The Neoliberal Regime in the Agri-Food Sector

Crisis, Resilience, and Restructuring

Steven Wolf, Alessandro Bonanno, Steven A. Wolf

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9780415817905
• eBook ISBN: 9781136667138
• Topic: Business
• Subtopic: Agribusiness
• Index: Business

For the last three decades, the Neoliberal regime, emphasising economic growth through deregulation, market integration, expansion of the private sector, and contraction of the welfare state has shaped production and consumption processes in agriculture and food. These institutional arrangements emerged from and advanced academic and popular beliefs about the virtues of private, market-based coordination relative to public, state-based problem solving. This book presents an informed, constructive dialogue around the thesis that the Neoliberal mode of governance has reached some institutional and material limits. Is Neoliberalism exhausted? How should we understand crisis applied to Neoliberalism? What are the opportunities and risks linked to the construction of alternatives? The book advances a critical evaluation of the evidence supporting claims of rupture of, or incursions into, the Neoliberal model. It also analyzes pragmatic responses to these critiques including policy initiatives, social mobilization and experimentation at various scales and points of entry.

The book surveys and synthesizes a range of sociological frames designed to grapple with the concepts of regimes, systemic crisis and transitions. Contributions include historical analysis, comparative analysis and case studies of food and agriculture from around the globe. These highlight particular aspects of crisis and responses, including the potential for continued resilience, a neo-productivist return, as well as the emergence and scaling up of alternative models.

Part 1
Theoretical Analyses and Key Concepts

1
The Legitimation Crisis of Neoliberal Globalization

Instances from Agriculture and Food

Alessandro Bonanno

The United States has continued to progress: its citizens have become better fed, better clothed, better housed, and better transported; class and social distinctions have narrowed; minority groups have become less disadvantaged, popular culture has advanced by leaps and bounds. All this has been the product of the initiative and drive of individuals co-operating through the free-market. Government measures have hampered not helped this development.

(Friedman, [1962] 1982, p. 200)

There is a tendency to regard any existing government intervention as desirable, to attribute all evils to the market, and to evaluate new proposals for government control in their ideal form, as they might work if run by able, disinterested men, free from the pressure of special interests.

(Friedman, [1962] 1982, p. 197)

Introduction

In recent years, the issue of the legitimation crisis of neoliberal globalization has become one of the topics of discussion in scientific circles. Pertinent literature underscores that neoliberalism and the process of globalization that it supports has diminished people’s democratic participation in decision-making processes (Lupel, 2005; Habermas, 2002, 2012), concentrated power in the hands of the private sector and the super rich (Harvey, 2010; Krippner, 2011), augmented the monopolistic character of markets (Lynn and Longman, 2010), and promoted improbable individualistic solutions to society’s problems (Harvey, 2010; Raulet, 2011). These conditions, coupled with the inability of market mechanisms to correct economic and social problems, generated a crisis of legitimation of neoliberal globalization.

The crisis runs deeper than the inability of market mechanisms to address current problems as it involves the concomitant ineffectiveness of state intervention. State actions to address the unwanted consequences of the implementations of neoliberal measures have not corrected problems and have not solved the issues that have been associated with the intervention of the state. Even as the state provides funds to address the crisis, critics from all sides of the intellectual and political spectrum denounce its inadequacy. The state’s “steering mechanisms” (Habermas, 1975) have not been able to distribute the wealth generated in the economy and have not created sufficient support for the dominant ideology and norms.¹ In agri-food, this contradictory situation is in full view. Farmers, agri-food corporations, and consumers support the assumed virtues of the market but simultaneously call for state intervention to address its negative outcomes. The assumed ability of market mechanisms to regulate agri-food is contradicted by calls for state intervention.

This chapter addresses the issue of the legitimation crisis by underscoring the ideological and historical limits of neoliberal globalization. Following Habermas’s theory of the legitimation crisis, it is argued that neoliberal globalization cannot meet the objectives that it claims. A discussion on the general characteristics of the crisis is presented with instances from the agri-food sector. In particular, the chapter opens with a brief review of the debate on the current legitimation crisis, making references to the legitimation crisis that led to the demise of Fordism in the late 1970s.² The second section discusses the ideological and structural components of the legitimation crisis by contrasting theory claims with the historical evolution of socioeconomic arrangements. This segment includes a discussion on the classical work of Milton Friedman and structural contradictions that characterize the economy and society. The following section provides examples of the crisis of neoliberal globalization in agriculture and food. The positions of producers (farmers), corporations, and consumers are illustrated. A brief set of conclusions ends the chapter.

The Historical Dimension of the Legitimation Crisis

Almost forty years ago, the renowned German social theorist Jürgen Habermas wrote his book Legitimation Crisis (1975).³ In that book, Habermas analyzed the conditions that engendered the crisis of legitimation of Fordist capitalism. His thesis centered on the inability of the state to fulfill the claims of economic expansion, social stability, and equality that characterized advanced societies.⁴ For Habermas, the legitimation crisis indicated that “the legitimizing system does not succeed in maintaining the required levels of mass loyalty … [and] it is not possible by administrative means to maintain or establish effective normative structures to the extent required” (1975, pp. 46–7). For Habermas, the legitimation crisis, therefore, is a destabilizing phenomenon that indicates the historical failure of society to mobilize the means necessary to fulfill immanent social imperatives.⁵

The changes brought about by neoliberal globalization have forcefully reopened discussion on legitimation. Often based on analyses on the “crisis of the nation-state,” these contributions call into question the adequacy of existing normative structures to address the consequences of the expansion of transnational social relations. In particular, the adequacy of claims made by neoliberal theorists in regard to enhanced freedom, democracy, and socioeconomic growth are called into question. Employing a definition of legitimation that rests on the gap between the ability of global constituencies to democratically participate in decision-making processes and the very processes with which decisions are made, Lupel (2005) argues that neoliberal globalization has eroded the collective capacity to make “legitimately binding decisions.” The current conditions, he concludes, open a crisis of legitimacy as established mechanisms of decision making are ineffective and new and more democratic ones are lacking. Underhill and Zhang (2008) further this argument by contending that current global arrangements undermine the legitimacy of the global system by shifting power overtly in the hands of private actors. Under neoliberal globalization, the public good is increasingly defined and decided upon by private entities that escape collective scrutiny. For these authors, legitimacy is defined as, and refers to, the process of establishing accepted norms of social justice and democracy that allows constituencies to align themselves with the decisions of the rulers (Underhill and Zhang, 2008, p. 537). Focusing on the governance of the financial sector, they conclude that the unchecked dominance of private interests in decision making strips the process of governance of the necessary legitimacy. Discussing the same substantive area, Helleiner (2010) contends that the neoliberal claims of the effectiveness and desirability of market mechanisms clash with calls for state intervention and regulation that followed recent economic crises. These moves unveil a delegitimizing gap between ideology and practice under globalization.⁶

Defining the financial crisis of 2008, as an epiphenomenon of the structural crisis of advanced capitalism, the French philosopher Gérard Raulet (2011) supports the contention that the current situation is reminiscent of the legitimation crisis of Fordist capitalism illustrated by Habermas. As in the case of the 1970s, under the current global regime, the administrative system cannot meet the demands stemming from the economy and the expectations of the masses. The neoliberal withdrawing of the state has magnified the unwanted consequences of the functioning of the market and significantly diminished the ability of large segments of society to participate in decision-making processes. As global capitalism negatively affects the well-being of weaker segments of society, its devastating consequences are addressed though the upsurge and popularity of extreme individualistic interpretations (Harvey, 2010). As society is decollectivized through the individualization of social relations and responsibilities, the regulatory instruments of the state are seen as irrational and inefficient. Individual responsibility placed in the context of the free functioning market is viewed as the most effective replacement of a collective effort to address social needs and inequalities. The result of the resurgence of individualism is the erosion of the instruments and practices that reduced inequality and class polarization and provided opportunities for the lower and middle classes in the past. This system, Raulet concludes, has reached its limits as the market and individualism cannot address the problems emerging from the evolution of contemporary society.

The Ideological and Structural Dimensions of the Legitimation Crisis

The Ideological Dimension

In the classical manifesto of Neoliberalism, Capitalism and Freedom, Milton Friedman ([1962] 1982, pp. 196–9) lauds the virtues of the free market and sets the theoretical stage for the argument for the superiority of the neoliberal regime. For Friedman, the virtues of the free functioning of the market go far beyond economic benefits. While the establishment of economic freedom is central to his theory ([1962] 1982, p. 8), the application of neoliberalism solves many of the social and political problems that affect modern advanced societies. Better economic political and social arrangements would emerge from the implementation of neoliberal reforms ([1962] 1982, pp. 8–9). Economically, the key provision of neoliberalism rests on an “affective” freedom of exchange ([1962] 1982, pp. 14–15). It requires that individuals exchange goods and services in ways that do not interfere with the desires and actions of other individuals. Individuals must be free to act, but they should do so without limiting the freedom of action of others. In this context, consumers, Friedman contends, would be protected from coercion from any seller because of the presence of other sellers with whom they can deal. In a free market, consumers are not forced to buy from any one seller. Similarly, sellers are protected from coercion from consumers because of the existence of a multitude of other consumers who can buy their products ([1962] 1982, pp. 14–15). Even workers would be protected from the abuse of employers in a free market, as they can find alternative and more desirable employment. The free market makes unions and their claims in support of the well-being of workers obsolete.

For Friedman, freedom of exchange leads to political freedom. The ability to exchange without coercion gives people “what they want”: individuals act freely to achieve independently selected goals. This is significantly different from situations characterized by government intervention in which a relatively small group of political leaders select the course of action for the rest of society ([1962] 1982, pp. 14–15). For Friedman, the essence of political freedom rests on the absence of coercion over individuals. Situations characterized by the existence of guidelines imposed by the government generate limited freedom because individuals are told how to act. Accordingly, the independence of the economic sphere from the political sphere is a condition for freedom ([1962] 1982, pp. 14–15) and a protection against any form of authority ([1962] 1982, p. 21). To be sure, Friedman contemplates some intervention of the state. It should be allowed in a few areas, such as law and order, the definition of property rights, adjudication of disputes, the enforcement of contracts, the provision of a monetary framework, and the implementation of antimonopoly measures. Ultimately, he argues, no government intervention and no entitlements allow people to take care of their interests. People should be left free to act rather than be directed by the state.

The market acts impersonally. No particular group affects its functioning ([1962] 1982, p. 21). This impersonality, Friedman maintains, is fundamental in the creation of conditions that promote the resolution of social problems and a better society ([1962] 1982, pp. 20–2). Employing the instances of the discrimination of minorities, Friedman criticizes the ineffectiveness of government programs designed to alleviate the conditions of minorities. He contends that the best protection against discrimination is the market. Its free functioning allows minorities to earn a living through unconstrained economic activities. Consumers, he explains, do not know the ethnicity of those who produce the bread that they purchase ([1962] 1982, p. 21). They will purchase what is convenient for them regardless of race or ethnicity. Therefore, the market separates economic activities from political views, making the former independent from the latter. The success of economic activities of minorities would depend on their productivity and abilities and not on their “views or their colour” ([1962] 1982, p. 21). Friedman contends that minorities have more to gain from the free market than other groups. Paradoxically, he concludes, these are the groups that claim more often than others that the market generates discrimination.

Addressing the cultural climate of the time, Friedman denounces the existence of a dominant attitude that sees government intervention as desirable while attributing “all evils” to the free market. He maintains that the desirability of government intervention is evaluated in its “ideal form.” He argues that government programs are examined in the abstract, as if they were to be executed by individuals without allegiance to any special interest group. After a number of decades of government intervention, Friedman continues, there is historical evidence that it is far removed from its ideal form. It shows not only its ineffectiveness and inefficiency but also its political nature. Government intervention responds to special interests and often creates results that are opposite to its politically established objectives ([1962] 1982, pp. 196–8). The argument made by Friedman and like-minded theorists powered the neoliberal critique of Fordism. Their claims about the neutrality of the market, its impersonality, and the alternative that neoliberalism represents to the ineffectiveness and inefficiency of state intervention found the support of the general public and became instrumental in the establishment of neoliberalism as the dominant ideology.

Today, four decades after the ascendance to dominance of this ideology, Friedman’s contention that government intervention is seen in its ideal rather than real form can be turned around and applied to neoliberalism. The social protest of recent years represents the externalization of the discontent with the neoliberal regime and its outcomes (Van Gelden, 2011; Byrne, 2012). Even critics of the Occupy Movement recogni...

Table of contents

• Cover Page
• Half Title page
• Series page
• Title Page
• Copyright Page
• Contents
• About the Contributors
• Introduction
• Part 1 Theoretical Analyses and Key Concepts
• Part 2 Case Studies
• Part 3 Research Opportunities
• Index