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A Brief History of
Neoliberalism
David Harvey
1
3
Great Clarendon Street, Oxford ox2 6dp
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Contents
List of Figures and Tables vi
Acknowledgements vii
Introduction 1
1. Freedom’s Just Another Word ... 5
2. The Construction of Consent 39
3. The Neoliberal State 64
4. Uneven Geographical Developments 87
5. Neoliberalism ‘with Chinese Characteristics’ 120
6. Neoliberalism on Trial 152
7. Freedom’s Prospect 183
Notes 207
Bibliography 223
Index 235
Figures and Tables
Figures
1.1 The economic crisis of the 1970s: inflation and
unemployment in the US and Europe, 1960–1987 14
1.2 The wealth crash of the 1970s: share of assets held by
the top 1% of the US population, 1922–1998 16
1.3 The restoration of class power: share in national income
of the top 0.1% of the population, US, Britain, and
France, 1913–1998 17
1.4 The concentration of wealth and earning power in the
US: CEO remuneration in relation to average US
salaries, 1970–2003, and wealth shares of the richest
families, 1982–2002 18
1.5 The ‘Volcker shock’: movements in the real rate of
interest, US and France, 1960–2001 24
1.6 The attack on labour: real wages and productivity in
the US, 1960–2000 25
1.7 The tax revolt of the upper class: US tax rates for
higher and lower brackets, 1913–2003 26
1.8 Extracting surpluses from abroad: rates of return on
foreign and domestic investments in the US,
1960–2002 30
1.9 The flow of tribute into the US: profits and capital
income from the rest of the world in relation to
domestic profits 30
4.1 Global pattern of foreign direct investments, 2000 91
4.2 The international debt crisis of 1982–1985 95
4.3 Employment in the major maquila sectors in Mexico
in 2000 102
vi
Figures and Tables
4.4 South Korea goes abroad: foreign direct investment,
2000 109
5.1 The geography of China’s opening to foreign
investment in the 1980s 131
5.2 Increasing income inequality in China: rural and urban,
1985–2000 143
6.1 Global growth rates, annually and by decade,
1960–2003 155
6.2 The hegemony of finance capital: net worth and rates
of profit for financial and non-financial corporations
in the US, 1960–2001 158
7.1 The deteriorating position of the US in global capital
and ownership flows, 1960–2002: inflow and outflow of
US investments and change in foreign ownership shares 191
Tables
5.1 Measures of capital inflows: foreign loans, foreign
direct investments, and contractual alliances,
1979–2002 124
5.2 Changing employment structure in China, 1980–2002 128
Acknowledgements
Figures 4.1, 4.3, 4.4 and 5.1 are reproduced by kind permission of the Guilford
Press from P. Dicken, Global Shift: Reshaping the Global Economic Map in the 21st
Century. 4th Edition, 2003.
Figure 1.3 is reproduced courtesy of MIT Press Journals from Thomas Piketty
and Emmanuel Saez, ‘Income Inequality in the United States, 1913–1988,’The
Quarterly Journal of Economics, 118:1 (February, 2003).
Figure 5.2 is reproduced courtesy of J. Perloff from Wu, X and Perloff, J, China’s
Income Distribution over Time: Reasons for Rising Inequality. CUDARE Working
Papers 977.
Figure 1.6 is reproduced courtesy of Verso Press from R. Pollin, Contours of
Descent, 2003.
Figures 1.4, 1.7, 1.8, 1.9 and 7.1 are reproduced by kind permission of Gérard
Duménil and are available on the website http://www.cebremap.ens.fr/levy.
Figures 1.2, 1.5 and 6.2 reprinted by permission of the publisher from Capital
Resurgent: Roots of the Neoliberal Revolution by Gérard Duménil and Dominique
Lévy, translated by Derek Jeffers, Cambridge, Mass.: Harvard University Press,
Copyright © 2004 by the President and Fellows of Harvard College.
Figure 4.2 is reproduced courtesy Blackwell Publishing from S. Corbridge, Debt
and Development, 1993.
vii
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Introduction
Future historians may well look upon the years 1978–80 as a revo-
lutionary turning-point in the world’s social and economic history.
In 1978, Deng Xiaoping took the first momentous steps towards
the liberalization of a communist-ruled economy in a country that
accounted for a fifth of the world’s population. The path that
Deng defined was to transform China in two decades from a closed
backwater to an open centre of capitalist dynamism with sustained
growth rates unparalleled in human history. On the other side of
the Pacific, and in quite different circumstances, a relatively
obscure (but now renowned) figure named Paul Volcker took
command at the US Federal Reserve in July 1979, and within a few
months dramatically changed monetary policy. The Fed thereafter
took the lead in the fight against inflation no matter what its con-
sequences (particularly as concerned unemployment). Across the
Atlantic, Margaret Thatcher had already been elected Prime
Minister of Britain in May 1979, with a mandate to curb trade
union power and put an end to the miserable inflationary stagna-
tion that had enveloped the country for the preceding decade.
Then, in 1980, Ronald Reagan was elected President of the United
States and, armed with geniality and personal charisma, set the US
on course to revitalize its economy by supporting Volcker’s moves
at the Fed and adding his own particular blend of policies to curb
the power of labour, deregulate industry, agriculture, and resource
extraction, and liberate the powers of finance both internally and
on the world stage. From these several epicentres, revolutionary
impulses seemingly spread and reverberated to remake the world
around us in a totally different image.
Transformations of this scope and depth do not occur by acci-
dent. So it is pertinent to enquire by what means and paths the
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