What is “Neoliberalism”? How is it Implicated in Urban Political Development?

By Timothy Weaver (University at Albany )

In the early 1980s, with the election of Margaret Thatcher and Ronald Reagan, urban policy and politics in the U.K. and the U.S. took a sharp turn towards markets, competition, and privatization. But while both the Thatcher government and the Reagan administration shared similar ideas about the causes of urban problems and about how best to tackle them, the differing institutional settings in which they operated shaped the timing, extent, and character of the changes they were able to introduce. In the British context, cities have no independent institutional standing. Urban jurisdictions—such as city and borough councils—are granted political authority by Parliament, and their powers can be withdrawn or overridden if the government so chooses. By contrast, cities in the U.S. are “creatures of the states” and therefore enjoy more autonomy from the federal (or national) government than do those in the U.K. So while Thatcher’s government was able to impose its designs on places like London, Reagan’s administration was far more constrained.  Yet, urban areas in both contexts embraced strikingly similar policies, with almost identical goals and remarkably similar effects.

I characterize these shifts as “neoliberal” in character. But what on earth is “neoliberalism,” and what does it have to do with cities? Much ink has been spilled about the murky concept of “neoliberalism,” especially in relation to the transformation of urban governance over the past four decades.  Regrettably the term often is deployed, usually by those on the left of the ideological spectrum, to describe all manner of ills from economic inequality to mass incarceration and everything in between. As such, it degenerates into a term of abuse rather than a concept with any analytical utility. Still, if clearly defined and consistently applied, the term can bring into sharp relief tendencies that distinguish a specific set of economic and social policies that have been pursued in a variety of urban contexts that are not fully captured by “conservatism.”

Drawing on David Harvey’s work, I define neoliberalism as “a political-economic theory and rhetorical framework that rests on the notion that freedom, justice, and well-being are best guaranteed by a political economic system, undergirded by state power, that promotes private property, open markets, and free trade.” Practically, neoliberalization entails lowering taxes, deregulating markets, privatization or marketization of public services, cutting the welfare state, and curbing union power. Neoliberals rejected the ideas and institutions associated with New Deal/Great Society liberalism in the U.S., the “post-war settlement” in the U.K., and continental European social democracy, and sought to undermine them. Furthermore, it is important to stress that neoliberalism is not simply a moniker for “pro-business” ideas or strategies. After all, there is a plethora of policies that could be said to promote profits that would include social democratic, corporatist, and New Deal liberal approaches. The shift to neoliberalism reflects a specific view on how best to promote the accumulation of capital and, as such, needs to be distinguished from these other forms. Crucially, neoliberalism does not envisage the dismantling of the state, but rather its reorientation. To the extent that the state intervenes to promote markets, privilege capital, and protect private property, it is a most welcome political weapon.

With this definition in mind, I suggest that we can identify two “logics of neoliberalization,” which reflect the different institutional and political contexts in which similar neoliberal ideas have been applied. In the U.K., the Thatcher government was able to transform London Docklands according to a logic of neoliberalism by design. In this mode of urban development, the central state exploited its institutional advantages to usurp the power of local borough councils and impose its vision. In particular, the government launched its enterprise zone program—that cut taxes and reduced regulation—and created the London Docklands Development Corporation, which assumed control over public lands, cleaned them up, and sold them to the private sector. Because it of the relatively weak position of local authorities, the government was able to remake Docklands in the neoliberal image by design without having to make significant concessions to its detractors.

By contrast, cities like Philadelphia illuminate a more subtle, serpentine, and pervasive form of neoliberalization, which I call neoliberalism by default. This logic points our attention to the political, institutional, and/or ideological constraints that push political actors, who may be of a wide range of ideological dispositions, to adopt urban policies consistent with neoliberal ideas. In Philadelphia, a predominantly neoliberal regime developed due to four factors. First, the politics of race divided the working class and drove the emergent black urban regime led by Wilson Goode into a coalition with business. Second, the city’s deteriorating financial position during the 1980s and early 1990s, forced the city under Goode, and then under Ed Rendell, to reduce budget deficits. Third, the Commonwealth of Pennsylvania created a new institution—the Philadelphia Intergovernmental Cooperation Authority—to implement major cuts to the local welfare state. Fourth, the ideational assessment of what these political, institutional, and financial constraints implied about the possible range of plausible alternatives privileged neoliberal policy ideas over others. Hence, neoliberalism emerged not because of the designs of neoliberal ideologues, but because of a confluence of material, institutional, political, and ideational factors.

With the election of Donald Trump, some have suggested that neoliberalism stands imperiled. In a number of respects, it would appear that Trump is no neoliberal, as borne out by many of his positions: his antipathy to free trade; his promises to stimulate economic growth via deficit spending on infrastructure; his suggestion of a religious test for entry into the United States; his hostility to the immigration of cheap labor; and his association with proto-fascists all fall outside of neoliberal thinking.

Yet, when we consider what cities might expect from Trump and his HUD nominee, Ben Carson, neoliberalism seems to be the order of the day. We can anticipate, for example, the continuation of the assault on public housing through the use of market-mechanisms such as accelerated use of housing vouchers. Furthermore, efforts to use housing policy to achieve racial and economic justice will likely be shelved in favor of a more deregulated environment. Moreover, Carson’s commitment to the perversity thesis—that public programs create perverse incentives not to work and hence create “dependency”—falls squarely within the neoliberal tradition. Finally, Carson has already indicated his commitment to the ultimate place-based articulation of neoliberal ideas: the enterprise zone. Indeed, in fall 2015, Carson suggested that 10 percent of the proceeds from the repatriation of U.S. companies’ profits of should be “used in enterprise that we’d set up in some of our major cities or to create jobs for people who are unemployed and on welfare.” As such, predictions of the death of neoliberal urban policy are likely to be greatly exaggerated.

Read the article here.

Author Biographies

Timothy Weaver is an assistant professor in the Department of Political Science. He is the author of Blazing the Neoliberal Trail: Urban Political Development in the United States and the United Kingdom (University of Pennsylvania Press, 2016). His research interests include urban policy and politics, urban political economy, American political development, the role of ideas, political institutions, British politics, race and class.

 

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