Ever since in the world history, people and nations have relied on economic, social and political development theories on which believes and ways of doing things have been heavily anchored. Before 1970s, the modernization theory of development had been the heavily adopted style for developing most of the countries post-war era. Modernization theory of development was anchored on moving the countries from the traditional ways of doing things like manufacturing to adopt new and better ways with an aim of improving the livelihoods of the citizens. The theory was good but not sufficient to address the social problems the globe was facing then. It was due to the above gap in development and the quest to keep tabs with the developed countries that economists and social scientists invented neoliberalism.
Neoliberalization refers to a policy model of economic and social studies that aims at transferring the ownership and control of economic factors from the public to the private sector (McBride, 1997, p. 7). Key to the economic factors that neoliberalism advocates for transfer of ownership to the private sector is capital. As such, neoclassical theorists argue that for development to be achieved in entirety, governments should agree to implement such policies like undertake thorough tax reforms to expand the tax base, limit subsidies to the private sector, open markets up for trade, limit protectionism of infant firms and reduce their expenditure of national deficits. Grossly, the argument was for free markets trading initiative by the governments.
This paper focuses on the neoliberalisation concept from the view of two of the main theorists David Harvey and McBride.
History of neoliberalism according to Harvey and McBride
Harvey has been described as a theorist who advocates for neoliberalism from the left in that he is seen to advocate for more freedom within the production corridors unlike the full control of what the Western governments wished to maintain as a means of exercising global dominance. In his book, A Brief History of Neoliberalism, Harvey dissects how the world has found itself where it has been for the better part of the 20th and the 21st century as well. His main focus is the economic and social shifts hath have occurred majorly the liberalization of free markets.
Free markets according to Harvey have been the fruit of the willingness and the ability of the governments across the globe to create such leadership elements like the military, the police and the jurisdictional wing with an aim of protecting private property ownership (Harvey, 2007, p. 53). Such bodies in the view of Harvey can fully explain how there has been a shift of power and control in the social, economic and political sectors from the historical dynasties to feature individuals from less renowned backgrounds in high offices globally. To reinforce what Harvey refers to as the gradual shift towards the realization of full independence by the globe, governments have had a further role and responsibility to ensure that where free markets never existed and governments enjoyed full control like in the education, health, social security and environmental pollution prevention frontiers, were introduced. With the governments exercising less regulation and control in such basic sectors of the economy as stated above, Harvey stated that more power will have shifted to the public and that has placed more states in the paths of democracy as witnessed today.
Harvey cautions that the urge by the governments to intervene for self-interests has been highly discouraged over time since they are not in apposition to predict the market eventualities (Harvey, 2007, p. 98). The end result has been complete reliance on the market forces outplay which has been the reliable source of information alongside the public. With such information more vested with the public, the governments have been left with little powers to push around their subjects hence achievement of full liberalization in the markets.
McBride on the other hand is not any different from Harvey. McBride explains the history of neoliberalisation form the angle that the economic and social polices adapted in the late part of the 20th
century and in the 21st century were arrived at as a result of an attack on the detrimental Keynesian economy which the globe operated on before 1970s (McBride, 1997, p. 77). According to McBride, Keynesianism as a social and economic theory was majorly built around labor and specific popular sector organizations which were not helpful to the global economy in any way. The corporate sector therefore is much attributable for the social attack on Keynesianism according to McBride.
McBride argues that the continued assault on Keynesianism was more of an attack on the social class that had been a presume character of the post-war period. Social classes were determinant in the labor markets as well as other social gatherings (McBride, 1997, p. 189). They were a central force to reckon upon which victory in corporate interests were heavily anchored. McBride then sites the Canadian state as classic example of what shift form the Keynesian economy to a free market economy can do to a state.
The Second World War was a historical fortress around which the change form Keynesianism to the modern free economy was harbored (McBride, 1997, p. 32). The results of this historic war in which the Soviet Union proved many wrong and changed the narrative. Many were left believing that an active state could not only stage and win a military war, but also had the right economy behind it to support the achievement of such impressive results. The case of Soviet Union was unique since they were being fought by the Western world and their allies while the communists chose to stand alone. The end result was a challenge of the social class across the globe the end result of which was full employment, economic security and labor rights unlike in the Keynesian economy where such privileges were enjoyed by few. With such rights enjoyed by the majority, neoliberalisation then became the norm for the last three decades according to McBride.
How/why neo-liberalization become the dominant economic paradigm
In the view of the above historical analysis of the origin of neoliberalisation, the two authors paint a picture of the post-war world which was harbored from achieving full economic and social growth as a result of bad socio-economic policies. The Second World War left much of the population across the world weakened spare the few who were in power and had the right machinery to defend their interests (Harvey, 2007, p. 192). As a result, there was a dire need for a socio-economic system that would abolish the social class and challenge the status quo delivering the control of natural resources and power to the majority. It was in the wake of the above realizations that neoliberalism was borne and got global embracement since many saw it as the only sure way to full economic and social independence.
How and why has neo-liberalization transformed economic structures?
With more capital and power in the hands of the majority, the decisions pertaining to natural resources both socially and economically are more public centered. The end result has been exploitation of the global natural endowment of resources with the interests of the majority at mind (McBride, 1997, p. 67). This is unlike before when such decisions would be made by few in whom all the power and influence was vested for their personal gain. This has led to freedom within the markets whereby prices are no longer fixed by those in power but as per the market forces outplay hence, profits and losses are fairly shared out. People can take on absolutely every other venture they deem right provided they have the potential to create utility to the public.
Who benefits and why?
Neoliberalism benefits the society at large (Harvey, 2007, p. 240). On the side of the public, they are able to partake in the making of socio-economic decisions on matters that affect their welfare. This has increased privileges like their access goods and services in good time. The government on the other side benefits from liberal economics in terms of increased tax revenues reaped from the booming businesses under this economic development regime.
Neoliberalism as a “project”
Neoliberalism can be referred to as a project since its initiators had the vision of engineering socio-economic change in the society (McBride, 1997, p. 37). The global population was suffering from poor policies and decisions made under the previous economic system dispensations and neoliberalism was seen as that change implementation tool through which the answer to the various social problems could be provided.
What does it aim to achieve?
Neoliberalism aims to achieve deregulation, free trade, fiscal austerity, reduced government spending and privatization factors which are associated with laissez-faire economics (Harvey, 2007, p. 113). Overly, in neoliberalism, there should be minimal government interference in the economic issues of the society and individuals.
Harvey, David. A brief history of neoliberalism. Oxford University Press, USA, 2007.
McBride, Stephen Kenneth, and John Mackie Shields. Dismantling a nation: The transition to corporate rule in Canada. Fernwood Publishing, 1997.