To those unfamiliar with the term, I generally say that neoliberalism can be understood as the ideas and policies of Margaret Thatcher and Ronald Reagan that support free markets and are anti-state. However, neoliberalism is a confusing term, because different groups have used the term in a variety of ways. In general, people see that capitalism has changed since the 1970s, and they call this new kind of capitalism "neoliberal." Broadly, neoliberalism contains the following changes:
- it rolls back the welfare state. On the one hand, it ends social services through austerity programs, which abandon people to a "precarious" existence. On the other hand, it expands the state by enhancing surveillance and coercion/violence to maintain order. In contrast to the usual perception that Ronald Reagan sought to dismantle the state, he in fact expanded the state in numerous ways, thus reorganizing the state. As many scholars have argued, both Republicans and Democrats have realized neoliberal policies, such as when Bill Clinton sought "to end welfare as we know it."
- it expands the realm of the market into state activities. Public-private partnerships bring together the state, corporations, and non-profit organizations to realize tasks of the state, such as military activity conducted by private contractors and education provided by the Harlem Children's Zone (funded by corporate donors and focused on testing, an education fundamentally different from that of middle- and upper-income children). Most importantly, the logic of the market changes these services, so that they focus on profits, efficiency, and the short-term, rather than, for example, equal access to these activities, cooperation, and long-term sustainability.
- it eradicates public or social property through privatization. In the US, most water is owned and managed by city governments, while elsewhere the water supply has been privatized and is run by international corporations.
- it supports the interests of owners and managers (especially in multinational corporations and international banks), rather than the interests of employees, the unemployed who would like to work, and those precariously employed (the precariat, see the video).
- it creates a new kind of individual, the neoliberal "subject." These neoliberal changes create a highly competitive, fragmentary, unstable life, to which people are adjusting (successfully or not). In this great article, sociologist Ulrich Beck shows how the new capitalism simultaneously liberates people from past constraints, puts them at considerable risk, and then blames them individually for failing in a situation they could not control. For example, our students often find themselves with a wide range of possible options and thus ask themselves "what do I really want to do? what kind of person am I really?," at the same time most options are illusory and thus they are individually blamed for their failures on the job market. For a similar discussion of the neoliberal subject, see also sociologist Richard Sennett's The Culture of the New Capitalism.
- it creates the neoliberal, entrepreneurial city. In the new context, cities like Washington, D.C. have taken on many of the tasks once carried out by the national state, but these cities do not have the resources to realize these tasks (due to austerity and low tax rates) and do not have the power to stand up to the demands of multinational corporations. Cities have thus become entrepreneurial, competing with other cities for international investments, high-bond ratings, and high-income residents (including the "creative class" discussed by Richard Florida). The entrepreneurial city must focus on competition and neighborhood branding to lure new residents and international investors. These trends create "dual" cities, with areas of great wealth and other areas of great poverty, through gentrification and dispersal of the poor from certain places (The Yards in SW and Hine Jr. High, both in Ward 6) to make way for new development projects funded by international investors, which in turn fund the entrepreneurial city government. As a result, city residents are not equal, as democracy requires, but rather residents are measured by the revenue they generate.