Neoliberalism
Neoliberalism is political philosophy and movement beginning in the 1960s that de-emphasizes traditional liberal doctrines to achieve progress and social justice by more pragmatic methods, especially an emphasis on economic growth. Because of close association between this philosophy and neoclassical economics, and confusion with the overloaded term "liberal", the term neoclassical philosophy is advocated by some.Either term is primarily used by critics of neoliberalism rather than proponents, thus most discussion and description of neoliberalism is written from a critical point of view. Supporters of concepts found in neoliberalism, such as free trade and capitalism, view many of the descriptions of neoliberalism as straw man arguments.
As described by Berkeley economic historian Bradford DeLong, neoliberalism has two main tenets:
- "The first is that close economic contact between the industrial core and the developing periphery is the best way to accelerate the transfer of technology which is the sine qua non for making poor economies rich (hence all barriers to international trade should be eliminated as fast as possible). The second is that governments in general lack the capacity to run large industrial and commercial enterprises. Hence, [except] for core missions of income distribution, public-good infrastructure, administration of justice, and a few others, governments should shrink and privatize)."
The neoliberal doctrine is also a subset of the so-called "Washington consensus": a set of specific policy goals designed for Latin American countries to help them recover from the "lost decade" of the 1980s. This period not only saw a rise in dictatorships in the region, but also disastrous financial mismanagement resulting in rapidly rising prices for basic products, which inevitably caused an increase in poverty. In addition to the tenets of neoliberalism, the Washington consensus stipulated that a country should have stable exchange rates and a government budget in balance.
Neoliberalism has drawn its share of critics due, in part, to some catastrophic failures. In particular, Nobel prize winner and former World Bank chief economist Joseph Stiglitz argues that the IMF is guilty of forcing neoliberal and Washington consensus policy goals on countries at times when it was not appropriate (i.e., the Asian Economic Crisis), with devastating results. Neoliberalism has also been criticised by the anti-capitalist movement, who argue that market forces inevitably increase inequality in wealth and hence power.
While some use the terms neoliberal and libertarian or classical liberalism interchangeably there is a difference between the two philosophies. While both share a belief in market economics and free trade, neoliberal economics theory shares with neoliberal international relations theory (and liberal internationalism) a belief in international regimes and a degree of global governance as a means of negotiating and administering international agreements. Neoliberals believe that greater economic and political interdependence will lead to progress and a reduction of international tensions or at least divert states from utilizing military means to resolve conflict. Libertarians reject the neoliberal belief that global governance bodies or state negotiated treaty regimes that bind the individual are desirable.
See also: anti-capitalism, privatization, Keynesian economics, globalisation, Think tank
External Critical Resources