Neoliberalism & Privatisation Flashcards
Definition of Neoliberalism
a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterised by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices (Harvey, 2007)
What is freedom?
Ideology. Based on own political ideology.
What is capitalism?
The economic system of reproduction. Also human reproduction. There are different types of capitalism which are geographically and historically determined
What are the key pillars of Neoliberalism?
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Deregulation
- Environmental and Social standards and transfer them to the global south
- Really looks at the ideas of removing rules on certain types of activities
-2. Privatisation - moving the state authority to private authority
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Liberalisation
- Notion of markets and making them free. Bring in the private actors. Free trade (what is free trade)
This moves capital and political power from the state to private owners. Gives rise to global inequalities and was a bigger boost after the proliferation of neoliberalism as the hegemonic political and economical trend after the 1980s
What are Keneysians Economics?
- Simply said: period that starts after the second world war that builds upon the ideas of John Maynard Keynes.
- Key element of the economic theory of capitalism - Keynesian ideology
- Capitalism has a strong state intervention
Idea grows - Extension of capitalism: The concept of development was build up after the second world war, the need to bring freedom to the people around the world, not only political, but also the freedom to acquire goods and services. The freedom of Extending markets
- Key factor = a strong governmental role
- Strong until the 1970s
Describe the crisis of Capital Accumulation, great recession.
Begin 1970’s, high levels of inflation and unemployment,
beginning cold war both elites and working class are unhappy due to high unemployment and high inflation rates (not the usual relation)
the ones that were really treathened by inflations were capital holders. As the value of their money drops in a greater amount. De relatie lijkt contra maar tijdens de great recession stegen ze allebei. Waarom?
At one moment even the working class (1970) were unhappy too, with high employment and high inflation,
- social movements and working class and labor unions are making everybody upset
Keynesians economics seems to be satysfied
What is the oil embargo and when?
1973 - the OPEC countries decide to put an embargo on oil production, this block of production translated in the west,
- Leads to high energy costs
- Leads to social environmental movements dynamics
- Moment that has global level repercussions economically due to increasing oil prices. The OPEC countries accumulate alot of money
The OPEC countries start to accumulate alot of money
- leads to two options
- Or collaboration
- Or we take over
- Origin of the Petrodollars
- Kind offer of their money to be invested in Wall Street
What characterizes the neoliberal turn?
Combination of 2 elections in the US Renold Reagan and in the UK margaret tatcher.
- 1979 is the moment in which the strongest economic and military figures are represented by strong conservative ideologies
- Neoliberalism becomes the supereim ideology. Or the only one.
- Ideological turn
As soon as Tatcher gets elected there is an immens shift of economic institutions
- Neoliberal Economist becomes leader of the World Bank
What is the Washington Consensus?
- Triangle between the World Bank, world monetary fund and the american treasure
- Bring the idea of the petrodollars to finance development in the global south
The World Bank start offering loans
Systematically what happens afterwards, due to start giving out loans to the global south:
- borrowing money imposes power
80’s countries in the global south take big loans from the central banks
- making them dependent from the banks, they fail on payments,
- Borrowing money is a great way to impose a certain type of power
- Confessions of an economic hitman (book die aangeraden is)
- Concept of Plata o Plomo
- Neocolonialism.
- Countries in the global south start to default, and their entire economic architecture is not efficient
They start to implement different types of reforms
- Privatise
- Deregulate
- Liberalise
Crystallizes after the oil embargo > petrodollars
What happens in the 80s ?
Stays in the 80’s loooool
Nee, it is a political project of restoration of class power comes through the definition of new institutional frameworks’
Neo-colonial project
- taking over national resources.
1979 = the Volcker Shock
Trying to control the inflation rapresents this
What is Daid Harveys (2007) key end message? And what is this based on?
we can, therefore, interpret neoliberalization either as a utopian project to realise a theoretical design for the reorganisation of international capitalism or as a political project to re-establish the conditions for capital accumulation and to restore the power of economic elites
Because from the Volcker shock, inflation, and the rising of other ideologies such as socialism threatened the accumulated capital by the elites, so after political economical reforms after the 80s there is a strong concentration of economic and political power, and inequality increased ever since. Thorugh Structural Adjustment Programs for countries in the global south for the global west to take over the natural resources (neo-colonialism). Established power by giving out loans from the central banks which evolved from the Washington Consensus in 1979, imposing power and then implementing reforms.
What is embedded liberalism?
Embedded Liberalism
- combination of free-market capitalism + significant degree of government intervention + social policies (Keynesian Economic Policies)
- political-economic organization
- Market processes and enterpreneural and corporate activities were surrounded by a web of social and political constraints and a regulatory environment that sometimes restrained but in other instances led the way in economic and industrial strategy
- High economic growth
What is it called when someone privatizes resources which were originally of someone else?
Appropriation of the commons, common grabbing
