Neoliberalism's sordid record has often engendered nostalgia for the mid twentieth century, which was characterized by Keynesianism and welfare state expansion in the United States and by developmentalist policy (and more modest welfare measures) in Latin America. Most analysts see the neoliberal assault that began in the 1970s as a moment of radical rupture. Amy Offner instead shows that the signature policies of the neoliberal era—deregulation, privatization, and the shifting of costs onto workers and other vulnerable groups—emerged long before the recognized advent of neoliberalism. Governments hamstrung by fiscal constraints opted not to confront the wealthy but to devolve public powers to autonomous entities controlled by capitalists. Later neoliberal crusaders built upon existing policies, “sorting out” the pieces they liked from those that were unprofitable.
Previous studies have not fully appreciated the transnational nature of this process. Drawing on extensive archival research in Colombia and the United States, Offner argues that the path from the New Deal to neoliberalism went through the Third World. She traces the careers of border-crossers like David Lilienthal, the ex-chairman of the Tennessee Valley Authority who traveled to Colombia in the 1950s. Lilienthal worked as a consultant for Colombian business elites, helping them to establish the Cauca Valley Corporation. The corporation wrested far-reaching powers from the government, including authority to set policies regarding agriculture, mining, transportation, the provision of water and electricity, and taxation. It shaped the 1961 agrarian reform law to favor large agribusiness while deliberately displacing smallholders. Colombia's program of “self-help housing” in the 1960s was another example of capitalist interests tailoring interventionist state policies to their benefit. Eschewing public ownership and formal-sector construction jobs, the program depended on unpaid labor from residents while promoting a middle-class ideal of private homeownership. To justify these policies, Colombian capitalists and collaborators like Lilienthal promoted new conceptions of the role of business in public policy-making, elevating managers and economists as arbiters of the social good.
Lilienthal and others brought these lessons home. Even as the Great Society programs of the mid 1960s launched the biggest expansion of US public welfare measures since the New Deal, they also pioneered new forms of privatization and austerity. Self-help housing made its appearance in the United States, with Indian reservations and other poor rural areas treated as laboratories. Business also colonized the education and job training programs associated with the War on Poverty, pushing a model of private contracting that later spread to other policy realms. The outsourcing of government functions to profit-oriented capitalists was increasingly celebrated as a virtue. In 1967 Lilienthal himself touted “the businessman as a leader in public affairs,” an efficient expert who could be trusted where government employees and public sector unions had allegedly brought disaster (quoted, 176). Neoliberals would later wield the spear that Lilienthal had helped to forge.
Offner's account thus revises common understandings of twentieth-century political economy, in several helpful ways. It illuminates the contradictions of welfare and developmental states. It suggests that neoliberalization was a longer-term process than often thought. And it reveals new links between that process in the United States and Latin America, highlighting the interchanges between Latin American and US elites.
The book's political takeaways are most explicit in its last paragraph. One is that any political-economic regime contains “seeds of multiple futures,” and outcomes are not preordained. Mid-century states had some progressive features that might be recovered and redeployed in the future, and even today's states include elements that are worth defending and expanding. However, a second lesson is that a return to welfare and developmental states will not solve all our problems: those states were rife with contradictions that reflected the continued power of capitalists. Offner counsels us to “recognize that when we take issue with neoliberalism, we are often struggling with much more enduring features of capitalism, and take aim accordingly” (289).
