Reply #32: Neoliberalism: origins, theory, definition [View All]

I'm glad you asked that question. I didn't realize until you asked, that yes, we do throw a lot of terms around without defining them for everyone. I book-marked this thread the day you started it so thanks. You got some excellent answers but thought I'd throw this explanation in too:


Neoliberalism: origins, theory, definition

Since the late 1990's activists have used the word 'neoliberalism' for global market-liberalism ('capitalism') and for free-trade policies. In this sense it is now widely used in South America. Some people use the word interchangeably with 'globalisation'. But free markets and free trade are not new, and this use of the term ignores developments in the advanced economies. The analysis here compares neoliberalism with its historical predecessors. Neoliberalism is not just economics: it is a social and moral philosophy, in some aspects qualitatively different from liberalism. Last changes 11 November 2004.


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The definition of neoliberalism presented here is more abstract than usual - but it also suggests that neoliberalism has been underestimated. A widely quoted example of those 'usual definitions' is What is "Neo-Liberalism"? by Elizabeth Martinez and Arnoldo García:

Neo-liberalism is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer....Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter- American Development Bank....the capitalist crisis over the last 25 years, with its shrinking profit rates, inspired the corporate elite to revive economic liberalism. That's what makes it 'neo' or new.

(snip)

http://web.inter.nl.net/users/Paul.Treanor/neoliberalism.html


The main points of neo-liberalism include:

THE RULE OF THE MARKET. Liberating "free" enterprise or private enterprise from any bonds imposed by the government (the state) no matter how much social damage this causes. Greater openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing workers and eliminating workers' rights that had been won over many years of struggle. No more price controls. All in all, total freedom of movement for capital, goods and services. To convince us this is good for us, they say "an unregulated market is the best way to increase economic growth, which will ultimately benefit everyone." It's like Reagan's "supply-side" and "trickle-down" economics -- but somehow the wealth didn't trickle down very much.


CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water supply -- again in the name of reducing government's role. Of course, they don't oppose government subsidies and tax benefits for business.


DEREGULATION. Reduce government regulation of everything that could diminish profits, including protecting the environment and safety on the job.


PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even fresh water. Although usually done in the name of greater efficiency, which is often needed, privatization has mainly had the effect of concentrating wealth even more in a few hands and making the public pay even more for its needs.


ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or "COMMUNITY" and replacing it with "individual responsibility." Pressuring the poorest people in a society to find solutions to their lack of health care, education and social security all by themselves -- then blaming them, if they fail, as "lazy."

Around the world, neo-liberalism has been imposed by powerful financial institutions like the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank. It is raging all over Latin America. The first clear example of neo-liberalism at work came in Chile (with thanks to University of Chicago economist Milton Friedman), after the CIA-supported coup against the popularly elected Allende regime in 1973. Other countries followed, with some of the worst effects in Mexico where wages declined 40 to 50% in the first year of NAFTA while the cost of living rose by 80%. Over 20,000 small and medium businesses have failed and more than 1,000 state-owned enterprises have been privatized in Mexico. As one scholar said, "Neo-liberalism means the neo-colonization of Latin America."

In the United States neo-liberalism is destroying welfare programs; attacking the rights of labor (including all immigrant workers); and cutting back social programs. The Republican "Contract" on America is pure neo-liberalism. Its supporters are working hard to deny protection to children, youth, women, the planet itself -- and trying to trick us into acceptance by saying this will "get government off my back." The beneficiaries of neo-liberalism are a minority of the world's people. For the vast majority it brings even more suffering than before: suffering without the small, hard-won gains of the last 60 years, suffering without end.

http://www.globalexchange.org/campaigns/econ101/neoliberalDefined.html