Neoliberalism, Creative Destruction and the Economic Reconstruction of Iraq, 2003-2010

Abstract

The Marshall Plan and post-2003 Iraq represent the two largest US-led, post-war reconstruction projects in history, yet the two cases embody the implementation of two nearly opposite political ideologies. Whereas proponents of the Marshall Plan emphasized the supremacy of the state in reconstruction, Bush administration officials felt that neoliberal market reforms, aided by the opportunistic nature of Schumpetarian creative destruction, were the only legitimate steps required in post-war Iraq. Such discrepancies were largely due to the changing role of the US in the international arena; by the end of the Cold War, Washington was able to take a unilateral approach abroad and more actively push for political and free market reforms. Yet the sectarian chaos that quickly engulfed Iraq and the economic rise of China have all but delegitimized neoliberalism and effectively reopened the issue of the role of the marketplace versus the state in the 21st century.