In her book The Shock Doctrine, Naomi Klein states that the incompatibility
between neo-liberalism and democracy is best exemplified by the political
manipulation and distraction that commonly accompanies Neo-liberal reform.
Klein (2009) outlines her belief that Neo-liberal restructuring is normally initiated
during a time of crisis. Such a crisis must be sufficient to distract the population
long enough for Neo-liberal reforms to be executed, this distraction being
necessary due to the un-democratic nature of Neo-liberal policies and the
resistance they naturally generate (Gill, 2013). Examples of this ‘cloak and
dagger’ implementation can be seen in the Neo-liberal reforms of the New
Orleans education system, which occurred in the wake of hurricane Katrina
(Salvaggio, 2013), or the bulk-selling of land, previously owned by fishing
communities for generations, following the 2004 tsunami in South East Asia
(Pfeifer & Pfeifer, 2013). Klein extends her point by arguing that the majority of
times Neo-liberal policies have actually been implemented, it has been under
dictatorships, not democracies, with state terror commonly accompanying their
enactment (Boas, 2009, Blakeley, 2011).
Neo-liberalism being prescribed by various international institutions, such as the
World Bank and International Monetary Fund, was not a result of coincidence.
The Influence Neo-liberalism came to have, would not have been possible if not
for the intellectual capital it held, with members of many leading think tanks
holding Neo-liberal views. Examples of these think tanks being, the Institute for
Economic Affairs, the Centre for Policy Studies, the Adam Smith Institute, the
Heritage Foundation (Cockett, 1995). These organizations provided a
“respectable veneer of intellectualism” under which the “neoliberal political
program can be disseminated” (Henry, 2010, p.548). It was thus in this
environment that from the 1980s onwards, crisis containment strategies, or aidrelief,
was paired with conditionality’s requiring Neo-liberal style political
reforms commonly in the form of SAPs.
Patnaik (2014, p.39) argues that nations that accept Neo-liberalism whilst being
democracies will reach a “Dead end for politics”. Furthering the point by saying
that instead of offering democratic alternatives for the people, “neoliberalism,
tends to close them, to make these alternatives indistinguishable from one
another” offering no real difference regarding the “material condition of the
electorate” (Patnaik, 2014, p.39). Henry (2016) points out that the rise of Neoliberalism
has coincided with a decline in the middle class. The reason this effects
the functioning of democracy is due to the middle class preventing the rise of
either extremes becoming dominant (Henry, 2016), via their moderation effects.
Although it wraps itself in the banners of “liberty” and “democracy”, in practice,
Neo-liberalism displaces the “key principles and assumptions long associated
with constitutional democracy” (Brown, 2006, p.701).