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The Key Concepts

Matthew Eagleton-Pierce

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The Key Concepts

Matthew Eagleton-Pierce

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Neoliberalism: The Key Concepts provides a critical guide to a vocabulary that has become globally dominant over the past forty years. The language of neoliberalism both constructs and expresses a particular vision of economics, politics, and everyday life. Some find this vision to be appealing, but many others find the contents and implications of neoliberalism to be alarming. Despite the popularity of these concepts, they often remain confusing, the product of contested histories, meanings, and practices. In an accessible way, this interdisciplinary resource explores and dissects key terms such as:

  • Capitalism

  • Choice

  • Competition

  • Entrepreneurship

  • Finance

  • Flexibility

  • Freedom

  • Governance

  • Market

  • Reform

  • Stakeholder

  • State

Complete with an introductory essay, cross-referencing, and an extensive bibliography, this book provides a unique and insightful introduction to the study of neoliberalism in all its forms and disguises.

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Neoliberalism The Key Concepts

DOI: 10.4324/9780203798188-1


There is more guile in ‘adjustment’ than first appears. In the context of neoliberalism, the word often passes unnoticed, and this partly accounts for its appeal to certain actors. Derived from the Old French ajouter, meaning to join, adjustment also carries a semantic association with justice (juste), hence the sense of ‘correcting’ a form of (in)justice. In English, from the seventeenth century, the word began to acquire other sets of meaning, including the idea of a collective agreement or settlement. With the emergence of capitalism, financial interpretations followed, especially evident in the balancing or auditing of an account. By the middle of the nineteenth century, the concept broadened further to represent a general sense of adaptation, particularly evident in the fields of biology and psychology (Spencer 1855). The idea of adjustment often takes on a modifying inflection, implying that the form or object in question is not inherently disputed but, simply, requires limited adaptation to reach a more perfect state. Because of its ambiguity, it is perhaps not surprising that the term has become allied with other notions in neoliberal vocabulary, notably reform but also, more widely, change and development. In this regard, the prefix ad (Latin for the preposition ‘to’) is a reminder that adjustment is always on the way to somewhere else.
Within economics, the notion of adjustment carries a stylistic appeal as a kind of mechanistic or Newtonian metaphor. It is also deployed in particular theoretical debates. Thus, the phrase ‘self-adjusting market’, an idea associated with the presumed impersonal and automatic workings of the capitalist system, with the implication that beneficial ends can be achieved without excessive government intervention, has become popular shorthand for neoliberalism as such. Although this expression has been linked to the classical liberal thought of Adam Smith (1993[1776]) and his many disciples, the first time the phrase was actually used in a significant way was by John Maynard Keynes in his critique of utilitarian economic theory. Its use is particularly evident in the idea that the economy has a tendency to return to a ‘normal’ equilibrium. In his key work, The General Theory of Employment, Interest and Money (1936), Keynes argued that the economy should not be understood as having any ‘natural’, self-adjusting propensity towards full employment. Rather, the economy contained many potential equilibria, one no more ‘natural’ than another. Along similar ideological lines, and published just eight years later, Karl Polanyi articulated his own critique of liberal thought, one that has become an influential touchstone for many scholars: ‘[O]ur thesis is that the idea of a self-adjusting market implied a stark utopia’ (Polanyi 2001[1944]: 3; for secondary literature, see Dale 2010; Block and Somers 2014).
Two illustrations from the neoliberal period can help to reveal how the notion of adjustment may initially appear innocent but, upon closer inspection, often carries a political message. In 1979, against the backdrop of various economic crises, Robert McNamara, the President of the World Bank, made the first public reference to ‘structural adjustment’ in a speech which urged developing countries to reform their export industries in order to increase trade with developed countries. The following year, after internal deliberations involving Ernest Stern, the Bank’s Vice President for Operations, structural adjustment loans (SALs) were approved as a new Bank instrument (Kapur et al. 1997; Babb 2009). Ostensibly justified for countries experiencing balance-of-payments problems and to enhance economic growth – concerns that, by 1982, were acute, following the Latin American debt crisis – SALs always had long-term reform objectives in mind. But what precisely did the Bank want to adjust? As the 1980s and 1990s unfolded, the policy content on ‘adjustment’ adapted to various conditions, but the general template remained relatively consistent, focused around ‘fiscal adjustment, getting the prices right, trade liberalization, and, in general, a movement towards free markets and away from state intervention’ (Easterly 2005: 3). For critics, however, agendas under the name of adjustment did not mean the minor, fine-tuning of policy machinery, but often entailed radical changes, such as removing state subsidies that supported the poor (Walton and Seddon 1994; Brown et al., 2000; Structural Adjustment Participatory Review Inter Network (SAPRIN) 2004). As Dani Rodrik has suggested, ‘structural adjustment’ was partly a ‘marketing’ concept at the Bank to persuade recipient nations that such packages of microeconomic and macroeconomic reforms were legitimate, even when more objective analysis, both at the time and subsequently, would cast doubt on the wisdom of such strategies (Rodrik 1994: 82).
While SALs would later become politically tainted at the World Bank, the appeal to the looser sense of policy adjustment lives on in countless issues associated with neoliberalism. For instance, from 2010, in the context of the Eurozone crisis, the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) (collectively known at the time as ‘the Troika’) designed a series of bailout programmes for Greece, Ireland and Portugal, in which the term ‘adjustment’ featured prominently, including in the legal headings of such schemes. Like SALs, ‘economic adjustment’, when invoked as the solution to the Eurozone crisis, took on an aura of technocratic managerialism, an image that was reinforced by the presence of bureaucrats who had no direct line of democratic legitimacy to national populations. In the minds of many observers, not least those who were protesting on the streets, the term ‘adjustment’ became a euphemism for austerity. The adjustment was always towards more, rather than less, with working people experiencing the major burden. Since the option of a currency devaluation for the peripheral states was impossible and an exit from the Euro was either non-negotiable or fraught with unknowns, the Troika demanded policies of ‘internal devaluation’ as a way to manage the debt and increase competitiveness (Pisani-Ferry 2014). Yet since the notion of adjustment was a commonplace expression, it was also appropriated by Greek officials in their negotiations with the European institutions. In one of the most memorable accounts of the crisis in 2015, Yanis Varoufakis, the Minister of Finance, made the following remarks:
That Greece needs to adjust there is no doubt. The question, however, is not how much adjustment Greece needs to make. It is, rather, what kind of adjustment. If by ‘adjustment’ we mean fiscal consolidation, wage and pension cuts, and tax rate increases, it is clear we have done more of that than any other country in peacetime.
(Varoufakis 2015, italics in original)
In this sense, adjustment can seem not only full of guile but often far from just.
See also: change, consensus, development, flexibility, reform, stability.
Further reading: Polanyi 1944; Brown et al. 2000; Pisani-Ferry 2014.


The term ‘business’ was originally identified with the quality or state of being busy (from the Old English bisignes). Although now differentiated as ‘busyness’, this earlier sense of the word still echoes today in the behaviour of business individuals, not only through the appeal to diligent labour and commitment, but also in how such work can be marked by anxiety and doubt. The dominant meaning of business as the collective expression of the world of trade and commerce emerges in the late fifteenth century, although it took until the early eighteenth century before it could refer to a specific company, firm or enterprise. A wide range of expressions and modifiers have been linked to this enduring concept, from ‘man of business’ (1640) and ‘business is business’ (1797) to ‘business before pleasure’ (1816) and ‘get down to business’ (1868). In the nineteenth century, reflecting the development of industrial society in Britain and elsewhere, a host of compound phrases entered the language, such as ‘business centre’ (1824), ‘business model’ (1832), ‘business travel’ (1833), ‘business morality’ (1836), ‘business associate’ (1842), ‘business leader’ (1848), ‘business English’ (1855) and ‘business magnate’ (1867). There is little evidence that this trend of conceptual extension is in decline, not least because countless ‘business gurus’ (1969), who teach at proliferating ‘business schools’ (1862), compete to coin new phrases that are attached to this master signifier.
Business entities can take a variety of forms depending upon the country in question and its legal tradition, including cooperatives, partnerships and sole-trading outfits. However, the dominant type of business organisation, one which is increasingly pursued in different regions of the world within the neoliberal period, is the corporation. This form of organisation can be traced back to mercantile trading groups, such as The Hudson’s Bay Company, before reaching commercial maturity in the nineteenth and twentieth centuries (Wilkins 2005). In the most basic definition, the modern business corporation is a state-sanctioned association which possesses a ‘separate legal personality’ distinct from its members. Other common characteristics include limited liability (a restriction against creditors seizing more than the assets owned by the company), transferable shares, a delegated management structure and investor ownership (Armour et al. 2009). In general, although not always, a business corporation is driven by a core profit motivation and the need to reinvest surplus capital. There are millions of small- and medium-sized enterprises within the capitalist system, but the large-scale business corporation is a special phenomenon that was created to address a particular problem_ how to manage productive industries, particularly those which involve contracts that often cross national borders. Such corporate expansion has generated not only astonishing wealth, development and new consumer goods but also other notable tendencies, including concentrations in economic power, oligopolistic market structures, close relations with political rule-making processes, claims about environmental destruction and, as a consequence, renewed questions about whom business ultimately serves (Galbraith 1972; Strange 1996; Gamble and Kelly 2000; Fuchs 2007; Wilks 2013). In other words, scepticism about the business corporation is central to wider debates about the definition of freedom and responsibility in a capitalist society.
The power of global corporations is one of the most commonly invoked themes in debates about neoliberalism. The visual spectacle of such power can be seen in the construction of office skyscrapers in major cities, part of a competitive struggle among urban and national jurisdictions to host leading firms (Sklair 2005). Although there are methodological difficulties in assessing corporate power, such as in defining the extent to which businesses are transnational, how business lobbying actually operates or the ways in which firms can dictate political rule-making, significant illustrations and trends can be observed (Fuchs 2007). From 1980 to 2013, total corporate earnings before interest and taxes more than tripled and now represent almost 10 per cent of world GDP (McKinsey Global Institute 2015a). In the 2014 Fortune ‘Global 500’ list, a major index ranking, the top 500 corporations earned US$31.3 trillion in combined revenue, including the leader, Wal-Mart, which earned US$8.6 trillion. Energy-related firms have a strong hold over the top 20, taking 11 spots on the list. Elsewhere, if one examines a snapshot view of market capitalisation – that is, the total value of publicly listed shares – Apple appears as the world’s largest corporation, with a market value of over US$500 billion in early 2016. These standard measures of corporate power have also been complemented by other assessments, one of the most eye-catching being comparisons between corporations and other ‘economies’ or ‘economic units’, such as cities and countries. For example, according to one analysis, the total sales of the top 20 corporations were equivalent to the combined national expenditures of the bottom 163 states. On the basis of GDP, many of these corporations are as large as middle-income countries, such as Chile or the Philippines (Mikler 2013).
Is big business, therefore, the big winner in the neoliberal era? The evidence suggests that major corporations, including a cadre of extremely wealthy executives, have tended to benefit from a favourable, if still volatile, political and economic environment. Three significant trends can be noticed. First, the location of corporate power is not fixed but always changing in response to various push and pull factors. Most multinationals still have a strong attachment to a ‘home’ country, as reflected in major sites of production or the constitution of board members. Notwithstanding this influence of ‘national business systems’ (Whitley 1999), the aspiration to be seen, and to act as, a ‘global business’ is characteristic of neoliberal corporate branding. This degree of ‘transnationality’ can be analysed in different ways (United Nations Conference on Trade and Development (UNCTAD) 2008). One major shift has involved the spreading of Western business practices to non-Western regions of the world, including those areas that were previously under Communist rule. Thus, in 2005, China had 16 corporations on the Fortune ‘Global 500’ list, but, by 2014, that figure had increased to 95 firms, second only to the US with 128 entries. The rise of Chinese-based businesses does not necessarily mean, however, that the US model of corporate power is on the wane, as the attraction of American management ideas and gurus in China testifies (Dickson 2008). Another way in which the location of corporate activity can be problematised concerns the development of flexible production chains that make up intra-industry trading. For instance, although most of the assembling of Apple’s iPhone is carried out in China, the California business also outsources production to five other firms, in South Korea, Japan and Germany (Xing and Detert 2010). In this sense, the label ‘made in’, when attached to consumer goods, often tells only a small part of the story of where products are assembled (Elms and Low 2013).
Second, a major focus regarding big business in the neoliberal period concerns the shaping of politics in their favour. In one sense, this is not a new phenomena: close ties or ‘revolving doors’ between commerce and politics have a long history, from mercantilist owners in the sev...