History of Neoliberalism and the Washington Consensus

Delay Apology: The instructor apologized for the delay in uploading the lectures, citing a chaotic week at home.
Assignment Extension: Despite the one-day delay in course materials, a two-day extension has been granted for all assignments.
Submission Trends: The instructor noted that most students submit assignments on Sundays regardless, so the delay is expected to have a minimal impact.
Course Context: This content belongs to Week 3 of History lower division three or 43.

Central Theme: The focus of the week is "neoliberalism," a term the instructor acknowledges is highly contentious and frequently used in academic and political critique.
Temporal Context: Neoliberalism in practice begins largely in the $1970s$ .
Historical Turning Point: The lecture references the $1973$ oil crisis, which was discussed in the previous week. This crisis serves as a "cesura" or a turning point in how governments managed national economies and international relations.
Core Concepts: The lecture aims to explore where the ideology comes from, its central ideas, and the primary actors involved.

Left-Wing Critique: Popular use of the term originally stems from a semi-academic, occasionally Marxist critique emergent in the mid- $1970s$ . It criticizes the resurgence of free-market policies. Broadly, this refers to a set of political-economic policies designed to:
- Deregulate markets.
- Embrace global free trade.
- Privatize state assets and public utilities/industries.
- Commercialize government services.
The Neoliberal Worldview: This system is often perceived as "rational" by those born into it, making it difficult for contemporary students to distinguish a world before and after its implementation.
Self-Identification: While originally a critique, the term is now used as a self-identifier by those on the "liberal left" or the American left under the influence of the Democratic Party.
Political Timeline in the United States:
- Ronald Reagan: His election solidified the neoliberal consensus.
- Bill Clinton: Described as "unquestionably a neoliberal" during the $1990s$ .
- Joe Biden: Elected in $2020$ , he is described as a "soft post-neoliberal" or at least representing a sharp break from the deep right-wing ideas characteristic of the ideology.

Origin: Developed in the late $1980s$ (the final years of the Cold War).
Terminology: The term was coined by John Williamson to describe policies held by Washington D.C.-based institutions.
Key Institutions:
- The World Bank.
- The International Monetary Fund (IMF).
- The United States Treasury.
Specific Policies:
- Fiscal discipline and austerity.
- Redirection of public spending.
- Tax reform and market interest rates.
- Trade liberalization.
- Privatization and deregulation.
- Securitization of property rights.
International Application: Unlike the domestic focus of original neoliberalism, the Washington Consensus looked outward to improve America's global position.
Global Context (Post-Cold War):
- With the collapse of the Soviet Union and the liberalization of the Chinese economy, Third World countries lost aid from former superpowers.
- To receive loans, these countries turned to the World Bank or IMF.
- Loans were conditioned on transitioning to neoliberal policies, making these nations "open for business" or open for resource extraction (e.g., oil, coltan, and cobalt used in modern electronics).

The Montpelleron Society: Founded in $1938$ by French philosopher Louis Rougier shortly before the outbreak of World War II.
Purpose: To discuss the future of liberalism in the face of the growing influence of fascism in Europe and socialism in the Soviet Union.
Coining the Term: Alexander Rustow coined the term "neoliberalism" during this conference.
Political Bedfellows: The instructor notes that the first and second generations of neoliberals often aligned with Nazism and fascism, describing them as "hard right, anti-socialist, [and] potentially reactionary."

Legal vs. Economic Intervention: The $1938$ conference participants believed in only "legal state intervention" (within the boundaries of liberal legalism) rather than state-directed economic planning.
The Price Mechanism: They argued the market—the way commodities receive prices—was the only way for society to achieve maximum social freedom.
Economic Choice: Neoliberals believed that exercising the right to choose whether to purchase something allowed for social freedom without legally infringing on others.
Critical Labels: Critics often refer to this worship of the price mechanism as "market fundamentalism" or "market fetishism."
Difficulty of the "Sell": In the $1930s$ , neoliberalism was a difficult ideology to promote because:
- The Soviet Union had transformed from an agricultural society to a superpower within two decades using social economic planning.
- The United States had achieved recovery from the Great Depression through similar social economic planning.
- The Great Depression itself was seen by many as a failure of the market.