Towards the end of his life, the great development economist Raúl Prebisch sat down to write a synthesis of his theoretical and practical experience. It was called Capitalismo periférico: Crisis y transformación, and was published in Mexico in 1982. That was about seven years into the neoliberal experiment in Chile, just after its first economic crisis, and just as the debt crisis years and the ‘lost decade’ of Latin America were beginning.
Prebisch could look back on a lifetime of political and intellectual engagement, from his time as president of the central bank of Argentina, to the founding of the famous CEPAL (the United Nations think-tank for economic development of Latin America, which he headed in its formative years), to the years of struggle establishing the UN agency for trade and development across the global South (UNCTAD, which he headed in its formative years). He had gathered one of the most remarkable think-tank teams ever put together, and promoted the development strategy of import replacement industrialization that was attempted around the global periphery from Australia to Brazil. He was a key figure in economic structuralism, godfather to the ‘dependency’ school, and co-author of the Prebisch-Singer thesis on long-term shifts in the terms of international trade.
Prebisch's book is therefore a very interesting point to begin thinking about Southern perspectives on neoliberalism. He was one of the first economists to doubt the universality of economic reason. In his remarkable 1950 report, The Economic Development of Latin America and its Principal Problems, he had expressed scepticism that the economics dominant in the global North could work for the periphery. His career at CEPAL and UNCTAD was, in a sense, an attempt to produce an economic reason and development strategy that would work for the periphery.
In Capitalismo periférico, Prebisch does not use the term ‘neoliberalism', which was not in common use at the time, but he certainly has a conception of neoliberalism. One of the six sections of the book is called ‘The neoclassical theories of economic liberalism', and in this he makes a sharp distinction between political liberalism and economic liberalism. Though both originate in a concept of freedom, they now point in different directions.
Prebisch's target is not exactly neoclassical economic theory, for which he (like Keynes) had considerable respect – ‘a great scientific advance', as Prebisch (1982: 280) calls it, seeing the mathematical formalization as precise and impressive. Rather, the problem, as he sees it, is the simplistic application of this admirable theory to the real world, and especially the world of the global periphery.
Here Prebisch's argument rests on a theme he had emphasized since his experiences in the 1930s and 1940s: the structural differences between centre and periphery. This was not only a matter of differences in industrial composition, but major differences in history and social structure. The capitalism of the periphery, Prebisch argued, operated in a political and social environment that negated the assumptions underlying free-market economics. This environment was characterized by great concentrations of land, wealth and power in the hands of small elites. With social mobility and income redistribution held down, peripheral capitalism was in practice exclusionary rather than dynamic. The benefits of technological advance and productivity growth were appropriated by entrenched elites or transferred to the global centre.
In this situation, neoclassical free-market economics comes to play an ideological rather than a scientific role. To understand the force of Prebisch's words, one must know that after a lifetime of bureaucratic work, his prose is usually extremely drab. But he calls economic liberalism, in this context, falseamiento – distortion of reality. Because it ignores social structure and the relations of power, it becomes hypocritical: ‘There, economic freedom is the freedom to be poor’ (Prebisch, 1982: 273).
Prebisch was not much kinder to Marxism. Though he respected Marx as a great critic of capitalism, he considered Marx's analysis also to be specific to the global centre, and he considered Leninism an unacceptable model of forced accumulation. His general view was that ‘Conventional theories do not represent reality’ (1982: 322).
Indeed, reality was changing. When Prebisch died, four years after this book was published, a neoliberal development agenda was getting a grip around the global periphery, while the Reagan/Thatcher attack on the Northern welfare state deepened. Transnational corporations and financialization, which had never figured much in Prebisch's economic thinking, were on the upsurge; and the technical underpinnings of the internet were already established.
Neoliberalism's origins are usually narrated starting with the role of anti-communist economists in Europe and the United States in creating a theory exalting free markets. Initially Hayek and Friedman argued with little success against Keynesian economics, state control of the economy and a welfare state. In the 1980s, however, the policy framework changed. Reagan and Thatcher created the political conditions for the free-market economists’ theory to be put into practice. A wave of monetarist policy, privatization, deregulation, tax reduction and attacks on welfare-state ‘entitlements’ followed.
In the usual story, through the political power of the United States and Europe, neoliberalism was imposed on the rest of the world in the 1980s and 1990s via the IMF and World Bank, under the rubric of structural adjustment programmes. This pressure was made effective by the growing integration of the world economy and by the collapse of the Soviet Union and its satellites. Finance capital emerged as the dominant sector of capital and unregulated financial markets – in currencies, shares, credit, and derivatives – have grown on a huge scale.
This story is told, with differing emphases, in several bodies of writing about neoliberalism. One school treats neoliberalism centrally as a system of ideas, amounting to a shift in the dominant ideology of capitalist society, ‘the ruling ideas of the time’ (Harvey, 2005: 36; Klein, 2007). Another treats neoliberalism as governmentality, a regime of power/knowledge that constitutes the economic subject as an ‘entrepreneur of himself’ (Foucault, 2004; Dean, 2012). Another school focuses on economic mechanisms. The most influential text here is perhaps Gérard Duménil and Dominique Lévy's Capital Resurgent: Roots of the Neoliberal Revolution (2004), arguing that a crisis of profitability emerged in the USA and western Europe in the late 1960s and 1970s, and neoliberalism expressed the ‘political will’ of the capitalist class to restore their revenues and power. The idea of crisis and mutation is also the basis of the prescient analysis of neoliberalism by Antonio Negri, in Italian-language work now largely forgotten. Negri's argument centred not on the strength of capitalism as a system, but on its weakness. The economic mechanisms of capitalism had been so de-structured by working-class struggle that new means of valorization had to be created, which could only be done ‘within a project that is qualitatively different from that of reformist planning’ (Negri, 1973, 1977; Connell, 2012).
All these origin stories share a geopolitical perspective. The cultural stories focus on the intellectuals of Europe and the USA; the political-economy stories focus on the economy of Europe and the USA. When neoliberalism appears elsewhere, it is an export from the North or a copy of Northern policies (e.g., Peck et al., 2009: 50). The critical literature on neoliberalism thus follows a familiar pattern in social science, finding the causal dynamic in the North and treating the rest of the world as the scene of application of Northern ideas. This pattern is reproduced in much of the literature on neoliberalism that comes from the global South, even from Latin America, where debate about neoliberalism has been intense (e.g., Gómez, 2004; Hernandez et al., 2010).
But are these stories right? The first substantially neoliberal regime, after all, was in the far South – Chile under Pinochet. In legend, this is attributed to the ‘Chicago Boys’ bringing Friedman from the North. But that ignores the question why Pinochet, a very conservative military man, should have taken up these policies at a time when they were not hegemonic in the North. He must have had solid reasons for doing so.
In fact, an economic strategy had been articulated by the Chilean right before the 1973 coup against Allende (in a document nicknamed ‘The Brick').1 There was already an active discussion of neoliberalism going on in South America. A study of neoliberal politics across Latin America in the 1960s documents the diffusion of neoliberal ideas through organizations involving businessmen and industrialists (Bailey, 1965). Still before the hegemony of neoliberalism in the North, Roberto Calvo (1979) published a whole monograph on neoliberalism and authoritarianism in the Southern Cone, starting the story in Paraguay in 1961 and linking economic agendas to the military ideology of national security. When an academic literature on neoliberalism grew in the 1980s, a significant part of it addressed this experience. Of 73 studies that named neoliberalism, published between 1980 and 1989, 27 were about Latin America, with a significant portion focused on agriculture (e.g., Silva, 1987, 1988). Regrettably but typically, these earlier publications were not referenced in the Northern critical literature on neoliberalism in the 1990s and 2000s.
Nor was South America the only part of the periphery to move towards neoliberalism before Reagan came to power. Neoliberal initiatives were being promoted in Turkey in 1978–79 and were turned into a national policy framework by Turgut Özal in the ‘January 24 package’ of 1980 (Ozel, 2003). In the settler-colonial state of Australia, an across-the-board cut to tariffs was enacted as early as 1973, by a Labor government – a key step towards abandoning state-supported industrialization.
So there are reasons to be sceptical of the notion that world neoliberalism derives from the brains of Northern economists or from an economic crisis internal to the global North (Connell and Dados, 2014). How then can we understand the emergence of a global regime in which Europe and North America are undoubtedly hegemonic, but where most of the population and growing proportions of economic activity are found in the postcolonial world?
Perhaps the most important background to neoliberalism was the debate on economic development around the postcolonial world in the mid-twentieth century. Two main development strategies were adopted by postcolonial elites at this time. One was capitalist import-replacement industrialization (IRI), the strategy famously urged by Raúl Prebisch and CEPAL, and pursued, with variations, by México, Australia, South Africa, Brazil and Argentina. The other was industrialization within a Soviet-inspired state-centred command economy, followed in Egypt and Algeria, China and Vietnam. In India, a shifting mixture of the two strategies was attempted. It was these strategies, not a bloated welfare state (which hardly existed in much of the South), that neoliberals in the periphery had to contest.
Over time, neoliberal economists, journalists and politicians by sheer repetition created an impression that these alternatives had failed. There is considerable evidence that IRI, at least, did not fail economically (Vellinga, 2002). But there is no doubt that both IRI and command economies involved unequal distributions of income, technocratic views of the state, and small local markets, making them prone to local crises (Kay, 1998; Vellinga, 2002). Celso Furtado, the great Brazilian development economist, made a famous distinction between ‘growth’ and ‘development'. Aggregate growth in national economic indicators need not mean an improved life for the majority of the people (Furtado, 1974; for an admirable English-language introduction to his thought, see Mallorquín, 2007). The social settlements around growth strategies, including labour rights and informal redistributive networks, were at stake. By the 1970s there were clear political vulnerabilities in the leading development strategies.
Neoliberalism gained a political grip in the majority world because it offered an alternative development strategy that broadly served the interests of local ruling classes, while having some attractions to wider constituencies. This strategy offered economic growth to a peripheral country by opening the economy to international capital and building export industries based on comparative advantage in global markets.
In different countries, comparative advantage might be found in mining, commercial agriculture, manufacturing using cheap labour, or even business services. The key point was that an orientation to global markets could yield rapid growth in those sectors, regardless of stagnation in others. With this orientation came the need for cheap and easy international transport of commodities (discussed below), and cheap and easy movement of finance, essentially the deregulation of capital movements.
A striking example is provided by settler-colonial Australia, where the main deregulation measures were brought in by the Australian Labor Party federal treasurer Paul Keating. In 1986 Keating, defending deregulation, famously declared that Australia had to become more internationally competitive or it would become a ‘banana republic', a ‘third-rate economy'. In the neoliberal decades that followed, Australian secondary industry was allowed to collapse and the economy was restructured around mining for export. In countries of the periphery where poverty remained widespread, neoliberalism offered the hope of a new wave of growth, by ‘joining the tracks of the world’ – a Chinese phrase applied to the Deng-era strategy of development.
Antonella Attili Cardamone (2010: 102–3) notes, in relation to Mexico, that state intervention in the economy is not an aberration but the norm. Indeed, neoliberal transition in the global South is part of a longer history of coercion. Colonial society was not so much regulated by the state as produced by the state – created by the massive violence of conquest and the installation of what Valentine Mudimbe (1994) calls the ‘colonizing structure'. By this he meant an apparatus of rule that undertook the domination of space, the integration of local economies into a capitalist system, and the re-forming of the natives’ minds via missions and schools.
Such structures were contested but not destroyed by decolonization, and they have underpinned the power of postcolonial elites (Mohamadieh, 2008; Mbeki, 2009). Moeletsi Mbeki argues that Africa today is ruled by ‘a purely government class’ that is parasitical on the rest of the population, acting as consumers rather than producers and employing state violence to stay in power. Achille Mbembe's celebrated On the Postcolony (2001) paints an even grimmer picture of predatory postcolonial regimes aided by international support for trade and minerals concessions. Violence, corruption and deregulation have led to ‘indirect private government', in Mbembe's phrase, where the state has lost its capacity for redistribution but continues to operate as an instrument of coercion.
The postcolonial state's capacity for coercion of the labour force is particularly visible, and important, in Korea and China, where it underpinned export industrialization surges such as the ‘South China Miracle'. State power also made possible the reorganization of space to create a typical neoliberal device, the export processing zones (discussed below). These, alongside indirect private government and the rise of the military as an economic power, represent a blurring of public and private sectors rather than a retreat of the state.
The power of the postcolonial state, then, is one of the key conditions of the global neoliberal regime. From this point of view, it was not accidental that the first substantially neoliberal regime in the world was a dictatorship. But coercion cannot be sustained indefinitely without mechanisms of hegemony; thus, the legitimation of neoliberal development is also an important issue.
Legitimation is difficult because neoliberalism in most places has widened gaps between rich and poor. Structural adjustment has disrupted some of the accommodations on which local elite power rested, such as the ‘tacit social contracts’ between society and authoritarian state in north Africa, whose failure led to the Arab Spring (Mohamadieh, 2008; Jamshidi, 2011). Mbembe (2001) points out for central Africa that the postcolonial state, as it ceased to be a guarantor of profits for colonizers, became a means of informal redistribution locally through kinship and political networks. But to neoliberal reformers, especially those in international agencies, these arrangements appeared as corruption, nepotism and unproductive state employment.
The legitimacy of neoliberal solutions has never been guaranteed. The rising of the ‘pink tide’ in South America in the early 2000s saw widespread anti-neoliberal campaigns. A serious breakdown of legitimacy for a neoliberal regime occurred in 2014–15 in Greece, formally a part of the European Union but in practice in a semi-colonial situation.
Global corporations have been ‘offshoring’ their operations from the global North for several decades now, an important part of a worldwide restructuring of labour and labour relations. In this familiar pattern, companies move manufacturing or service operations to another country with lower wages and a workforce with fewer legal protections. Alternatively, manufacturing may be abandoned and supply outsourced to a complex of smaller manufacturers in the global South, as in the clothing industry. The reason given is always that continued production under current conditions is not profitable. From the point of view of the receiving country, poor labour conditions are a comparative advantage.
In the global North, this shift has been understood as an attack on unions and on the pay and conditions of workers under the banner of increasing productivity. Campaigning by business lobbyists, corporate interests and right-wing think-tanks uses the possibility and the fact of such shifts to generate pressure to restructure labour relations in the North.
In the global South, where a much larger informal economy and greater rates of poverty are typical, the state's quest for survival and legitimacy is of a different magnitude. It is often this quest, rather than corporate interests alone, that has driven the global reorganization of labour (P. Silva, 1988; Toye, 1992; E. Silva, 1996; Mbembe, 2001; Mbeki, 2009). Offshoring by transnational corporations suits the interests of Southern elites if the process creates local jobs, however poorly paid and precarious. While this may not be real or sustainable development in the sense proposed by Furtado and Amin (see below), together with extractive industries it is often enough for a favourable change in key development indicators maintained by organizations like the IMF. These indicators are attached to global development credits and the chances of private overseas investment.
But Southern difference takes several forms and labour costs are only one among them. Add space, land tenure, climate, mineral deposits and local power structures to this list and we get a different picture of how labour has been restructured globally. The combination of several Southern differences led to the most distinctive feature of neoliberal geography, the export processing zone (EPZ). Often cited by the international financial institutions as examples of successful restructuring, these zones are established through coalitions of state officials, local business elites and international corporate actors (Nazzal, 2005; Aggarwal, 2006; Keshavarzian, 2010). Not all such initiatives worked, as shown by Kesharvazian's striking study of two export processing zones on the Persian Gulf, one set up by Dubai and the other by Iran. But the idea remains a feature of neoliberal development strategy. In India, legislation to facilitate special economic zones was proposed in 2000, and agricultural land has been seized to implement such zones (Aggarwal, 2006; Banerjee, 2010).
The exploitation of labour as a source of comparative advantage has been achieved through varied levels of coercion (Kumbetoglu et al., 2010; Selçuk, 2011; Velasco Ortiz and Contreras, 2011). In some parts of the South, the military has historically been one of the largest employers in the economy, partly through a welfare regime dependent on conscription (Baylouny, 2008), and partly through the creation of secondary businesses that are wholly or partly owned by the armed forces (e.g., Jordan, Egypt). The strength of the military and the surveillance regime in many parts of the Arab world produced a situation in which states rely on repression (Rabbani, 2011), while economic growth depends on a large informal sector that may comprise 50% of the entire national economy, as it does in Tunisia (Boughzala and Kouki, 2003; Aksikas, 2007). This is not a situation likely to generate a high volume of growth, even if it sustains a tacit social contract between state and people (Jamshidi, 2011). Unstable balances have developed in various parts of the Arab world as governments attempt to promote growth and generate jobs, hold down social turbulence, maintain surveillance, create EPZs, find export staples, and satisfy the military.
The restructuring of labour has created a world of new social relations that have not only meant a reorganization of elites, but also a world of greater uncertainty for those without economic and political power (Bayat, 2004; Sundaram, 2010). In many parts of the South where there is no welfare system to speak of, the huge numbers of the ‘permanently unemployable’ barely budge despite concessions made by states to facilitate business and investment for international firms (Boughazala and Kouki, 2003; Aksikas, 2007; Chatterjee, 2008). The informal sector continues and for many it is the only means of survival.
Commercial agriculture and pastoralism as export industries have histories going back to colonial times – in the case of agriculture, to the ancient world. Much of the world's wool production was relocated from Europe to colonial Australia and New Zealand in the nineteenth century, when much of the world's beef production was similarly relocated to the southern-cone countries of South America and western North America.
In these fields, neoliberalism has not meant a new beginning but an acceleration of trends and an extensive restructuring. There has been an increase in industrialized food production, a displacement of small producers and cooperatives by corporations, and an integration of Southern and transnational corporate agriculture with Northern technoscience. This is seen in initiatives like the ‘green revolution', dependent on artificial fertilizers and high-yield strains, and, more recently, genetically modified crops such as soya beans. Deregulatory policies, and free-trade agreements between states, have provided the political space in which these changes can occur.
Rather than a blanket neoliberal reform agenda imposed from above, the reshaping of land use in the global South is a product of multiple factors. They include the failure of state-building initiatives, military intervention and violent repression, and a shift in government policy away from less wealthy, independent operations towards multi-million-dollar projects that require finance on the scale of transnational corporations (Zghal, 1985; Silva, 1987; Bellisario, 2007; Chatterjee, 2008; Zurayk, 2012). Private sector finance has mainly moved in the same direction, despite the emergence of ‘micro-finance’ models.
The result has been a significant shift in land ownership and use away from smallhold independently-owned or leased farms towards agribusiness and large global corporations (which may employ displaced farmers) (Amin, 2006; Amanor, 2012). Most importantly perhaps, the nature of agricultural production has been drastically reshaped so that farm operators produce primarily for export to global markets (Amin, 2006; Zurayk, 2012). Remaining smallholders are less able to weather the fluctuations of global markets and survive downturns.
But agricultural production is not the only means by which states seek to exploit land for comparative advantage. The establishment of free-trade zones, special economic zones, export processing zones and similar initiatives is another, which is also linked to the pivot towards export markets (Nazzal, 2005; Aggarwal, 2006; Banerjee, 2010; Keshavarzian, 2010). This has been a notable neoliberal strategy for achieving development in parts of a country where economic activity is poor. While special trade zones epitomize the excesses of capital accumulation, creating areas of exception from labour and environmental regulation, research has emphasized the role of states in initiating, promoting and administering them (Keshavarzian, 2010; Kumbetoglu et al., 2010; Sathe, 2011). Often, they are linked with specific development initiatives of governments that coincide with the economic objectives of local elites and their links to global capital, rather than being proposals from transnational capital looking for fresh fields to exploit.
Sometimes, however, rather than developing land themselves, states simply sell off agricultural land, or offer long-term leases, to foreign corporations or firms acting on behalf of other states (Amanor, 2012; Zurayk, 2012). Such land purchases and leases to large corporations have been increasing in parts of Africa and Latin America, in particular. The purpose of acquiring this land is often to boost food production for consumption elsewhere. While the leasing state extracts rents on the land, these land deals reduce the land available for local food production, sometimes producing the paradoxical situation where a food exporting country needs to import its own primary nutritional requirements.
We have mentioned the tremendous importance of international trade for the way neoliberalism has worked in the global South. It is arguable that the most important neoliberal institution of all is not the IMF or World Bank, nor the OECD, but the World Trade Organization.
There were non-neoliberal approaches to world trade. One of Prebisch's main concerns was to open Northern markets to industrial products from the periphery (Prebisch, 1964). But a strategy of ‘comparative advantage’ that leveraged Southern difference, rather than attempting convergent development, had quicker and easier access to growing global markets.
Massive growth of material trade was made easier by new technology, though not the high-technology ICTs. A key change was the rise of the humble freight container (Cudahy, 2006; Levinson, 2006). This began in 1956 with the voyage of the ship Ideal-X from Newark carrying 58 containers. It went on to increase the speed and sharply lower the cost and labour demands of freight handling, integrating land and sea transport systems. Together with super-tankers, bulk ore carriers and jet air cargo, this changed the economic and social significance of international trade.
Today, seaborne traffic accounts for about 90% of total global trade, and its volume has nearly quadrupled since Prebisch's time, rising from 2,566 million tons in 1970 to 8,408 million tons in 2010 (UNCTAD, 2011: 7). In 2008, world trade amounted to more than 50% of world GDP (databank.worldbank.org). The new transport technologies created conditions favourable for the restructuring of domestic economies, not by local social settlements, but via transnational markets.
Minerals, including oil, are very prominent in the comparative-advantage strategy. Extractive industry had been a feature of imperial economies, from the fabulous silver mines of Potosí onwards. Dutch and British settlers fought several wars over the diamonds and gold of South Africa. As the internal combustion engine became vital for war-making and civilian transport, the British seized the easily-available sources of Middle Eastern oil in the early twentieth century. Persian Gulf oil continues to be globally important, an enclave development on a massive scale (Askari, 2006), based on tripartite deals between local rulers, transnational corporations and Northern military power.
Across most of Africa, Moeletsi Mbeki (2009) argues, similar deals are the mode of contemporary articulation with the global economy. In most cases, the mining and oil-pumping industries have little payoff for the peasant and urban majority. Here the idea of neoliberalism as a development strategy reaches a logical limit. Growth takes the form of rents extracted by predatory elites, who, Mbeki argues, are not a productive bourgeoisie. The principal exception in the continent is South Africa, where a degree of industrialization and local corporate development did occur, crystallized in the ‘minerals-energy complex’ at the centre of the national economy. Since the ANC's dramatic neoliberal turn in the 1990s, South African manufacturing has been devastated by cheap imports, especially from China. This keeps mining wages down, but gives no capacity to soak up mass unemployment. Twenty years after the end of Apartheid, a quarter of the labour force is officially counted as unemployed (Statistics South Africa, 2013).
The growth of world trade, the material side of global markets, and the turn to comparative advantage across most of the periphery, a development strategy which presupposes the continued presence of global markets, has produced an expanding and deeply heterogeneous global capitalism. Some parts of the periphery have deindustrialized in favour of primary export industries, including Chile and Australia as well as South Africa. This risks a long-term deterioration in the terms of trade, the problem that was warned against in 1950. Civil war and social devastation have followed extractive-industry deals with transnational capital in countries as far apart as Nigeria and Papua New Guinea.
Wealth is available for political elites that can position themselves favourably in these trade and financial flows. They include Singapore's People's Action Party and the monarchy in Morocco, both of which are in a sense family companies controlling a small state. On a larger scale, the post-communist power elite in Russia attempted a similar role based on fossil fuels. The post-authoritarian regimes in Brazil and India have managed a more balanced development at the cost of deep social inequalities. Though one would hesitate to call the Chinese regime neoliberal, it has certainly adapted to the neoliberal trade regime. Its unique combination of command economy and robber-baron capitalism has produced spectacular industrial growth, as well as social tension and environmental devastation.
However, dependency is no longer one-way. The relocation of world industrial production towards low-wage economies and the diversity of elite strategies in the periphery show this. Neoliberalism on a world scale seems to have produced a more diversified and chaotic economic process, but one that is far from the ‘weightless economy’ invoked by Northern commentators on financialization. It rests on a massive weight of material trade and on the reorganization of economies at all levels of wealth towards production for global markets.
The impression that neoliberalism originated within the North and was then exported to the South is reinforced by the fact that the best-known theorists of neoliberalism, both pro and con, come from the global North and naturally write about their own societies. Indeed, much of the discussion proceeds as if Northern authors were the only theorists of neoliberalism.
But intellectuals across the global South have been concerned with neoliberalism, have tried to understand what is happening, and are an important source of theory. Across the social sciences, there is increasing concern with the pattern of knowledge flows, the creativity of intellectual workers in the South, and the need to decolonize Northern-dominated disciplines (Connell, 2007; Bhambra, 2014). Accordingly, we present here brief sketches of ideas from several parts of the South that show the diversity of approaches to understanding neoliberal society.
As noted above, food production is one industry where the neoliberal transformation of trade and land use has had a strong impact. Rami Zurayk, a professor of agricultural and food sciences at the American University of Beirut, has written extensively about the reliance on intensive, export-oriented food production based on monocultures in the Middle East and North Africa (MENA). Zurayk points out that export-oriented agriculture in Lebanon precedes the neoliberal era, but the consequences for smallhold farmers and peasants have intensified as control of agricultural markets, land ownership and production moves into the hands of commercial ventures that rely on aggressive agrochemicals and damage biodiversity (Zurayk, 2000, 2012).
As one of the founders of the Slow Food Movement in Lebanon, Zurayk is concerned with the impact of export-oriented agriculture on food security and small farming communities. He writes, ‘export-oriented farming is good for business, but only that of a few people’ (Zurayk, 2000: 23). Producing for global markets has paradoxically made the MENA region one of the most food-scarce in the world. Zurayk argues that the question of environmentally sound practices that has dominated the discussion of sustainability is not enough. For agriculture to be sustainable, it must pay farmers a sustainable livelihood and ensure food security for the poor (Zurayk, 2000, 2012). Much of Zurayk's activism has been in helping set up food co-ops and farmers’ markets as well as documenting local practices of food production.
The famous Egyptian Marxist Samir Amin is also critical of mainstream environmental discourses. Amin draws attention to the massive disparity in consumption patterns between North and South that is concealed by standard development indices.
The centre–periphery relationship has long been the focus of Amin's analysis and informs his work on the global dimensions of unequal development. As suggested by the title of his most famous book, Accumulation on a World Scale, Amin (1974, 2007) sees capitalism as global and imperialist by nature. The process requires spaces across the periphery to be economically exploited (Amin, 2010). Amin revises many of Marx's theories accordingly. For example, he diverges from Marx's theory of primitive accumulation that sees the periphery as being in a pre-capitalist state.
Rather than seeing the periphery as a space yet to be subjected to a homogenizing project of capitalist development, Amin helps us to understand it as a space that is integral to the hegemonic ascent of the centre. The continued extraction of resources from the periphery creates the necessary conditions for ongoing domination by the centre.
Like many Northern Marxists, Amin emphasizes crisis tendencies within capitalism. Unlike their focus on crisis tendencies within the North, Amin focuses instead on crisis at the global level. He understands neoliberalism explicitly as a response to global crisis tendencies, being the ‘return to the exclusive domination of capital’ following the collapse of the Bandung-era alternatives (Amin, 2010). There were, in his view, other possible paths of economic change; and in this, if not much else, Amin agrees with Prebisch.
The Peruvian sociologist Aníbal Quijano is one of the key thinkers in the decolonial school and the author of its most famous concept, the coloniality of power. The underlying colonial logic of power, created in the European colonization of the Americas, persists globally after political independence. Quijano (2000) argues that it was no coincidence that capitalism, as a project that produced hierarchies based on economic and social status, emerged at the same time that colonization was producing a world organized around hierarchies of race.
Consequently, work as a productive activity is structured by the category of race at the same moment that work as an economic activity is articulated to a world market. Race as a concept permeates all modern European thought and contributes to the eurocentricity of knowledge. Classes in Latin America ‘have colour', says Quijano. This leads him to conclude that all forms of government across the continent, whether bourgeois-democratic or socialist, will fail as state-building projects if they do not acknowledge the coloniality of power.
The social struggles of the neoliberal era are similiarly structured by the coloniality of power and its attendant racial hierarchies. Quijano's (1995) close study of the rise of the Fujimori government in Peru is the clearest indication of his thinking on this. The Fujimori regime used military force backed up by international institutions like the IMF to implement a programme of massive social and economic reorganization. A re-concentration of wealth and economic power and the dispossession of the productive bases of society followed, along with the stagnation of production, unemployment, underemployment and increased informalization of the economy. Wages were frozen for the poorest, while prices were internationalized. This polarization was reflected politically with dramatic consequences. The gains of earlier political mobilizations against the colonial character of state power were reversed, with mestizos, indios, and negros, ‘the very people who reflect the colonial character of power', being the principal victims (Quijano, 1995: 60). All forms of social inequality were re-legitimized, including those of colonial origin and character, as the political discourse of capital in its neoliberal form became hegemonic.
A similar picture of neoliberal hegemony across South America is given by Brazilian Marxist scholar Emir Sader, though without the same focus on the colonial and racial dimensions of power. Sader (2008a, b) presents neoliberalism across the Latin American continent as a hegemonic project which violently destroys alternatives and disrupts the social base on which struggles for justice can be built. The advent of neoliberalism coincided with the destruction of the democratic process and the overthrow of governments such as Allende's in Chile, followed by authoritarian regimes operating under the approving eye of the North.
Sader characterizes the destructive force of neoliberal hegemony in terms of the way it shifted the balance of social power. Repression reorganized social relations and created extreme inequality because people were physically no longer able to defend their rights and interests. It subsequently delivered the sphere of rights and interests to the market, setting up two ‘enemies of the people’ – the repressive state and the greedy market. In contrast to many Northern Marxists, who are sceptical of democracy, Sader wants to reclaim democracy from the neoliberal paradigm of freedom for the market, and redefine it in terms of a strengthened public sphere (Sader, 2008b).
Sader's (1999) earlier writing on Brazil studied more closely the implementation of neoliberal policies. He argued that the realization of a coherent neoliberal project began with the Collor government (1990–92) but only fully materialized under the presidency of Itamar Franco (1992–94), when the then Finance Minister Fernando Cardoso implemented the ‘Real Plan'. This included familiar neoliberal measures of fiscal and monetary discipline, restrictions on state expenditure, deregulation and privatization. More significantly, it featured abandoning the principles of state planning and a return to a primary resources-oriented export regime. Among the consequences were an increase in unemployment, the growth of the informal economy and a severe curtailing of social rights, particularly for Indigenous people. Sader (1999: 68) paid some attention to class, arguing that the Real Plan, though implemented by a social democrat, was a pact among the elites that consolidated the hegemony of the Brazilian ruling class.
A closer look at the class dimension is found in the work of Armando Boito, the editor of Critica Marxista and a political scientist at the University of Campinas in São Paulo state. In his paper ‘Class relations in Brazil's new neoliberal phase', Boito (2007) grapples with the question of neoliberalism's appeal and power over the political system despite its evident social destructiveness. Boito complicates Sader's claim of a pact among elites by examining the fractions in the ruling class (Boito, 2006, 2007). He argues that industrial capital declined in the period of neoliberal ascendency in the 1990s as the financial segment of the bourgeoisie became hegemonic. Finance capital was able to take advantage of the core neoliberal package pursued by successive administrations in the 1990s, promoting deregulation, high interest rates and stability of currency. A major rise in bank profits was one palpable outcome of this struggle.
Like Sader, Boito sees the struggle within the bourgeoisie as creating opportunities for social change. One outcome was the growth of the labour movement headed by Lula. The PT (Party of Labour) ran a successful campaign against ‘speculators’ and went on to win the 2002 presidential election. Once in office, however, the PT feared the wrath of international capital and, in Boito's view (though not everyone's – see Emir Sader's work (2006, 2008a) for a more sympathetic view of the Workers Party and Lula's time in office), there was little policy change. In the last stages of the Cardoso government and in Lula's government, industrial and agricultural capital were again integrated into the bloc in power under the hegemony of finance capital. In Boito's account, neoliberalism leads in the end to a unification of the various fractions of the Brazilian ruling class. The outcome for the workers has been much less favourable. Former activists comprise a new labour elite but little real change flows to the larger population (Boito, 2006).
Changes in rural society, and the informal urban economy, have been more central to Indian debates on social change in the neoliberal era. Somewhat like Boito, the well-known historian Partha Chatterjee argues that corporate capital gained hegemony in the 1990s over other sectors of the ruling class, specifically the landed propertied class and the state administrative/professional class who had dominated post-independence politics in India. Peasant society was being transformed by the market so that it was no longer able to reproduce itself. The large urban informal sector becomes the domain of non-corporate capital, oriented to subsistence rather than accumulation. The management of non-corporate capital occurs in the domain of ‘political society', where subaltern groups mobilize to ensure their own survival, and where government is required to ‘preserve’ peasant society under altered conditions (Chatterjee, 2008: 53). There is a gulf between this world and the formal economy and civil society. Corporate capital, operating in the formal economy and oriented to global markets, now controls the narrative of neoliberalism as a depoliticized development agenda (Chatterjee, 2011: 232).
Perhaps the most interesting dimension of Chatterjee's understanding of neoliberalism is his reconceptualization of the role of the state and of the way different social classes relate to it. In market society, the state becomes a negotiator between the interests of various social classes and the corporate world. While the educated middle classes control the domain of civil society and look on party politics as a zone of corruption and clientelism, the breakdown of peasant society means that the state is no longer an external pressure on the peasantry, extracting rents as the old order did. Rather, the state has become internal to peasant society, which must now lobby for the provision of services to survive. This has led to the emergence of ‘globally circulating technologies of poverty management’ that characterize neoliberalism (Chatterjee, 2008: 55–6), both state-provided services and market-based programmes, such as microfinance.
Chatterjee's argument provoked considerable debate in India, and is certainly not universally accepted. Baviskar and Sundar (2008), for example, reject the characterization of the spheres of political influence that Chatterjee attributes to the middle classes and impoverished peasants, respectively. They argue that it is not the peasantry who are outside the law, although they do actively work to be legally recognized by the state, but that it is the middle-class members of civil society who frequently break the law and get away with it. The ideas of the other theorists mentioned in this section are not universally accepted either. Given the chaotic global process discussed above, and the immense diversity of postcolonial thought, debate and diversity can be expected. What we hope to have shown in this section is the wealth of ideas coming from Southern experience and intellectual work with respect to neoliberalism.
As our overview of some major Southern theorists demonstrates, class conflict and social struggles in the three strategic areas of labour, land and resource extraction are an important part of the global dynamics of neoliberalism. The impact of neoliberalism's new development strategies on land use and agricultural production has been most sharply felt in the global South, where a greater proportion of the population is rural. The flow-on effects of these changes can be seen in the growth of the informal economy, the reorganization of social classes and the restructuring of labour. The strategic emphasis on resource extraction has had similar effects on rearticulating society towards the world economy, while reshaping social relations, with the effect of intensifying inequality between social classes.
Putting market society in world perspective raises serious doubts about the tendency to view the transformation of the global economy as one driven by changes in the global North. The perspective that we present here shows how the new development strategies of post-independence political elites, centred on comparative advantage in global markets rather than autonomous industrial development, were significant factors in the reshaping of North/South relations and the remaking of the world economy. While there is not, and cannot be, a uniform Southern theory of neoliberalism, these considerations place the global dimensions of knowledge production at the centre of our account of the creation of market society on a world scale.
1. ‘The brick’ or ‘El Ladrillo’ was originally published as Programa de desarollo económico and distributed in September 1973 by Oficinas de Planificación Nacional (ODEPLAN), Santiago. Reprinted as ‘El Ladrillo': Bases de la Politica Económica del Gobierno Militar Chileno, Centro de Estudios Publicos, 1992, with preface by Sergio de Castro.
This work was supported by the Australian Research Council's discovery project grant DP 110102372, ‘The making of market society on a world scale'.
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