Blazing the Neoliberal Trail: Tim Weaver’s Response to Jonathan Davies

In this post Tim Weaver responds to Jonathan Davies’ review of his recent book ‘Blazing the Neoliberal Trail’.

I would like thank Jonathan for his stimulating reactions to my book and the opportunity of offering this response. I will focus primarily to two key points he raises. The first concerns the question of periodization. As Jonathan rightly points out, I suggest that the 1970s was the “pivotal decade”—to borrow Judith Stein’s phrase—for the shift to neoliberalism. However, Jonathan notes that “the break with the post-war order was implicit in the emerging political and economic zeitgeist of 1960s for both left and right.” He is right to argue that neoliberal ideas were beginning to take root in the 1960s and that business mobilization occurred in the U.K. and the U.S. in the 1960s and 1970s, as elites were forced to consider alternatives to the Keynesian regime of capital accumulation.

That said, my aim in the book—as Jonathan anticipates in his review—was to locate the period at which neoliberal ideas became politically consequential, that is when they became reflected in institutionally and ideologically durable ways. There were examples of experiments with neoliberal policymaking in the 1960s and the book might have been strengthened by illuminating of the connective tissue that links the proto-neoliberal efforts of the 1960s with those that came later as Jonathan suggests. That said, these neoliberal experiments, often proved abortive as leaders of both main parties in both countries became ultimately unwilling to jettison Keynesian approaches to economic policy until well into the 1970s, which drew sharp rebuke from neoliberals. Examples include Nixon’s wage and price controls and Heath’s retreat from proto-neoliberal macroeconomic policy in 1972 when unemployment hit one million—it was not yet a “price worth paying.” Heath’s famous U-turn illustrates the degree to which neoliberal remedies were perceived to be politically untenable by British elites into the 1970s, even on the right. Anecdotally, it is worth noting that Richard Nixon averred in 1971 that “I am a Keynesian in economics” and that Keith Joseph maintained that he was only “converted to conservatism” in 1974. Moreover, in the U.S., redistributive urban spending and all manner of urban programs accelerated markedly during the Johnson administration, with federal aid to cities reaching its apotheosis in the late 1970s, all developments I would characterize as at odds with the neoliberal turn that would follow.

The second major point that Jonathan raises concerns my characterization of the state. He points out correctly that my book draws a distinction between the capitalist class and state actors, who I suggest enjoy a degree of autonomy from societal interests. As such, my analysis allows that the state within the capitalist system may not necessarily operate as “the capitalist state.” By contrast, Jonathan maintains that it may be more fruitful to think about the state as an inherent part of the capitalist system. While this issue regrettably does not receive detailed treatment in the book, my position is that the state under capitalism does indeed act disproportionately in the capitalist interest. However, despite this bias, there is nevertheless space for state actors—operating from their own ideological convictions, or from pressure from anti-capitalist groups (such as trade unions)— to pursue policies that are contrary to the interests of capital. Moreover, I view the state itself as a multifaceted set of institutions that operate in a variety of domains to advance different interests, some of which might not be characterized as capitalist. This is especially evident with respect to the American state, with its multiple, overlapping nodes of authority and cross-cutting purposes. To give an example, in the 1980s, the same “state” was issuing social security checks to the elderly and food stamps to the poor while attacking the air traffic controllers, slashing urban spending, and using monetarism to squeeze the life out of the economy. These contradictory positions risk elision by the “capitalist state” characterization. The theoretical orientation I have followed demands that researchers spell out the processes by which certain policies become adopted and institutionalized rather than assuming that they are necessary a reflection of capitalist imperatives.

On a related note, it is important to consider that even within the capitalist class there is likely to be disagreement about the most effective mode of capital accumulation, especially during periods of uncertainly such as that which emerged in the 1970s (or, for Jonathan, in the 1960s). Hence, even if one were to grant that the state operates throughout the post-war period as an integral part of the capitalist system, the shift from a Keynesian capitalist state to a neoliberal is one that requires examination and explanation. Given the uncertainly among capitalists about how to deal with falling rates of capital accumulation, material explanations of why the neoliberal variety of capitalism took hold fall short. As Mark Blyth has shown a complete account requires an ideational dimension.

My position on the state and the role of ideas brings us finally to the question of whether my analysis might be compatible Marxist analysis. I am not certain. I maintain that politically consequential ideas can emerge independently of material interests. I am leery of accounts that reduce ideology to its function of reflecting materially derived imperatives, though it very often works in this way.  Thus, to the extent that political development can be propelled by ideas that are, or become, unmoored from capital, my account is compatible with Marxist analysis. But would this move not be antithetical to the materialist foundation on which Marxism rests? I hope in future projects to probe this question far more deeply and may enlist Jonathan’s help as I do!

Dr. Timothy Weaver is Assistant Professor in Political Science at the University of Louisville.

Barcelona: Crisis Austerity and Socio-Political Change

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This post summarizes the main findings of the case study of Barcelona from the collaborative governance under austerity project, sponsored by the Economic and Social Research Council as part of its Urban Transformations Network, and led by Prof. Jonathan Davies. The case study was led by Ismael Blanco with help from Helena Cruz and Yunailis Salazar (Universitat Autònoma de Barcelona).

The case of Barcelona is particularly interesting in the context of a study that interrogates transformations in the forms of relationship between the local state and civil society during crises. The interest of this case study lies, on one hand, in the strength of the participatory and collaborative tradition of Barcelona, which dates back to the early years of democracy (1980s). In this sense, it is interesting to analyse the extent to which this tradition constrains and conditions the possibilities of institutional change in the politics of urban governance, neutralising the effects of a crisis that has been particularly severe. On the other hand, Barcelona has become particularly important  since the local elections of May 2015, which led to the formation of a new radical-left government led by the Mayor Ada Colau, former leader of the social movement against housing evictions in Spain. In this context, Barcelona illustrates the strength of social mobilisation against austerity in Spain and the strategy of a significant part of this movement to occupy the institutional arena, generating profound changes in local and national politics. Our future research will be particularly concerned with how far a radical government can alter the power relations between the public, the private and the community sectors, enlarging the opportunities for citizens’ direct participation and overcoming the injustices of austerity.

The impacts of the crisis in the city of Barcelona have been intense in terms of unemployment, poverty and foreclosures. Such impacts have been distributed unevenly between different groups and urban areas, creating a more polarized social and spatial structure. The socio-spatial inequalities in the city have grown significantly since the outbreak of the crisis, reversing a sustained trend of inequality reduction since the 1980s. The intensity of the socio-spatial crisis stands in stark contrast with the good health of municipal public finances. The last municipal budgets of 2015, for example, closed with a surplus of 100 million euros – the textbook neoliberal budgeting strategy.  As part of the national austerity drive, Spain has witnessed as strong tendency for the  re-centralization of political power with serious consequences for both local (and regional) autonomy – for example deficit budgeting was prohibited in 2011.  However, the institutional capacity of the City Council of Barcelona remains relatively high thanks to the strength of municipal finances and the special powers conceded by the Municipal Charter of 1999. Such Charter, for example, allows the City Council of Barcelona to intervene in policy fields like housing, education and health through public consortia composed of the regional and the local government.

In analysing the role of collaborative governance in addressing the socioeconomic crisis, we must recall that participation and public-private and public-community collaboration have had a very important role in Barcelona since the 1980s. Collaborative governance in Barcelona precedes the “collaborative moment” observed in different parts of the world during the economic boom of the 1990s and early 2000s. Apart from various forms of public-private partnership such as joint ventures, structures of participation and public-community collaboration in Barcelona have been gradually built up, first under the 1986 Rules of Functioning of Districts and Citizen Participation and later under the Rules of Citizen Participation of 2003. It has contributed to developing a strong culture of inter-sectoral collaboration and a wide range of formal rules and institutions consolidated by the passage of time and the interests and habits they have generated.

Institutional path dependency in the field of collaborative governance in Barcelona is strong, as could be observed during the only period of conservative government the city has known in recent times (2011-2015). While the new government tended to be very critical of the participation model established under the leadership of the Socialist Party of Catalonia, changes in the formal architecture of participation in the city were minimal. Informal changes were more subtle, encompassing strategies such as residualisation of existing mechanisms, institutional layering  by creating mechanisms that overlap pre-existing ones , and the adoption of a  narrative influenced by neoliberalism around notions such as open government, social co-responsibility and social innovation. Some of our respondents thought that under this government there was a deep, though subtle, weakening of participation and incremental social welfare privatisation.

The 2011-2015 mandate coincided with a period of resurgence of social movements and alternative social practices in the city (and across Spain) stimulated by the outbreak of the 15M indignados movement. The 15M movement emerged spontaneously in different cities in the spring of 2011, although its origins were linked to the activity of previous movements like Real Democracy Now!, Youth Without Future, and the Platform for People Affected by Mortgages. The 15M also overlapped with a set of sectoral mobilisations (Mareas) fighting austerity in areas such as education, health and culture. The anti-austerity movement has retained great vitality in Spain, and polls indicate strong growth in the levels of interest and political participation among citizens. The de-centralized and urbanized structure of the 15M amid the growing disaffection of citizens with political and dominant economic institutions has favoured the emergence of a multitude of alternative social practices such as time banks, agro-ecological consumption cooperatives, ethical banking and urban gardens. Such practices – which experienced a strong growth since 2011 – have been particularly strong in Barcelona, ​​connecting with the cooperative and self-management traditions that existed in the city throughout the twentieth century.  A key lesson from our study is that the national anti-austerity movement is an urban movement, built in cities and neighbourhoods and rooted in longstanding urban traditions of organising and cooperation.

Barcelona en Comú – previously called Guanyem Barcelona – is an electoral alliance born in 2014 out of the confluence of anti-austerity social movements, alternative social practices, left-wing parties (such as ICV and United Left) and emerging political forces (like Podemos and Equo). The formation of this coalition stimulated a multitude of alternative candidacies at the May 2015 elections in Spain. The so-called “change candidacies” took office in 4 of the 5 largest cities in Spain (Madrid, Barcelona, ​​Zaragoza and Valencia) – as well as in many other small and middle-size cities with regional importance such as La Coruna in Galicia and Cadiz in Andalusia. The case of Barcelona is especially significant, as the new Mayor Ada Colau is not only the first woman to govern this city, but had a significant political role as the leader of the main organization of the anti-housing evictions movement in Spain (La PAH).

Our exploratory research shows that the new government has a strong commitment to radical change in the model of participation and collaboration between the public, private and community sectors in the city. One of the key ideas that it intends to promote is a form of co-production linked to the ‘commons’ (that inspires the name of Barcelona en Comú) and social innovation. Under Colau, the meaning of “social innovation” has shifted from entrepreneurship and takes a more radical meaning, linked to the ambition of transforming power relationships through community action. The notion of co-production involves, according to some respondents, taking a step beyond citizen participation towards generating more horizontal relationships between public institutions and citizens, increasing citizen empowerment and enabling citizens to take over the management of goods and services.

It is still too early to assess the accomplishments and limitations of the new government, though the evidence collected in this exploratory phase points to a significant continuity in the formal structures of participation after one year – perhaps due to institutional path dependency (by which we mean the constraining influence of past decisions, practices and actions) and the minority position of the new government, which faces significant challenges in getting its agenda and financial proposals approved by the City Council.

During the next phase, we will focus on analysing changes in the relationships between local political institutions and civil society in four key areas: the formal structures of consultation and participation (like neighbourhood councils); spaces of deliberative democracy (like the participative process for the elaboration of the Municipal Action Plan); community management practices (such as community management of public urban plots and disused buildings); and policy co-production (covering both pre-existing and emerging practices). A key question is whether the new government is able to undertake radical institutional change, despite barriers such as “path dependency”, institutional resistance, corporate and neoliberal opposition and the lack of a formal majority in the council.

Dr Ismael Blanco is Lecturer at the Department of Political Science and Public Law and Research Fellow at the Institute of Government and Public Policy (IGOP) at the Autonomous University of Barcelona (UAB)


Governing Austerity in Leicester

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This post outlines the main findings from the first round of research carried out by Prof. Jonathan Davies and Dr. Adrian Bua in Leicester as part of the collaborative governance under austerity project sponsored by the Economic and Social Research Council as part of its Urban Transformations Network. It will be followed by a further seven publications relating to the comparator cities of Athens, Baltimore, Barcelona, Dublin, Melbourne, Montreal and Nantes.

Leicester has experienced several waves of industrial decline and restructuring over the past 40 years, leaving it with high long-term unemployment and income poverty. The crisis of 2008 and ensuing national austerity regime intensified these problems.  In 2013, ONS statistics suggested that gross disposable household income in Leicester was the lowest in the UK.  In-work poverty persists at very high levels with full-time workers earning less than 80% of the national average.  These conditions mean that many citizens rely on public welfare. However, our research suggests that benefit cuts, continuing policy reforms and the government’s sanctioning regime have hit the city very hard in the eight years since the crash, leaving many unable to meet their basic needs, and eroding the social fabric that people depend upon to participate effectively in social, political and economic life.

In this project, we are looking at different ways in which austerity is governed and contested.  Who gets to have a say and how?  The national context is that despite George Osborne’s “localism” agenda, English cities still have little financial room for manoeuvre – deficit budgeting has long been illegal and the power to levy taxes is minimal. Since the 1980s, UK authorities have largely avoided confrontation with government. One councillor quoted in the Leicester Mercury commented on the implications for austerity: “we are not happy making cuts but we cannot set an illegal deficit budget. If we do Eric Pickles will simply come in and take over the running of the council”.  This comment captures Leicester’s approach, which we call “austerity realism”.  By austerity realism, we mean that the city applies cuts regretfully, but diligently, because policy makers cannot see any alternative..

Leicester City Council estimated last year that by 2019, it would have lost some 50% of its budget over a decade. Its goal is to manage down demand for services and mitigate the impact of austerity for those worst affected, while trying to avoid dramatic headlines and conflicts with central government.  Anti-austerity activists have mixed views about this strategy. They mostly accept that it is impractical for local authorities to defy Westminster and set expansionary anti-austerity budgets, but argue that there is room for manoeuvre.  One commented on twitter in response to a CURA blog on localism, that Leicester City Council could agitate against austerity and plough reserves into sustaining services – ideally as part of a concerted national strategy of municipal resistance.

As we explained in the project overview blog, our exploratory research focused on the relevance of the “collaborative moment” for austerity governance, the idea that networks sustained through trust could be a new and exciting way of governing complex problems, ushering in a new era of empowered participatory democracy.  In Leicester, many respondents see working in partnership with others as good sense, but without any idealism.  As one VSO respondent put it, “the only way to compete is to collaborate”.  Collaboration was seen as a functional and practical tool for austerity management, and some respondents thought austerity had made collaborating easier by concentrating minds.  On the other hand, attitudes to collaboration were strongly influenced by austerity realism, lacking any optimism about the potential in networks for democratic revitalisation and social flourishing.  In practical terms, this means that while public engagement is a high priority for public authorities in Leicester, many of our respondents think that participatory governance is a pale shadow of the New Labour years – a period for which there was some nostalgia.

Within this broad ethos of austerity realism, we see four basic tactics and strategies: amelioration, rationalisation, co-production and development.  We explain each and highlight associated dangers and criticisms.  We conclude by looking at what the research suggests about the vexed problem of how to resist and exit austerity.

Amelioration: The Department of Work and Pensions (DWP) exercises a formidable grip on the lives of benefit claimants in Leicester under a regime that regulates, disciplines and punishes – what academics call “workfare”.  Those who fail to meet stringent work-search targets receive a “sanction”, which means a punitive cut in benefits.  While sanctioning has eased in the past year, it has affected many thousands of people in Leicester. National research shows that the workfare regime causes widespread destitution.  In Leicester, agencies from the statutory and voluntary sectors aim to pick up the pieces.  The capacity of public and voluntary organisations to work in partnership is seen as vital for plugging the gaps through advice and emergency payments. One danger is that while these networks do good work, they are under the constant and growing stress of having to do more with less.  With further cuts ahead, a priority for us is to explore whether the system of advice, discretionary and emergency payments will remain sustainable without either further rationing or a dramatic improvement in the local jobs economy.

However, our research draws particular attention to the “invisible” effects of destitution.  We know anecdotally that the welfare regime drives some people “off grid”. Young claimants in particular are prone to giving up on the benefits system, at which point they disappear from official records.  The numbers are unknown, and nor is there much evidence of what happens to them beyond the demand for emergency payments and food parcels. Do they fall back on family; do they find formal or informal work of some kind, resort to crime, or migrate out of the city?  Respondents suggested that some affected groups find support in family and friendship networks, while others – particularly in traditional working class neighbourhoods – lack those resources and are disproportionately affected. The critical question moving forward is whether communities in Leicester and across the UK can continue absorbing the costs of destitution and disappearance. Or, will a breaking point come, making the crisis “visible” once more in the form of angry protests?

Rationalisation: some critics of austerity nevertheless concede that the public sector could be leaner and work “smarter”, as one respondent put it, even after decades of efficiency measures.  The view is that rationalising services and delivering them in partnership is a way of implementing austerity while minimising cuts to the front-line. However, we heard from front-line workers in both the statutory and voluntary sectors that restructuring reduces the time they have to work with communities. Moreover, some respondents were critical of the rationalisation discourse, pointing to the impact of cuts on the front-line.  Debate about the city’s approach to homelessness exemplified the difference between those who believe reorienting the service from provision to prevention can deliver services more effectively, and others who think it hits client groups hard.  The message is that efficiency savings do not absorb the full impact of austerity.

Co-production is the idea that citizens and community organisations can run public services, with support from public agencies. This agenda is popular with organisations wanting to promote the “commons” – the expansion of “social” goods beyond the state and the market.  Leicester recently agreed a first-wave of asset transfers under the Transforming Neighbourhood Services programme. Facilities are leased to community groups on condition that they continue to provide for all.  A danger is that community groups have little time or expertise for facilities management and that such arrangements will not prove sustainable. More broadly, cash-starved community organisations have fewer opportunities to win ever-bigger government contracts and grants are now exceptionally scarce. Local voluntary organisations must form consortia to stand any chance of competing with outside bodies – big charities and corporations often with little or no connection with Leicester.  The danger for advocates of “commoning” is that austerity erodes the fabric of local civil society and “co-production” becomes a figleaf for privatisation instead of a vehicle for empowerment.

Development and growth:  Most of our respondents see Leicester as a city “on the up”, buoyed by a cultural and sporting renaissance and the proud heritage of multi-culturalism.  The role of the Mayoral system adopted in 2011 and the leadership style of the Mayor himself, were often cited as explanations for the renewed focus on urban development.  As in many cities, growth, investment and job-creation are seen as the only viable solutions to Leicester’s poverty and unemployment. But, this is not a win-win option for everyone.  The concern among critics of the Mayor’s approach is that if the city does achieve an economic renaissance, those in deprived areas will not benefit and become further marginalised.  Moreover, getting the right kind of employer into the city will remain a huge challenge, even in an improved investment climate.  Leicester needs many thousands of good quality jobs. International literatures suggest that urban “boosterism” rarely delivers for those most severely hit by austerity and neoliberalism.  Building a socially just city through economic competitiveness would require Leicester to buck this powerful trend.

Viewed in an international context, especially our comparator cities of Athens and Barcelona, resistance to austerity has been very muted – certainly since the brief national upsurge of spring 2011.  There have been lively anti-austerity protests in Leicester, with unions playing an important role alongside local campaigns against national welfare reform and local cuts to hostels and community centres.  However, no durable anti-austerity movement has yet emerged on any scale in Leicester, or in the UK.  The research points to multiple inter-related explanations, including lost traditions of struggle linked to the legacies of industrial and trade union decline.  Another possibility is that low mortgage rates and low inflation afforded some protection against stagnating incomes for those in stable employment, muting protest and isolating people trapped in the workfare regime.

Austerity has a seemingly vice-like grip on England and it is not easy to see beyond it. At the same time, several respondents mentioned Jeremy Corbyn’s election to the Labour leadership as a weathervane of change and foresaw potential tipping points ahead.  The next phase of our research will look in more depth at how different actors in cities govern and organise around crises and social change. In Leicester, we hope to extend our study to explore the impact of austerity on the governance of migration and multi-culturalism, neighbourhood services, local economic development and adult social care and health.

Professor Jonathan Davies is Director of CURA and principal investigator on the collaborative governance under austerity (CGA) project, Dr. Adrian Bua is a core member of CURA and research assistant on CGA.

How is Austerity Governed in Cities? Our First Reflections on International Findings

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We are pleased to launch a series of 8 further publications outlining the findings from exploratory research the 8 case study cities – Athens, Baltimore, Barcelona, Dublin, Leicester, Melbourne, Montreal, Nantes and Sydney – of the collaborative governance under austerity project, sponsored by the Economic and Social Research Council as part of its Urban Transformations Network. In this initial post, Professor Jonathan Davies provides an overview of the emergent findings from exploratory research across the 8 cases.

In the 1990s and early 2000s, intellectuals, policy makers and activists all became enthused by networks.  They reasoned that at a time of greater prosperity than ever before, conflicts along the lines of class, race and gender could be broken down and a social consensus sustained through trust. Networking could coordinate a public sector fragmented by new public management and foster partnerships across state, market and civil society.  For the most idealistic thinkers, it could transcend social cleavages and usher in a revitalised participatory democracy, overcoming the limitations of market competition and government hierarchies. We use the term “collaborative moment” to capture this wave of excitement about networks, which emerged in the aftermath of communism and waves of neoliberal restructuring.

Is the collaborative moment still with us? The first phase of our research explored this question in eight cities – Athens, Baltimore, Barcelona, Dublin, Leicester, Melbourne, Montreal and Nantes.  We were particularly interested in whether it influences governing philosophies and practices after the 2008 crash, a conjuncture in which many cities face degrees of austerity budgeting with public service and welfare cuts, spiralling fees and charges, privatisation, foreclosures and severe unemployment and poverty. Over the next few weeks, we will post blogs from each of the research teams telling the story of their city, so far. The following paragraphs highlight some key messages.

First, it is clear that austerity bites very unevenly in time and place.  The perceived economic and political significance of the 2008 crisis varies widely. It has far greater impact in European cities than in Baltimore, Melbourne or Montreal. And, while 2008 was a crucial moment for Athens, Barcelona, Dublin and Leicester, it was not in Nantes.  Equally, some cities have been exposed to the full force of the economic crisis and turbo-charging of austerity urbanism, while a sense of business as usual persists in others, albeit with risks and threats on the horizon. Governing strategies differ too, depending for example on local political traditions and the powers and resources (or lack thereof) invested in public institutions at the urban scale. For example, where deficit budgeting has long been strictly prohibited in UK local authorities, it was commonplace in Spain until the austerity regime prohibited it in 2011 and it still is in France.

Concerning our core question about the resonance of the “collaborative moment”, the research shows that cooperation between government, business and civil society organisations remains very important, as has always been the case.  However, the politics of collaboration bear little resemblance to the idealised model of network governance.  It is not that the idealism of network governance has disappeared altogether – it is prominent among local elites in Nantes.  The problem is that even when the ideas retain some influence, they become subsumed in state-centred practices, enmeshed in realpolitik or overtaken by political activism against austerity. For example, we found instances where activists distance themselves from dialogue with the state, questioning its relevance and purpose – notably Barcelona, Dublin and Montreal. So far, our inquiries do not suggest that the “collaborative moment” is a critical theme in the urban politics of 2016.

In the second phase of our research between now and summer 2017, we will take a step back from the immediate questions of austerity and collaboration, developing a broader focus on the urban governance of rolling welfare state crises. We ask how different social actors organise around the multiple waves of dislocation and restructuring, experienced in different ways and at different times in all our cities, since the heyday of welfarism in the 1950s and 60s.  The research will endeavour to show how some strategies and alliances succeed and others fall by the wayside, and draw lessons about the future of urban and local politics.

Jonathan Davies is Principal Investigator on the Austerity and Collaborative Governance Project, as well as Director of CURA and Professor of Critical Policy Studies at De Montfort University