What is neo-liberalism?
Neo-liberalism is an approach to economic and social studies in which control of economic factors is shifted from the public sector to the private sector. Drawing upon principles of neoclassical economics, neo-liberalism suggests that governments reduce deficit spending, limit subsidies, reform tax law to broaden the tax base, remove fixed exchange rates, open up markets to trade by limiting protectionism, privatize state-run businesses, allow private property and back deregulation. The concept of liberalism was introduced in 1776 by Adam Smith when he stated that government intervention in economic matters is diminishing. That is, there is no restriction on manufacturing, no barriers to commerce, and no tariffs. This raised the idea of liberal in the sense of no controls, encouraging free enterprises and free competition which allow making huge profits. While Adams supported the ideology of liberalism to balance the market and achieve economical growth, Keynes had another opinion regarding liberalism. In 1930’s after the great depression and the increase in unemployment rate caused by liberalism and limited protectionism, Keynes challenged liberalism as the best policy for capitalist. He claimed that full employment is necessary for capitalism to grow and it can be achieved if only government and central bank intervene to increase employment. The use of the term "liberal" in economics is different from its use in politics. Liberalism in economics refers to "freeing up" the economy by removing barriers and restrictions to what actors can do. Neo-liberalism's policies seek to create a casual atmosphere for economic development. What are the features of neo-liberalism?
In the following list, twelve features of neo-liberalism are identified from a viewpoint heavily influenced by Michel Foucault’s (1979) notion of governmentality. In outlining the main features of neo-liberalism it is important to realise that there are similarities, connections, and overlapping concepts as well as differences and theoretical innovations with classical liberalism: The relation between government and self-government
Liberalism as a doctrine which positively requires that individuals be free in order to govern; government as the community of free, autonomous, self-regulating individuals; ‘responsibilisation’ of individuals as moral agents; the neo-liberal revival of homo economics, based on assumptions of individuality, rationality and self-interest, as an all-embracing redescription of the social as a form of the economic. Cultural reconstruction as deliberate policy goal (‘the marketisation of ”the social”’) The development of an ‘enterprise society’; privatisation of the public sector; the development of quasi-markets; marketisation of education and health; a curriculum of competition and enterprise Promotion of a neoliberal paradigm of globalisation
World economic integration based on ‘free’ trade; no capital controls; International Monetary Fund (IMF), World Bank (WB), World Trade organisation (WTO) as international policy brokers. The rule of the market
Liberating "free" or private enterprise from any bonds imposed by the government (the state). Provide 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. Debating that; "unregulated market is the best way to increase economic growth, which will ultimately benefit everyone". 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. The most extensive privatization of public goods and spaces was justified done in the name of greater efficiency, which is often needed....
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