‘Shock Therapy’ as a Neo-Liberal Response to an Economic Crisis

Abstract

This paper investigates the resurgence of neo-liberalism during and after the Great Recession by exploring shock therapy reforms in the American state of Michigan. Using the framework of variegated neo-liberalization we demonstrate that even failed neo-liberal policies can be reused in divergent geographical and historical contexts. Further, we suggest that the jurisdictional and territorial autonomy of the state of Michigan allows its government to initiate market disciplinary restructuring in some cases at the expense of potential solutions to the crisis. In this process, the federal state's government actively overrides local and city governments and their voters. The resulting new policy configurations continue and deepen structural changes that favour neo-liberal ideologies. Our most telling example is a unique new neo-liberal formation, emergency management, a legitimate institution that allows an appointed individual to suspend democratic procedures and dismiss democratically elected local officials under the premises of a crisis of governance. Since neo-liberalization works in non-linear, but cumulative ways, one could expect that the emergency management model can be replicated outside the state of Michigan or the USA. We conclude that the broad neo-liberal project has no problem suspending, circumventing, or removing democratic procedures in its continued metapowering effort to create lasting structural change.

Extracto

En este artículo investigamos el resurgimiento del neoliberalismo durante y después de la Gran Recesión analizando las reformas de la terapia de choque en el estado de Michigan de los Estados Unidos.Mediante el contexto de la neoliberalización variada demostramos que incluso las políticas neoliberales que han fracasado pueden volverse a utilizar en contextos geográficos e históricos divergentes.Además, sugerimos que la autonomía jurisdiccional y territorial del estado de Michigan permite que su Gobierno comience una reestructuración disciplinaria del mercado en algunos casos a costa de posibles soluciones a la crisis.En este proceso, el Gobierno del Estado federal ignora activamente a los Gobiernos locales y urbanos y a sus votantes.Las configuraciones resultantes de la nueva política mantienen y profundizan los cambios estructurales que favorecen las ideologías neoliberales. Nuestro ejemplo más representativo es una nueva formación neoliberal única, la gestión de emergencias, una institución legítima que permite a una persona designada suspender los procedimientos democráticos y destituir a funcionarios locales democráticamente elegidos bajo las premisas de una crisis de Gobierno.Dado que la neoliberalización funciona de maneras no lineales pero acumulativas, cabe esperar que el modelo de gestión de emergencias se reproduzca fuera del estado de Michigan o en los Estados Unidos.Concluimos que el amplio proyecto neoliberal no tiene problemas para suspender, eludir o eliminar procedimientos democráticos en su continuo esfuerzo meta poderoso de crear un cambio estructural duradero.

摘要

本文透过探讨美国密西根州的 “休克疗法” 之改革，检视大萧条期间与之后再度兴起的新自由主义。我们运用多样的新自由主义化之框架，证明即便是失败的新自由主义政策，仍可在不同的地理与历史脉络中被再度利用。再者，我们主张，密西根州的管辖权与领域自主性，使得该州政府得以在部分案例中，发起市场规范的再结构，并捨弃应付危机的可能解决办法。在此一过程中，联邦政府积极地否决地方政府、市政府及其投票者，而其所导致的新政策结构，持续、并深化了有利于新自由主义意识形态的结构变迁。我们最具说服力的案例，是一个特别的新自由主义形构— —紧急状况管理，此一合法的制度，使得被委任的个人，能够在“治理危机”的前提下，悬置民主程序，并屏除民主选举而生的地方官员。由于新自由主义化并非以线性方式、而是以积累的方式进行，我们因而可以预期紧急状况管理模式，能够在密西根州或美国之外的地方进行复製。我们在结论中主张，广泛的新自由主义计画，在其创造持久结构变迁的持续性上层权力行动中，完全能够毫无问题地悬置、规避或移除民主程序。

Résumé

Ce présent article examine le renouveau du néo-libéralisme pendant et après la Grande Récession en étudiant les réformes en matière de thérapie de choc dans l’état de Michigan, aux États-Unis. Employant ce cadre de néolibéralisation diversifiée, on démontre que même les politiques néoliberales échouées sont à mettre en oeuvre dans des milieux divergents à la fois géographique et historique. Qui plus est, on laisse supposer que l'autonomie juridictionnelle et territoriale de l’état de Michigan permetà son administration d'amorcer une restructuration fondée sur la discipline du marché, dans certains cas au dépens des solutions éventuelles à la crise. Dans ce processus, l'administration de l’état fédéral passe activement outre aux administrations locale et municipale et à leurs électeurs. Les nouvelles configurations de politique qui en résultent développent etrenforcent les changements structurels qui favorisent les idéologies néolibérales. L'exemple le plus éloquent est une nouvelle formation néolibérale unique, la gestion de crise, une institution légitime qui permetà un individu désigné de suspendre les processus démocratiques et de relever de leurs fonctions les élus locaux en vertu de la crise de gouvernance. Étant donné que la néolibéralisation est non seulement non-linéaire, mais aussi cumulative, on pourrait s'attendre à ce que le modèle de la gestion de crise puisse être reproduit en dehors de l’état de Michigan ou des Etats-Unis. On conclut que, dansle but poursuivi quant à la meta-puissance de créerunchangementstructurel durable, le projetnéolibéralélargin'aaucunproblèmenià suspendre, nià contourner,ni à supprimerles mesuresdémocratiques.

Keywords:

• neo-liberalism
• politcal economy
• democracy
• shock therapy
• metapower

Acknowledgements

The authors are indebted to Victoria L. Johnson, Amy M. Lane and the anonymous reviewers for their thoughtful comments and astute recommendations on improving this paper. An earlier draft of this paper was presented at the 2013 Annual Meeting of the American Sociological Association in New York. The authors would also like to thank the ASA roundtable participants Curtis Child, Rachel Harvey, Adriana Kemp, and Nitza Berkovitch for their suggestions.

ORCID

Maksim Kokushkin http://orcid.org/0000-0002-2802-4114

Notes

1. Blyth (2013b, p. 2) defines austerity as ‘a form of voluntary deflation in which the economy adjusts through the reduction of wages, prices and public spending to restore competitiveness, which is (supposedly) best achieved by cutting the state's budget, debts and deficits'.

2. In an edited volume dedicated to alterity, Jonas (2010, p. 4) defines the concept as ‘being alternative by believing in the possibility of an economic and political “other”’.

3. Burns and Hall (2012, p. 15) define meta-power as ‘the power to establish, reform, and transform social systems'. The concept of meta-power goes beyond individual agents and their intentions and has profound structural implications (Hall and McGinty, 1997, 2012).

4. Hall (1993) defines the concept of policy paradigm as a general framework outlined by policy-makers that specifies the problems that need to be addressed, the goals that need to be achieved, and the instruments that should be used to achieve those goals. Even though it is open to some interpretation, most of this framework is taken for granted by the officials who work within it. Hall likens policy paradigms to Kuhn’s (1996) scientific paradigms in that policy paradigms also go through a cycle of normalization, change, and shift.

5. As defined by Benson and Martindill (1998).

6. Our process was as follows: The relevance of our topic was established by the frames set in place after the Great Recession and the radical neo-liberal policies undertaken by some US states after the 2010 election. After reviewing the shock therapy literature and a few articles about the reforms in Michigan, we set up the research framework and timeline. We acquired the software (Microsoft OneNote) to collect, organize, and process the data and developed a draft protocol. We created an analytical sample and carried out the collection of primary documents. We revised the protocol after coding a portion of the data. We completed the coding, organized the codes, and then organized the documents based on codes and themes. In the end, we developed studies of each individual policy that all come together in a coherent policy paradigm.

7. Altheide and Schneider define document analysis as an ‘integrated and conceptually informed method, procedure, and technique for locating, identifying, retrieving, and analyzing documents for their relevance, significance, and meaning'(Altheide and Schneider, 2013, p. 5).

8. We followed documents related to the reforms from local and national sources for two months during the first year of the Governor Snyder's administration. We used the news portal MLive.com, which offers its own and syndicated coverage of news from across state, and also drew on other media for additional information about specific issues. For instance, key reforms and policy documents were tracked into the Governor's second year.

9. While a part of the overall discourse, the last two frames add dimensions that should be investigated on their own. We have left them out of this analysis for purposes of analytical clarity and brevity.

10. We have also used, without formal coding, articles from 2012 and 2013 that allow us to update the section on the emergency manager. These articles are not included in the total number, because they are not a part of the main data set.