WHAT IS NEOLIBERALISM?
BY MATT SPARKE, 2015
Neoliberalism is a challenging term, but both because of the challenges and despite the
misunderstandings they sometimes create, it remains very useful for explaining much
of the political baggage carried by Globalization discourse. For the same reasons, it is
also a keyword in my writing and teaching on globalization, and, in order to make its
meaning as transparent as possible, I here offer a working definition that I am revising
for the second edition of my book based on the glossary entry I offered in the first
edition. Matthew Sparke, Introducing Globalization: Ties, tensions and uneven
integration (New York: Wiley, 2013). Please send suggestions for improvements to me
at [email protected]
Neoliberalism names an approach to governing capitalism that emphasizes
liberalizing markets and making market competition the basis of economic
coordination, social distribution, and personal motivation. It recalls and reworks
the 18th and 19th century liberal market ideals of economists such as Adam Smith
and David Ricardo. And yet it is new – hence the ‘neo’ – insofar as it comes after and
actively repudiates the redistributive ideals of welfare-state liberalism in the 20th
century. When Milton Friedman was idealizing a neoliberal future back in 1951 he
saw it thus as a return to 19th century individualism made possible by refocusing
state action centrally on the work of creating a competitive political-economic
order. “Neo-liberalism would accept the nineteenth century liberal emphasis on the
fundamental importance of the individual,” he said, “but it would substitute for the
nineteenth century goal of laissez-faire as a means to this end, the goal of the
competitive order.” (Friedman, 1951). Despite this clear historical rationale for
referring to neoliberalism, it remains a confusing term, especially in the US where
(unlike in Europe and Latin America) the word ‘liberal’ is widely assumed to refer to
just welfare-state liberalism. For related reasons, references to neoliberalism tend
to be made more often by its global critics, than by its American advocates: the latter
generally preferring to use alternatives such as the ‘Washington Consensus’, the
‘free market’, ‘small government’, or the ‘limited’ or ‘minimalist’ state. These too
are confusing terms in their own way. The claims of ‘Consensus’ in Washington DC
(chiefly at the IMF, World Bank and US treasury) concealed the widespread
dissensus in other national-state capitals about the neoliberal policies of so-called
structural adjustment. And meanwhile all the appeals to market freedom in turn
obscure the ways in which the norms of market rule have depended systematically
on states (especially the United States, but increasingly others as diverse as France,
China and South Africa) to liberalize markets and re-make government, including
personal self-government, in ways that make market forces more influential.
Reminding readers that this was a new and notably non-laissez-faire concern of the
original neoliberal intellectuals, the French scholars Pierre Dardot and Christian
Laval also offer one of the most systematic definitions of neoliberalism available as a
new global rationality. It “is not merely destructive of rules, institutions and rights,”
they argue. “[Neoliberalism] is also productive of certain kinds of social relations,
certain ways of living, certain subjectivities.”
“Neoliberalism defines a certain existential norm…. This norm enjoins
everyone to live in a world of generalized competition; it calls upon wageearning classes and populations to engage in economic struggle against one
another; it aligns social relations with the model of the market; it promotes the
justification of ever greater inequalities; it even transforms the individual, now
called on to conceive and conduct him- or herself as an enterprise. For more
than a third of a century, this existential norm has presided over public policy,
governed global economic relations, transformed society, and reshaped
subjectivity” (Dardot and Laval, 2013: 3).
Expanding the influence of market competition everywhere as a new global
rationality, processes of neoliberalization are well underway all over the globe –
including in Europe, Asia, Africa and Latin America as well as in the US itself.
Moreover, these processes have become so closely tied to globalized trade and
finance that for many commentators the all-in-one synonym and argument for
neoliberalism is simply Globalization. In other words, because they believe big ‘G’
Globalization is inevitable they also think neoliberalization is necessary and natural
as well. Liberalizing markets is vital, goes the argument, because it is the only way
to adapt to the competitive borderless economy of Globalization. Making this case
repeatedly in multiple countries, pro-market advocates have successfully expanded
and entrenched the top ten policies of neoliberalism right around the world. In the
process, this disciplinary rule set for neoliberalism’s market constitution has come
to sound like a contemporary political equivalent of the biblical ten commandments:
1) liberalize trade; 2) privatize public services; 3) deregulate business and finance;
4) shrink big government; 5) reduce taxes on business; 6) encourage foreign
investment; 7) constrain unions; 8) expand exports; 9) minimize inflation; and 10)
enforce property rights. And so far, despite the obvious connections between many
of these policies and the economic crises that have rocked the world from 2007
onwards, and despite the subsequent statements by various global leaders (such as
French President Nicholas Sarkozy) about the need to rein in markets, neoliberalism
is showing no signs of dying soon (Crouch, 2011). Indeed, as Philip Mirowski
explains with iconoclastic verve, the beneficiaries and boosters of neoliberalism
survived the financial meltdown by effectively using the global crisis to extend still
further the reach and influence of market forces (Mirowski, 2014).
Something that advocates of neoliberalism do not say so much but something
that is nevertheless betrayed by all their pro-market activism is the fact that none of
the neoliberal policies are themselves either natural, or inevitable. Following
Margaret Thatcher, they may well argue that ‘There Is No Alternative’. But the fact
that such TINA tout arguments have to appeal so often to big myths about
Globalization to make their case simultaneously reflects a global reality in which
many alternatives exist and inspire communities (especially those that have already
experienced the distress and dispossession of market rule). In the same way,
neoliberalism is never automatic in practice either. The anti-state state requires all
sorts of active pro-market state-making and re-regulation. Defining and defending
the practical details of these regulations also remains a constant challenge, and
whether they are actually implemented with sustained political support hinges in
turn on historical and geographical circumstances. A good example of all this nonnatural contextual contingency is the work of the Austrian Friedrich Von Hayek.
Von Hayek published what many consider the original argument for
neoliberalism – a polemic against state planning entitled The Road to Serfdom – back
during World War II (Hayek, 1944). Despite his move to the US, this was not a
propitious time or space to promote neoliberal ideas. Instead western policymakers, including US leaders, considered welfare-state liberalism a commonsense
capitalist alternative to communism and fascism. In the wake of the Great
Depression, the European financial crises and the subsequent war, Keynesian ideas
about government demand management were also seen as a sensible response to
market volatility. Thus Hayek’s neoliberal arguments had no immediate influence
on policy, and he was obliged instead to help foster intellectual institutions that
would keep the ideas afloat to such a time that they might gain policy-making
traction (Peck, 2010). He worked in this way to develop the Mont Pèlerin Society
and contribute to the pro-market theorizing of the Chicago School of Economics.
But as successful and influential as these institutions have subsequently become as
bastions of pro-market orthodoxy, it was not till the 1970s that their ideational
work began to bear policy-making fruit. With simultaneous economic stagnation
and inflation (so-called stagflation) creating a crisis of Keynesianism, Fordism and
the national balancing of national mass production with national mass consumption,
the times had changed in the US. The opportunity was now right for other Chicago
intellectuals such as Milton Friedman to take-up the baton from Von Hayek, and
help political leaders such as Ronald Reagan make the public case that government
intervention in the economy was the problem, not the solution. Von Hayek had been
saying similar things for decades (and in 1974 he finally received his Nobel prize for
doing so), but it was the changed real-world circumstances that made all the
difference in terms of the wider acceptance and translation of the ideas into policy
(e.g. ‘Reaganomics’) in the 1980s.
Global economic integration was undoubtedly the major backstory behind
the crisis of welfare-state liberalism in the 1970s, and to this extent the argument
that a form of post-Fordist globalization precipitated the implementation of
neoliberalism is convincing (Harvey, 2005). But as David Harvey also emphasizes,
the context contingent rise and spread of neoliberalism has also meant that it is very
uneven geographically. As a set of simple pro-market ideals it inspires the one-sizefits-all template of the ten neoliberal commandments. But as a set of real world
practices it has been variegated and experimental, both in the original moments of
implementation as well as in subsequent episodes of failure, correction and
adaptation (Peck, 2010). Sometimes it has been introduced with military force by
far right authoritarians – as happened in Chile in 1973 when the coup d’etat of an
army general Augusto Pinochet opened the door to a forced experiment in overnight
neoliberalization led by Chicago trained economists (Klein, 2007). But in other more
privileged times and places it has been developed as so-called social democratic or
Third Way or New Labor policy by western political leaders pulling traditionally
left-leaning and centrist parties in more conservative pro-market directions. Then
again, in many poor countries in the 1980s and 1990s, it has been imposed from the
outside through the policy conditionalities of World Bank and IMF structural
adjustment programs. More recently still it has been further globalized by two new
sets of neoliberal experiments: the first involving the use of military force again, but
this time in Iraq by the US in the name of spreading freedom (Pieterse, 2005;
Sparke, 2005); and the second, much more globally, by promoters of microfinance
as a solution for global poverty (Roy, 2010). Meanwhile, in China yet other ‘aidezfaire’ variations in neoliberalization involving strong state management have led to
new fusions of macro market reform with the micro-market remaking of everything
from patriotism and regional planning to sexuality and individuality itself (Hoffman,
2010; Rofel, 2007; Zhang and Ong, 2008; Zhang and Peck, 2014).
More globally, experiments in neoliberalization involve evolving articulations
of market-led macro-economic policy-making (including various re-mixes of the ten
commandments) with much more individualized approaches to inducing risk-taking
and competitive entrepreneurial behavior. Social theorists drawing on the lectures
of Michel Foucault call this personal inculcation of market imperatives ‘neoliberal
governmentality’ (Dean, 2010; Lemke, 2001). Like Dardot and Laval, others
augment these ideas by showing how the 20th century neoliberal thinkers that
fascinated Foucault himself have effectively fostered a 21st century global groupthink of commonsensical-turned-experiential neoliberalism (Mirowski. 2014). The
resulting forms of market ‘responsibilization’ involve individuals increasingly seeing
their lives as investment projects in which they must act as accountable and always
competitively-calculating investors.
Mirowski’s account of this ‘everyday
neoliberalism’ points in turn towards an evolving suite of neoliberal self-making
practices, including the fragmentation of personal identity and the demonization of
non-neoliberal others as well as all of the economized inclinations towards marketmodeled behavior. At least seven such self-making practices stand out: namely,
i) responsibilization – the relentless devolution of accountability to
individuals who are encouraged to see themselves as prudent and well-disciplined
market subjects who only make history under circumstances of their own choosing;
ii) entrepreneurialization – the pursuit of calculative risk-taking, enterprising
experimentation, and constant competition as the essence of social life and as a
model for politics;
iii) self-capitalization – the reappraisal of diverse aspects of life, including
education, recreation, health, eating, parenting and even religion, as human capital
investment arenas where individuals can assess the return on their investments visà-vis the costs, including the costs of taking on the market discipline of financial
debts to pay for any of the investments;
iv) self-commodification – the selling, marketing and branding of the self
(including the competitively counted congeries of self-objectification, selfcustomization and self-promotion assembled in social media sites such as Facebook,
Twitter, and YouTube) as a personal commodity chasing local and global markets;
v) personalization – the enlistment of individuals into the idea that their
individuality, citizenship, freedom and pathway through life can all be reduced to a
kind of consumerist maximization of personal choice;
vi) fragmentation – the flip side of personalization and self-marketization,
this involves being endlessly flexible, adaptable, moveable, re-brandable and retrainable; and,
vii) externalization – involving either, as Mirowski shows, the sadistic
demonization all those deemed beyond the market pale, or alternatively, involving
humanitarian efforts imagined in terms of inclusionary compensation of others
whose problems are understood as being caused by disconnection rather than
adverse incorporation into global capitalism (Mitchell and Sparke, forthcoming).
Summed up like this in an easily recounted list – itself a classic trope of consumer
guides and online marketing inventories as well as innovations in powerpoint
pedagogy – we could well adapt the title of a best-selling business class self-help
guide to satirize such self-making practices by naming them The Seven Habits of
Highly Successful NeoliberalsTM. There might even be a market for a guide like this as
an app or Fitbit plugin or multiplayer online game, although certain conditions and
exceptions would undoubtedly apply, different titles might be employed in different
countries, users would be wholly responsible for personal outcomes, and not
everyone would be able to trade the resulting metrics of their market selves!
More generally it is important to stress that the ways such neoliberal norms
of personhood work out in everyday life range widely from conformity to resistance,
with most people unconsciously making do in the messy middle ground in between
self-conscious market discipline and radical or revolutionary refusal. While
economics textbooks may urge students to think of human agents as always and
everywhere making rational choices as utility maximizing customers, other social
norms, morals and feelings continue to complicate how people internalize economic
imperatives and buy into being the ‘enterprising subjects’ idealized in theories of
market civilization. Moreover, notwithstanding all the market logics, languages, and
listings involved, the wholesale neoliberalization of everyday life does not always
include making money through market exchange. As Wendy Brown clarifies: “To
speak of the relentless and ubiquitous economization of all features of life by
neoliberalism is not to claim that neoliberalism literally marketizes all spheres”
(Brown, 2015: 31). Instead, she argues, “the point is that neoliberal rationality
disseminates the model of the market to all domains and activities – even where
money is not at issue – and configures human beings exhaustively as market actors,
always, only, and everywhere as homo oeconomicus” (Brown, 2015: 31). Across a
wide range of social arenas, from finance to law to education and health, scholars
are finding increasing tendencies towards such market-modeled self-management,
tendencies that subject citizens simultaneously to economized social-management,
increasing depoliticization and widespread precarity and cruelty (Brown, 2015;
Giroux, 2014; Keshavjee, 2014; Lupton, 2014; Mahmud, 2013; Sandel, 2013). Aiwha
Ong has argued that both the macro neoliberal reforms and more micro innovations
in neoliberal subjectivity involve exceptions from older norms of sovereignty and
citizenship (Ong, 2006). This may be true, but abstract arguments about
exceptionalism risk confusing too much if they come without careful attention to the
context-contingent fusions of macro neoliberal governance and micro neoliberal
governmentality on the ground (Sparke, 2006). Moreover, given that contemporary
economic crises are undermining the ability of increasing numbers of people to
invest in economic responsibilization in the normative neoliberal ways, alternative
responses – such as the 2011 Occupy movement and the ongoing (and more
organized) development of anti-austerity politics in Latin America and Europe –
remain real possibilities too (Sparke, 2014; Tsipras, 2015; Tyler, 2013). Thus just as
neoliberalism had to be kept alive intellectually before being implemented, thinking
about alternatives remains a democratic but non-neoliberal response-ability for the
21st century.
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