Neoliberalism and the Political Economy of Tourism

Jan Mosedale

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317088981
• Edition: 1
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

Tourism has become increasingly shaped by neoliberal policies, yet the consequences of this neoliberalisation are relatively under-explored. This book provides a wide-ranging inquiry into the particular manifestations of different variants of neoliberalism, highlighting its uneven geographical development and the changing dynamics of neoliberal policies in order to explain and evaluate the effects of neoliberal processes on tourism. Covering a variety of different aspects of neoliberalism and tourism, the chapters investigate how different types of tourism are used as part of more general neoliberalisation agendas, how neoliberalism differs according to the geographic context, the importance of discourse in shaping neoliberal practices and the different approaches of putting the neoliberal ideology into practice. Aiming to initiate debates about the connections between neoliberalism and tourism and advance further research avenues, this book makes a timely contribution which discusses the relationships between markets, nation-states and societies from a social science perspective. Neoliberalism is considered as a political-economic ideology, as variants of the global neoliberal project, as discourse and practices through which neoliberalism is enacted.

Chapter 1
Neoliberalism and the Political Economy of Tourism: Projects, Discourses and Practices

Jan Mosedale

Tourism has become increasingly shaped by neoliberal policies, yet the consequences of this neoliberalization have received relatively little specific attention in the literature. Only few contributions to the tourism literature have analysed the role of tourism within neoliberal change and vice versa. In particular, the neoliberalization of nature has received recent and concerted interest from tourism scholars such as Duffy (2008, 2013 and, 2014), Rytteri and Puhakka (2012) and Keul (2014). Other contributions have focussed on particular nation states (Desforges, 2000; Tamborini, 2005; Yüksel et al., 2005), regions and communities and the neoliberal change in their institutional structures (Shone and Memon 2008; Mair, 2006), policies or specific types of tourism such as medical tourism (Ormond, 2013) or agritourism (Timms, 2006), as well as wider international policy (Wood, 2009) and, more specifically, its link to international aid (Schilcher, 2007; Lacey and Ilcan, 2015).

This edited collection brings together different perspectives of neoliberalism and tourism in order to illustrate, explain and evaluate the effects of different variants of neoliberalism and thus to provide a solid basis for further, more specific analyses of the effects of the wider neoliberal project on tourism. Drawing on concepts from political economy and regulation theory, this chapter will introduce neoliberalism as a continuous and evolving process that results in local variations or projects of the wider neoliberal ideology, underpinned by neoliberal discourse and practices. At the same time, it will attempt to position neoliberalism within contemporary debates in the social sciences drawing on examples within a tourism context.

How did Neoliberalism Develop?

There is no set start date for the idea of neoliberalism. It emerged from a number of different starting points with the aim of bringing a revised classical liberalism to the fore and rebranding it as ‘neoliberalism’ (Springer, 2010). Discussions began in the late 1930s to situate neoliberalism as an alternative to Keynesianism and Friedrich von Hayek’s Road to Serfdom (1944) positioned him as the main protagonist in the expansion of the neoliberal idea. In 1947, the Mont Pèlerin Society was created and is now widely accredited as having been the first neoliberal think tank. Not satisfied with merely identifying an alternative to the current relationship between states and markets (Keynesianism), they purposefully engaged in a programme of discourse-building within their international networks and wider dissemination in order to position neoliberalism as a desirable and inevitable project to fix the problems of the Fordist/Keynesian regulatory system (Plehwe, 2009). Over time, the idea of a neoliberal project spread not just geographically but also across society and eventually succeeded in becoming the dominant political-economic discourse.

The rise of neoliberalism came with the financial crisis of the 1970s, when Keynesianism – the intervention of the state in the market or even substitution of the market (as in state ownership of key sectors, such as public transport) in order to maintain the welfare of its population – was no longer viewed as a suitable mode of regulation due to the severity of the crisis. It was generally felt that governments did not have the necessary acumen and knowledge to predict market changes and that it was best for governments not to intervene but to provide the necessary environment for the functioning of free markets. Neoliberal theory posits that “… human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong property rights, free markets, and free trade’ (Harvey, 2005: 2).

In what way does neoliberalism differ from liberalism? Castree (2010) identifies three key differences. First, neoliberalism revives classical liberalism, after the interlude of the Fordist-Keynesian system, and has been rebranded to distinguish it from liberalism and the crisis of accumulation, which lead to the great depression. Second, neoliberalism interprets individual freedoms as economic freedoms. Following liberal thought, individual property rights are paramount: “private property is the embodiment of individual liberty … and market freedoms are indivisible components of the basic liberties of the person” (Gray, 1995: 61, cited in Hardin, 2014: 202). Yet neoliberalism does not stop there but extends market rationality to all social action with individuals expected to engage with markets and become individual entrepreneurs: “human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills … The role of the state is to create and preserve an institutional framework appropriate to such practices” (Harvey, 2005: p 2). Individuals should use their agency to acquire the necessary capital (intellectual, social, human and cultural) in order to be able to negotiate and engage in free markets and thus become homo economicus (Fitzsimons, 2000). Potential structural disadvantages that may hinder the development of social capital are largely discounted and left to charitable organizations to address.

Third, neoliberalism also differs from liberalism as it has been strategically pursued as an “epistemological project of the neoliberal thought collective” (Hardin, 2014: 214), gained impetus beyond ‘first world’ countries as it is being disseminated by global institutions such as the International Monetary Fund and the World Bank via structural adjustment programmes (Schilcher, 2007; Lacey and Ilcan, 2015).

Although the previous paragraphs suggests a linear trajectory and a common goal, “the zigzagging prehistories of neoliberalism serve as timely reminders of the contradictory, contingent and constructed nature of the neoliberal present, its produced and contextually embedded form, and its inescapable impurity” (Peck, 2008: 4, emphasis original). Chile was among the first states to implement neoliberal policies when General Pinochet took power in 1973 and former students of Milton Friedman at the University of Chicago were given positions in government and – in collaboration with the International Monetary Fund – engaged in structural reforms geared at incorporating neoliberal economic policies. In the UK, Margaret Thatcher took office in May 1979 and implemented her own brand of neoliberalism largely by privatizing profitable national entities such as British Aerospace and Cable & Wireless to reduce state borrowing. Later, the Thatcher government justified extensive privatization campaigns with the increased efficiency and productivity of private enterprise with the aim to increase the competitiveness of these newly private firms in the wider European and global market (Seymour, 2012). In the US, Ronald Reagan introduced a supply-side oriented Program for Economic Recovery, upon taking office in 1981, aimed at cutting taxes and reducing the deficit and spending in order to guarantee monetary and fiscal stability to ensure continued economic growth (Steger and Roy, 2010). Later, more moderate interpretations of neoliberalism, were introduced in social-democratic states such as Canada (Keil, 2002), New Zealand (Larner, 1997) and Germany (Brenner, 2000) and existing neoliberal projects in the UK (Tony Blair’s Third Way) and the US (Bill Clinton) were adjusted in response to the socio-political effects of the actions of the previous governments (Brenner and Theodore, 2002).

Theorizing Neoliberalism

Neoliberal ideology is the belief in the principle of unregulated markets as the optimal strategy for economic development and growth. This involves the adoption of policies to reduce state involvement in order to allow the extension of market forces (for example competition and commodification) to all aspects of economic activity and indeed throughout society – for example via the erosion of elected governance, privatization of assets and services culminating in a general shift away from Keynesian social policies (Brenner and Theodore, 2002). Neoliberalism has restructured and rescaled the relationships between institutions, governance and markets (Peck and Tickell, 2002) in order to disembedd capital and its accumulation from state-led constraints (Harvey, 2005).

Neoliberalism has its origins in classical liberal economic theories (such as of Adam Smith) and its focus on individual freedoms and thus limited involvement of the nation state. Neoliberalism as a neoclassical economic theory thought to revive, an adapted version of liberal capitalism (prominent as political economic system from the mid-1800s to the World War I) and thus to oppose the ‘Fordist-Keynesian’ combination of regime of accumulation and mode of regulation. The rationale behind this was that the state a) is too easily influenced by special interest groups (for example labour unions) and b) does not have the necessary market information in order to take necessary decisions. Neoliberalism opposes the previous regime of accumulation and mode of regulation (the welfare state) and thus changes the relationship between markets, the state and society. The main characteristics of neoliberalism according to Castree (2010) are the privatization of assets, increased commercialization of the public sector (the implementation of market proxies), the creation of new markets for services previously not subject to free market principles, deregulation, reregulation, the implementation of flanking mechanisms to counteract the effects of neoliberalism and a focus on self-sufficient individuals. These characteristics will now be discussed in a tourism context.

Privatization of National Assets

The first priority of the new neoliberal policies of Thatcher’s first-wave neoliberalism was the privatization of public utilities and public services in order to reduce public spending and to increase efficiencies and thus competitiveness. The reinforcement of private property rights and the elimination of public ownership is a strong theme in neoliberal theory so that markets may regulate themselves without government intervention. State ownership is the ultimate government intervention and therefore an anathema to neoliberal thought.

The privatization of former national assets such as transport and, in some cases, hotel infrastructure probably had the largest impact on tourism. The transportation sector was one of the first industrial sectors to be privatized (in particular air, but also train and bus transport). Nowadays public transport is rarely in public ownership and, more often than not, is at least operated by private enterprise. Other examples of privatization include the selling of hotel infrastructure, as has only recently occurred in India, where the state government of Karnataka sold 18 tourism properties under a Renovate, Operate, Manage and Transfer scheme (Venkatesh, 2014), or the increasing privatization of park infrastructure (see Chapter 9 by Nyahunzvi).

However, certain types of tourism have also benefited from the privatization of other sectors. For example, the privatization of health care has led to medical tourism, as medical tourists exploit political-economic differences (i.e. different regulatory contexts) between countries for their personal well-being. “Health-care is becoming less enshrined as a public good and instead increasingly reimagined as a tradable commodity via international, regional and bilateral trade agreements … and through the involvement of transnational agencies and companies” (Ormond, 2011: 248). This is a growing market with new entrants to the tourism sector: “… hundreds of medical tourism companies have become travel agents, brokering and facilitating medical travel …” (Connell, 2011: 260). Medical tourism has become a profitable niche market for many developing countries and “a way of outsourcing healthcare for Western countries with escalating waiting lists and costs” (Smith, 2012: 2). Medical tourism therefore eases the pressure on public health care systems battling continual budget cuts and puts the onus on the individual to fund his/her treatment. While medical tourism has benefitted from the privatization of health care in some countries, it exacerbates the negative effects of neoliberalism as medical tourism may increase inequalities in terms of access to health care, as well as its cost and quality (Connell, 2011; Smith, 2012) in both source markets and the medical tourism destinations.

Commercialization of the Public Sector

Those public sectors that have not (yet) been privatized have to function (at least internally) according to market principles. For example, the cost of environmental conservation has to be recouped and protected areas must run cost efficiently. The UK Department for Environment, Food & Rural Affairs states that “protected natural areas can yield returns many times higher than the costs of their protection” (DEFRA, 2011: 4 cited in Sullivan, 2013: 198). Under neoliberal economic regimes, protected areas are expected to top up the government support via new innovative funding concepts, which position protected areas within a market context. Protected areas therefore engage in a number of different activities in order to gain sufficient funds to be able to achieve their aim of conservation. Yet, paradoxically, these funding activities may be in conflict with that same aim, as protected areas commodify nature by providing tourism activities, extracting natural resources or by bioprospecting. “[Protected area] financial sustainability requires that funds are managed and administered in a way that promotes cost efficiency and management effectiveness” (Emerton et al., 2006: 15). Consequently, commercialization involves charging market-based fees for these goods and services provided.

Nyahunzvi (Chapter 9) analyses the effects of such commercialization in Kruger National Park, South Africa and concurs with Fletcher’s statement (2012: 296–7) “the market-based mechanisms upon which [protected areas] usually rely to generate income from in situ resources and thereby incentivize their conservation … commonly force into opposition the very conservation and development goals they purportedly seek to reconcile …”. Nyahunzvi further problematizes the resulting distribution of capital from the commercialization...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Contributors
• Acknowledgements
• 1 Neoliberalism and the Political Economy of Tourism: Projects, Discourses and Practices
• 2 Contingent Neoliberalism and Urban Tourism in the United States
• 3 Mega-events as Neoliberal Projects: ‘Realistic if we want Dunedin to Prosper’ or ‘the Biggest Civic Disgrace … in Living Memory’?
• 4 The Changing Role of the State: Neoliberalism and Regional Tourism Development in New Zealand
• 5 Developing Markets – the Neoliberalization of Tourism Structures in Jordan: The Example of Aqaba Special Economic Zone
• 6 Ecotourism as the Focus of the Neoliberal Tourism Project in India
• 7 The Changing Nature of National Parks under Neoliberalization
• 8 Social Tourism: From Redistribution to Neoliberal Aspiration Development
• 9 Enacting Neoliberal Discourses through Heritage Tourism in Ghana
• 10 Decommodifying Grassroots Struggle Against a Neoliberal Tourism Agenda: Imagining a Local, Just and Sustainable Ecotourism
• 11 Conclusion: Tourism and Neoliberalism: States, the Economy and Society
• Index