The Hypocrisy of Neoliberalism
Neoliberalism proposes “market exchange as an ethic in itself, capable of acting as a guide for human action”. In tracing the politico-economic history of this doctrine, Harvey attests that the ubiquity of neoliberalism as an ethic comes from the cunning framing of its postulates as upholding ‘freedom’. That neoliberalism appeals to a particular type of freedom- individuals, trade- as opposed to others, is one flaw of the doctrine. That there has to be a granting of such ‘freedom’- in order to avoid Hobbesian anarchy- alludes to an unidentified source of power that does this granting, which contradicts the idea of Smith’s invisible hand- another flaw. That the latter flaw has come to mean an unacknowledged unfair distribution of opportunities, monies, access, responsibility for loss and risk, etcetera, I think contradicts the claims of ‘individual freedom’ as well. Competition breeds efficiency, ceteris paribus. But all things are not equal. Hence my contention of hypocrisy in the existing form of neoliberalism.
The Reality of Growth
Harvey’s explanation of the financialization of the economy as a means of capital accumulation for the revival of Western economies in the 1960s correlates with the observation that entire economies are now shifting towards being based on ‘intangibles’ like finance or knowledge production and exchange. To me, services and exchanges effecting larger capital accumulation than products themselves seems a bit counterintuitive. This is because of the finiteness of resources- if all it takes to breed capital is capital (or politics), then we will not be cognizant of resource limitations because our perpetually increasing demands are in disjunction with the limited materiality of the earth. Since humans still need to consume materials, substantive demands will also become inordinate.
And they have. As evidenced by mass extinctions, ecosystem destruction, tragedy of the commons, water wars, and other such large scale ramifications of exorbitant consumerism. Heinberg’s The End of Growth links resource constraints, environmental impacts, and financial system overload to theorize that given the natural limits to growth, there is an urgent need for a new economic model. This is because of the neoliberal’s predilection towards the expectation of growth (the conventional definition), which has resulted in capital-obsessed economies, competition-centric societies, dis-acknowledgement of the commons; again, individual freedom trumps societal freedom. This is problematic for a consumer-oriented system, since stagnating economies imply fewer goods and services per capita. The current form of neoliberalism (financialization) has created monetary and financial systems that require growth- that more money and credit be available, expectations are high, people buy more goods, businesses take out more loans, and interest on existing loans can be repaid. This links back to Harvey’s contention that pure neoliberalism does not generate growth, which begs the question: how exactly is ‘new capital’ being generated without growth?
The Reality of Capital Accumulation
Harvey shifts the question to one of capital redistribution as opposed to generation. Using sub-national and transnational examples of widening disparities of income and wealth distribution in neoliberal economies, he attests that there is just a re-appropriation of wealth to the elite, who are disproportionately positioned to amass capital in this existing form of neoliberalism which does not raise red flags among the public because of the indoctrinated notion of ‘individual freedom’.