Tourism and neoliberalism

Abstract

While tourism has been a core feature of the global economy for more than a century, over the past several decades, it has been a central component of a worldwide process of neoliberalization in particular. Neoliberalization describes a political-economic programme of ‘free trade’ embodying interrelated principles of deregulation, decentralization, marketization, privatization and commodification. Grounded in a critique of the post-war welfare state, it was first introduced into public administration in the US and Western Europe in the 1980s, then spread worldwide in the next decade via structural adjustment programmes (SAPs) incorporated into international development planning. As one of the world’s largest industries, tourism development has been a key component of this process. In this way, tourism policy in many places has been progressively neoliberalized, while in turn tourism development has thus served as a key component of neoliberalization more generally, helping to progressively bind the world within a single integrated economy. Hence, tourism can be understood not only as a key site of neoliberalization, but a central means by which neoliberalization spreads as well. In the process, tourism development has played a key role in helping to stabilize a neoliberal capitalist economy riddled with fundamental contradictions that subject it to periodic crises. This article explores how this dynamic developed, where it stands at present, and how it is likely to evolve in the future as the contradictions underlying neoliberal capitalism continue to unfold.

Keywords:

• Neoliberalism
• capitalism
• ecotourism
• nature
• climate change
• political economy

Introduction

While tourism has been a core feature of the global economy for more than a century, over the past several decades, it has been a central component of a worldwide process of neoliberalization. Neoliberalization describes a political-economic programme of ‘free trade’ embodying interrelated principles of deregulation, decentralization, marketization, privatization, and commodification. Grounded in a critique of the post-war welfare state, it was first introduced into public administration in the US and Western Europe in the 1980s, then spread worldwide in the next decade via structural adjustment programmes (SAPs) incorporated into international development planning. As one of the world’s largest industries, tourism development has been a key component of this process. In this way, tourism policy in many places has been progressively neoliberalized, while in turn, tourism development has thus served as a key component of neoliberalization more generally, helping to progressively bind the world within a single integrated economy. Hence, tourism can be understood not only as a key site of neoliberalization but a central means by which neoliberalization spreads as well. In the process, tourism development has played a key role in helping to stabilize a neoliberal capitalist economy riddled with fundamental contradictions that subject it to periodic crises. This article explores how this dynamic developed, where it stands at present, and how it is likely to evolve in the future as the contradictions underlying neoliberal capitalism continue to unfold.

Understanding neoliberalism

As scholarly analysis of neoliberalism has exploded over the past two decades it has become increasingly complex. Prior to the 1990s the term ‘neoliberalism’ was virtually unknown outside of small communities of activists and scholars. From a mere handful of academic references in the 1980s, use of the term increased dramatically thereafter, such that between 2002 and 2005 it appeared in more than 100 social science articles yearly (Boas & Gans-Morse 2009), quickly becoming ‘one of the great academic growth concepts of recent years’ (Flew, 2012, p. 44).

As this literature on neoliberalism has proliferated, however, use of the term has become increasingly diffuse, leading Boas and Gans-Moore to complain that ‘that its appearance in any given article offers little clue as to what it actually means’ (Boas & Gans-Morse 2009, p. 139) and Ferguson (2010, p. 170) to lament the ‘huge variation in the way the word ‘neoliberalism’ is used in contemporary scholarship. At worst, this increasing delusion means that the term risks becoming ‘nothing more than a vehicle for academics who like to criticise things that they do not like’ (Igoe & Brockington, 2007, p. 445), while at its broadest it may be used merely ‘as a sloppy synonym for capitalism itself, or as a kind of shorthand for the world economy and its inequalities’ (Ferguson, 2010, p. 171).

Responding to this issue in synthesizing the growing literature of the topic, Castree (2010) distinguished what he terms the ‘3 p’s’ of neoliberalism as a constellation of an overarching philosophy or worldview; a general policy programme; and a set of specific policies. As a general worldview, then, neoliberalism can be understood as ‘a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade’ (Harvey, 2005, p. 2). As a general socioeconomic programme, neoliberalism is seen to pursue a set of interrelated principles: 1) privatization; 2) marketization; 3) deregulation and reregulation (both away from and through state actors); 4) commodification; 5) use of ‘market proxies’ in state processes; and 6) encouragement of civil society ‘flanking mechanisms’ (Harvey, 2005; Castree, 2010). Specific policies to operationalize these principles include the various ‘market-based instruments’ (MBIs) categorized by Pirard (2012) and others.

Neoliberalization in tourism development

Understood as per the preceding, neoliberalization within the tourism industry can be observed in a number of ways. Most generally, it can be seen in the trend in so-called ‘new’ or ‘alternative’ tourism that has arisen as an antidote to conventional mass tourism since the 1970s. The rise of mass tourism centered on collective prepackaged holidays in the post-World War II era coincided with the consolidation of an ‘organized,’ Fordist regime of capital accumulation emphasizing increasingly larger vertically-integrated firms. By contrast, the rise of new/alternative tourism offering a diversity of flexible, individually-tailored trips occurred in the context of capitalism’s shift towards a novel neoliberal ‘disorganized,’ or ‘post-Fordist’ form centered on ‘flexible accumulation’ (Harvey, 1989) through diverse structures. This has led to the development of a myriad ‘niche’ or ‘boutique’ markets designed to offer an outlet for every tourist’s particular taste, including such diverse (and disturbing) products as war, sex, and slum tourism (Mowforth & Munt, 2008; Gibson 2009).

This rise of new/alternative tourism was facilitated by aspects of the neoliberal restructuring that took place in relation to structural adjustment policies (SAPs) implemented in societies worldwide during the 1980s and 1990s. Championed by the IMF and World Bank, neoliberalization increasingly opened societies throughout the world to competition from foreign firms in search of new markets in which to invest excess capital accumulated during the 1970s crisis (Arrighi, 1994). As a result, nascent domestic tourism industries worldwide were quickly controlled by foreign operators (Mowforth & Munt, 2008; Honey, 2008). Increasing global competition, meanwhile, spurred the proliferation of alternative forms of tourism into new niche spaces and markets.

Neoliberalizing nature

Neoliberalism seems to have a particular affinity for ecotourism - nature-based tourism that seeks to provide environmental and social benefits to rural communities. The rise of neoliberalism can be understood largely as an effort to introduce a new approach to natural resource management as the basis for renewed capital accumulation following the 1973 economic recession that undermined the Keynesianism that had dominated political-economic planning prior. Neoliberalism thus initiated what Martin O’Connor (1994) calls capitalism’s contemporary ‘ecological phase,’ which aims to internalize resources as integral components of production generally rather than externalizing these in pursuit of higher profit as had been the dominant strategy during the previous era (see Brockington et al., 2008). In this way, neoliberalism enacted what Boyd et al. (2001), Smith (2007), and others label a shift from ‘formal’ to ‘real’ subsumption of nature within capitalist production.

Several social scientists note that in its approach to development and conservation, ecotourism often embodies elements of neoliberal capitalism (cf. Harvey, 2005). In particular, ecotourism development is seen to express such characteristic neoliberal mechanisms as privatization, marketization, commodification and deregulation in its emphasis on employing nature-based sightseeing as a force for locally-directed economic development based on individual entrepreneurship through affixing monetary value to in situ natural resources and thus creating both a market and incentive for their sustainable management (see e.g., Vivanco, 2001, 2006; Duffy, 2002, 2008, 2015; Mowforth & Munt, 2008; West & Carrier, 2004; Bianchi, 2004; Carrier & MacLeod, 2005; Fletcher, 2009, 2014; Duffy & Moore, 2010; Neves, 2010). West and Carrier (2004, p. 484) describe ecotourism as ‘the institutional expression of particular sets of late capitalist values in a particular political-economic climate,’ while Cater (2006) similarly labels ecotourism a ‘Western construct’ expanding the hegemony of global capitalism. Duffy (2013, p. 605) goes further to contend that ecotourism ‘is not just reflective of global neoliberalism, but constitutes one of its key drivers, extending neoliberal principles to an expanding range of biophysical phenomena.’

This analysis is part of a growing body of research describing an increasing trend toward neoliberalization within natural resource management in general around the world. While initially, this research centered on conventional forms of resource extraction and processing (see e.g., McCarthy & Prudham, 2004; Heynen et al., 2007; Castree, 2008, 2010; Bakker, 2009, 2010), more recently it has turned its focus to environmental conservation (see e.g., Sullivan, 2006, 2013; Igoe & Brockington, 2007; Brockington et al., 2008; Fletcher, 2010; Neves, 2010; Büscher et al., 2012). While extractive industry creates value by transforming natural resources into commodities that can be transported to their point of consumption, conservation, by contrast, seeks to commodify resources in situ, necessitating mechanisms to generate value sans extraction (Büscher et al., 2012). By transporting consumers to the point of production where they pay to interact with preserved resources, ecotourism thus serves as an—currently perhaps the most—important financing mechanism for neoliberal conservation.

Key to this neoliberalization of environmental management is a conviction that governance in general functions most efficiently when it entails not direct regulation but rather a softer practice of creating incentive structures to influence how people choose among alternative courses of action (Fletcher, 2010). From this perspective, individuals are commonly understood as ‘rational actors’ who calculate the costs and benefits of these different possible actions and choose that which maximizes their material utility. Effective governance, in this sense, entails providing incentives sufficient that individuals will choose the desired behavior, thus obviating the need for direct regulation. Within the promotion of ecotourism, Honey (2008, p. 14) terms this the ‘stakeholder theory,’ asserting ‘that people will protect what they receive value from.’

The fix is in

Yet tourism development can be understood not only as an expression of neoliberal capitalism but also as one of the main ways in which the capitalist system more generally seeks to sustain itself within the neoliberal era. Marx (1973) identified as capitalism’s central contradiction the tension between capitalists’ desire to extract profit from the system and the necessity for sufficient money to be transferred to the workforce so that production could be consumed (see also Harvey, 1989). Capitalism profits by appropriating labor’s surplus value, of course, necessitating that workers be paid less than the full sale value of their product. However, if workers are paid less than this full value, then, on aggregate, they will be unable to purchase what they have produced, leading to overproduction, overaccumulation, and economic stagnation.

Marx saw this tension as an inevitable feature of capitalism that would eventually contribute to the system’s self-destruction. Subsequent researchers, however, have identified a number of mechanisms by which capitalism is able to alleviate overproduction crises through economic growth. Thus, they contend that capitalism requires continual expansion to survive. Harvey (1989), for instance, observes that excess capital may be reabsorbed into the system by means of a variety of different spatial and/or temporal displacements or ‘fixes,’ thereby (temporarily) forestalling an overproduction crisis. Tourism can be seen to provide several such fixes.

Harvey’s ‘spatial fix’ entails exporting excess capital to a new geographic location where it can be reinvested in novel development. International tourism development can be viewed as an ideal means by which this is accomplished, and ecotourism, in its quest specifically for relatively undeveloped areas, can be viewed as the epitome of this strategy.

A ‘temporal fix,’ by contrast, involves displacing excess capital into future return, either by investing in ventures that will realize profit down the road or by reducing turnover time, that is, ‘the speed with which money outlays return profit to the investor,’ such that ‘speed-up this year absorbs excess capacity from last year’ (Harvey, 1989, p. 182). One means that Harvey identifies by which the latter is accomplished is the selling of not a durable product but rather a transient event that is instantaneously consumed, thus reducing turnover time to a minimum. As an industry in the business of selling transient events, tourism provides such temporal fixes.

Combining the forms of displacement identified above into a composite ‘time-space fix,’ according to Harvey, is accomplished principally through the provision of loans, which simultaneously displace capital into new spaces and into the future as well, to be recovered upon repayment. Lending for tourism development, therefore, of the type widely provided by the World Bank and United Nations Development Programme, among many other organizations (Honey, 2008), accomplishes this time-space fix as well. After suspending its tourism loans in the 1980s, for instance, the World Bank began lending anew in the 1990s as part of its own neoliberal reconstruction and by 2009 was providing more than $550 million annually (Hayakawa & Rivero, 2009).

In this context, tourism development provides a means for capitalism to find outlets for excess capital that might otherwise provoke an overproduction crisis, and thus supports the system to sustain itself over time. In addition to providing an outlet for capital from other sectors, tourism expansion may help to overcome overaccumulation within the tourism industry itself as well through facilitating the displacement of capital from locations that have become overdeveloped to those newly on the rise, as Butler’s (1980) classic ‘tourism area life cycle’ demonstrates.

In addition to helping to resolve the central capitalist contradiction, ostensibly ‘sustainable’ forms of tourism such as ecotourism may help to resolve what James O’Connor (e.g., J. O’Connor, 1988, 1994) calls capitalism’s ‘second contradiction’ as well. In O’Connor’s analysis, efforts to resolve the overproduction crisis through growth tend to provoke a second crisis, what Marx (1973) called a ‘metabolic rift’ (see Foster, 2000), because capitalism’s need to continually expand in order to survive is ultimately predicated on the extraction of finite natural resources. As increased production increasingly taxes limited resources, rents for such resources rise, thus augmenting production costs, decreasing demand, and eventually provoking economic stagnation once more. By generating capital based on in situ consumption of natural resources, in the form for instance of visits to protected areas, ecotourism may thus be viewed as an exemplary means by which capitalism seeks to resolve O’Connor’s second contradiction and provide for ecologically sustainable economic growth. In this sense, ‘sustainable’ tourism may be seen as providing an ‘environmental fix’ (Castree, 2008) like the various spatial-temporal fixes that it similarly provides capitalism.

Yet this is still not the entire story. In addition to helping to forestall an ecological crisis, ecotourism may capitalize upon this very same crisis as well (Igoe et al., 2010; Neves, 2010). Klein (2007) contends that neoliberal capitalism displays the remarkable ability to turn crises to which it has contributed into opportunities for economic growth, and Brockington et al. (2008) build upon this analysis to suggest that international conservation can gain value from the disappearance of the biodiversity it seeks to preserve, as that which remains grows increasingly desirable. Neves (2010) identifies this dynamic in cetourism (whale watching), whereby the activity’s value has increased in concert with its objects’ depletion. Munt (1994) notes that, through new tourism activities such as ecotourism, capitalism can transform crises to which it has contributed into marketable commodities, selling poverty and class struggle, for instance, as touristic experience. In addition, ecotourism may be seen to capitalize on the loss of ‘undeveloped’ areas due to the expansion of extractive capitalist production, in the same manner as conservation generally. Many ecotourism sites, in fact, explicitly market themselves as desirable destinations based on the probability that they will cease to exist down the road (Mowforth & Munt, 2008; Fletcher, 2019).

Conclusion: The future of tourism

Via strategies such as those previously outlined, tourism development thus exemplifies capitalism’s astonishing capacity for self-renewal through creative destruction (Harvey, 1989). Such dynamics may thus allow the ostensive ‘limits to growth’ (Meadows et al., 1972) posed by the environmental degradation wrought by industrial capitalism to be transformed into opportunities for further growth itself. Consequently, expanding tourism may provide a key ‘fix’ for obstacles to accumulation via spatial-temporal displacement of accumulated capital into new avenues for investment and future return. As one of the largest capitalist industries in the world, tourism’s potential may not be insubstantial (Fletcher, 2011). The tourism industry may continue to play a key role in sustaining not only itself but the capitalist system as a whole.

Of course, there remain clear (environmental and economic) limits to this potential in the long run, which must eventually be reached. When this occurs, somehow a new model for tourism management, as well as economic development more generally, must be developed that does not depend on continual growth (Hall, 2009, 2010; Higgins-Desbiolles, 2010, 2018; Büscher & Fletcher, 2017). Given that capitalism, as an economic system, is dependent on such growth (Fletcher, 2011), particularly in its current neoliberal form wherein growth constitutes the ‘one true and fundamental social policy’ (Foucault, 2008, p. 144), this movement must of necessity be away from capitalism as a mode of production and form of exchange. To realize its ‘post-capitalist’ potential, tourism must, first and foremost, ‘move radically from a private and privatizing activity to one founded in and contributing to the common’ (Büscher & Fletcher, 2017, p. 664). In this way, the practice may be harnessed as a force of progressive political, social, and environmental justice, as Higgins-Desbiolles (2006, 2008, 2018; 2020) and others (e.g., Scheyvens & Biddulph, 2018) maintain. The success of tourism as such an instrument of post-capitalist politics must therefore be gauged by the extent to which it pursues: (1) forms of production not based on private appropriation of surplus value; and (2) forms of exchange not aimed at capital accumulation; that (3) fully internalize the environmental and social costs of production in a manner that does not promote commodification and (4) are grounded in common property regimes (Agrawal, 2003). Investigating the potential to operationalize these principles in both policy and practice, building on the analytical framework advanced by Fletcher et al. (2023), thus constitutes an important new direction for tourism studies going forward.

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No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Robert Fletcher

Robert Fletcher is Associate Professor in the Sociology of Development and Change group at Wageningen university in the Netherlands. He is the author of Failing Forward: The Rise and Fall of Neoliberal Conservation (U of California Press, 2023) and Romancing the Wild: Cultural Dimensions of Ecotourism (Duke University, 2014), co-author of The Conservation Revolution: Radical Ideas for Saving Nature beyond the Anthropocene (Verso, 2020) and co-editor of The Ecolaboratory: Environmental Governance and Economic Development in Costa Rica (university of Arizona, 2020) and NatureT M Inc.: Environmental Conservation in the Neoliberal Age (university of Arizona, 2014).