Neoliberalism

Contexts & Political Background of Neoliberalism

Neoliberalism emerged as the dominant global development model during the late 1970s and 1980s following the stagflation crisis of Keynesianism and the severe debt crises facing Latin American states under Import Substitution Industrialization (ISI). Accelerated by the Volcker Shock (1979) and the 1982 Mexican Debt Crisis, Western powers and international financial institutions replaced state-led development with free-market governance.

State-Centric vs. Market-Centric Development

• State-Centric (Modernization & Dependency): Views the state as the primary actor responsible for planning, protecting national industries (ISI), and investing in public infrastructure.

• Market-Centric (Neoliberalism): Believes the unregulated free market is the most efficient allocator of resources. It treats state intervention as a source of inefficiency and market distortion.

David Harvey (A Critical View of Neoliberalism)

• A Marxist geographer and author of A Brief History of Neoliberalism (2005). Harvey argues that while neoliberalism uses the seductive rhetoric of "individual freedom" and "free markets," it is fundamentally a political project to restore and consolidate the class power of economic elites following the economic crises of the 1970s.

Bretton Woods Institutions

The International Monetary Fund (IMF) and the World Bank shifted during the late 1970s and 1980s from post-WWII Keynesian stabilization toward enforcing strict free-market conditionality. By making emergency loans contingent on neoliberal structural reforms, they functioned as the primary external policy enforcers over indebted Global South nations.

Washington Consensus

A package of standardized, market-oriented policy recommendations promoted during the 1980s and 1990s by the U.S. Treasury, IMF, and World Bank. Key tenets include fiscal austerity, trade liberalization, deregulation, privatization of state assets, opening up to foreign direct investment (FDI), and deregulation of labor markets.

Structural Adjustment Programs (SAPs)

• Conditional loan packages imposed by the IMF and World Bank on developing countries facing severe debt crises. SAPs forced recipient states to surrender policy autonomy in exchange for credit, requiring them to cut public spending on health and education, privatize state utilities, devalue local currencies, and eliminate protective trade tariffs.

"A Win-Win Solution" (Neoliberal Framing)

Neoliberal discourse presents market expansion, microcredit, and privatization as a universal benefit—claiming businesses grow, governments reduce costs, and the poor gain entrepreneurial income. Critics demonstrate that this rhetoric masks structural exploitation, shifting risk onto vulnerable populations while concentrating wealth among corporate elites.

Retreat of the State

The deliberate rollback of state welfare provision, price controls, and public services. Under neoliberalism, social safety nets (healthcare, education, housing) are defunded or privatized, forcing individuals to rely on market mechanisms or donor-funded NGOs (a "shadow state") for basic survival

Neoliberal State (David Harvey)

Harvey argues that the state does not simply disappear under neoliberalism; rather, it is repurposed to serve capital. The neoliberal state uses its legal and police power to guarantee private property rights, enforce market rule, facilitate capital accumulation, and protect corporate financial interests over social welfare

Accumulation by Dispossession

• A reworking of Marxian "primitive accumulation," describing how capital expands under neoliberalism not through productive investment, but by expropriating public and common wealth. Examples include privatizing land, municipal water systems, public pensions, and natural resources, transferring public assets into private corporate hands.

Labor Disposability & Labor Flexibility

• Labor Flexibility: Deregulating labor markets to weaken trade unions and allow employers to hire, fire, and adjust wages without institutional restraint.

• Labor Disposability: A structural condition where workers (especially low-wage migrants) are treated as precarious, temporary economic inputs who bear all market risks while employers gain maximum profit.

Robyn Rodriguez (Migrants for Export)

Sociologist and author of Migrants for Export (2010) who examined how the Philippine state under neoliberalism institutionalized the global export of its own citizens as temporary contract labor to generate remittances, service foreign debt, and manage domestic unemployment

Labor Brokerage State

A state apparatus that actively commodifies, trains, licenses, and deploys its own citizens as overseas migrant workers for global labor markets. Rodriguez highlights the Philippines as the paradigmatic case where labor brokerage is employed as an official neoliberal development strategy to generate state profit and remittance capital.

Remittances & Migrant Citizenship

• Remittances: Foreign currency sent home by overseas workers, functioning as a privatized, state-sanctioned alternative to public welfare and a major source of foreign exchange.

• Migrant Citizenship: The structural condition where exported workers are celebrated as national economic "heroes" (bagong bayani) for their remittances, yet denied full political, social, and labor rights in both host and origin countries.