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neo-liberalism A doctrine, loosely con-
ceived, that argues for the desirability of a
society organized around self-regulating
markets, and free, to the extent possible, from
social and political intervention (Cypher and
Dietz, 1997, pp. 222–32). The term came into
prominence in the 1980s, especially inlatin
america, where it referred to agendas imposed
by leaders such as Chilean dictator Augusto
Pinochet – who, with backing from US-trained
economists, opened the economy to foreign
investors while pushing economic deregulation
and privatization of state enterprises – and
to the forms of restructuring promoted
under Margaret Thatcher in the UK and
Ronald Reagan in the USA (Harvey, 2005,
pp. 7–9). The US government, along with the
international monetary fund(IMF), the
World Bank and theworld trade organiza-
tion(WTO), has aggressively promoted the
policies associated with neo-liberalism; and
with the collapse of socialist and communist
projects since the 1980s, US leaders asserted
broad agreement over neo-liberalism under
the heading of ‘the Washington Consensus’.
Notwithstanding this geographical locus,
neo-liberal policies have gained adherents
around the world (Toye, 1987).
Neo-liberalism can be analysed in various
ways, including as a set of theoretical proposi-
tions, as a variety of actual practices and as a
manifestation of specific social interests. As a
set of theoretical propositions, neo-liberalism
is to its advocates an update of basic ideas
about economic and social life that the clas-
sical liberal theorists of the eighteenth and
nineteenth centuries put forward (seeliberal-
ism). Neo-liberals cite favourably Adam
Smith’s contentions about the capacity of
marketsto regulate themselves and to pro-
duce greater social prosperity than mercantil-
ism (Smith, 1976 [1776]), as well as David
Ricardo’s arguments for the greater aggregate
prosperity thattradespecialization can pro-
duce, based uponcomparative advantage
and minimal tariff barriers (Ricardo, 1992).
Theorists such as Friederich von Hayek and
Milton Friedman (Friedman, 2002 [1962];
Hayek, 1981) reworked these ideas and used
them to argue against a range of Keynesian
economic policies – especially social welfare
and counter-cyclical government spending
policies – that had become prominent in West-
ern countries since the Great Depression of
the 1930s. Their arguments, however, did
not gain substantial support in governing cir-
cles until the 1970s, when some of them came
to be advertised as part of the theoretical basisfor the policies of the New Right (Harvey,
2005, pp. 19–31).
As policy, many neo-liberal practices differ
from the theories (Peck and Tickell, 2002;
Harvey, 2005, pp. 70–81). While neo-liberals
have argued the virtues of minimalist or
‘night-watchman’states, the states that have
most aggressively promoted neo-liberalism
have often been far from non-interventionist.
Pinochet’s military dictatorship provided a
model that was to be replicated in many
other developing countries undergoing IMF-
mandatedstructural adjustmentpolicies,
imposing specific forms of economic liberal-
ization through a strong state that engaged in
political repression. Similarly, neo-liberal re-
forms in China have been accomplished under
a one-party state that exercises strict control
over various aspects of social and economic
life. Moreover, actual neo-liberal economic
measures have typically been selective and
uneven.
Contradictions between theoretical proposi-
tions and actual practice lead some commenta-
tors to argue that neo-liberalism is best seen not
as a fully coherent doctrine, consistently ap-
plied, but as a reflection of theclassinterests
of particular capitalists and their allies (Dume ́-
nil and Le ́vy, 2004; Harvey, 2005). In this view,
the global economic downturn in the 1960s and
1970s led the most internationally mobile
groups of investors – especially those involved
in international finance – to begin attacking
state policies that were seen as hinderingcap-
ital mobility and reducing profit rates.
Through both reinvesting capital abroad and
advertising the allegedly undesirable effects of
regulations on capital mobility, these investors
attempted to restore profitability by driving
down wages and production costs in core areas
of the global economy, selectively making use of
lower wages, production costs and emerging
markets in countries of the globalsouth.
These efforts to restore profitability through
neo-liberalglobalizationhave been partially
successful, but they have also generated
various forms of backlash. First, the attacks
on state programmes that enhance social wel-
fare have generated responses from popular
forces that see neo-liberalism as antithetical
to improved life chances for the least privil-
eged members of society (Harvey, 2003b,
pp. 137–82; Harvey, 2005, pp. 198–206).
Second, neo-liberalism has come under in-
creasing attack from within the ranks of the
elite after Washington Consensus policies
were seen to have been inappropriately applied
during the Asian economic crisis of 1997–8Gregory / The Dictionary of Human Geography 9781405132879_4_N Final Proof page 497 31.3.2009 3:13pm Compositor Name: ARajuNEO-LIBERALISM