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Lecture 6

POLC99H3 Lecture Notes - Lecture 6: Per Capita Income, Neoliberalism

Political Science
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R Rice

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POLC99 Lecture 6 February 8
Neoliberalism + The New Politics of Protest
The Neoliberal Counter-Revolution
Neoliberalism: An economic theory that emphasizes the market, the private sector, and
trade as the engines of growth and development. It referred to as a counter-revolution
because it attacks the previous inward state-led model. It too a revolution to put a state-
led model into place, and neoliberalism challenges that model.
Policies Challenged by Neoliberalism:
The over-extension of the public sector in favour of privatization.
The over-emphasis on investment in physical capital such as infrastructure in
favour of trade and exports.
The use of protectionism in favour of free market principles
Significance: these were the very policies that made the North that way it is today.
Neoliberalism is challenging all thee models and turning them upside down. Economic
objective is to halt inflation and restore growth. Most scholars hailed neoliberalism for
bringing down inflation. However, how well it has reactivated the economies of the Global
South is debatable.
Economist will analyze the data and see improvement in GPD per capita, but critics say
its not enough in the face of income inequalities.
Selected indicators: Latin America 1995—2007
1995 2000 2005 2007
GDP0.4 4.0 4.9 5.8
Per capita income $3,792 $4,072 $4,834 $6,425
% of people in poverty45.7%42.5%41.7%34.1%
Geni Coefficient
(inequality)0.532 - - 0.515
Critics would argue that the level of inequality is so severe that it undermines all the
economic indicators.
Six pillars of exclusion under neoliberalism:
1.Lack of access to labour markets. Those who dot have formal work experience or
connections are shut out of the labour market.
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POLC99 Lecture 6 February 8
2.Inadequate # of jobs. Jobs are part-time and temporary, contact. Theres no
stability. They can give lower wages because people are desperate. Too few
opportunities for people to work.
3.Lack of access to good quality or decent jobs. Workers are required to work longer
hours with little safety standards.
4.Reduced access to social services. Cut back in government social programs, lack of
funding to education and health care. Now they are privatizing them and making
available to those who have money.
5.Lack of access to the means of production. Productive resources (land, capital,
technology) are beyond the reach of common citizens are concentrated in the hands
of a few who benefit from it tremendously.
6.Incapacity of households to meet their basic needs. While poverty levels appear to
be on the decline, certain groups (indigenous) poverty levels are getting worse.
The Assault on Organized Labour
The initial policies targeted privatization state-owned industries, laying off thousands of
employees. Very hard to hold a strike if theres no members in your union left. The unions
and labour took the brunt of neo-liberal policies. By the end of the 1990s workers were
pushed from the factories into the streets.
Example: Argentina was a home to a vibrant workers union. Unemployment rose form 6%
to 8% at the beginning of the 1990s. Mid 200110%. Middle class found themselves in
the ranks of the dispossessed.
Options of organized labour:
1.Resort to defensive and reactionary behaviour: try to hold on the little benefits they
have. Hang on to that pension, do whatever it takes just to cling to whatever they
have. Maximum goal now is to maintain minimal rights and concessions.
2.Develop a Social Pact (Concertacion Social). Social negotiations and compromise
between governments and organized labour. Jobs security and pension funds for
neoliberal support.
3.Turn toward social movement unionism: other affected social actors join together
with workers into a broad-based union movement. Workers are no longer restricted
to the factories. Labour unions would become part of those new social movements
in a multi-class, multi-identity movement for change. Brazil: workers party had
flexibility to do this. They opened their struggle to women, environmental groups
and indigenous groups. A union is a social movement and not a union it used to be.
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