The editors argue that: “the most basic feature of neoliberalism is the systematic use of state power to impose (financial) market imperatives, in a domestic process that is replicated internationally by ‘globalisation’.” [p.3]
Neoliberalism means the imposition of privatisation, deregulation, cuts in welfare spending and free trade by governments and by international financial institutions such as the IMF and the World Bank.
Neoliberalism was a response to the economic and political crisis that began in the 1970s, exemplified by the US government uncoupling the dollar from gold, by the oil price shock in 1973 and subsequent recession, and by the US defeat in the Vietnam War. It offered a “finance-friendly solution to the problems of capital accumulation at the end of a relatively long cycle of prosperity.” [p.4]
It was first imposed by the most powerful states on their own working classes – with 1979-80 a crucial turning point – with Paul Volcker becoming head of the US Federal Reserve, Thatcher’s election in Britain and a year later Reagan to the presidency in the US.
Al Campbell’s chapter on the birth of neoliberalism in the United States goes beyond the usual explanations – namely that neoliberalism represents the return to hegemony of finance capital and that the period between 1950 and 1973 was founded on a capital-labour truce. He points out that US finance capital never accepted the Keynesian compromise of capital controls and that class struggle took place throughout the golden age after the Second World War.
He argues that neoliberalism was adopted because of the structural crisis of capitalist accumulation by the early 1970s – in particular the “diminished relative economic power of US productive capital”. [p. 191] The neoliberal response meant principally US capital attacking the US working class. It did this through increasing overseas production and purchase of foreign-produced productive inputs, wage freezes and outright wage cuts, eliminating cost of living clauses, introducing two-tier wage structures, using temporary workers and union busting. [pp.196-197]
Having triumphed in capitalist heartlands, neoliberalism has been systematically imposed on the rest of the world. Beginning with the Third world debt crisis in the early 1980s, as the editors put it new converts won “a refurbished international airport, one brand new branch of McDonalds, two luxury hotels, 3,000 NGOs and one US military base”. [p.2]
Radice argues that imperialism after 1945 has taken mainly an economic form, in contrast to the more overt political control exercised over colonies. Neoliberalism grows out of this tendency but as a new form of imperialism, “amounts to nothing less than the ‘re-embedding’ of capitalism across the world”. [p. 97]
But neoliberalism has not been a success. It has not fostered rapid accumulation, with growth rates persistently lower than the golden age of 1950-73. It has also elicited revolt and resistance – with strikes, riots, popular uprisings, demonstrations and spurred the creation of a young global justice movement. But for opposition to be effective, class politics are necessary.
put forward an explicitly class answer
John Milios says to change the balance of class forces, “the working classes must once again elaborate their own autonomous class objectives, independently of the capitalist imperative of labour discipline and profit maximisation”