Africa and Neoliberalism (Part II): Is neoliberalism the cause of contemporary social, political, and economic problems in Africa?
Although neoliberalism as a theory is Euro-American centered, its influence or practical aspects has greatly affected economies of African countries. Western institutions such as the International Monetary Fund (IMF) and World Bank (WB) have been major conduits for promoting market fundamentalism in African countries. In the 1980s and 1990s, they formulated policies, commonly referred as Structural Adjustment Programs (SAPs), that led to economic adjustments such as austerity and scrapping of subsidies for important sectors such as agriculture, education, and healthcare, factors that finally wrecked economies of many African countries.
As I pointed out in my introductory article, reading David Harvey’s, A Brief History of Neoliberalism, Jamie Peck’s Explaining (with) Neoliberalism, and Michel Foucault’s The Birth of Bio-Politics, one learns that neoliberalism does not have a single definition because the concept cuts across multiple disciplines. But at its basic, neoliberalism refers to an assemblage of social-economic, political, and cultural relations that favor market-based initiatives. According to Harvey, originators of neoliberalism leveraged the desire for individual freedom and dignity, which is ubiquitous in western societies (but not limited to it) to drum up support for the concept. They figured out that people are more willing and likely to support policies or frameworks that warrant personal liberty and freedom to determine their own lives however they wish.
Harvey further notes that from the beginning, proponents of neoliberalism, especially those based at Chicago School (the Economics Department of the University of Chicago), were against state interventionist theories such as Keynesian. Whereas Keynesian economic theory (which was advanced by British economist John Keynes) advocated for increased government spending and lower taxes as a means for addressing economic depression, Chicago School argued that the state was not competent enough to judge market initiatives because it had limited data, and that politicians could not be trusted to be impartial in planning the economy. Moreover, economic stagflation in Europe and America was blamed on Keynesian initiatives such as fixed exchange rates, heavy government spending on social welfare, and government intervention that hindered market competition. Neoliberalists argued that there is no such thing as society. They privileged individuals and families, and thus, justified the scrapping of state enterprises or social welfare programs geared to the benefit of society (as a collective). They proposed the idea of a neo-liberal state, one that operates as super-enterprise facilitating other sectors of the economy while ensuring market competition. As Harvey notes, “the freedoms it embodies reflect the interests of private property owners, businesses, multinational corporations, and financial capital” (7).
Scholars seem to agree that the common denominator for various interpretations of liberalism is the market. However, some scholars such as Jamie Peck have gone beyond the basic definition to explore how neoliberalism tends to operate differently from one geographical region to another with varying degrees of success. Furthermore, even the historiography of the concept of neoliberalism also tends to differ from one region to another. For instance, Ordo-liberals in Germany anchored their neo-liberal ideas on “social market economy’ and advocated for the creation of a social policy that can create and determine conditions for the market, which included “universalization of the entrepreneurship form and the redefinition of law” (Lemke, 2001: 195). In other words, they conceptualized an economic-institutional structure that encompasses the law of the land and even determines the nature of the state that can be established. Chicago School went further and blurred the line between the social and economic spheres. As Lemke (2001) notes, they “attempted to re-define the social sphere as a form of the economic domain” (197). In other words, social phenomena that were not considered in monetary or economic terms were incorporated into the economy.
In other areas neoliberalism redefined the relationship between capital and labor, that is, it introduced the concept of human capital whereby people were no longer receiving wages for performing a task but “an income from a special type of (human) capital” (Lemke, 2001: 199). In this regard, people became entrepreneurs of themselves. Thus, a person pursuing education to acquire more skills was regarded as investing in self; increasing one’s human capital.
The concept of neoliberalism has had its fair share of criticism from both the left and right critics in cultural studies, political science, economics, and other disciplines. The 2008 crash of the economy led to mass protests such as Occupy Wall Street that condemned neoliberalism as a cause of economic inequality in the US. But as Peck (2013) points out, neoliberalism is not the sole cause of contemporary social, political, and economic problems. He argues that it is one of the Others. My view is that neoliberalism as conceptualized favors certain classes of people who have taken advantage of the system and enriched themselves at the expense of the poor. Some countries such as the US have taken the neoliberal idea of freedom beyond their borders through instituting and adopting foreign policies that purport to promote freedom around the world. For instance, President Bush’s invasion of Iraq was pegged on the idea that they were liberating Iraq citizens from decades of oppression under Saddam Hussein. They sought to achieve this through liberalization of the entire Iraq economy, that is, privatizing key public institutions and adopting market-based initiatives for all sectors of the economy. They even sought to regulate labor by prohibiting unions and unionization. All these policies have not translated into “good freedom” for the oppressed. Instead, they have widened inequality and exacerbated suffering.
Harvey, D (2005). A Brief History of Neoliberalism. Oxford: Oxford University Press.
Lemke, T (2001). ‘The birth of bio-politics’: Michel Foucault’s lecture at the College de France on neo-liberal governmentality. Economy and Society, 30(2), 190-207.
Mamdani, M. (2007). Define and Rule. Cambridge, MA: Harvard University Press.
Mantena, K (2010). Alibis of Empire: Henry Maine and the ends of liberal imperialism. Princeton: Princeton University Press.
Peck, J (2013). Explaining with Neoliberalism, Territory, Politics, Governance, 1:2, 132-157.