Explain the advantages and shortcomings of David Harvey’s account of neoliberalism as a ‘restoration of class power’.
David Harvey’s account of neoliberalism as a ‘restoration of class power’ does much to explain the central effect of the political changes that have characterised recent decades. Neoliberalism, inspired by the ideologists of the Mont Pelerin Society, is viewed as market deregulation, state decentralisation and reduced state intervention into economic affairs (Alber 1993; Lash and Urry 1987; Przeworski 1995 in Campbell & Pedersen 2001:1). Embraced most notably by Margaret Thatcher and Ronald Reagan throughout the 1980s, Harvey argues that neoliberalism restored class power to levels not seen since the 1920s (Harvey, 2005). His account has many advantages, but it falls short of explaining the strength of the class power reinstated by the ‘monetarist counter-revolution’ (Clarke, 1988: 1). From the numerous examples used throughout Harvey’s own work, and alternative accounts offered by Stuart Hall and Lois Wacquant, it is evident that neoliberalism also resulted in a change in the relations of class power, as well as its consolidation and expansion. As one of the most extreme examples of a political ideology affecting societies across the world (Clarke, 1988) it is imperative that political sociologists not only acknowledge the advantages of Harvey’s account of neoliberalism, but more importantly, also explore its limitations.
The main advantage of Harvey’s account of neoliberalism is that it adequately describes the fundamental effects of the increasing prominence of this ideology. ‘Neoliberalization’ (Harvey, 2005: 3) marked an end to the Keynesian policies of welfare and state intervention that defined the post-war consensus politics (Clarke, 1988: 1). Harvey explains how neoliberalism restored the power that the elite class in society had lost to organised labour and trade unions (Harvey, 2005). His account is supported with a detailed history of the politics of ‘embedded liberalism’ - a social and moral economy fostered through the activities of an interventionist state, prior to the implementation of neoliberal policies (Harvey, 2005: 11). Indeed, it is only with knowledge of the historical context that we can understand the circumstances in which neoliberalism reinstated class power. Furthermore, another of the strengths of Harvey’s account is that it explores the numerous ways in which class power was restored – most notably, how neoliberals reinstated class power on a global scale. For example, he clearly illustrates the influence that ‘the Chicago Boys’ - economists who had trained under Milton Friedman - had on Chilean politics, advising Pinochet after the Keynesian General Gustavo Leigh was sidelined in 1975 (Harvey, 2005: 8). Harvey notes that although such policies in Chile resulted in the Latin American debt crisis in 1982, they inspired the new political direction in Britain and America. In such, he provides evidence that neoliberalism was used to reinstate the dominant position of the ruling elite, rather than improve society at large. However, despite the advantages of Harvey’s account, it does not adequately explain the full effect of the economic and social policies implemented throughout the 1980s. Neoliberalism resulted in considerable changes across the world – not just economic, but also cultural and societal, that saw not simply the restoration of class power, but also a change in class relations, that resulted in the consolidation and expansion of class power.
Harvey’s account of neoliberalism as a ‘restoration of class power’ is limited in that it does not acknowledge the extent to which class power has been changed, not merely restored. Right-wing neoliberals won the support of the middle class, and those who aspired to the middle class, partly by offering policies that appealed to their needs, but also because there was no credible left-wing alternative that could compete with the clarity of Thatcher’s ideological position. Harvey explains that neoliberals described the economic stagnation of the 1970s to the electorate as a crisis of left-wing governance, and that there was no alternative to neoliberalism (Harvey, 2006), but he does not describe this as part of the neoliberal effort to change class power. Reagan gave the middle classes in America the sense that the Republicans were fighting for them (Obama, 2006: 33), and similarly, Thatcher capitalised on middle class aspirations such as home ownership with the Right to Buy policy in Britain (Moore, 2014). In offering a route to the lifestyles that many in the middle class desired, focusing on individualism, rather than collective progress, neoliberals shifted the mindset of many voters towards the right. Consequently, they won much of the working class and middle class vote, not previously guaranteed to support the Conservatives, changing the way a significant portion of society chose to vote. Hall, writing in the 1980s, stated that there were real conflicts in society, such as the competing desires for low taxes and support for the NHS, which Labour may have been able to capitalise on, had they rethought their strategy and been able to offer a serious alternative based on choice, diversity, and the empowerment of ordinary people (Hall, 1988: 271-278). However, at the time, Labour had no equivalent moral agenda of its own, and consequently was not actively shaping politics (Hall, 1988: 282). Indeed, it could be argued that there was little left-wing position remaining for Thatcher to destroy. Still, she fully capitalised on the waywardness of the Labour party (Hall, 1988: 274), forcing them to the right of the political spectrum in order to attempt to regain some of the support they had lost to her neoliberal policies. Robert Dahl states that power is where ‘A has the power over B to the extent that A can get B to do something that they wouldn’t otherwise do’ (Dahl, 1957: 203). Thanks to Thatcher and Reagan’s shrewd political strategies, and indeed the poor alternative offered by the left, many in the middle class were convinced that neoliberals offered what they wanted. Neoliberalism was not simply the restoration of class power - it changed the traditional concept of power defined by Dahl, as A (neoliberals) essentially disguised neoliberal ideology in policies that B (left-wing voters) wanted to vote for. Had neoliberalism only restored class power as Harvey states, then it is unlikely that the effect of such policies would have been so lasting, and any alternative so difficult to foster, as a core section of the electorate (the middle class) would no longer have supported left-wing changes.
Neoliberalism also fundamentally changed power by demolishing working class unity and actively removing those worst affected by neoliberalism from society. Harvey explains two instances of union destruction: the Miner’s Strike in Britain, and Reagan’s assault on the air traffic controllers unions in 1981 (Harvey, 2005: 52, 59), but only as examples of how class power was restored. Rather, Reagan’s refusal to negotiate with the air traffic controllers union, PATCO, and subsequent dismissal of all 11,000 striking workers after only 48 hours of strike arguably marked a clear turning point in the tolerance of unions (Desvarieux, 2014). Equally, the ultimate defeat of the British miners, after a strike lasting for almost a year, broke a core element of the labour movement – by the time Thatcher left office, strike activity had fallen to one-tenth of its former levels (Harvey, 2005: 59) – a sign that class power had changed considerably. For Harvey, the destruction of the PATCO strike meant that ‘the uneasy social compact that had ruled between corporate and union power during the 1960s was over’ (Harvey, 2005: 52) – but arguably, the total consequences of Reagan’s victory were more extreme. Both instances fundamentally changed, rather than simply restored, class power relations. Wacquant explores one significant disadvantage of Harvey’s account of neoliberalism – namely, that he fails to address the role of the penal state in changing, rather than simply restoring power relations (Wacquant, 2010). Wacquant views ‘authoritarian moralism as an integral constituent of the neoliberal state’ (Wacquant, 2010: 214), rather than simply an element of neoliberalism as seen by Harvey. For Wacquant, the penal activism of the state is an on-going feature of neoliberalism, hiding and ‘containing the urban disorders spawned by economic deregulation’ (Wacquant, 2010: 198, 216). Where previously the working classes had power in their unity, the significant efforts taken to prevent any stranglehold they could have on the elite ensured that not only was class power restored, but was unlikely to be further threatened.
Harvey’s account does not explicitly recognise the fact that through deregulation of the financial system neoliberalism also consolidated class power. To restore class power would have meant returning the elite in society to a former position of strength, yet neoliberalism saw their power further secured. Harvey’s A Brief History of Neoliberalism shows that in the 1920s, the share of assets held by the top one per cent of the US population reached nearly fifty per cent (Harvey, 2005:16), whereas today, almost half the world’s wealth is now owned by just one per cent of the entire population (Oxfam, 2014). A clear example of the consolidation of class power was the fiscal crisis in New York City, where financiers bailed out the public sector after their request for federal assistance was denied - ‘essentially a coup by the financial institutions against the democratically elected government of New York City’ (Harvey, 2005: 45). Though Harvey presents a detailed explanation of the way in which class power was restored through the New York crisis, the fact that financial institutions, rather than the state, bailed out the city illustrates the extent to which power was consolidated through strengthened relations between finance and the state, to a degree previously unseen. Neoliberalism saw that considerable efforts were taken to not just to restore but also to ensure the survival of class power – ‘during the 1970s, business refined its ability to act as a class, submerging competitive instincts in favour of joint, cooperative action in the legislative arena’ (Edsall, 1985:128 in Harvey, 2005: 48). Previous crises of capitalism (Streeck, 2011: 5) had highlighted the fragility of the position of the ruling class - in uniting previously competitive forces into an oligopolistic system supported by state infrastructure through neoliberalism, power was bolstered rather than simply restored.
Neoliberalism consolidated, rather than restored, class power to such a degree that even left-of-centre politicians continued to implement neoliberal policies. Harvey notes that Blair and Clinton did the most to promote neoliberalism both at home and globally (Harvey, 2005: 93). However, he fails to state that if neoliberalism had merely restored class power then arguably politicians on the left would have remained determined to overturn neoliberal policies. Left-wing politicians such as Blair recognised the need to reform their policies (Wring, 1998), if there was any chance of victory over the right-wing, given the neoliberal political climate. But essentially, they were offering what appeared to be a more compassionate form of conservatism – their ideology had shifted so far to the right that they no longer represented many of the working class interests on which their parties were founded. Thatcher herself stated that her greatest legacy was the rightward shift in Labour party ideology orchestrated by Blair (McSmith et al.: 2013), not least because once in office, he did little to reverse the neoliberal policies of his predecessors (BBC News, 2013). Wacquant’s analysis of the central, if often silent, role of the prison system further supports the argument that neoliberalism consolidated, rather than simply secured, class power: warehousing, not reforming inmates (Wacquant, 2010: 197-210). Indeed, the penal reforms implemented by neoliberals were continued by their supposedly centrist and progressive rivals (Wacquant, 2010: 209), further consolidating class power. Arguably, the continuation of neoliberalism by left-wing parties is further evidence that neoliberalism has consolidated, not just restored, class power.
Through neoliberalism class power expanded as the elite came to hold an increasing level of financial influence, but Harvey’s account does not explicitly state the global scale of this influence. Throughout Harvey’s work there are examples of the global expansion of neoliberalism, but these are only described as the ‘restoration’ of class power. There was a clear effort to encourage neoliberalism internationally through university education (Harvey, 2005), as many foreign students studied in America on Fulbright Scholarships and subsequently promoted neoliberalism in their home countries (Harvey, 2005: 54). Equally, ‘rapidly diminishing transport and communication costs’ (Harvey, 2005: 92) resulted in an increasingly interconnected world, that was particularly suited to a growing financial industry ever seeking new markets in which to expand. Harvey states that class power was restored through the turn towards more open financialization, enabled by the increasing geographical mobility of capital, the Wall Street-IMF-Treasury complex that persuaded many developing countries to adopt neoliberal policies and the global diffusion of the new monetarist and neoliberal economic orthodoxy (Harvey, 2005: 92-94). Yet, these measures not only restored class power, but ensured its expansion. The power of the elite in the US was not simply restored, but also expanded, as it exerted its influence worldwide, promoting neoliberalism through institutions such as the World Bank and the International Monetary Fund (IMF). The adoption of neoliberal policies across the world led to ‘endemic and contagious’ financial crises (Harvey, 2005: 94). However, at the time, the US seemed immune from such disasters, and explaining that the crises were due to ‘too much state intervention and corrupt relationships between state and business’ (Harvey, 2005: 96-97), they encouraged further deregulation or increased their power by providing loans from the IMF. Furthermore, some are suspicious that neoliberalism was promoted across the world purely to maximise the power of the US financial elite (Harvey, 2005: 97). While Harvey himself offers many examples that show the expansion of class power, his account of neoliberalism describes such instances as the restoration of class power and falls short of acknowledging the extent to which it expanded on a global scale.
Harvey’s account of neoliberalism as a restoration of class power has a number of advantages, but it fails to acknowledge the fact that the class power dynamic also changed, consolidating and expanding the dominance of the elite. Through the destruction of workers’ unions and the introduction of policies favoured by those of, and aspirants to, the middle classes, serious opposition was deliberately quashed. The increased importance of the financial services industry supported by a state apparatus willing to fund any market failure consolidated class power. And, as neoliberalism was promoted and financiers sought to expand their markets, a global corporate elite came to control much of the world’s wealth, expanding class power. Harvey argues that ‘the neoliberal state may be an unstable and contradictory political form’ (Harvey, 2005: 64) – indeed, neoliberalism is a contradictory ideology – reducing state support for the masses, while ensuring the survival of the ruling class. However, Harvey’s assertion that it is unstable, is incorrect. Neoliberalism effectively ended the potential insecurity of liberalism, in which Adam Smith’s ‘invisible hand of the market’ prevailed (Adam Smith, 1761), strengthening, rather than simply restoring class power, as financial institutions were seen as ‘too big to fail’ (Sorkin, 2010) and were continuously backed by government. The fact that neoliberalism remains, and thrives, despite crises across the world throughout the past 35 years, is ultimate evidence of the extent to which it has consolidated, expanded and changed, rather than simply restored, the relations of class power.
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