2.3.4 Weaknesses of neo-liberalist
principles
The main critique that I would like to formulate against
neo-liberal policy is the justification of inequality and the growing poverty
in developing countries. It may be observed in neo-liberal States that only the
elite are likely to perform and markets of good jobs and opportunities are not
opened to those who are not competitive. The response to the question of why
there are inequalities and poverty in societies, including developed countries
such as USA, becomes simple and obvious. Individuals who constitute the elite
or those who are skilled, rich and powerful are competitive and in fact, may
bring into the market their goods, services or qualified skills. In turn, some
individuals are poor, weak and lack influence because they cannot bring
something consistent or significant into the market. As a result, they will
grow poorer. This means that neo-liberals judge individuals under the criteria
of competence and power. In other words, an individual is appreciated and
considered in the society insofar as he/she is able to compete in the market
Alongside the justification of inequalities and poverty the
conception of economic growth which in turn, according to neo-liberals, should
bring poverty alleviation does not go without being challenged. In practice
this principle is not applied. Nowadays we observe throughout the world that
neo-liberalism with its belief in economic growth did not succeed. On the
contrary the number of poor people in developing countries where neo-liberal
policy is implemented is increasing. Only competitive people may profit from
economic growth. As Bauman (1998: 4) observes, «the direct benefits of
economic growth have tended to be distributed in favour of the already
excessively wealthy members of the community and as a result `the poor get
poorer, the very rich... get richer still»(quoted in Smart, 2003: 44). In
contrast, poor people who are supposed to be the beneficiaries of development
growth become the victims of neo-liberalist policy. This explains the shift by
the World Bank around 1970s in instituting the implementation of Local Economic
Development and in announcing that «the development record should be
judged not by economic growth but by the extent to which poverty was reduced in
the world» (Colclough, 1991: 5).
The last critique that I would like to stress in this debate
regarding neo-liberalism is the place or the future of poor people in the
neo-liberal State. Neo-liberals believe that poor people will improve their
living conditions once economic growth is attained. Indeed, according to
neo-liberals, economic growth will automatically bring investors and in turn
will attract capital flow. This is partially true. Nevertheless, most poor
people in developing countries are unskilled as they do not improve their
education for one reason or another. It may be observed in developing countries
that «schooling is too costly to expand coverage to all who need it,
resources are inefficiently used and benefits are disproportionately captured
by the richer group in society» (Colclough, 1991b: 210). In a neo-liberal
State poor people are unlikely to find a good job. Indeed, as Baumann (2003)
argues, it is almost impossible for an enterprise to employ uneducated people.
In sum, poor people do not have a better future in a neo-liberal State, unless
they improve their level of education and become competitive. This is because
in a neo-liberal State, good education is a function of a good job.
Related to housing, in a neo-liberal State where the State
must reduce its intervention in social services and keep a distance from
economic activities, poor people who cannot compete in the market do not have
another alternative than practicing spontaneous SHH. As poor people suffer from
the lack of education (see the argumentation above), they will be likely to
violate State laws in, for example, invading public or private land for the
purpose of housing. This violation of land has happened in South Africa (see
Huchzermeyer, 2003b). The question which arises from this debate related to
neo-liberal policy is whether or not poverty alleviation and adequate housing
solutions for poor households may be achieved without the intervention of the
State. This debate has shown that without State intervention only richer and
more powerful groups can attain their ends. This explains my interest in State
aided SHH. Indeed, a successful aided SHH combines the participation of the
State and the involvement of beneficiaries. This process may bring about
personal satisfaction of individuals and adequate housing solutions for poor
people.
The rest of the debate in this chapter will look at
inequalities, poverty and the concept of need which, like liberalism and
neo-liberalism, welcome the practice of SHH.
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