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Planning and Neoliberalism: The Challenge for Radical Planners

July 22, 2007 by Administrator in Summer 2007

By Kanishka Goonewardena

The “real” planner must be a radical planner, planning for social justice and social change. In order to do this type of planning today, the hegemony of neoliberalism must be contested and defeated.

What is neoliberalism? Neoliberalism is the dominant political-economic thought of our time–the philosophy of corporate globalization, which in turn is a code-word for the universalization of laissez-faire capitalism. Its inviolate moral principle is remarkably lucid, but rarely acknowledged and hardly ever questioned: maximum profit at any cost. What this categorical imperative amounts to is clear: a political-economic environment within which a handful of private interests are permitted to control social life in order to maximize their personal profit.

Planners confront neoliberalism not only in such practice but also in theory. Many courses we encounter in planning schools today revolve around the assumptions and abstractions of neoclassical economics; so, we have all been blessed with a religious faith in the infallible virtues of the unregulated market, and doubtful of anything that gets in its way. But unregulated capitalism is a myth. Capitalist markets have never been free–especially when sanctioned by laissez-faire rhetoric. Without “big government,” capitalism would not exist. That is why Max Weber coined the term “political capitalism” in his classic work General Economic History. That is also why economic historian Karl Polanyi demonstrated that “laissez-faire was planned; planning was not.”

The rhetoric of neoliberalism is one thing; its reality is something else. The nineteenth century theory of neoliberalism (neoclassical economics) romanticized free markets; its twenty-first century practice (globalization) reveals a world-economy rigged in favor of the ruling classes and multinational corporations, at the terrible expense of the masses, the postmodern wretched of the earth. Since neoliberalism became hegemonic in the 1980s, the world has indeed become more hellish for many, and even more heavenly for a few. The relevant statistics, as Mike Davis notes, would have stunned even the authors of The Communist Manifesto. “In the late 1990s… America’s 400 richest families increased their net worth by almost a billion dollars apiece, while the pie slice of the bottom 40 percent of the population plummeted 80 percent…. Globally, the Wealth Decade of the 1990s translated into negative income trends for eighty African and Latin American countries, while 200 masters of the universe, led by Bill Gates… amassed personal fortunes equivalent to the total income of the world’s 2.5 billion poorest people.”

The current symptoms and underlying trends of neoliberalism are hardly unprecedented. In fact, they remind us of the reign of imperialist oligopolies in the world-economy around the turn of the previous century, during the long wave of capitalist expansion from 1893 to 1914 that culminated in structural crisis and ultimately World War I. That crisis is instructive today because it proves that capitalism without planning is unsustainable. Unless the free-wheeling adventures of global capital are brought under political control and subjected to the demands of social justice, there is every reason to expect that neoliberalism as we know it is destined toward a systemic crisis of global proportions. The uncertainty is this: will the current stage in the development of capitalism come to an end in a social catastrophe or an ecological disaster? For my part, I hope–being an optimistic person on these matters–that the crisis will be mostly social, so that some of us will still be around to come out on the other side of it.

Now, if a global crisis is very much on the world-historical agenda, what can planners do in the meantime, here and now? Contributors to this magazine have already broached many aspects of this question in terms of social justice, with due respect to issues such as class, gender, sexuality and race. For my part, I can offer here a thought on the nature of our political agency in the face of neoliberalism. We must engage neoliberal dogma not because it is true, but because it is the most influential political-economic ideology in the world today; because it severely constrains not only what planners do, but also what they think they can do. In order to liberate planning practice from the boundaries erected by the political-economic realities of neoliberalism, therefore, it will be necessary to also emancipate planning thought from the shackles of neoliberal ideology. Planners cannot hope to be radical unless all manifestations of this ideology are sharply contested and defeated.

For a start, let me consider neoliberalism’s reification of the economy. Reification here refers to the transformation of human attributes, relations and actions into an objective entity that is independent of human agency. In so doing, it elevates the objective over the subjective, the products of labor and relations between them (commodities and markets) over the people who produce them (workers) and their human essence (the labor process). The conception of the economy in neoclassical economics in fact provides the best example of such reification. How? We know that it is the people who make the economy. As a social construction, the economy does not exist independently of the subjective agents who produce and reproduce it. Yet, if we look at our mainstream economics textbooks, then the economy suddenly appears as a fully autonomous entity, governed by nothing else but its own objective laws. The frequent invocation of these laws with the glib reference to Adam Smith’s Hidden Hand certainly conjures up the image of an omnipotent force, well beyond human control. This conception of the economy admits no trace of human agency, and it thus becomes impervious to politics. Accordingly, the human subjects who constructed the economy to begin with are now purged of any political agency and also deemed to behave “rationally” (“rational fools,” as Amartya Sen once put it), simply by obeying the objective laws of the supposedly self-regulating market. In this scenario, the economy returns as an alien force to haunt the very people who created it. Here–in the reification of the economy–we have a special case of what Marx called alienation.

When I was a graduate student, a neoliberal planning professor told me that a planner (developing real estate) must obey the laws of the market just as a civil engineer (building a bridge) obeys the laws of gravity. That analogy was deeply flawed. My professor was right about the engineer, but wrong about the planner. The laws of gravity are of course not produced socially and politically, and the engineer cannot alter them–in that sense gravity is absolutely objective. By contrast, as Polanyi explains in his book The Great Transformation, the self-regulating market was produced politically and socially–in fact, by planners of various descriptions. As such, it is neither natural nor objective. If we made the economy in the first place, then why can’t we change the way it works and remake it? We can and must, because neoliberalism legitimates a historical condition in which the economy subjugates human life to its own autonomous laws, often with inhuman consequences. “Real planners” must strive, in radical democratic fashion, for exactly the reverse: to guide the economy according to human purposes.

Kanishka Goonewardena is an assistant professor in Planning and Geography at the University of Toronto.

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