Revisiting the Self-Help Housing debate: Perception of Self-Help Housing by the beneficiaries of South African low-cost housing

2.3.2: The role of the neo-liberal State

The role of neo-liberal State is not very different from a liberal State. Both liberalism and neo-liberalism have, as a starting point, the freedom that every citizen must enjoy and the concept of the individual conceived as a rational being capable of making right choices and finding the best way to attain his/her goals. Given the role attributed to individuals, liberals argue that there is no alternative for the State than to play a limited role in social life. If the advocates of liberalism recognize a limited role for the State, those who defend neo-liberalism declare that the State must not intervene in economic life at all. Does this mean that the government should completely disappear, as some liberals such as Nozick advocate? If the government completely disappears, it may result in a state of anarchy or we can go back to what

philosophers call the «state of nature»^12(*).

Some defenders of neo-liberalism argue that the State should not disappear and they assign to the State the role of referee. This is well explained in Turner (1972) when he argues that the State must allow households to solve their housing problems themselves. The argument which may be advanced to support Turner's statement or the role that the neo-liberals attribute to the State is that no one knows better real needs or concerns of individuals than individuals themselves.

Hayek (1949), one of the advocates of neo-liberalism, claims that the State is desirable only if it protects individuals' interests. It clearly appears that the main role of the neo-liberal State is to create laws in which every individual can realize his or her dreams. In relation to the market, the central element of neo-liberalism, the government must make the market work better. Carruthers and Babb (2000: 164) summarise the role of the liberal State in these terms: «governments make laws for governing the market, provide regulatory agencies and courts for enforcing rules and adjudicating conflicts, and penalize those who violate the rules». Moreover, the government must support competition and enforces laws which protect individuals' rights and avoid fraud. The role of the State is reduced to protecting individuals' rights and allowing competition in the society. This limited State role is often called «laissez-faire».

Referring to the housing process, neo-liberal proponents will assign to the State the role of organizing the housing process, not as the main actor but as facilitator. The process of land acquisition, housing finances, construction, etc., should be opened to the market. Likewise, the neo-liberal State will encourage individuals without coercing them and forcing them to create better housing conditions for themselves. This limited role of the State or laissez-faire presents some advantages and weaknesses as well.

2.3.3 Strengths of neo-liberalism

As the intervention of government in economic sphere is seen by advocates of neo-liberalism as the main cause of underdevelopment (Colclough, 1991), and as they propose the reduction of government intervention in education, health and social services (Kaber et al, 1991) it may be supposed that the government may well play the role of referee. In addition, the non intervention of government in the economic sphere may also allow the investment in hard infrastructure such as its communication system, airport, etc. In a few words, the non direct intervention of government is understood, according to neo-liberal advocates, as the main prerequisite of economic growth. In developing countries where the economic growth is imperceptible neo-liberals believe that «the state is doing too much, that public expenditures must be reduced if growth is to accelerate» (Colclough, 1991: 16).

It may also be argued that neo-liberal strategies about laissez-faire economy may find moral basis. In fact, as Marcuse (1992: 15) argues, «God helps those that help themselves». Neo-liberals would encourage individuals to be main actors of development, to be creative and initiators of development projects. Competition is the term used and the reality which explains that in the neo-liberal State individuals are free to undertake development projects, to present their goods and services. If the competition is reliable, it will stimulate individuals to get specialized skills in order to better respond to the criteria of competition. The main advantage of competition is that it fosters individuals to give the best of themselves. In addition, it avoids mediocrity and inefficiency in the society. As remarks Gerber (1983), the stimulation of the elite has permitted the United States of America to become the most economically powerful country in the World. It may be argued that neo-liberalist policies stimulate real economic growth. However, neo-liberalist policies do not go without serious critiques. The discourse below will emphasize the weaknesses of neo-liberalist ideology.

* ¹² The state of nature is considered by some philosophers such as Rousseau, Locke and Hobbes as before the existence of authority. If Rousseau presents the state of nature as the state where human being is not corrupted by private property, Hobbes considered this state as the state of anarchy in which there are no rules to protect human beings. Thus, the state of nature is for Hobbes the worst state that all rational human beings must necessarily avoid.