Neo-Liberalism as Creative Destruction

Author(s): David Harvey

Source: Geografiska Annaler. Series B, Human Geography , 2006, Vol. 88, No. 2,
Geography and Power, the Power of Geography (2006), pp. 145-158
Published by: Taylor & Francis, Ltd. on behalf of the Swedish Society for Anthropology
and Geography
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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

by
David Harvey

Harvey, D., 2006: Neo-liberalism as creative destruction. Geogr. sons. Nevertheless, there has everywhere been an
Ann., 88 B (2): 145-158.
emphatic turn, ostensibly led by the Thatcher/Re-
agan revolutions in Britain and the US, in politi-
ABSTRACT. Neoliberalization has swept across the world like a
vast tidal wave of institutional reform and discursive adjustment,
cal-economic practices and thinking since the
entailing much destruction, not only of prior institutional frame- 1970s. State after state, from the new states that
works and powers, but also of divisions of labor, social relations, emerged from the collapse of the Soviet Union to
welfare provisions, technological mixes, ways of life, attachments
old-style social democracies and welfare states
to the land, habits of the heart, ways of thought, and the like. To
such as New Zealand and Sweden, have em-
turn the neoliberal rhetoric against itself, we may reasonably ask:
in whose particular interests is it that the state take a neoliberal braced, sometimes voluntarily and in other in-
stance and in what ways have these particular interests used neo- stances in response to coercive pressures, some
liberalism to benefit themselves rather than, as is claimed, every-
version of neoliberal theory and adjusted at least
one, everywhere?
Neoliberalism has spawned a swath of oppositional move- some of their policies and practices accordingly.
ments. The more clearly oppositional movements recognize that Post-apartheid South Africa quickly embraced the
their central objective must be to confront the class power that has neoliberal frame, and even contemporary China
been so effectively restored under neoliberalization, the more they
appears to be heading in this direction. Further-
will likely themselves cohere.
more, the advocates for the neoliberal way now
Key words: neoliberalism, creative destruction, class power, ac- occupy positions of considerable influence in ed-
cumulation by dispossession, privatization, financialization, re- ucation (the universities and many 'think tanks'),
distribution, democratic alternatives
in the media, in corporate boardrooms and finan-
cial institutions, in key state institutions (treasury
Neoliberalism is in the first instance a theory of po-
departments, the central banks) and also in those
litical economic practices which proposes that hu-
international institutions such as the IMF and the
man well-being can best be advanced by the max-
WTO that regulate global finance and trade. Neo-
imization of entrepreneurial freedoms within an in-
liberalism has, in short, become hegemonic as a
stitutional framework characterized by private
mode of discourse, and has pervasive effects on
property rights, individual liberty, free markets and
ways of thought and political-economic practices
free trade. The role of the state is to create and pre-
to the point where it has become incorporated into
serve an institutional framework appropriate to
the common-sense way we interpret, live in and
such practices. The state has to be concerned, for
understand the world.
example, with the quality and integrity of money. It
Neoliberalization has in effect swept across the
must also set up those military, defence, police and
world like a vast tidal wave of institutional reform
juridical functions required to secure private prop-
and discursive adjustment, and while there is plenty
erty rights and to support freely functioning mar-
of evidence of its uneven geographical develop-
kets. Furthermore, if markets do not exist (in areas
ment, no place can claim total immunity (with the
such as education, health care, social security or en-
exception of a few states such as North Korea). Fur-
vironmental pollution) then they must be created,
thermore, the rules of engagement now established
by state action if necessary; but beyond these tasks
the state should not venture. State interventions in through the WTO (governing international trade)
and by the IMF (governing international finance)
markets (once created) must be kept to a bare min-
instanciate neoliberalism as a global set of rules.
imum because the state cannot possibly possess
All states that sign on to the WTO and the IMF (and
enough information to second-guess market sig-
who can afford to stay out?) agree to abide (albeit
nals (prices), and because powerful interests will
with a 'grace period' to permit smooth adjustment)
inevitably distort and bias state interventions (par-
by these rules or face severe penalties.
ticularly in democracies) for their own benefit.
The creation of this neoliberal system has ob-
The actual practices of neoliberalism frequent-
viously entailed much destruction, not only of pri-
ly diverge from this template for a variety of rea-

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2006
2006
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 DAVID HARVEY

or institutional frameworks and powers rains where

(such asthe liberal tradition has had a strong
historical
the supposed prior state sovereignty over politi-presence. Such ideals empowered the
cal-economic affairs) but also of divisions of la-
dissident movements in Eastern Europe and the So-
viet Union
bour, social relations, welfare provisions, techno-before the end of the Cold War as well
logical mixes, ways of life, attachmentsas theto the in Tianenmen Square. The student
students
land, habits of the heart, ways of thought, andthat
movement so swept the world in 1968 - from Par-
on. Some assessment of the positives isand and nega-
Chicago to Bangkok and Mexico City - was
tives of this neoliberal revolution is called for. In in part animated by the quest for greater freedoms
what follows, therefore, I will outline some pre-of speech and of individual choice. These ideals
liminary arguments as to how to both understand have proven again and again to be a powerful his-
and evaluate this transformation in the way globaltorical force for change.
capitalism is working. This requires that we come Hardly surprisingly, therefore, appeals to free-
to terms with the underlying forces, interests anddom and liberty surround us rhetorically at every
agents that have propelled the neoliberal revolu-turn and populate all manner of contemporary po-
tion forward with such relentless intensity. To turn litical manifestos. This has been particularly true of
the neoliberal rhetoric against itself, we may rea- the United States in recent years. On the first anni-
sonably ask: In whose particular interests is it thatversary of the attacks now known as '9/11', Presi-
the state takes a neoliberal stance and in what dent Bush, for example, wrote an op-ed piece for
ways have these particular interests used neolib- the New York Times that extracted ideas from the
eralism to benefit themselves rather than, asUSisNational Defense Strategy document issued
claimed, everyone, everywhere? shortly thereafter. 'A peaceful world of growing
freedom,' he wrote (as the US geared up to go to
war with Iraq), 'serves American long-term inter-
The 'naturalization' of neoliberalism
ests, reflects enduring American ideals and unites
For any system of thought to become hegemonic America's allies.' 'Humanity,' he concluded,
requires the articulation of fundamental concepts 'holds in its hands the opportunity to offer free-
that become so deeply embedded in common-sense dom's triumph over all its age-old foes' and 'the
understandings that they become taken for granted United States welcomes its responsibilities to lead
and beyond question. For this to occur not anyinold this great mission.' Even more emphatically, he
concepts will do. A conceptual apparatus has to later
be proclaimed that 'freedom is the Almighty's
constructed that appeals almost 'naturally' togift ourto every man and woman in this world' and 'as
intuitions and instincts, to our values and our the de-greatest power on earth (the US has) an obliga-
sires, as well as to the possibilities that seem totion
in-to help the spread of freedom.'2
here in the social world we inhabit. The founding So when all the other reasons for engaging in a
figures of neoliberal thought took political idealspre-emptive
of war against Iraq were proven falla-
individual liberty and freedom as sacrosanct, as or at least wanting, the Bush Administration
cious
'the central values of civilization', and in so doing
appealed increasingly to the idea that the freedom
they chose wisely and well, for these are indeed conferred upon Iraq was in and of itself an adequate
compelling and great attractors as concepts. Thesejustification for the war. But what sort of 'freedom'
values were threatened, they argued, not only wasbyenvisaged here, since, as the cultural critic
fascism, dictatorships and communism, but byMathew all Arnold long ago thoughtfully observed:
forms of state intervention that substituted collec-
'freedom is a very good horse to ride, but to ride
tive judgements for those of individuals set free somewhere
to (cited in Wliiliams, 1958, p. 118).' To
choose. They then concluded that without 'thewhat dif- destination, then, were the Iraqi people ex-
fused power and initiative associated with (privatepected to ride the horse of freedom so selflessly do-
nated to them by force of arms?
property and the competitive market) it is difficult
to imagine a society in which freedom may be ef- The US answer was spelled out on 19 Septem-
fectively preserved'. ber, 2003, when Paul Bremer, head of the Coalition
Provisional Authority, promulgated four orders
Leaving aside the question of whether the final
part of the argument necessarily follows fromthat the included 'the full privatization of public enter-
first, there can be no doubt that the concepts ofprises,
lib- full ownership rights by foreign firms of Ira-
erty and freedom of the individual are powerfulqi businesses, full repatriation of foreign prof-
and
appealing in their own right, even beyond those its...the
ter- opening of Iraq's banks to foreign control,

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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

military coup of 1964) had fallen into disrepute.

national treatment for foreign companies and...the
With the world economy in the midst of a serious
elimination of nearly all trade barriers (Juhasz,
recession,
2004).' The orders were to apply to all areas of the something new was plainly called for. A
economy, including public services, the media, group of US economists, known as 'the Chicago
manufacturing, services, transportation, finance
boys' because of their attachment to the neoliberal
theories of Milton Friedman then teaching at the
and construction. Only oil was exempt. A regres-
University
sive tax system favoured by conservatives called a of Chicago, were summoned to help re-
construct
flat tax was also instituted. The right to strike was the Chilean economy. They did so along
outlawed and unions banned in key sectors. An free market lines, privatizing public assets, opening
Ira-
qi member of the Coalition Provisional Authority
up natural resources to private exploitation and fa-
cilitating
protested the forced imposition of 'free market fun- foreign direct investment and free trade.
damentalism,' describing it as 'a flawed logicThethat
right of foreign companies to repatriate profits
from their Chilean operations was guaranteed. Ex-
ignores history (Crampton, 2003, p. C5).' Howev-
er, the interim Iraqi government appointed at the growth was favoured over import substitu-
port-led
tion. The subsequent revival of the Chilean econo-
end of June 2004 was accorded no power to change
my in terms of growth rates, capital accumulation,
or write new laws: it could only confirm the decrees
already promulgated. and high rates of return on foreign investments,
What the US evidently sought to impose provided
upon evidence upon which the subsequent turn
Iraq was a full-fledged neoliberal state apparatusto more open neoliberal policies both in Britain
whose fundamental mission was and is to facili- (under Thatcher) and the US (under Reagan) could
be modelled. Not for the first time, a brutal exper-
tate conditions for profitable capital accumulation
iment in creative destruction carried out in the pe-
for all comers, Iraqis and foreigners alike. The Ira-
qis were, in short, expected to ride their horse of
riphery became a model for the formulation of pol-
freedom straight into the coral of neoliberalism. icies in the centre (Valdez, 1995).
According to neoliberal theory, Bremer's decreesThe fact that two such obviously similar restruc-
are both necessary and sufficient for the creationturings of the state apparatus occurred at such dif-
of wealth and therefore for the improved well-be-ferent times in quite different parts of the world un-
der the coercive influence of the United States
ing of the Iraqi people. They are the proper foun-
might be taken as indicative. It suggests that the
dation for an adequate rule of law, individual lib-
erty and democratic governance. The insurrection grim reach of US imperial power might lie behind
the rapid proliferation of neoliberal state forms
that followed can in part be interpreted, therefore,
as Iraqi resistance to being driven into the embrace
throughout the world from the mid- 1970s onwards.
of free market fundamentalism against their own While there have been strong elements of this at
free will. work over the past thirty years, this is by no means
constitutive of the whole story. It was not the US,
It is useful to recall, however, that the first great
experiment with neoliberal state formation was after all, that forced Margaret Thatcher to take the
neoliberal path she took in 1979, and during the
Chile following Pinochet's coup almost thirty years
to the day before Bremer's decrees were issued, early
on 1980s Thatcher was a far more consistent ad-
the 'little September 11th' of 1973. The coup,vocate of neoliberalism than Reagan ever proved to
be. Nor was it the US that forced China in 1978 to
against the democratically elected and leftist social
democratic government of Salvador Allende, was begin upon a path of liberalization which has
strongly backed by the CIA and supported by brought
US it closer and closer to the embrace of neo-
liberalism over time. It would be hard to attribute
Secretary of State Henry Kissinger. It violently re-
the moves towards neoliberalism in India and Swe-
pressed all the social movements and political or-
ganizations of the Left and dismantled all forms den
of in 1992 to the imperial reach of US power. The
popular organization (such as the community uneven geographical development of neoliberal-
health centres in poorer neighbourhoods). The ismla- on the world stage has been, evidently, a very
complex process entailing multiple determinations
bour market was 'freed' from regulatory or institu-
and not a little chaos and confusion. So why, then,
tional restraints (for example, trade union power).
However, by 1973 the policies of import substitu-did the neoliberal turn occur and what were the
forces compelling it onward to the point where it
tion that had formerly dominated in Latin Ameri-
has now become so hegemonic a system within glo-
can attempts at economic regeneration (and which
bal capitalism?
had succeeded to some degree in Brazil after the

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 DAVID HARVEY

ment and accelerating inflation. Discontent was

Why the neoliberal turn? widespread, and the conjoining of labour and urban
social movements
Towards the end of the 1960s global capitalism was throughout much of the ad-
vanced capitalist
falling into disarray. Serious recession occurred in world appeared to point towards
the emergence
early 1973 - the first since the great slump of the of a socialist alternative to the social
1930s. The oil embargo and oil price hike compromise
that oc- between capital and labour that had
grounded capital accumulation so successfully in
curred later that year in the wake of the Arab-Israeli
the post-war
war exacerbated already serious problems. It wasperiod. Communist and socialist par-
ties were
clear that the 'embedded capitalism' of the gaining ground across much of Europe,
postwar
period with its heavy emphasis upon someand even
sortinofthe United States popular forces were
agitating
uneasy compact between capital and labour for widespread reforms and state inter-
bro-
kered by an interventionist state that paid ventions
great in everything ranging from environmental
at-
tention to the social (i.e. welfare state) as protection
well as theto occupational safety and health and
individual wage, was no longer working.consumer
The Bret-protection from corporate malfeasance.
There was, in this, a clear political threat to ruling
ton Woods system set up to regulate international
trade and finance was finally abandonedclasses everywhere, both in the advanced capitalist
in favour
of floating exchange rates in 1973. This countries
system had (such as Italy and France) as well as in
many developing
delivered high rates of growth in the advanced cap- countries (such as Mexico and
Argentina),
italist countries and generated some spill-over but beyond this, the economic threat to
ben-
efits (most obviously to Japan but alsothe position of the ruling classes was now becom-
unevenly
across South America and to some other ing
countries
palpable. One condition of the post-war settle-
mentof
of South East Asia) during the 'golden age' in cap-
almost all countries was that the economic
italism in the 1950s and early 1960s. Butpower of the
it was nowupper classes be restrained and that la-
exhausted and some alternative was obviouslybour be accorded a much larger share of the eco-
needed to restart the processes of capital nomic pie. In the US, for example, the share of the
accumu-
lation (Armstrong et al., 1991).Whatever national
reformsincome taken by the top 1% of income
were achieved, they obviously had to seek earners fell from a pre-war high of 16% to less than
to re-es-
tablish appropriate conditions for the8% revival
by the endof of the Second World War and stayed
close to that level for nearly three decades. While
capital accumulation. How and why neoliberalism
emerged victorious as the only possiblegrowth answer was strong
to this restraint seemed not to mat-
this problem is a far too complicated story ter, to
butdetail
when growth collapsed in the 1970s, when
real interest
here. In retrospect it may seem that the answer was rates went negative, and paltry divi-
both inevitable and obvious, but at the timedends Iand
think
profits were all that were possible then,
it is fair to say that no one really knew orthe ruling class itself felt deeply threatened eco-
understood
with any certainty what kind of answer wouldnomically.
workRuling classes had to move decisively if
and how. The world stumbled towards neoliberal-
they were to protect their power from political and
economic annihilation.
ism as the answer through a series of gyrations and
chaotic motions that really only converged The coup
uponin Chile and the military takeover in
neoliberalism as the new orthodoxy with Argentina,
the con- both fomented and led internally by rul-
struction of the so-called 'Washington ing elites with US support, provided one kind of so-
Consensus'
in the 1990s. The uneven geographical lution, but the Chilean experiment with neoliberal-
develop-
ment of neoliberalism, its frequently ism demonstrated
partial and that the benefits of revived cap-
lopsided application from one state and ital accumulation
social for- were highly skewed. The country
mation to another, testifies to the tentativeness of elites along with foreign investors did
and its ruling
neoliberal solutions and the complex wellways
enough,inwhile the people in general fared bad-
which political forces, historical traditions andhas
ly. This ex-been a persistent enough effect of neo-
liberal policies
isting institutional arrangements all shaped why over time as to be regarded as struc-
tural
and how the process of neoliberalization to the whole project. Indeed, Dumenil and
actually
occurred. Levy go so far as to argue that neoliberalism was
There is, however, one element within this tran-from the very beginning a project to achieve the res-
sition that deserves specific attention. The crisis oftoration of class power to the richest strata in the
capital accumulation in the 1970s affected every-population. They show how from the mid-1980s
one through the combination of rising unemploy- onwards the share of the top 1% of income earners

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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

soared suddenly to reach 15% by the end of the sure:

cen-a military coup backed by the upper classes
tury. Other data show that the top 0.1% of income
and the subsequent fierce repression of all solidar-
earners increased their share of the national income
ities created within the labour and urban social
from 2% in 1978 to over 6% by 1999. Another
movements that had so threatened their power.
measure shows that the ratio of the median com-
Elsewhere, as in Britain and Mexico in 1976, it took
pensation of workers to the salaries of CEOs thein-
gentle prodding of a not yet fiercely neoliberal
creased from just over thirty to one in 1970 toInternational
more Monetary Fund to push countries to-
wards a practice (though by no means a policy com-
than four hundred to one by 2000. Almost certainly,
mitment) to cut back on social expenditures and the
with the Bush Administration's tax cuts now taking
effect, the concentration of income and of wealth in state in order to re-establish fiscal probity.
welfare
the upper echelons of society is continuing a-pace
In Britain, of course, Margaret Thatcher later took
(Dumenil and Levy, 2004, p. 4; see also Task Force,
up the neoliberal cudgels with a vengeance in 1979
2004, p.3) and the US is not alone in this: the
andtop
wielded them to great effect, even though she
1% of income earners in Britain have doublednever
their fully overcame opposition within her own
share of the national income from 6.5% to 13% party and could never effectively challenge such
over the past twenty years, when we look further centrepieces of the welfare state as the National
afield we see the extraordinary concentrations of Health Service. Interestingly, it was only in 2004
wealth and power within a small oligarchy after that the Labour government dared to introduce a fee
neoliberal 'shock therapy' had been administered structure into higher education. The process ofneo-
to Russia, and an extraordinary surge in income in- liberalization has been halting, geographically uin-
equalities and wealth in China as it adopts more even and heavily influenced by'the balance of class
neoliberal practices. While there are exceptions to and other social forces ranged for or against its cen-
this trend (several East and Southeast Asian coun- tral propositions within particular state formations,
tries have contained income inequalities within and even within particular sectors (such as health
modest bounds, as have France and the Scandina- and education) (Yergin and Stanislaw, 1999).
vian countries), the evidence strongly suggests that It is, however, interesting to look more specifi-
the neoliberal turn is in some way and to some de- cally at how the process unfolded in the US, since
gree associated with a project to restore or recon- this case was pivotal in influencing the global trans-
struct upper-class power. formations that later occurred. In this instance var-
We can therefore examine the history of neolib- ious threads of power intertwined to create a very
eralism either as a utopian project providing a particular rite of passage that culminated in the Re-
theoretical template for the reorganization of inter- publican Party takeover of Congressional power in
national capitalism or as a political project con- the mid-1990s, vowing what was in effect a totally
cerned both to re-establish the conditions for capi- neoliberal 'Contract on America' as a programme
tal accumulation and the restoration of class power. of domestic action. But before that point many
In what follows I shall argue that the last of these steps were involved, each building upon and rein-
objectives has dominated. Neoliberalism has not forcing the other.
proven good at revitalizing global capital accumu- To begin with, there was a growing sense among
lation but it has succeeded remarkably well in re- the upper classes by 1970 or so that the anti-busi-
storing class power. As a consequence, the theoret- ness and anti-imperialist climate that had emerged
ical utopianism of neoliberal argument has worked towards the end of the 1960s had gone too far. In a
more as a system of justification and legitimation celebrated memo, Lewis Powell (about to be ele-
for whatever had to be done to restore class power. vated to the Supreme Court by Nixon) urged the
The principles of neoliberalism are quickly aban- American Chamber of Commerce in 1971 to mount
doned whenever they conflict with this class a collective campaign to demonstrate that what was
project. good for business was good for America. Shortly
thereafter a shadowy but deeply influential and
powerful Business Round Table was formed (it still
Towards the restoration of class power exists and plays a significant strategic role in Re-
If there was a movement to restore class power publican Party politics). Corporate Political Action
within global capitalism, how was this done and by Committees (legalized under the post-Watergate
whom? The answer in countries such as Chile and campaign finance laws of 1974) proliferated like
Argentina was as simple as it was swift, brutal and wildfire and, with their activities judged protected

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 DAVID HARVEY

under the First Amendment as a form of in Chile.

free Much of the social infrastructure of the city
speech
in a 1976 Supreme Court decision, the was
systematic
destroyed and the physical infrastructure (e.g.
capture of the Republican Party as the unique class
the transit system) deteriorated markedly for lack of
investment
instrument of collective (rather than particular or even maintenance. The management
and
individual) corporate and financial power
of thebegan.
New York fiscal crisis pioneered the way for
neoliberal
But the Republican Party needed a popular practices both domestically under Rea-
base.
This proved more problematic but the gan
incorpora-
and internationally through the International
tion of the leaders of the Christian RightMonetary
- depictedFund in the 1980s. It established the prin-
as a 'moral majority' - with the Business Round
ciple that in the event of a conflict between the in-
Table provided the solution. A large segment
tegrity ofof a
financial institutions and bond holders on
disaffected, insecure and largely white theworking
one hand and the well-being of the citizens on
the other,
class was persuaded to systematically vote the former was to be preferred. It ham-
against
mered home the view that the role of government
its own material interests on cultural (anti-liberal,
black, feminist and gay), nationalist andwasreligious
to create a good business climate rather than
grounds. By the mid-1990s the Republican look to Party
the needs and well-being of the population
had lost almost all of its 'liberal' elements and be- at large. Fiscal redistributions of benefit to the upper
come a homogeneous right wing machine connect- classes resulted in the midst of a general fiscal crisis.
ing the financial resources of large corporate capi-Whether all the agents involved in producing this
tal with a populist base among a 'moral majority'fiscal compromise in New York understood it at the
that was particularly strong in the US South (Ed-time as a tactic for the restoration of upper-class
sall, 1984; Court, 2003; Frank, 2004). power is an open question. The need to maintain fis-
The second element to the US transition was the cal discipline is a matter of deep concern in its own
problem of fiscal discipline. The recession ofright and does not have to lead to the restoration of
1973-1975 diminished tax revenues at all levels at class power. It is unlikely, therefore, that Felix Ro-
a time of rising demand for social expenditures. hatyn, the key merchant banker who brokered the
Deficits emerged everywhere as a key problem. deal between the city, the state and the financial in-
Something had to be done about the fiscal crisis of stitutions, had the restoration of class power in
the state. The restoration of fiscal discipline was es- mind, but this objective was probably very much in
sential. This empowered those financial institu-the minds of the investment bankers. It was almost
tions that controlled the lines of credit to the state. certainly the aim of then Secretary of the Treasury
In 1975 they refused to roll-over the debt of NewWilliam Simon who, having watched the progress
York City and forced the city close to the edge ofof events in Chile with approval, refused to give aid
bankruptcy. A powerful cabal of bankers joined to-to the city and openly stated that he wanted New
gether with state power to discipline the city. ThisYork City to suffer so badly that no other city in the
meant curbing the aspirations of the city's powerfulnation would ever dare take on social obligations in
municipal unions, lay-offs in public employment, this way again (Alcaly and Mermelstein, 1977;
wage freezes, cut-backs in social provision (educa- Tabb, 1982).
tion, public health, transport services) and imposi- The third element in the US transition entailed
tion of user fees (tuition was introduced in thean ideological assault upon the media and upon ed-
CUNY university system for the first time). Theucational institutions. Independent 'think-tanks' fi-
bail-out entailed the construction of new institu- nanced by wealthy individuals and corporate do-
tions that had first rights to city tax revenues in or- nors proliferated (the Heritage Foundation taking
der to pay off bond holders: whatever was left went the lead) to prepare a discursive onslaught to per-
into the city budget foressential services. The final suade the public of the common sense of neoliberal
indignity was the requirement that municipal un- propositions. A flood of policy papers and propo-
ions invest their pension funds in city bonds to sitions and a veritable hired army of well-paid lieu-
make sure that unions moderated their demands to tenants trained to promote neoliberal ideas and ide-
avoid the danger of losing their pension funds als coupled with corporate acquisition of media
through city bankruptcy. power effectively changed the discursive climate in
This amounted to a coup by the financial institu- the US by the mid-1980s. The project to 'get gov-
tions against the democratically elected govern- ernment off the backs of the people' and to shrink
ment of New York City and it was every bit as ef- government to the point where it could be 'drowned
fective as the military coup that had occurred earlier in a bathtub' was loudly proclaimed. In this the pro-

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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

rialisminwithout colonies. Independent republics

moters of the new gospel found a ready audience
couldwas
that wing of the movement of 1968 whose goal be kept under the thumb of US influence and
greater individual liberty and freedom from
effectively
state act, in the best of cases, as proxies for
US interests, by supporting a 'strong man' (e.g. So-
power and the manipulations of monopoly capital.
The libertarian argument for neoliberalismmoza
provedin Nicaragua, the Shah of Iran and Pinochet
in Chile)
a powerful force for change and to the degree thatand a coterie of followers with military as-
capitalism itself reorganized to both opensistance
up aand financial aid. Covert assistance was
space for individual entrepreneurial endeavours
available to promote the rise to power of such lead-
ers, but by the 1970s it became clear that something
and switch its efforts into satisfying the innumera-
ble niche markets (particularly those defined else was
byneeded: the opening of markets, of new
sexual liberation) that were spawned out ofspaces an in-for investment, and clear fields where finan-
creasingly individualized consumerism, so it could
cial powers could operate securely entailed a much
match words with deeds. closer integration of the global economy with a
This carrot of individualized entrepreneurialism well-defined financial architecture. The creation of
and consumerism was backed by the big stick taken new institutional practices, such as those set out by
by both the state and financial institutions to that oth- the IMF and the WTO, provided convenient vehi-
er wing of the '68 movement that sought social jus- cles through which financial and market power
tice through collective endeavors and social solidar- could be exercised. But for this to happen required
ities. Reagan's destruction of the air traffic control- collaboration among the most powerful capitalist
lers in 1980 and Margaret Thatcher's defeat of the powers, and the G7 brought Europe and Japan into
British miners in 1984 were crucial moments in the alignment with the US to shape the global financial
global turn towards neoliberalism. The assault uponand trading system in ways that effectively forced
all those institutions, such as trade unions and wel-all other nations to submit. 'Rogue nations' defined
fare rights organizations, that sought to protect and as those that failed to conform to these global rules
further working-class interests, was as broad as it could then be dealt with by sanctions or coercive
was deep. In addition, the savage cut-backs in socialeven military force if necessary. In this way US ne-
expenditures and the welfare state, the passing of all oliberal imperialist strategies were articulated
responsibility for their well-being to individuals and through a global network of power relations, one
their families, proceeded apace. However, theseeffect of which was to permit the US upper classes
practices did not and could not stop at national bor-to exact financial tribute and to command rents
ders. After 1980 the US, now firmly committed to ne- from the rest of the world as a means to augment its
oliberalization and clearly backed by Britain, sought, already overwhelming power (Harvey, 2003).
through a mix of leadership, persuasion (the eco-
nomics departments of US research universities
Neoliberalism as creative destruction
played a major role in training many of the econo-
mists from around the world in neoliberal principles)In what ways may it be said that neoliberalization
and coercion to export neoliberalization far and has resolved the problems of flagging capital accu-
wide. The purge of Keynesian economists and theirmulation? Its actual record in stimulating econom-
replacement by neoliberal monetarists in the Inter-ic growth is dismal. Aggregate growth rates stood
national Monetary Fund in 1982 transformed theat 3.5% or so in the 1960s and even during the trou-
IMF (dominated by the US) into a prime agent of ne- bled 1970s fell to only 2.4%. But the subsequent
oliberalization through its structural adjustment pro-global growth rates of 1.4% and 1.1% for the 1980s
grammes visited upon any state (and there wereand 1990s (and a rate that barely touches 1% since
many in the 1980s and 1990s) that required its help2000) indicate that neoliberalism has broadly failed
with debt repayments. The 'Washington Consensus' to stimulate worldwide growth (World Commision,
that was forged in the 1990s, and the negotiating2004). Even if we exclude from this the catastroph-
rules set up under the World Trade Organization thatic effects of the collapse of the Russian and some
was established in 1998, confirmed the global turnCentral European economies in the wake of the ne-
towards neoliberal practices (Stiglitz, 2002). oliberal shock therapy treatment of the 1990s, the
But this international dimension also dependedglobal economic performance from the standpoint
upon the reanimation and reconfiguration of the US of restoring the conditions of general capital accu-
imperial tradition. That tradition, arrived at in Cen- mulation has been weak.
tral America in the 1920s, sought a form of impe- In spite of all the rhetoric about curing sick econ-

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 DAVID HARVEY

omies, neither Britain nor the US achieved

mal record, high have we been so persuaded that
levels of economic performance in the eralization
1980s,is forsuch a successful solution? Over and
example. The 1980s in fact belonged tobeyond
Japan, thethe
persistent stream of propaganda ema-
East Asian 'tiger' economies and West nating
Germany from theas neoliberal think-tanks and suffus-
powerhouses of the global economy. The ing fact thattwo material reasons stand out. First,
the media,
these proved very successful in spite neoliberalization
of radically has been accompanied by in-
creasing
different institutional arrangements makes volatility within global capitalism. The
it diffi-
fact alone
cult to argue for some simple turn to (let that 'success'
im- was to be had somewhere ob-
position of) neoliberalism on the worldscured
stagethe fact that neoliberalism was generally
as an
obvious economic palliative. To be sure, the The
failing. West extreme volatility entailed periodic ep-
German Bundesbank had taken a strongly mone-
isodes of growth interspersed with intense phases
tarist line (consistent with neoliberalism) for more
of creative destruction, most usually registered as
than two decades, thus suggesting thatsevere
there financial
is no crises. Argentina opened itself up
necessary connection between monetarism per
to foreign se and privatization in the 1990s and
capital
and the quest to restore class power. Infor several
West Ger-years was the darling of Wall Street,
many the unions remained very strong onlyand wage into total disaster as international
to collapse
levels stayed relatively high alongside the
capital con- at the end of the decade. Financial
withdrew
struction of a progressive welfare state collapse and social devastation was quickly fol-
apparatus.
lowed rate
One of the effects was to stimulate a high by a long
of drawn-out political crisis. Finan-
technological innovation, and this keptcial crises
West proliferated all over the developing
Ger-
world andcom-
many well ahead of the field in international in some instances, such as Brazil and
petition. Export-led growth could powerMexico, repeated waves of structural adjustment
the coun-
andindepend-
try forward as a global leader. In Japan, austerity led to economic paralysis.
ent unions were weak or non-existent, but Butstate in-
neoliberalism has been a huge success from
vestment in technological and organizational
the standpoint of the upper classes. It has either re-
change and the tight relationship between stored class power to ruling elites (as in the US and
corpora-
Britain) orthat
tions and financial institutions (an arrangement created conditions for capitalist class for-
also proved felicitous in West Germany) mation (as in China, India, Russia and elsewhere).
generated
an astonishing export-led growth performance,
Even countries that have suffered extensively from
neoliberalization
very much at the expense of other capitalist econ- have seen the massive reordering
omies such as the UK and the US. Such growth
of class as internally. The wave of privatiza-
structures
tion that
there was in the 1980s (and the aggregate came of
rate to Mexico with the Salinas adminis-
growth in the world was lower even than that in
tration of1992
thespawned extraordinary concentra-
tions upon
troubled 1970s) did not depend, therefore, of wealth
ne-in the hands of a few people (such as
oliberalization. Many European states therefore
Carlos Slim who
re- took over the state telephone sys-
tem and found
sisted neoliberal reforms and increasingly became an instant billionaire). With the me-
ways to preserve much of their socialdia democratic
dominated by upper-class interests, the myth
heritage while moving, in some casescouldfairly suc-
be propagated that territories failed because
cessfully, towards the West German model. In Asia,
they were not competitive enough (thereby setting
the Japanese model implemented underthe stage for even more neoliberal reforms). In-
authoritar-
ian systems of governance in South Korea,
creasedTaiwan
social inequality within a territory was nec-
and Singapore also proved viable andessary consistent
to encourage the entrepreneurial risk and in-
with reasonable equality of distribution.novation
It was thatonly conferred competitive power and
in the 1990s that neoliberalization beganstimulated
to pay growth.
off If conditions among the lower
for both the US and the UK. This happenedclasses indeteriorated,
the this was because they failed,
midst of a long drawn-out period of deflation in Ja-
usually for personal and cultural reasons, to enhance
their own Ger-
pan and relative stagnation in a newly unified human capital (through dedication to ed-
many. It is a moot point, however, as to ucation,
whether thethe
acquisition of a protestant work ethic,
Japanese recession occurred as a simple resulttoof
submission work discipline and flexibility and so
competitive pressures or whether it was engineered
on). Particular problems arose, in short, due to lack
by powerful class forces in the US usingofallcompetitive
their fi-strength or personal, cultural and po-
nancial power to humble the Japanese litical
economy.failings. In a Darwinian world, the argument
went,
So why, then, in the face of this patchy only dis-
if not the fittest should and do survive. System-

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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

ic problems were masked under a blizzard of ideo-

logical pronouncements and under a plethora 1 Privatization
of lo-
calized crises. The corporatization, commodification and privati-
If the main achievements of neoliberalism have zation of hitherto public assets has been a signal
been redistributive rather than generative, then feature of the neoliberal project. Its primary aim
ways had to be found to transfer assets and redis-has been to open up new fields for capital accumu-
tribute wealth and income either from the mass oflation in domains hitherto regarded off-limits to the
the population towards the upper classes or fromcalculus of profitability. Public utilities of all kinds
vulnerable to richer countries. I have elsewhere (water, telecommunications, transportation), social
provided an account of these mechanisms under thewelfare provision (social housing, education,
rubric of 'accumulation by dispossession (Harvey,health care, pensions), public institutions (such as
2003, ch. 4).' By this I mean the continuation anduniversities, research laboratories, prisons) and
proliferation of accumulation practices that Marxeven warfare (as illustrated by the 'army' of private
had treated as 'primitive' or 'original' during the contractors operating alongside the armed forces in
rise of capitalism. These include the commodifica- Iraq) have all been privatized to some degree
tion and privatization of land and the forceful ex- throughout the capitalist world. The intellectual
pulsion of peasant populations (as in Mexico and property rights established through the so-called
India in recent times); conversion of various forms TRIPS agreement within the WTO defines genetic
of property rights (e.g. common, collective, state) materials, seed plasmas, and all manner of other
into exclusive private property rights; suppressionproducts, as private property. Rents for use can then
of rights to the commons; commodification of la- be extracted from populations whose practices had
bour power and the suppression of alternative (in- played a crucial role in the development of these
digenous) forms of production and consumption; genetic materials. Biopiracy is rampant and the pil-
colonial, neocolonial and imperial processes of ap-laging of the world's stockpile of genetic resources
propriation of assets (including natural resources); is well under way to the benefit of a few large phar-
monetization of exchange and taxation, particular- maceutical companies. The escalating depletion of
ly of land; the slavetrade (which continues partic- the global environmental commons (land, air, wa-
ularly in the sex industry); and usury, the nationalter) and proliferating habitat degradations that pre-
debt and, most devastating of all, the use of the clude anything but capital-intensive modes of agri-
credit system as radical means of primitive accu-cultural production have likewise resulted from the
mulation. The state, with its monopoly of violence wholesale commodification of nature in all its
and definitions of legality, plays a crucial role bothforms. The commodification (through tourism) of
in backing and promoting these processes, and incultural forms, histories and intellectual creativity
many instances has resorted to violence. To this listentails wholesale dispossessions (the music indus-
of mechanisms we may now add a raft of additionaltry is notorious for the appropriation and exploita-
techniques, such as the extraction of rents from pat- tion of grass-roots culture and creativity). As in the
ents and intellectual property rights and the dimi- past, the power of the state is frequently used to
nution or erasure of various forms of common force such processes through, even against popular
property rights (such as state pensions, paid vaca- will. The rolling back of regulatory frameworks de-
tions, access to education and health care) won signed to protect labour and the environment from
through a generation or more of social democratic degradation has entailed the loss of rights. The re-
class struggle. The proposal to privatize all state version of common property rights won through
pension rights (pioneered in Chile under the dicta-years of hard class struggle (the right to a state pen-
torship) is, for example, one of the cherished ob-sion, to welfare, to national health care) into the pri-
jectives of neoliberals in the US. vate domain has been one of the most egregious of
While in the cases of China and Russia, it mightall policies of dispossession pursued in the name of
be reasonable to refer to recent events in 'primitive' neoliberal orthodoxy. All of these processes
and 'original' terms, the practices that restored amount to the transfer of assets from the public and
class power to capitalist elites in the US and else-popular realms to the private and class-privileged
where are best described as an ongoing process ofdomains. Privatization, Arundhati Roy argues with
accumulation by dispossession that rose rapidly to respect to the Indian case, entails 'the transfer of
prominence under neoliberalism. I isolate four productive public assets from the state to private
main elements. companies. Productive assets include natural re-

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 DAVID HARVEY

sources. Earth, forest, water, air. These are

of the as-
accumulation by dispossession. Crisis creation,
management
sets that the state holds in trust for the people it rep- and manipulation on the world stage
resents.... To snatch these away and sell has evolved
them as into the fine art of deliberative redis-
stock to private companies is a process of tribution
barbaric of wealth from poor countries to the rich.
dispossession on a scale that has no parallel
Byin his-
suddenly raising interest rates in 1979, Volcker
tory (Roy, 2001).' raised the proportion of foreign earnings that bor-
rowing countries had to put to debt-interest pay-
ments. Forced into bankruptcy, countriessuch as
2 Financialization
Mexico had to agree to structural adjustment.
The strong wave of financialization that set in after While proclaiming its role as a noble leader organ-
1980 has been marked by its speculative and pred- izing 'bail-outs' to keep global capital accumula-
atory style. The total daily turnover of financial tion stable and on track, the US could also open up
transactions in international markets which stood at the way to pillage the Mexican economy through
$2.3 billion in 1983 had risen to $130 billion by deployment of its superior financial power under
2001. This $40 trillion annual turnover in 2001 com- conditions of local crisis. This was what the US
pares to the estimated $800 billion that would be re- Treasury/Wall Street/IMF complex became expert
quired to support international trade and productive at doing everywhere. Greenspan at the Federal Re-
investment flows (Dicken, ch. 13). Deregulation al- serve deployed the same Volcker tactic several
lowed the financial system to become one of the times in the 1990s. Debt crises in individual coun-
main centres of redistributive activity through spec- tries, uncommon during the 1960s, became very
ulation, predation, fraud and thievery. Stock promo- frequent during the 1980s and 1990s. Hardly any
tions, ponzi schemes, structured asset destruction developing country remained untouched and in
through inflation, asset stripping through mergers some cases, as in Latin America, such crises were
and acquisitions, the promotion of levels of debt in- frequent enough to be considered endemic. These
cumbency that reduced whole populations, even in debt crises were orchestrated, managed and con-
the advanced capitalist countries, to debt peonage, trolled both to rationalize the system and to redis-
to say nothing of corporate fraud, dispossession of tribute assets during the 1980s and 1990s. Wade
assets (the raiding of pension funds and their deci- and Veneroso (1998, pp. 3-23) capture the essence
mation by stock and corporate collapses) by credit of this when they write of the Asian crisis (pro-
and stock manipulations - all of these became cen- voked initially by the operation of US-based hedge
tral features of the capitalist financial system. The funds) of 1997-1998:
emphasis on stock values that arose out of bringing
together the interests of owners and managers of Financial crises have always caused transfers
capital through the remuneration of the latter in of ownership and power to those who keep
stock options led, as we now know, to manipulations their own assets intact and who are in a posi-
in the market that brought immense wealth to a few tion to create credit, and the Asian crisis is no
at the expense of the many. The spectacular collapse exception... there is no doubt that Western and
of Enron was emblematic of a general process that Japanese corporations are the big win-
dispossessed many of their livelihoods and their ners...The combination of massive devalua-
pension rights. Beyond this, we also have to look at tions, IMF-pushed financial liberalization,
the speculative raiding carried out by hedge funds and IMF facilitated recovery may even precip-
and other major institutions of finance capital, since itate the biggest peacetime transfer of assets
these formed the real cutting edge of accumulation from domestic to foreign owners in the past
by dispossession on the global stage, even as they fifty years anywhere in the world, dwarfing
supposedly conferred the positive benefit for the the transfers from domestic to US owners in
capitalist class of 'spreading risks.' Latin America in the 1980s or in Mexico after
1994. One recalls the statement attributed to
Andrew Mellon: 'In a depression assets return
3 The management and manipulation of crises to their rightful owners.'
Beyond the speculative and often fraudulent froth
that characterizes much of neoliberal financial ma- The analogy with the deliberate creation of unem-
nipulation, there lies a deeper process that entails ployment to produce a pool of low-wage surplus la-
the springing of 'the debt trap' as a primary means bour convenient for further accumulation is exact.

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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

Valuable assets fall out of use and lose their value.

the 1990s, has had analogous effects upon the pros-
They lie fallow and dormant until capitalists pos-
pects for the Mexican peasantry, forcing many rural
sessed of liquidity choose to seize upon themdwellers off the land into the cities in search of em-
and
ployment.
breathe new life into them. The danger, however, is The Chinese state has followed through
that crises might spin out of control and a whole
become series of draconian steps in which assets
have been
generalized, or that revolts will arise against theconferred on a small elite to the detri-
system that creates them. One of the primement of the mass of the population.
func-
tions of state interventions and of international in-
The neoliberal state also seeks redistributions
stitutions is to orchestrate crises and devaluations
through a variety of other means such as revisions
in the tax code to benefit returns on investment
in ways that permit accumulation by dispossession
to occur without sparking a general collapse or incomes and wages, promotion of re-
rather than
popular revolt. The structural adjustment
gressive
pro-elements in the tax code (such as sales
taxes), displacement of state expenditures and free
gramme administered by the Wall Street/Treasury/
IMF complex takes care of the first while access to all by user fees (e.g. on higher educa-
it is the
job of the comprador neoliberal state apparatus
tion), and the provision of a vast array of subsidies
(backed by military assistance from the and imperial
tax breaks to corporations. The corporate wel-
powers) in the country that has been raidedfareto en-
programmes that now exist in the US at fed-
sure that the second event does not occur. eral, state and local levels amount to a vast redi-
However,
the signs of popular revolt soon began to rection
emerge, of public moneys for corporate benefit (di-
first with the Zapatista uprising in Mexicorectly,
in 1994,as in the case of subsidies to agribusiness,
and later in the generalized discontent and which
indirectly, as in the case of the military-indus-
emerged with the anti-globalization movement that in much the same way that the mort-
trial sector),
cut its teeth in the revolt at Seattle. gage interest rate tax deduction operates in the US
as a massive subsidy to upper-income home own-
ers and the construction industry. The rise of sur-
4 State redistributions
veillance and policing and, in the case of the US,
The state, once transformed into a neoliberal set of incarceration of recalcitrant elements in the pop-
institutions, becomes a prime agent of redistribu- ulation indicate a more sinister role of intense so-
tive policies, reversing the flow from the upper to cial control. In the developing countries, where
the lower classes that had occurred during the era opposition to neoliberalism and accumulation by
of social democratic hegemony. It does this in the dispossession can be stronger, the role of the neo-
first instance through pursuit of privatization liberal state quickly assumes that of active repres-
schemes and cut-backs in those state expenditures sion even to the point of low-level warfare against
that support the social wage. Even when privatiza- oppositional movements (many of which can now
tion appears as beneficial to the lower classes, the conveniently be designated as 'terrorist' so as to
long-term effects can be negative. At first blush, for garner US military assistance and support), such
example, Thatcher's programme for the privatiza- as the Zapatistas in Mexico or the landless peasant
tion of social housing in Britain appeared as a gift movement in Brazil.
to the lower classes which could now convert from In effect, reports Roy, 'India's rural economy,
rental to ownership at a relatively low cost, gain which supports seven hundred million people, is be-
control over a valuable asset and augment their ing garroted. Farmers who produce too much are in
wealth. But once the transfer was accomplished, distress, farmers who produce too little are in dis-
housing speculation took over, particularly in tress, and landless agricultural laborers are out of
prime central locations, eventually bribing or forc- work as big estates and farms lay off their workers.
ing low-income populations out to the periphery in They're all flocking to the cities in search of em-
cities such as London, and turning erstwhile work- ployment (Roy, 2001).' In China it is estimated that
ing-class housing estates into centres of intense at least half a billion people will have to be absorbed
gentrification. The loss of affordable housing in by urbanization over the next ten years if rural may-
central areas produced homelessness for many and hem and revolt is to be avoided. What they will do
extraordinarily long commutes for those who did in the cities remains unclear, though, as we have
have low-paying service jobs. The privatization of seen, the vast physical infrastructural plans now in
the ejidos in Mexico, which became a central com- the works will go some way to absorbing the labour
ponent of the neoliberal programme set up during surpluses released by primitive accumulation.

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 DAVID HARVEY

The redistributive tactics of neoliberalism are ed to avoid avant-gardism and refused to take the
wide-ranging, sophisticated, frequently masked form of a political party. It preferred instead to re-
main a social movement within the state, attempt-
by ideological gambits but devastating for the dig-
ing to form a political power bloc in which indige-
nity and social well-being of vulnerable popula-
tions and territories. The wave of creative destruc- nous cultures would be central rather than periph-
tion which neoliberalization has visited across the
eral. It sought thereby to accomplish something
whole landscape of capitalism is unparalleled in akin to a passive revolution within the territorial
the history of capitalism. Understandably, it has logic of state power
spawned resistance and a search for viable alter- The effect of all these movements has been to
natives. shift the terrain of political organization away from
traditional political parties and labour organizing
into a less focused political dynamic of social action
Alternatives across the whole spectrum of civil society. But what
it lost in focus it gained in terms of relevance. It drew
Neoliberalism has spawned a swathe of opposition-
al movements both within and outside of its com- its strengths from embeddedness in the nitty-gritty
pass. Many of these movements are radically dif-of daily life and struggle, but in so doing often found
ferent from the worker-based movements that dom- it hard to extract itself from the local and the partic-
inated before 1980. I say 'many' but not 'all'. Tra-ular to understand the macro-politics of what neo-
ditional worker-based movements are by no meansliberal accumulation by dispossession was and is all
dead even in the advanced capitalist countries about. The variety of such struggles was and is sim-
where they have been much weakened by the neo-ply stunning. It is hard to even imagine connections
liberal onslaught upon their power. In South Koreabetween them. They were and are all part of a vola-
and South Africa vigorous labour movements arosetile mix of protest movements that swept the world
during the 1980s, and in much of Latin Americaand increasingly grabbed the headlines during and
working-class parties are flourishing if not in pow-after the 1980s (Wignaraja, 1993; Brecher et al.,
er. In Indonesia a putative labour movement of 2000; Gills, 2001, Bello, 2002; Mertes, 2004).
great potential importance is struggling to be heard. These movements and revolts were sometimes
The potentiality for labour unrest in China is im- crushed with ferocious violence, for the most part by
mense though quite unpredictable. In addition, it isstate powers acting in the name of 'order and stabil-
not clear either that the mass of the working class ity'. Elsewhere they produced interethnic violence
in the US, which has over this last generation votedand civil wars as accumulation by dispossession
consistently against its own material interests for produced intense social and political rivalries in a
reasons of cultural nationalism, religion and oppo- world dominated by divide-and-rule tactics on the
sition to multiple social movements, will foreverpart of capitalist forces. Client states, supported mil-
stay locked into such a politics by the machinationsitarily or in some instances with special forces
of Republicans and Democrats alike. Given the vol-trained by the major military apparatuses (led by the
atility, there is no reason to rule out the resurgence US with Britain and France playing a minor role),
of worker-based politics with a strongly anti-neo- took the lead in a system of repressions and liquida-
liberal agenda in future years. tions to ruthlessly check activist movements chal-
However, struggles against accumulation by dis-lenging accumulation by dispossession.
possession are fomenting quite different lines of The movements themselves have produced a
social and political conflict. Partly because of theplethora of ideas regarding alternatives. Some seek
distinctive conditions that give rise to such move- to de-link wholly or partially from the overwhelm-
ments, their political orientation and modes of or-ing powers of neoliberalism and neoconservatism.
ganization depart markedly from those typical ofOthers seek global social and environmental justice
social democratic politics. The Zapatista rebellion,by reform or dissolution of powerful institutions
for example, did not seek to take over state powersuch as the IMF, the WTO and the World Bank. Still
or accomplish a political revolution. It sought in-others emphasize the theme of 'reclaiming the com-
stead a more inclusionary politics to work through mons', thereby signalling deep continuities with
the whole of civil society in a more open and fluidstruggles of long ago as well as with struggles waged
search for alternatives that would look to the spe-throughout the bitter history of colonialism and im-
cific needs of the different social groups and allowperialism. Some envisage a multitude in motion, or
them to improve their lot. Organizationally, it tend- a movement within global civil society, to confront

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 NEO-LIBERALISM AS CREATIVE DESTRUCTION

the dispersed and decentred powers of thearound accumulation by dispossession in w

neoliberal
order, while others more modestly look to local ex- from classic forms of primitive acc
everything
periments with new production and consumption
lation through practices destructive of cultures
systems animated by completely different tories
kindsand
of environments to the depreda
social relations and ecological practices.wrought
There areby the contemporary forms of financ
ital are the focus of resistance. Finding the or
also those who put their faith in more conventional
political party structures with the aim oflink between these different class movements i
gaining
urgent
state power as one step towards global reform theoretical and practical task, but an
of the
economic order. Many of these diverse currents
also shows
now that this has to occur in an historica
come together at the World Social Forum in an at- trajectory of capital accumulation
ographical
tempt to define their commonalities and is
tobased
build in
an increasing connectivity across spac
organizational power capable of confronting
time butthe
marked by deepening uneven geogr
many variants of neoliberalism and of neoconserv-
cal developments. This unevenness must be un
atism. There is much here to admire and stood as something actively produced and
to inspire.
But what types of conclusions may be derived
tained by processes of capital accumulation
from an analysis of the sort here constructed? To how
matter be- important the signs may be of resi
gin with the whole history of the social of past configurations set up in the cultural
democratic
compromise and the subsequent turn to scape neoliberal-
and the social world.
ism indicates the crucial role played by class But analysis also points up exploitable con
strug-
gle in either checking or restoring class dictions
power. Al- within the neoliberal agenda. The ga
though it has been effectively disguised, we rhetoric
tween have (for the benefit of all) and reali
(for the benefit of a small ruling class) incr
lived through a whole generation of sophisticated
overinspace
class struggle on the part of the upper strata soci-and time and the social movements
ety to restore or, as in China and Russia, todone much to focus on that gap. The idea tha
construct,
an overwhelming class power. All of this occurred
market is inabout competition and fairness is in
decades when many progressives were theoretically
ingly negated by the facts of extraordinary m
polization,
persuaded that class was a meaningless category and centralization and internationaliz
when those institutions from which class of struggle
corporate and financial power. The startlin
had hitherto been waged on behalf of the crease in class and regional inequalities both w
working
classes were under fierce assault. The firststates
lesson (such
we as China, Russia, India, Mexico
must learn, therefore, is that if it looksSouthern
like classAfrica) as well as internationally p
serious
struggle and acts like class struggle then we political problem that can no longe
have to
swept under
name it for what it is. The mass of the population has the rug as something 'transition
the
either to resign itself to the historical and way to a perfected neoliberal world. The
geograph-
ical trajectory defined by this overwhelming
liberalclass
emphasis upon individual rights and th
power or respond to it in class terms. creasingly authoritarian use of state power to
tain
To put it this way is not to wax nostalgic forthe
somesystem become a flashpoint of conten
lost golden age when the proletariat was ness. The more neoliberalism is recognized
in motion.
failed have)
Nor does it necessarily mean (if it ever should if not disingenuous utopian project mas
that there is some simple conception of athe prole- attempt at the restoration of class
successful
er, the (let
tariat to which we can appeal as the primary more it lays the basis for a resurgen
mass movements voicing egalitarian politica
alone exclusive) agent of historical transformation.
There is no proletarian field of utopian Marxian
mands, seeking economic justice, fair trad
fantasy to which we can retire. To pointgreater
to the ne-
economic security and democratizatio
cessity and inevitability of class struggle is
Butnot to the profoundly anti-democratic natu
it is
say that the way class is constituted is determined
neoliberalism that should surely be the main fo
or even determinable in advance. Class movements
political struggle. Institutions with enormous po
make themselves, though not under conditions of Federal Reserve, are outside of any d
such as the
their own choosing, and analysis shows that those
ocratic control. Internationally the lack of ele
conditions are currently bifurcated into movements
tary accountability let alone democratic control
around expanded reproduction in which the institutions
exploi- such as the IMF, the WTO and the W
tation of wage labour and conditions defining thesay nothing of the overwhelming pr
Bank, to
social wage are the central issues and movements
power of financial institutions, makes a mocke

? The author 2006 157

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 DAVID HARVEY

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