Neoliberalism is an ideology that emphasize the value of free market competition. It is closely associated with the ideology of Laissez-faire economics with minimal state intervention in economic and social affairs, and its commitment to the freedom of trade and capital. It emerged due to the failure of communist and socialist policies which resulted in high public debt.
Characteristics of neoliberalism:
The philosophy of neoliberalism is usually considered as a modern alternate of classical economic liberalism. It is centered on a conviction in the self-regulating capacity of the market and correlatively the need to restrict the scope of action of the state. Its characteristics include:-
1. Liberalization and privatization: Opening up sectors for private participation where government regulations are relaxed and hitherto banned sectors are opened up for private sector.
2. Government as a business enterprise: Government at all scales under neoliberalism is turned into a business and citizens are consumers of public goods.
3. Free flow of capital and labour: the foreign investment has limited restrictions. labour mobility is relaxed.
4. Limited trade barriers facilitating free flow of goods and services with least tariff and non-tariff barriers.
5. The increasing replacement of the Citizen with the Consumer as the most important and respected identity and mode of communication with both the State and the Market.
6. The public has a choice in goods and services due to competition as multiple players are involved in production.
7. Trickle down philosophy: Under neoliberalism, the belief and rhetoric of “trickle down” economics runs strong and alongside it the belief that everything would be better off if it were a private business.
8. personal responsibility doctrine: all emphasis on individual. Every transaction happens at the individual level.
History of Neo-liberalism:-
Neoliberalism has gained traction over the last 25 years. The term neoliberalism means a new kind of liberalism. The idea of a liberal economy became prominent in 1776 when a Scottish economist named Adam Smith wrote a book called “The Wealth of Nations.”
In his book, Smith propagated the idea of getting rid of government intervention and claimed that the best way for an economy to flourish is through free trade and deregulation.Several years later, in the 1930s, another economist named John Keynes challenged the policy of liberalism and inferred that such a policy was suitable for capitalists. Government intervention was deemed crucial for the welfare of the public, and it led to several leaders transitioning and working towards the common good.However, the concept of neoliberalism is now being practiced on a global level, following the decline in corporate profitability.
Conclusion
A general characteristic of neoliberalism is the desire to intensify and expand the market which act as a balancing force. Neoliberalism has overcome the problems of socialism by the rightful mix of market and state role in providing efficient and effective goods and services to citizens.
Emphasis supplied
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