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Fifty Years of Neoliberalism: Lessons for Development Education

The fiftieth anniversary of the United States’ (US)-backed coup d’étât in Chile, led by General Augusto Pinochet, on 11 September 1973 had a significance and resonance beyond remembering the 3,000  victims of Pinochet’s brutal seventeen-year dictatorship.  The coup also signaled the first practical experimentation in neoliberalism, the radically deregulated economic system that has driven ‘development’ for the past fifty years and exposed millions to crushing poverty and inequality.  Premised upon the ‘holy trinity’ of laissez-faire economics – privatization, deregulation and spending cuts – neoliberalism was ruthlessly implemented in Chile by Pinochet under the under the tutelage of Margaret Thatcher’s favourite economist, Milton Friedman.  The neoliberal playbook established by Friedman in Chile combined cuts to government expenditure, privatization of state services, the removal of price controls and welfare support, and the suppression of wages and organized labour.  The enforcement of these deeply unpopular ‘reforms’ was most safely left in the hands of an autocrat like Pinochet with Friedrich Hayek, one of the intellectual architects of neoliberalism remarking on a visit to Chile: ‘my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism’.

Shock economics

It was Naomi Klein who recognized Pinochet’s Chile as one of the first examples of shock economics which saw the ‘rapid-fire corporate reengineering of societies still reeling from shock’.  Other examples included the collapse of the Soviet Union in 1991, the US invasion of Iraq in 2003, Hurricane Katrina which devastated New Orleans in 2005, and more recently, the eye-watering levels of corporate welfare during the COVID-19 pandemic.  The impact of neoliberalism on Chile had disastrous results: ‘by the early 80s, Pinochet's Friedman-prescribed policies had caused rapid de-industrialisation, a tenfold increase in unemployment and an explosion of distinctly unstable shantytowns’. 

None of this dampened the enthusiasm for neoliberalism in the US and UK with the Thatcher and Reagan administrations in the 1980s enthusiastically embracing and ruthlessly imposing Friedman’s economic cocktail.  Neoliberalism also informed the ‘development’ policies of the World Bank and International Monetary Fund (IMF) which used structural adjustment programmes to impose neoliberal policies on low and middle-income countries as conditions for loans.  ‘These programmes – focused on privatisation, austerity, and forced market liberalisation – argues economist Jason Hickel, ‘have created lucrative profit opportunities for multinational companies, but have had a devastating effect on the South’.

Neoliberalism and inequality

By 2016, a paper by IMF economists had to accept that ‘Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion’.  The most recent World Inequality Report has found that five decades of neoliberalism have resulted in a global inequality crisis.  In 2021, the global bottom 50 percent captured just 8.5 percent of total income and two percent of wealth.  By contrast, the global top 10 percent owned 76 percent of total wealth and 52 percent of total income.  On reflecting on this grotesque level of global inequality Oxfam found that it is: ‘the product of a flawed and exploitative economic system, which has its roots in neoliberal economics and the capture of politics by elites.  It has exploited and exacerbated entrenched systems of inequality and oppression, namely patriarchy and structural racism, ingrained in white supremacy’.  Neoliberalism has also enabled the wealthiest one percent of the world’s population to consume twice as much carbon as the bottom global fifty per cent combined for the past quarter of a century.  The carbon emissions of billionaires are thousands of times above the average person because of lifestyles characterized by use of high-polluting private jets, SUVs and yachts.  Thus, inequality is not only resulting in elite wealth accumulation but driving the climate emergency too.

As Henry Giroux has observed: ‘Under neoliberalism, everything is for sale and the only obligation of citizenship is consumerism’, which begs the question what has been the response by the development education (DE) sector to this global contagion of inequality, privatization and poverty?  

Development education and neoliberalism

In August 2022, consultant Harm-Jan Fricke published research following an investigation into the extent to which nine leading INGOs and development networks in the island of Ireland are engaging with neoliberalism as part of their development education and public engagement work.  He found ‘that little consideration seems to be given to systematic explorations of global economics or of root causes of poverty, inequality and injustice’.  Fricke’s research points toward two current, inter-connected trends in development education policy and practice that does the sector little credit.  The first that is that (with a few exceptions) the sector is almost entirely ignoring neoliberalism as the root cause of global poverty, inequality and the climate emergency despite compelling evidence that it is central to all these crises. 

And second, the sector is completely over-extended in its (uncritical) support of the Sustainable Development Goals as a policy and practice framework for global learning, despite their failing agenda, flawed methodology, lack of efficacy as a sound basis for DE and complicity with neoliberalism.  The UN Secretary-General, António Guterres, has reported that ‘Progress on more than 50 per cent of targets of the SDGs is weak and insufficient’.  This faltering process is the result of the Goals’ failure to address the root cause of the problems that they are designed to address; the neoliberal economic system.  Because the Goals fail to problematize growth and its outworkings, they are most unlikely to be achieved in 2030.  As Philip Alston, the former rapporteur on extreme poverty and human rights, has said: ‘economic growth is at the core of the SDGs, the engine relied upon to lift people out of poverty’. 

Given the accelerating climate emergency and global inequality, this position of ‘development as growth’ is indefencible.  As the DE sector has the remit of exploring ‘the root causes of local and global injustices’, it should be directly engaging with neoliberalism which author George Monbiot has described as ‘the ideology at the root of all our problems’.  On reflecting on the life and work of Paulo Freire, his long-time collaborator, Henry Giroux said that Freire ‘was a revolutionary whose passion for justice and resistance was matched by his hatred of neoliberal capitalism and loathing for authoritarians of all political stripes.  Put simply, he was not merely a public intellectual but also a freedom fighter’.  It is inconceivable that Freire, if he was practicing his radical pedagogy of transformative learning today, would be side-stepping the dominant philosophical, political and ideological question of our age; neoliberalism.  ‘To surmount the situation of oppression’, argued Freire, ‘people must first critically recognize its causes, so that through transforming action they can create a new situation, one which makes possible the pursuit of a fuller humanity’. 

Stephen McCloskey

September 2023