What is Neoliberalism?

The political-economic theory of neoliberalism provides a critical instrument in analyzing modern-day economic and political systems. One of the areas that the theory affects is the varied aspects of urbanization and urban development. Neoliberalism explains the changes in modern urban centers to create space for the growing population. The changes occur due to neoliberalism, which is associated with the free market economy that transfers the forces of change from the government to the market (private actors). The theory relates to laissez-faire economics, which suggests minimal involvement and interference of the government in the economic issues affecting people and societies. The idea behind the concept and its related changes is that economic growth and human progress will emerge from the free market economy and focus on minimal state interference. Although many explanations of neoliberalism exist, the most effective way of understanding the concept is to consider changes, such as gentrification (like the Cabrini Green case study in Chicago), which have created major changes in the American urban space.

Defining Neoliberalism

The term neoliberalism has been commonly used by English-speakers since the beginning of the 20th century with diverse meanings and understanding of its effect on global economic and political affairs. However, the word became more prevalent in the present meaning in the 1970s and 1980s (Duménil and Lévy 9). Neoliberalism, from the free trade perspective, became common in political science and social sciences, among its proponents and critics. Notably, it is frequently used in free-market policies and in attempts to understand their impact on the economy and societies and also relates to the emergence of the capitalist economic reality around the world. Regardless of the common usage of the concept and its association with free-market policies, critics still contest its meaning and implications, which has led to various adjustments in its meaning over time (Goldstein 30). For example, some scholars view it as an economic philosophy that emanated from European liberal scholarship, while others consider it as an essential model to help economies to overcome the detrimental effects of the Great Depression. Regardless of the debate, many scholars agree that neoliberalism is real and has major implications on the political and economic systems around the world.

The definition of the concept of neoliberalism is one of the most debated in the political and economic realms, as well as in theory and practice. However, the political-economic theory represents a paradigm shift from the post-war Keynesian consensus, which involved the belief in a blended economy with the nationalization of major industries and the establishment of the welfare state provided by the government (Dutton 5). On the contrary, neoliberalism suggested a political and economic environment in which the government would have minimal control over the economic performance of a country. Consequently, the concept is a resurgence of laissez-faire economic liberalism, which emerged in the 19th century as a political-economic theory. The model relates to free-market capitalism and economic liberalization policies, such as deregulation, privatization, free trade and globalization, and reduced government spending to increase economic growth (Goldstein 30). Indeed, neoliberalism focuses on the role that the private sector plays in economic growth and leaves market performance in the hands of individual actors and organizations instead of the government.

Political science scholars consider neoliberalism as advocating less government intervention in the economy to encourage growth through a free-market model. The concept supports policies, such as fiscal austerity, deregulation, privatization, free trade, and a lower rate of government spending to ensure that the market is self-regulating. From the perspective of the economic and political policies that follow the neoliberal model, scholars, critics, and policy-makers have agreed that neoliberalism is a reality and that its effects are evident in various dimensions around the world. For example, senior economists at the International Monetary Fund (IMF) published a paper, Neoliberalism: Oversold?, which criticized neoliberalism, but still affirmed that it exists. The paper censures the concept for supporting deregulation on global economies, pushing for the opening of national markets to capital and trade, and requiring the government to reduce their control through austerity or privatization (Ostry et al. 39). Notably, neoliberal policies have given rise to major changes in countries, including the US, such as the push for gentrification, which has caused anemic growth, boom-and-bust cycles and high levels of inequality.

What is Gentrification?

Gentrification is one of the economic and political outcomes of neoliberalism. A definition of the concept of gentrification will support the understanding of the interplay between the process and neoliberal policies. Gentrification is among the recent changes that have accompanied the liberalization of the market and minimal government control over the political and economic dimensions of countries around the world. However, the current analysis will focus on the effects of gentrification in the United States, using the Cabrini Green case study in Chicago, which involves a change in a public housing project. Redevelopment continues to change the urban spaces, especially neighborhoods once occupied by working-class residents. Scholars view the idea of renovations as a classed notion evident in the urban context and involve the displacement of working-class residents from their homes to pave way for improved housing facilities for white, middle-class families (Bridge and Butler 24). Chaskin and Joseph define the concept as the adaptation of working-class as well as socially-marginal parts of urban space to the needs of middle-class families (480). Consequently, gentrification has considerable implications on the ecumenical, social, and political realities of the modern urban spaces.

The definition of the concept of gentrification involves a trend in which strong market forces influences unfavorable policies against the less-powerful classes in society. When considering the concept, scholars view it in two ways. One, the middle class (which is more powerful economically) displace the working class (which is less powerful). Two, the concept suggests changes to improve neighborhoods to reflect the values of the middle class in society. As a result, structures in the urban space have transformed steadily to suit the demands of the middle class (Chaskin and Joseph 480). The return of the middle-class residents in major cities in the US has happened steadily and is evident in cities, such as Chicago through such projects as Cabrini Green. With the trends supported by neoliberal policies, it is evident that the changes will continue through 2025 with the increase in the urban population and increased demand for housing (Chaskin and Joseph 480). Therefore, neoliberalism is the most suitable political-economic theory to explain the rise of gentrification in the US.

The Relationship between Neoliberalism and Gentrification

Scholars in social sciences and political science affirm that neoliberalism is the main cause of gentrification. To understand the role of neoliberalism in gentrification, it is necessary to revisit the neoliberal position and the role of government. Notably, the current urban space is dominated by neoliberal agendas, including the elimination of the role of government in its development. In A Brief History of Neoliberalism, David Harvey argues that the most important consequence of neoliberalism is the retreat of government in economic processes (Harvey 3). The administration role in the neoliberal model is no longer providing for or protecting its citizens; instead, it should give way for market freedom and the chance for private players to determine its performance. The regime seeks to alleviate restrictions on capital flow and accumulation, such as the policy introduced by the Reagan regime, which became the main austerity, cutting social spending and protection to support market freedom. The administration no longer protects its people, which explains the reality of gentrification, which involves the removal of the working class from their homes in favor of middle-class families.

The main outcome of neoliberalism in cities around the United States is “urban entrepreneurialism”, which is characterized by gentrification. Harvey writes that changes in the urban spaces emerge, characterized by the exploration of novel ways of fostering and encouraging employment growth and localized development (16). The new model of development differs from the traditional approach of government spending on social services to benefit urban populations, especially the working class. Changes that have occurred in the urban space focus on economic growth at the expense of the poor and the working-class families, who occupy an important place in the cities around the country. Instead of playing the traditional role of protecting the residents of the working-class residents, the government support the restructuring of urban spaces to achieve local economic development. Furthermore, the administrations respond to new markets and the struggle for an advanced formula of urban competitiveness (Lees 4). Thus, the US government has supported gentrification initiatives that have continued to change the provision of housing in the country.

Recent literature reveals that neoliberal urbanism has emphasized the progressively significant role of the urban space as the site of accumulation of capital in the built environment. Neoliberalism has led to the rapid growth in the volume and turnover of capital and its continued movement to the major cities in the United States, such as Chicago. As a result, gentrification is an intrinsic consequence of capital accumulation on the urban centers, which has become the main aim of related policies (Kelly 174). The social profile of areas has changed to accommodate the new architecture of capital investment in inner-city parts of the urban space. Competition in the market, driven by neoliberalism leaves little room for the working class to survive in the new urban spaces due to the increasing costs of living. Therefore, they have been driven out of their residents to pave way for improvement and occupation of those with the ability to pay, that is, the middle-class residents.

One of the leading consequences of neoliberalism is changes in the economic landscape of a country, which cause transformation in the leading mode of production. Neoliberalism prompts countries to adopt new models of production, devoid of government control, which focus on market liberalization (Goldstein 30). For example, in the wake of neoliberalism, the economic landscape in the U.S. and around the world has changed from an industrial regime to a service-driven economy, which has led to an increase in the urban population. Such conversion began in North America in the 1970s and 1980s, and have continued to the rest of the world (Marcuse 171). Furthermore, the rise of capitalism demanded the capacity of individuals to work in the new economic landscape to survive the increased competition (Marcuse 171). Consequently, many people, mostly from the middle income level, have migrated into the cities and created a need to develop houses that meet their needs, leading to gentrification.

The neoliberal model of development has led to the absorption of agricultural towns, as well as the development of novel sectors in the economy based on the service economic model. The main factor behind the changes is the growth and propagation of capitalism which has incentivized the society to occupy the new economic spaces (Marcuse 171). The economic restructuring also caused changes in the urban space around real-estate, finance, and insurance to meet the needs of the new occupants of the cities. Since the quantity of the urban space remains constant and cannot increase to accommodate the new economic reality, actors in the capitalist society have to restructure the spaces to accommodate the transforming needs. Gentrification is one of the means through which the government has restructured the urban space to accommodate the change in the economic landscape (Kelly 174). Unfortunately, the change comes at the expense of the earlier occupants of the cities, such as the working class. Gentrifications has led to major changes in agricultural towns as the growth in population demand for more space for the middle class.

Several cities in the United States have experienced gentrification as a result of neoliberal urban policies. One such urban space that has changed in the wake of gentrification is the Cabrini Green: the 70 Acres in Chicago. The case study involves a plan for transformation at a cost of 1.5-billion-dollars. The project involved the demolition of public housing projects in Chicago to create space for middle-income families. The government created the Cabrini Green Homes between 1942 and 1961 to provide housing for the working class in Chicago (POV’s Documentary). However, in the wake of neoliberal policies, the housing projects are considered inconvenient since they no longer meet the needs of the changing economic conditions in the city, such as the rise of the middle-income families. While the public housing projects were publicly funded, the new housing facilities are controlled by market forces, including the ability of the residents to buy the homes.

The changes in Chicago and other cities in the country are mandated by the neoliberal policies-led competition in the market. The adjustments in policies are also motivated by the laws of urban entrepreneurialism, in which actors in the market compete to provide the most profitable projects in the cities. Harvey further noted a high level of competition among cities in the country to be the next hipster metropolis (17). The competition emerges from the perspective of appealing to a specific audience, especially the creative class. For instance, it would make Chicago more profitable than other cities in the country if it created attractive housing facilities in the place of the public housing projects, occupied by the low-income families (POV’s Documentary). Gentrification stands a better chance to attract more middle-income residents by creating suitable homes for their families. The socio-political processes have resulted from deconstructing hegemonic of neoliberal rationalities, which have colonized the minds of economic and political actors in the country. The neoliberal policies have led to changes in cities, such as Chicago as urban policies prioritize economic development over other societal needs.

Neoliberalism is evident in urban political ecology, which has led to gentrification. Since the emergence of the concept of the urbanization process, major innovations have occurred, which have power relations. Neoliberalism supports the powerful forces in the market due to the elimination of the role of government in the economic development process (Hogan 148). For example, one of the powerful players in the market is the real-estate business that controls changes in urban space. Notably, devoid of the administration’s role in the urbanization process, the powerful players have the leeway to make changes that improve their economic might. The alterations from neoliberal urban policies have influenced new perspectives from urban planners and real-estate firms regarding their role in providing housing and other structures for city dwellers. Generally. Gentrification has emerged as an interplay of political, economic, social, and ecological changes in the urbanization process in the wake of neoliberalism.

Neoliberalism has played a critical role in understanding the changes in urban space in the United States and around the world. The changes are informed by the need to attract global capital informed by the free trade policies. The ‘revitalization’ or ‘“renewal’ of cities relates to the need to make them attractive to the main contributors to economic development from local and international sources, such as workforce from other regions within the country or nations around the world. The urban geography restructuring, which is the ‘revanchist city’, also focuses on the removal of undesirable elements, including the housing facilities of the poor, such as slums, from the urban spaces and create room for desirable occupants, such as the middle-class families. The idea focuses on the effort to “tame the wild city” and restore control by removing poor neighborhoods, as well as to improve the level of aesthetics, cleanliness, and modern progress (Swanson 709). The cities devoid of “backwardness,” “rural spaces,” and “dirty towns” would make cities attractive to individuals who would support progress and economic development. Urban policy-makers focus on “purifying” and “sanitizing” urban spaces through the principles and ideas of gentrification, where there are notable changes that influence how populations and governments understand gentrification.

Conclusion

Neoliberalism is one of the most debated political-economic model in theory and practice in political science and social sciences. Regardless of the controversy surrounding the meaning of the concept, it is without a doubt that neoliberalism exists in reality and affects decisions made locally and internationally. Several explanations of the concept exist, but the most effective way of understanding it is the consideration of changes as gentrification, which are associated with the theory. Neoliberalism focuses on the removal of government control in the economy, where the market and other forces of economic growth and development are independent. Gentrification is one of the outcomes of neoliberal policies as it involves private actors controlling urban plans, such as the displacement of the working class in US cities, and replacing them with the middle-income creative class. One of the examples is the Chicago project that changed public housing programs into condominiums for mixed-income families who could afford them. Such changes are expected to continue in the US until 2025 and will affect the urban space completely. Unfortunately, the neoliberal policies will create greater inequality and leave many people poor and homeless.

Works Cited

Bridge, Gary, and Tim Butler, eds. Mixed Communities: Gentrification by Stealth?. Policy Press, 2011.

Chaskin, Robert J., and Mark L. Joseph. “‘Positive’Gentrification, Social Control and the ‘Right to the City’in Mixed‐Income Communities: Uses and Expectations of Space and Place.” International Journal of Urban and Regional Research, vol. 37 no.2, 2013, pp. 480-502.

Duménil, Gérard, and Dominique Lévy. “The Neoliberal (Counter-) Revolution.” Neoliberalism: A Critical Reader, pp. 9-19, Pluto Press. 2005.

Dutton, David. British Politics Since 1945: The Rise, Fall and Rebirth of Consensus, 2nd ed. Blackwell, 1997.

Goldstein, Natalie, Globalization and Free Trade. Infobase Publishing. 2011.

Harvey, David. A Brief History of Neoliberalism. Oxford University Press, 2007.

Hogan, Tiffany L. “Cities, Change and Conflict: A Political Economy of Urban Life.” Teaching Sociology, 26, no. 2, 1998, p. 148

Kelly, Sinéad. Taking Liberties: Gentrification as Neoliberal Urban Policy in Dublin. In Neoliberal Urban Policy and the Transformation of the City. Palgrave Macmillan, 2014

Lees, Loretta. “The Geography of Gentrification: Thinking Through Comparative Urbanism.” Progress in Human Geography, 36, no. 2, 2012, pp. 155-171

Marcuse, Peter. “Abandonment, Gentrification, and Displacement: The Linkages in New York City.” In Gentrification of the City, pp. 169-193. Routledge, 2013

Ostry, Jonathan D., Prakash Loungani, and Davide Furceri. “Neoliberalism: Oversold.” Finance & Development, vol. 53, no.2, 2016, pp. 38-41.

POV’s Documentary. “America Reframed Unfiltered: The 20-Year Journey Behind ’70 Acres in Chicago: Cabrini Green’” Available at http://archive.pov.org/blog/america-reframed-unfiltered/2017/02/america-reframed-unfiltered-20-year-journey-70-acres-in-chicago-cabrini-green/. Accessed 23 May 23, 2020

Swanson, Kate. “Revanchist Urbanism Heads South: The Regulation of Indigenous Beggars and Street Vendors in Ecuador.” Antipode, vol. 39, no. 4, 2007, pp. 708-728.