999 the Bolivian government was put under heavy pressure from the World Bank. As a result a water supply system was been privatised and placed under the control of a British company, owned by the US multinational Betchel. In this case there was no competition. A monopoly came into existence and prices were set at an exorbitantly high rate. The Director of the World Bank; Wolfensohn had the view that if public services were made free of charge to consumers, it would lead to considerable waste. Bolivians needed to pay a proper unsubsidised charge. He maintained that this was not designed to make poor people even poorer. People had different opinions about it, and protests ensued. Protest leader Oscar Olivera responded, “In Mr. Wolfensohn’s view, requiring families who earn $100 per month to pay $20 for water may be ‘a proper system of charging,’ but the thousands of people who filled the streets and shut down Cochabamba last week apparently felt otherwise.” (Schultz, 2010)

The World Bank again put profit before people’s welfare. This reflection of neoliberalist political economics proved once again that human beings have little value.

After, this incident the Bolivian government was forced to reverse the privatization. “… the democratic process must be allowed to take decisions on vital issues of service delivery, especially if the service is essential to the poor.” (Coates, 2001) This message is being repeated on an ever more regular basis – when people feel strongly enough, the democratic voice is powerful enough to overturn unpopular local decisions. This was also witnessed during the Thatcher years with the hugely unpopular riots against the ‘Poll Tax’ in 1990.

An additional account of neoliberalism could be illustrated by Bourdieu’s: “Utopia of endless exploitation; the essence of neoliberalism” In Bourdieu’s view he presents an abstract and ideological view which contradicts itself. If social welfare and workers rights are protected, neoliberalism by its definition can never succeed in its purest sense. For him (1998) neoliberalism is: “A program for destroying collective structures which may impede the pure market logic.”

In neoliberalism rich people, whose political and economic needs are expressed, are able to exercise power within society. Moreover, those people have the knowledge that they would not face any consequences in the event that something went wrong. Thus, they also have a threat of losing their place in the market and the support of their stockholders, and because of this financial directives are needed in order to create rules in their favour. Flexibility is a keyword for them. Employees can be taken on with different types of contracts, specifically to fit in with a business need at time. Another condition is competition. It is not only on the business level but individual too. Competition also produces job insecurity in the work-place, which then produces the threat of unemployment. This is even more relevant at managerial level than at a basic job level. Bourdieu backs this up by saying: “Organisational discourse has never talked as much of trust, co-operation, loyalty, and organisational culture as in an era when adherence to the organisation is obtained at each moment by eliminating all temporal guarantees of employment (three-quarters of hires are for fixed duration, the proportion of temporary employees keeps rising, employment “at will” and the right to fire an individual tend to be freed from any restriction).” (Bourdieu,1998)

Bourdieu’s (1998) words on the effects of neoliberalism: “And yet the world is there, with the immediately visible effects of the implementation of the great neoliberal utopia: not only the poverty of an increasingly large segment of the most economically advanced societies, the extraordinary growth in income differences, the progressive disappearance of autonomous universes of cultural production, such as film, publishing, etc. through the intrusive imposition of commercial values, but also and above all two major trends. First is the destruction of all the collective institutions capable of counteracting the effects of the infernal machine, primarily those of the state, repository of all of the universal values associated with the idea of the public realm. Second is the imposition everywhere, in the upper spheres of the economy and the state as at the heart of corporations, of that sort of moral Darwinism that, with the cult of the winner, schooled in higher mathematics and bungee jumping, institutes the struggle of all against all and cynicism as the norm of all action and behaviour.” His account broadly goes with Brown’s.

Harvey analyzed particular countries in depth and gives an explanation for their move to neoliberalism at the time. We know that neoliberalism works for a while, and it also works for some societies, and not all necessarily democratic. However, having said this we are living in a consumer society, which frequently places need before values. This is where Brown sees this contradiction of neoliberalism working with neoconservatism. Her example of Pfizer’s producing Viagra for its sex obsessed young society and yet at the same time dictating moral values emphasizes the dichotomy between neoliberalism and neoconservatism.

Another issue that she raises involves political ethical scandals, such as that of Jack Abramoff. He was a former Republican lobbyist who was sentenced after pleading guilty to fraud, tax evasion and malfeasance. And the examples of corporate scandals such as Enron and World Com, where the banks made considerable loans, only to find that ‘loose’ accounting procedures masked the real value of the businesses. The fact they were not discovered before is due to the effects of neoliberalism, which reduces the amount control and regulation of business. The banks lent them money until an error in accounting was discovered, which revealed a consider imbalance in stock value. However, since then, many more scandals have come to light.

Brown’s account is very descriptive but seemed to look only from one perspective, which only underlined negative issues. She described very well how neoliberalism combines with neoconservatism. Moreover, it shows us how this duality is destroying the meaning of democracy. Decades of human history built a chain of separate events which when driven upon those economical, political, socio-psychological changes will develop a new form of governance. And this will fit in those strict contexts of that event and purpose of it. In her understanding democracy is endangered by neoliberalism and can be rebuilt by going back to values of “classical liberalism”. As we are now a consumer society the question here would be: Do all of people are happy to go back to “classical liberalism”? Classical liberalism is viewed in a positive light. However, the long and frequently unhappy history of liberal democracy in the USA has been littered with skeletons which seem to have been put firmly back in the cupboard. Or maybe people want something new? The majority of people still are happy to get cheaper and cheaper products and services. They do not necessary think that someone in a sweat shop in a developing country is competing with them.

I can agree with Brown that because of neoliberal lack of regulation, financial scandals will frequently occur.

My final point of this paper gives a recent example of the effect of neoliberalism in a democratic country but contrary to the perceived norm, democratic rule prevailed. Iceland is in financial crisis mainly because of a lack of regulation. The main bank operated a very competitive savings account, which took in billions of pounds from savers and investors. However, when the recent economic recession took hold, the bank failed. The Icelandic government were unable to assist the bank, so the governments of Britain and Holland provided financial assistance. The IMF also loaned them $10 billion. Moreover, they loaned monies under different conditions than they used to do in the past. The arrangement was that the Icelandic government would repay this loan at a later date. However, the people of Iceland felt that they should not be held responsible for the collapse of the bank, and objected to repaying the loans, which would amount to €12,000 per head of population. In a way this is also reflecting the de-democratisating process, as certain groups of people benefited from neoliberal rationality, which resulted in losing jobs, reduced significance of union workers, and generally creating poverty. Citizens in a democratic manner protested, and their powerful voice was heard. Therefore, the Prime Minister, who was about to sign the repayment agreement, then refused ratification, and instead decided to put the issue to a public vote. At the end we can see that this is an exceptional example, which leads to the conclusion that neoliberalism is not always fully de-democratising.

Icelandic Politician Valgarðsson said: “Right now we have a chance to build a truly revolutionary society, which aims to benefit the whole of it, not just a privileged few,” (Chataigne, 2009) He pointed out that the situation in his country is the beginning what will happen around the world in the near future. I think that he is indeed right. Another politician added:”I hope this is the end of pure capitalism and we will see the rise of more humane policies.” (Chataigne, 2009)

In summary, it is clear that all presented accounts are emphasising consequences of neoliberalism. Harvey’s writings are more about connections between the power of specific classes, imperialism and capitalism, which concludes that this only benefits the minority at the expense of the majority. He analyses the theory and practice of neoliberalism purely on historical grounds.

In Volker’s and Wriston’s ideas, they were looking for a solution to political economics at the time. It cannot be argued that their intentions were to de-democratize societies. It is quite common in the history of humanity that society develops ideas which then turn into something very different than initially planned.

Bourdieu is strong in his attack on neoliberalism. Bourdieu encouraged the emergence of some of the social movements in France, not only by writing but by action too.

Finally, Brown strongly emphasises the negative issues associated with neoliberalism, without looking for any explanation of why this has occurred.

I agree that neoliberalism is certainly de-democratizing. Media ownership, job security, worker and human rights, abrogation of the law – are all de-democratising effects. However I feel that neoconservatism, which was “born in part as a response to capitalism’s erosion of meaning and morality”. (Brown, 2006) has proven to be balancing and ameliorating force, even though not all of it’s effects can be seen as positive. Neoliberalism is a rolling bandwagon upon which many countries are jumping – whether by intention or force – protection of market share and jobs, or being pushed by external entities such IMF or World Bank. As neoliberalism gains strength, the danger is that the influence of neoconservatism will wane, leaving us open to the juggernaut of globalization and further devaluation of democratic influence. Eventually, as we have seen elsewhere, there must be a backlash against neoliberalism; an element of restraint must be introduced. Timing is crucial – as neoliberalism eats away at the very fabric of democracy, the chances of a right and democratic change are reduced. Which neoliberal country would want to be the first to change direction? To deliberately put markets and trade at risk? To bring upon itself the spectre of unemployment, reduction of living standards, backlash from all classes of society against the medium-term austerity resultant on a conscious painful decision? What government would even survive? The change away from neoliberalism must surely be as gradual as the change to it. By stealth, and over time.



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