While I do not consider myself to be either a Capitalist or a Neoliberalist, it is worth noting that in and of itself Capitalism is not necessarily a bad thing.
To some degree people should be socially and economically free to pursue their own interests, even their commercial and financial interests. Essentially this is what Capitalism is all about, affording people the freedom to trade and accumulate wealth within the wider restrictions of a state wherein regulations limit the damage that can be done by Capitalistic ambition and greed.
Neoliberalism, on the other hand, as a political development of Capitalism, is a political and economic ideology that seeks to maximise the freedom of the market by removing all barriers to the private accumulation of wealth.
In so doing it becomes a power over and above the state directed to the ends of profit without government interference. It is not so much the case that Neoliberalism is against regulation as it is against regulation over which it has no control. The ruling ethic of Capitalism is prudence which leads to wealth, whereas the ethic of Neoliberalism is the accumulation of wealth for its own sake which leads to political power.
Capitalism is socioeconomic way of life. Neoliberalism is an politico-economic means of social control. The success of this latter economic doxa in recent decades has resulted in the near universality of the hybrid neoliberal state; the evolution of statist thinking where the arrogation of power and the accumulation of wealth have become synonymous with good government.
I argue that by employing the term capitalism in its stead, it calls attention to the economic system that has been in place now for several centuries, rather than its specific phase or manifestation, be it a Keynesian state-managed capitalism in alleviating gross economic inequalities by increasing social welfare, or a neoliberal state-managed capitalism in privatizing the public domain. This is impossible if capitalism is still in place. If the system known as capitalism is named, and better understood amongst the public, a greater awareness of its injustices can be facilitated and heightened, whereas neoliberalism can serve to confuse that by its very situatedness as a stage or variety of capitalism.
Brenner, N. After neoliberalization? Globalizations, 7 3 , Campbell, A. The birth of neoliberalism in the United States: A reorganisation of capitalism. Johnston Eds. London: Pluto Press. As such, if there has been a reduction in the welfare state, this has arisen after globalization commenced, and can thus not be seen as an independent variable that has affected globalization. This questions the very notion that there is a clear epochal distinction to be drawn between the Keynesian and neoliberal era.
Hence, there seems to be no clear empirical grounds to argue that the proliferation of neoliberalism has led, or will lead, to a reduction or dissembling of the Keynesian welfare state. This seriously undermines the very argument that neoliberalism has had a profound impact on policymakers worldwide, as well as the idea that neoliberalism has become the hegemonic political ideational discourse. Nevertheless, it is possible that although states have not illustrated a firm commitment to domestic neoliberal ideas, they may still have been influenced by its content in its foreign and trade policies.
This theory states that a country can maximize its economic gains by specializing in producing and trading goods that it can produce relatively cheaply.
By contrast, the neoliberal argument is individualist and supports free trade on the notion that it provides individualists with increased consumer choices, freedom to conduct business transnationally, and a greater choice of where and with whom one wishes to conduct business. Since World War II, there has been a clear reduction in trade barriers such as tariffs and quotas Madsen Similarly, the amount of trade worldwide has increased sharply in relations to GDP and output Hummels However, in a historical perspective, reductions in protectionist measures have often been the result, rather than the cause, of increased international trade Chase-Dunne, Kawano and Brewer Nevertheless, in relations to the GATT, it seems that trade has increased subsequently after each round of negotiation which has contributed to lowering trade barriers Goldstein, Rivers and Tomz , Nevertheless, barriers to trade, notably in agriculture and textiles, are still prevalent.
Hence, it is not the case that there has been a complete shift towards a deregulated economy. In addition, there has been a notable reduction in transportation costs since the last half of the 20 th century that is seen as a contributing factor to increased trade flows Hummels , Most importantly, global trade has had a relatively linear increase since the end of World War II and had already reached high levels before the s and the decline of Keynesianism.
The advent of neoliberalism can thus not be the cause of increased globalization Cohen and Centeno Lastly, globalization has had an unequal effect on international trading patterns, with a disproportionate increase in trade growth occurring between countries that traded with each other before the s Helpman, Melitz and Rubinstein , Thus, lack of empirical evidence and the presence of rival explanations makes it highly doubtful whether or not it is possible to establish causality, or even a correlation, between neoliberalism and international trade.
Economic neoliberalism supports FDI for largely the same reasons they support international trade; to ensure individual freedom and increasing choices and options in business conduction Harwell ; von Hayek Despite U. This trend strengthened in the s when other countries, notably China, India and the newly liberalized countries of Western Europe, became large recipients of foreign capital inflows. In fact, in the s, China became the world largest recipient of foreign funds Cohen The importance of U.
However, China has for the period before, during, and after it assumed a position of global importance in international investment flows, maintained a strong interventionist state Barboza Furthermore, the trend in increased FDI also coincides with the emergence of easily available ICTs, which are considered to have played a very important role in facilitating the possibility and coordination of international business transactions Cohen Of course, Harvey argues that these technologies did not emerge exogenously of the neoliberal transition.
Instead he argues that technological innovations were a direct result of a commitment by neoliberals to expand business transactions and their ideological doctrine globally. He provides no sources for this statement. On the contrary, it is commonly argued that the U. To conclude, the empirical evidence supports the notion that policymakers and IFIs have been influenced by liberal economic theory.
However, there is little empirical evidence to argue that these processes have developed out of a commitment to enhance individual freedom. Instead, the economic policies adopted since the s seem to have emerged as an attempt to increase economic gains. As such, globalization must be considered a separate and autonomous phenomenon from neoliberalism. However, this essay has operationalized a high amount of conceptual rigour in the discussion on neoliberalism.
Hence, if conceptual rigour were reduced, there would be no theoretical basis for these arguments. Lastly, this essay has demonstrated how a whole genre of literature has emerged which has been based on furthering arguments which are based on poor empirical research and terminological confusion. Barboza, D. Boas, T. Still, it is important to differentiate them because they are not only not the same thing — they are not the same KIND of thing.
Capitalism is an economic practice. Neoliberalism is a philosophy about how societies in which that practice prevails should be managed, and a programme which is at least nominally informed that philosophy, or looks like it is. So families are sites of affective and genetic transaction; love and sex are forms of capital. I think that matters because the privatisation has a kind of brutal but consistent and applicable materialist logic to it whereas the reduction of all action to market action has a hysterical and metaphysical aspect to it which makes it a different beast politically speaking.
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