“What is Neoliberalism?” is the second session of our Political Economy Teach-in Series. It was held on December 7, 2022, and delivered by Jayati Ghosh.

Jayati Ghosh taught economics at Jawaharlal Nehru University, New Delhi for nearly 35 years, and is currently at the University of Massachusetts Amherst, USA. She is a member of the WHO Council on the Economics of Health for All, the United Nations Advisory Board on Economic and Social Affairs, and the UN Secretary General’s High-Level Advisory Board for Effective Multilateralism.

Our South Feminist Political Economy Teach-in Series aims to strengthen intergenerational dialogue and build a cross-regional feminist constituency. The series covers various topics to interrogate and strengthen understanding of issues shaping conditions in the Global South.

Ghosh prefaced her talk by clarifying “what neoliberalism isn’t”, noting a common misconception that the nearly 50-year global phenomenon of neoliberalism implies a receding or diminution of the state. Rather, she explains, it entails a redirection of the state: as a project undertaken by nations, neoliberalism does not aim for – nor does it result in – there being ‘less state’, as Ghosh put it; rather, it results in ‘less state serving the people’, and ‘more state serving large capital’.

Conceptually, Ghosh continues, neoliberalism relies on two fundamental axioms about human behavior. First, everything can be and is a commodity – i.e., something that can be traded and exchanged for gain. Second, people are not only motivated by profit; rather, to incentivize them, a profit motive must be provided. These notions of human behavior are linked to theories and philosophies such as utilitarianism and possessive individualism, both of which are rooted in patriarchal thought. For example, they do not account for economic dynamics such as care work performed by women which is often unpaid labor.

Neoliberalism is thus fundamentally marked by the phenomenon of privatization. Here, Ghosh introduced the concept of natural monopolies, the first of several concepts essential to understanding neoliberalism from a feminist economics perspective.

A natural monopoly is a market in which a single provided is sufficient – such as the electricity sector – because electricity distribution is most efficiently managed by a single entity. Electricity markets have often been publicly owned, i.e., state-run. In many of these markets, neoliberal privatization has transformed natural monopolies into contestable markets, where, if a provider raises prices, competitors can enter and provide the same service at a lower cost. Professor Ghosh observed that privatization has occurred rapidly across the globe in a way that might have been unimaginable even a century ago, extending beyond electricity to include groundwater, lakes, and various natural resources.

This can be understood as the privatization of public goods, which, in economic terms, refers to goods that are non-rival and non-excludable. In other words, using goods – such as a streetlight – does not prevent another person from using it, nor can one person exclude another from benefiting from it.

Another important concept is externalities. In economics an externality is a cost or benefit that affects others but is not reflected in the individual’s transaction – it is external to them. As such, a positive externality refers to a product that benefits both society and the individual, such as education. If one provides education, this is helping society. As a result, noted Ghosh, education is underprovided – commercial providers will only educate those who can afford to pay. Public provision is needed to counterbalance this positive externality; if left to the market, underprovision will result.

A negative externality occurs when an economic action has a negative effect on society. For example, the operations of a factory may cause pollution downstream – something affects society negatively but does not harm the factory or the company running it. Public provision and regulation of resources and services help mitigate negative externality. By contrast, neoliberalism shifts everything into private provision and private gain.

Understanding the economics of public control, Ghosh continues, involves another key term. That is, public control of products such as health, sanitation, and education is a response to what is known as information asymmetry – where one party knows something that the other does not.

In the provision of health services, for example, a person may feel ill and visit a doctor who diagnoses their condition and prescribes certain medications. The patient will accept the diagnosis and take the medications, but they do not know whether the information is correct. Public provision of health ensures that doctors have no financial incentive to provide patients with incorrect information or medication. For instance, a doctor might administer a sugar solution injection instead of necessary antibiotics just to charge a fee, knowing that the patient cannot verify the medication. The privatization of public services means providers of formerly public services have far fewer barriers to profiting from information asymmetry.

Indeed, the privatization – and consequent exclusion – of knowledge is a key aspect of neoliberalism, particularly evident in the system of intellectual property rights. Knowledge that serves the common good – such as technological adaptions for coping with climate change and mitigating health emergencies (e.g., vaccines) – is now increasingly restricted to those who can afford it.

Neoliberalism, logically, is also characterized by the decline of state-owned public wealth and assets. Consequently, private wealth is now highly concentrated among a very small number of people, who influence laws and regulations that further increase their wealth. At the same time, the dominance of global finance restricts the ability of states to meet basic social and economic obligations, as resources are redirected away from serving citizens and toward serving capitalists and financial interests. 

Ghosh continued, explaining that feminist economists examine the gendered impacts of this redirection of the state and other aspects of neoliberalism in markets and public life. They find that neoliberalism reinforces women’s differential treatment in the labor market – women are clustered into low-wage occupations and self-employment, they perform the vast majority of unpaid work in households and communities, and cuts to social services disproportionately impact women and girls.

In other words, the unequal gender relations of patriarchy “enable states and large capital to get away with all of this”, explained Ghosh. Society can function under neoliberalism because patriarchal gender relations allow more unpaid labor to be performed (when, for example, a government implements an austerity program that removes a childcare subsidy or household food allowance). Neoliberalism would not survive without patriarchy, and as such, feminists cannot fight patriarchy without also fighting neoliberalism.

After the talk, Ghosh took questions from participants, covering a wide range of topics, such as alternatives to neoliberalism, resistance strategies, the impact of climate disasters on analysis of neoliberalism, and the role of the state in feminist resistance to neoliberalism. In responding, the professor emphasized the need for activism that finds ‘different things we can chip away at’, looking at the multilateral system and what we can do to change the global rules; and the opportunities for working in coalitions to persuade on solutions to the current, indubitable crisis – absolute hunger, collapse of livelihoods, fragility of basic incomes, and the inability of states to provide services they once did.

The increasing velocity and damage of the climate catastrophe, said Ghosh, could push corporations and governments to reconsider their commitment to neoliberalism. However, governments across the world seem to be in denial’ about the planet’s future under the current system. Governments such as in India might “announce a green project” but still invest in coal and continue not to provide social services or pay workers in the social service system.

Still, said Ghosh, we have no choice but to rely on the state, while also confronting it, as it remains central to citizenship. She noted some shifts away from neoliberalism in governments led by Jacinta Ardern (New Zealand) and Nicola Sturgeon (Scotland). State-based solutions include undoing privatization and bringing back regulations on capital – increasing public wealth through taxation of the extremely rich, and regulating markets for carbon and nature to halt the damage of climate change.