Mohan - Structural adjustment: theory, practice and impacts

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One might think, among other things, that in a period of capitalist triumphalism there is more scope than ever for the pursuit of Marxisms principal project, the critique of capitalism. Yet the critique of capitalism is out of fashion. There can never have been a time since Marxs day when such a task needed doing more urgently, as more and more branches of knowledge, both in cultural studies and in the social sciences, are absorbed into the self-validating assumptions of capitalism or at least into a defeatist conviction that nothing else is possible.

(Meiksins Wood 1995: 1 and 4)

While teaching Development Studies in Preston a student came to me after a lecture and asked what single text I could recommend that covered the theories underlying Structural Adjustment Programmes (SAPs) as well as their various impacts. I thought for a while and mentioned a couple of chapters and a pamphlet. As soon as she had left I locked my office and hurtled around to Alfred B. Zack-Williams room in the adjacent building. On asking him the same question that the student had asked me he was equally stumped. It was from there that this book emerged. After too many years of writing I am pleased that there is still nothing on the market which covers this range of material.

But beyond pedagogical and marketing reasons we feel that this book is important for wider political motivations. As the quote above suggests, the need to analyse and criticise global capitalism is now more pressing than ever. It is ironic, but perhaps not coincidental, that at the very time that such a critique was needed, the one body of theory and praxis which has consistently exposed the contradictions of capitalism was seen to be in an impasse (Rapley 1994; Schuurman 1993). This body of theory is, of course, Marxism, which from the mid-1980s (Booth 1985) onwards began to be discredited within Development Studies in particular and social theory more generally. The ending of the Cold War in the late 1980s signalled the practical limitations of actually-existing socialism and with it the Marxist project.

The triumphalism that greeted the ending of the Marxist alternative and the hegemony of a globalising capitalism was summed up in Francis Fukuyamas (1992) End of History thesis. He famously argued that liberal democracy allied to market capitalism was the pinnacle of human achievement (despite being rather dull) and that all contending ideologies were invalid. Subsequent conflicts and crises have attempted to reconcile this assertion by reducing these problems to examples of irrationality, in much the same way as modernisation theorists had done in the early days of the Cold War. For example, Sierra Leone was, according to Kaplan (1994), seen to epitomise the anarchic outpourings of uncivilised people. Likewise the currency speculations of Nick Leeson were seen to be the machinations of a single rogue trader who flouted the rules. The overall picture was one of a normal and inevitable logic which dissenting governments ignored at their peril (Agnew and Corbridge 1995).

Underlying this discourse about the natural order of globalisation and free-marketeering was a set of political and economic processes which went largely unseen by the majority of the developed world, but could hardly be ignored by those people living in the Third World. Contrary to Fukuyama and others (for example, Ohmae 1990; Friedman and Friedman 1980), the globalisation of free markets and neo-classical order was anything but natural and inevitable. Huge political and economic resources, known as structural adjustment programmes, were mobilised to ensure that these dissident countries danced to the same tune. It is often overlooked that in the heartlands of neo-liberalism equally heavy-handed and repressive political power was used to weaken the power of labour and remove the state from large sectors of economic and social life. Either way, the neo-liberal world order has been, and is being, created through the intervention of key institutions such as the World Bank and International Monetary Fund. It is ironic that a theory that posits the freedom of markets and the limited use of state power requires massive amounts of political interfer-ence to do so (Polanyi 1960).