All of these efforts—lobbying efforts, think tanks, and media—contributed to neoliberalism’s ideological success, but Harvey maintains that the political victories of Thatcher and Reagan proved decisive. He observes, “Once the state apparatus made the neoliberal turn it could use its powers of persuasion, co-optation, bribery, and threat to maintain the climate of consent necessary to perpetuate its power. This was Thatcher’s and Reagan’s particular forte.”45 Reagan and Thatcher utilized political power to discipline and transform the population through neoliberal policies and offered reforms that emerged out of the same playbook: attack and dismantle unions (coal mining with Thatcher and air traffic control with Reagan), reduce taxes, privatize and deregulate industries, and cut the welfare state. These policies had a twofold effect. First, they served the interest of their corporate donors and supporters and created enormous wealth for the capital class. Second, these policies disciplined the population and began to remake social relations and reform expectations about the function of government. In this, Thatcher and Reagan made decisive progress toward the neoliberal goal of producing new subjects. As Thatcher famously quipped, “Economics are the method . . . but the object is to change the soul.”46
The cultivation of democratic consent to these policies tells only a part of the story, even if it represents the dominant piece of it in the North Atlantic world. Harvey argues that the creation or manipulation of crises—natural disasters, coups, wars, and financial crises—were often the central means by which neoliberal policies were imposed on society.47 In the United States and Europe financial crises have led to austerity measures that further facilitated the neoliberal reorganization of society. It was in the global South, however, that the creation, management, and manipulation of crises served as the primary method for neoliberalization. Harvey points to Chile in 1973 and Iraq in 2003 as bookends of the process through which military intervention served as a precursor to neoliberalization. He observes of Chile and Argentina in the 1970s that the imposition of neoliberalism “was swift, brutal, and sure: a military coup backed by the traditional upper class (as well as by the US government), followed by the fierce repression of all solidarities created within the labour and urban social movements which had so threatened their power.”48 Harvey describes Iraq in similar terms, observing that after the “Shock and Awe” campaign in 2003 the United States went about the business of establishing a “capitalist dream” in the Middle East.49 Paul Bremer, the head of the Coalition Provisional Authority in Iraq, dictated orders to reorganize the economy of Iraq, which included the privatization of public enterprises, the elimination of trade barriers, the disciplining of the labor market, a regressive “flat tax,” the full repatriation of foreign profits, and full ownership of Iraqi businesses by foreign firms.50 This represented a wish list for neoliberals insofar as these orders secured economic “freedoms” for Iraqis “that reflect[ed] the interests of private property owners, businesses, multinational corporations, and financial capital.”51
As evidenced by Chile and Iraq, military force represented a dominant means of establishing neoliberalism internationally. But the more common practice was to employ the power of the IMF and the World Bank to impose neoliberal policies on countries in the global South.52 This tactic was created in response to the economic crisis in Mexico when Mexico defaulted on its debt in the early 1980s. The Reagan administration pushed the US Treasury and the IMF to roll over the debt, but to do so only on the condition that Mexico would undertake neoliberal reforms. This policy served to protect New York bankers from Mexico’s debt default and to disseminate neoliberal policies in the developing world. These so-called structural adjustment policies, which were created in response to the crisis in Mexico, soon became the standard practice of the IMF and World Bank (which, by the mid-1980s, had purged itself of any “Keynesian influence”). In return for debt rescheduling, structural adjustment policies required indebted countries to cut welfare, disband unions, and privatize public industries.53 Thus, while debt represents a very different type of crisis than military intervention, it nevertheless served as a potent means for imposing neoliberal policy on less developed countries.
This brief narrative gives a sense of how neoliberalism spread globally over the past forty years. Once installed, the neoliberal approach to statecraft followed a fairly standard set of policies: privatization, deregulation, the reduction or elimination of social spending (welfare, health care, education, pensions), liberalization of trade, tax cuts, and the eradication of unions as well as other organized forms of solidarity.54 For Harvey, the end result of these policies—across geographical and sociopolitical diversity—has been to restore class power for global elites.
With this characterization of neoliberalism, we return to the tension between the utopian and political dimensions of the neoliberal project. According to Harvey, the utopian interpretation posits that the freedom of the market—of businesses, corporations, and individual entrepreneurial initiative—is critical to wealth creation, which eventually increases the living standards and well-being of everyone. As Harvey puts it, “Under the assumption that ‘a rising tide lifts all boats,’ or of ‘trickle down,’ neoliberal theory holds that the elimination of poverty (both domestically and worldwide) can best be secured through free markets and free trade.” But while neoliberalism presents itself as a utopian political-economic project that institutes policies that will benefit everyone, “the main substantive achievement of neoliberalization . . . has been to redistribute, rather than to generate, wealth and income.”55 Harvey rejects the utopian justification of neoliberalism as an ideological facade and claims that on the basis of its material effects neoliberalism is a class warfare project and not a poverty alleviation program or a set of political-economic reforms oriented toward enhancing human life. For Harvey, the situation is clear: neoliberalism is an intensified capitalist assault on the values of equality and justice, the commons, the environment, and democracy.
The second approach to neoliberalism follows Foucault’s 1979 lectures, The Birth of Biopolitics, and theorizes it as a modification of political liberalism. This framework differs with the Marxist interpretation in that it approaches neoliberalism not as an intensification of economic liberalism but instead as a new form of liberal governmentality. According to Foucault, where classical liberalism protected the market from government in order to allow society to benefit from market exchange, neoliberalism advocates for an interventionist state that introduces market principles into every sphere of life. Following Foucault, Wendy Brown argues that neoliberalism serves as a reality principle for our world: “Neoliberalism governs as sophisticated common sense, a reality principle remaking institutions and human beings everywhere it settles, nestles, and gains affirmation.”56 The ontological valence of this description of neoliberalism should be emphasized, because it points to the fact that neoliberalism is not simply an economic theory or a set of public policies but more deeply a way of structuring all of reality as market competition—or what, following Foucault, Brown terms a pervasive “political rationality.”57
In Undoing the Demos Brown turns to Barack Obama’s presidency to demonstrate the powerful hold that neoliberalism has on political common sense in the United States. At the beginning of Obama’s second term, in a matter of weeks he delivered two major policy speeches, “We the People” and the State of the Union, in which he focused on those “left out of the American dream by virtue of class, race, sexuality, gender, disability, or immigration status.”58 While Obama’s first term was characterized by a series of compromises with Republicans and centrist Democrats, these speeches appeared to announce a return to his progressive roots. Obama called for the protection of Medicare, immigration reform, progressive tax reform, the development of clean energy, and the elimination of sexual discrimination and domestic violence.59 These policies represented the agenda many on the left expected from Obama when he was elected in 2008. But just beneath the surface Brown detects a tension in Obama’s renewed progressive rhetoric. Obama justified these policies not on the basis of their moral rectitude or because they comported with the egalitarian aspirations of American democracy. Instead, he pitched these policies to