APPROACHING NEOLIBERALISM AS FINANCIAL HEGEMONY

Abstract

This study addresses the post-1945 history and dynamics of neoliberalism on a global scale focusing on such issues as a hegemonic state, global finance, and subject-(re)production in the neoliberal governmentality. Studies of neoliberalism can be classified into three-groups according to those groups’ different understandings of neoliberalism: ‘economic ideology’, ‘state policy’, or ‘governmentality’. The core dynamics of the global movement of neoliberalism is reflected in ‘financialization’, i.e., hegemony of liquid money-capital over productive capital, which is related to the current spread of neoliberalism across national-borders. Historically, this financialization is termed as the “second financial hegemony” (Duménil & Lévy, 2004), or the “US hegemonic cycle of financial expansion” (Arrighi, 1994). Thus, for examining neoliberalism as the resurgence of global finance, the study of a hegemonic state is required. According to Helleiner (1996), neoliberal financial hegemony has been established as the outcome of ‘domestic politics’ in the US, that is, a victory of New York financial communities over the New Deal alliance until the 1970s. With deregulations in the financial sector, the free movement of money-capital has exercised financial hegemony over the business sector domestically and globally by shaping the hegemonic neoliberal bloc that consists of the ‘private financial’ sector, the ‘government’ sector, and the ‘epistemic’ sector. This study pays critical attention to the role of transnational institutional investors (TIIs), who are mainly based in the US or the UK, in the global (re)production of neoliberalism (Harmes, 1998). Above all, the shareholder value ideology for good corporate governance has been instrumental in the role and activities of TIIs toward neoliberalization worldwide. Based on this specific understanding of the history and dynamics of neoliberalism, the last half of this study examines the case of South Korea’s recent neoliberalization.