Neoliberalism is not a common word we hear today in the American society. Although it’s the word that represents the haunting lifestyle that we live. Neoliberalism, in theory, is essentially about making trade between nations easier. It is about freer movement of goods, resources and enterprises in a bid to always find cheaper resources, to maximize profits and efficiency. Neoliberalism originated in the 1960’s and is a political philosophy based on classic liberalism but focusing more on the economic aspect.
The basic concept of Neoliberalism is as the rich grow richer, the poor grow poorer. In the United States, we have seen this rise within the last thirty years. The neo in neoliberalism is for the fact that this philosophy is fairly new from regular liberalism. Economic Liberalism began in Europe in the late 1700’s. Scottish economist, Adam Smith, published The Wealth of Nations, where he and others advocated the abolition of government involvement in economic situations. There are five main points behind Neoliberalism.
The first is the rule of the market. The rule of the market is for freedom for capital, goods and services, where the market is self-regulating allowing a slow notion of wealth distribution. It also includes the deunionizing of labor forces. The freedom is also controlled from the state, or government. The next is cutting public expenditure for social services, such as education and health care. “Reducing the safety-net for the poor” this can include welfare and different social programs.
Other social works provided to the people such as the maintenance of roads, bridges, and water supply. All in the plans of reducing government aid to the people. This is all controlled by the government. Third there is deregulation. Many neoliberals are in favor to reduce government regulation. This is to allow market forces to act as a self-regulating mechanism and open up the free market to competition and economic growth. Deregulation contributes to a competitive market, believed to help economic growth. So reducing of government regulation of everything hat could diminish profits, including protecting the environment and working conditions for the employee is something favored by many neoliberals. Privatization of public enterprise such as government sponsored programs should only be given to private individuals or corporations to manage. That includes retirement programs and education. Meaning that there should be private educational and retirement plans that should be handled individually and not by the government. The idea behind privatization is that by putting these services on the free-market, it’ll help self-regulate bigger industries.
The fifth is eliminating the concept of “The Public Good” or “Community” and replacing it with “individual responsibility. ” Changing the perceptions of public and community good to individualism and individual responsibility. This doesn’t leave much for the poor class of our society and pressuring them to find their own solutions to financial and societal problems. There are different extremes to Neoliberals. Some wish for a limited amount of privatization, while others wish for complete elimination of government funded problems.