Question:

What is neoliberalism according to David Harvey and Phillip Mcmichael? Please identify (1) specific world-wide institutions that are active in promoting/imposing deregulation, privatization, and enclosures, (2) the ways in which “;neoliberalism” have activated a laboring population [recall sassen] , and (3) how one may think about Chinese immigration, be it internally in China or overseas since the 1970.

Answer:

China and their life

Neoliberalism has for the past three or so decades been a dominant ideology in the contemporary world. Scholars have even suggested that we live in a world that is being shaped predominantly by neoliberalism. However, neoliberalism is not always clearly defined. To many people, it is extremely difficult to understand the precise meaning of this term. Moreover, even in instances where the definition is clear, significant differences exists between its usage in theory and in practice.

David Harvey is one of the scholars who provide a concise definition of neoliberalism. According to Harvey (2007), neoliberalism is a political-economic theory that proposes that the best way to advance the human well-being is by liberating the entrepreneurial skills and freedoms by establishing institutions that facilitate free trade, free markets, and strong private property rights. Harvey (2007) adds that the role of the state is restricted to the creation and preservation of an institutional framework that is appropriate for such political-economic practices.

Some of the roles of the state in the context of neoliberalism include guaranteeing the integrity and quality of money and setting up police, defense, military, and legal structures necessary for securing private property rights. If need be, force is used to ensure that markets are functioning properly. Moreover, in aspects where markets are not at play such as education, land, social security, water, and environmental pollution, state action should be used to create them. Beyond this point, the state should not get involved. Harvey (2007) argues that once the markets have been established, the intervention of the state should be at a bare minimum. Neoliberals support this argument by asserting that it is not possible for the state to possess sufficient information for second-guessing market signals and prices. Moreover, it is normal for powerful interest groups to exert bias and distortions on state intervention for their benefit, particularly in democracies.

On the contrary, Phillip McMichael discusses the theory of neoliberalism in the context of other theoretical constructs such as third-worldism. According to McMichael (2004), it is no accident that neoliberalism was explicitly created. Mcmichael (2004) adds that neoliberalism is an embodiment of the phenomenon that he refers to as home economomicus, which has for the last several decades been constantly subjected to creation, individuation, and control efforts within the contemporary political environment.

McMichael (2004) points out that neoliberalism has led to the “commodification” of public services as well as restructuring of food regimes in many countries in the contemporary world. When public services are commodified, the idea of welfare arrangements is nullified. For example, in terms of healthcare, factors such as eligibility criteria and economic calculus are put into consideration in neoliberal societies. In societies with welfare arrangements, such factors are not put into consideration.

It is imperative to assess how neoliberalism has emerged in the US by exploring immigration issue from as far back as the 1940s. The period starting early 1940s is normally regarded as the beginning of the Developmental Project in the US. Developmental Project existed between the 1940s and 1970s. During this time, focus was on nation-state building with the government implementing social contracts with citizens, most of which were human-rights based. During this era of increased emphasis on welfare programs, soldiers who had gone to fight during the World War II came back. Baby boomers were born and many of the welfare programs only included Whites (not Asians or Blacks) of the lower middle class. They were also targeted at the White immigrants who had settled on Long Island.

The 1970s marked the start of the Neoliberal Time Period, which is sometimes referred to as the Globalization Project. As McMichael (2004) points out, one of the characteristics of neoliberalism is a reduction in the extent to which the state engages in social welfare. During the  Developmental Project period, a lot of attention was on nation-state building, primarily through social welfare. However, the neoliberal period ushered in a new era where the state started cutting drastically on welfare. The capitalist logic was introduced and social order began undergoing numerous changes. A good example is that of Binghamton University in New York, which used to operate as a low-cost institution of higher learning. Today, the institution has become a privatized commodity.

McMichael (2004) argues that in the neoliberal society, the interest of the nation is based on the market and not on people. In other words, it is based on trade liberalization. The new social order that was introduced during the 1970s best illustrates this point. The capital market rule was made to supersede all social welfare initiatives. Market liberalization became the new locus of society. This new way of thinking coincided with the rise of the global world market. This market pushed many countries in the third world into debt soon after being forced to adopt capitalism (McMichael, 2004).

According to McMichael, the concept of comparative advantage remains one of the most crucial doctrines that are normally used in legitimizing the relationship between the downward pressures of liberalization on social rights and its contemporary export regime. Incidentally, however, the doctrine of comparative advantage also explains the close correlation between export liberalization, debt, and high deforestation rates (McMichael, 2004).

In the era of neoliberalism that started during the 1970s, privatization and patenting have also tended to go hand in hand. McMichael (2004) gives a simple example of what this means for biodiversity; he notes that whenever scientists formulate seeds, they promptly patent them. Anyone who is growing similar plants containing similar genes can end up being sued by these scientists for violating their intellectual property. Another example is when people privatize water by virtue of simply buying a piece of land that acts as a water catchment area (McMichael, 2004). This is an excellent demonstration of how neoliberalism leads to the transformation of natural resources into commodities.

Many international institutions greatly promote deregulation, privatization, and enclosures. They do this by promoting marketing liberalization. Some of these organizations include the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank. McMichael (2004) states that the so-called Bretton Woods institutions led many third world countries into debt and bankruptcy. Most of the damage to these developing countries was done when Structural Adjustment Programs (SAPs) were being implemented.

Neoliberalism has also activated a laboring population. This has happened in many ways. Harvey (2007)gives the example of China where foreign capital has been allowed to exploit the country’s labor resources. Moreover, China has also undergone internal transformation mainly through state-owned enterprises (SOEs) in cities and township and village enterprises (TVEs) which are under the regulation and maintenance of banks. However, neoliberalism is already causing SOEs to undergo a phenomenon  where they are slowly dissolving.  They are gradually being replaced by the idea of private property.

The impact of neoliberalism is also evident in immigration trends, both within China and overseas since the 1970s. TVEs started allowing capitalists to venture into the countryside, where they organized agricultural production. This led to the displacement of many farmers, thereby triggering a large wave of rural-urban migration. Moreover, many farmers opted to migrate into cities because the exploitative wages that they received in the countryside were not enough to support them and their families.

In China, immigration into other countries was affected by neoliberalism. The gradual dissolution of SOEs and the introduction of the institution of private property opened a new chapter in China’s relations with other countries. Foreign competition  intensified, forcing many SOEs to get rid of surplus labor as a way of increasing profitability and efficiency. With the entry of multinational enterprises (MNEs) into China, most of these employees sought to take advantage of this opening-up of the international market to migrate into the MNEs’ home countries in the search for job opportunities.

Since the 1970s, China has become a very active participant in foreign investment. The importance of foreign capital for China’s economy forced the Chinese government to pursue ambitious foreign investment projects. These developments came at a time when  both unpaid labor and social inequality were increasing. Few Chinese workers could bypass the job opportunities that arose in the countries China did business with. At first, these opportunities arose in the neighboring countries such as Japan and South Korea. Later on, the opportunities arose in many western countries such as the US and the UK.  According to Harvey (2007), this is an indication of how neoliberalism has led to the redistribution of class power, forcing many people to look for new ways of surviving.

 

References

Harvey, D. (2007). Neoliberalism as Creative Destruction. The Annals Of The American Academy Of Political And Social Science, 610(1), 21-44.

Mcmichael, P. (2004). Third Worldism and the lineages of global fascism: The regrouping of the global South in the neoliberal era. Third World Quarterly, 25(1), 231–254.