What is the relationship between neoliberalism and globalisation, and what impact has it had on societies at a national and local level?
In this lecture, I’ll provide some insight into the relationship between neoliberal market strategies, globalisation and social change.
First, what is neoliberalism? Neoliberalism is both an economic theory and a policy model.
It emerged in the 1970s as a more radical form of classical liberal philosophy,
which is most commonly associated with the 18th century Enlightenment thinkers John Locke and Adam Smith.
These classical liberal thinkers advocated for a separation of economics and politics,
and minimal government intervention in economic affairs and markets.
Neoliberalism shares many ideological similarities with classical liberalism, but its scope is global and much wider than classical liberalism.
This is partly due to the re-emergence of liberal thought at a time when national economies
were becoming more interdependent in the new era of economic globalisation.
As a result, advocates of neoliberalism also promote free trade policies and minimum barriers
to the flow of goods, services and capital across national borders.
There are a number of ideological and political tenets that underpin neoliberalism.
These include an emphasis on individualism, self- interest, liberty; freedom of choice, the entrepreneurial spirit; economic growth;
technical progress and freedom for corporations to pursue economic advantage without state impediment.
Under neoliberalism, the state is assigned a very limited economic role,
such as defining property rights, enforcing contracts, and regulating the money supply.
In essence, proponents of neoliberalism are deeply committed to the idea of a self-regulating market.
They argue that as much as possible ought to be left to the market, or other processes in which individuals freely choose to take part.
The practical implementation of neoliberal policies leads to a relocation of power from political to economic processes,
and from the state to markets and individuals.
So what exactly is the connection then between neoliberalism and economic globalisation?
Some scholars contend that processes of globalisation
helped to create the ideal environment for neoliberalism to thrive and spread across the globe.
Technological advancements that made the movement of capital, information and trade across national borders much more fluid,
and facilitated the realisation of the ideals of neoliberalism that had, until that point, existed only in academic economic theory.
In order to survive in an increasingly global and interdependent climate,
many governments began to adopt policies of economic liberalisation, including trade liberalisation
by reducing tariffs and changing laws regulating trade, and privatisation of government institutions and organisations.
Such policies give freer rein to markets, and less control to the state, which is in line with neoliberal ideas.
On the other hand, other commentators argue that globalisation has been occurring for centuries,
and that it would be incorrect to assume that neoliberalism and globalisation have always gone hand in hand.
John Gray, for example, observes that while we conceptualise globalisation today as being a particular type of neoliberal economic regime,
This is supported by theorists such as David Harvey,
Harvey argues that proponents of neoliberalism have successfully created a system that allow for the accumulation of wealth amongst
a small minority, while blocking any redistributive measures by a welfare state.
Regardless of whether you believe that the relationship between globalisation produced the dominance of neoliberalism,
or is contingent or manufactured, it is undeniable that neoliberal ideology and policy is one that promotes the concept of globalisation
and is arguably the dominant economic theory of our time.
So what are some of the social impacts of neoliberalism?
Internationally, there is much debate about whether neoliberal economic strategies imposed by institutions like
the World Trade Organisation, the World Bank and the International Monetary Fund have reduced or in fact exacerbated global poverty.
Proponents of neoliberalism have argued that neoliberal policies, allowing for maximum economic growth,
help to bridge the gap between rich and poor.
Ronald Reagan, for example, former President of the United States, promoted the ‘trickle down’ theory –
the idea that wealth generated at ‘the top’ by investors, corporate heads and entrepreneurs would eventually ‘trickle down’ to the masses,
and so the state does not need to implement redistributive policies.
In contrast, other advocates, activists and scholars such as David Harvey contend that in fact, the exact opposite is true,
and that the rich have simply become richer at the expense of the poor, whose labour is exploited.
There is also a fear that the globalisation of financial markets means that economic crises that arise out of policies
that are primarily concerned with short-term economic growth will become more common and catastrophic
because of the interdependence of markets.
At the national level, neoliberal ideology has had a dramatic effect on state structures and policies,
which has led to sometimes contradictory outcomes.
On the one hand, the neoliberal state is meant to step back and allow the market to self-regulate,
with only minimal government intervention where necessary.
On the other, governments have often been complicit in aiding the market through the introduction of laws and policies that
provide significant infrastructural support for market activities. Along with Ronald Reagan, another political
leader famously associated with neoliberalism was Margaret Thatcher, former Prime Minister of the United Kingdom.
During their respective leaderships in the 1980s, they were both vocal proponents of neoliberalism,
and used their political power to enact neoliberal strategies such as economic liberalisation and the dismantling of the welfare state.
As a consequence of these changes, the United Kingdom and the United States have seen the abolishment or reduction of subsidies and tariffs,
the privatisation of previously government-owned institutions, a sustained attack on unions,
and the move towards “user pay” systems of healthcare and education.
The social impacts of neoliberalism have also been felt in Australia.
Higher education is one example.
Sociologist Raewyn Connell argues that since the Dawkins reforms of the 1980s,
which included the introduction of fees for tertiary education,
universities have become increasingly organised around competition in a global marketplace,
rather than being orientated towards the public good of society.
She contends that access to education has been commodified in Australia, as university degrees are now viewed not as an education,
but as a commodity to be exported and sold, with their only benefit being improvement in graduates’ earning capacity.
By aiming to put a market price on all aspects of social life that were once governed by the logic of social advancement,
neoliberal thinking has encouraged governments to value competition, and profit above all else,
and to weaken the role of other types of social principles, such as altruism, co-operation, and community.
Finally, neoliberalism has led to an increased focus on the individual, which means that concepts
such as “the public good” and “the community” are less likely to be considered in policy discussions.
Social issues like unemployment, inequality, and poverty are increasingly blamed on individuals rather than on structural factors.
Such a worldview makes it easier to rationalise the idea that some people are much more deserving of wealth than others,
which then justifies the fact that in practice, neoliberalism often benefits a only a minority of people.