The resurgence of ideas associated with laissez-faire economic liberalism beginning in the 1970s and 1980s,known as Neoliberalism, is an economic philosophy that is described as the 'defining political economic paradigm of our time' by Naom Chomsky.Translated into simple terms, the Americans refer to such a concept as a 'free market', where policies encourage private enterprise and consumer choice.
While neoliberalism has gained substantial support throughout the world, it has also been subjected to mass criticism on the grounds of decreased government involvement in the field of Education, social welfare and medicine. Not only does a decreased role of government raise doubts about every member of the public receiving equal opportunities, but it also questions the quality of services provided.
Institutions like IMF and the world bank have imposed neo-liberalism around the world, and the adversities of this concept have been visible throughout this time. Some of the worst effects were witnessed in Mexico, where wages declined 40 to 50% while the cost of living rose by 80%. In the United States, neo-liberalism is destroying welfare programs, attacking the rights of labour and cut backing social programs.
In light of the argument presented, it can be stated that the beneficiaries of neo-liberalism are a minority of the world's people.
3 comments:
This argument, though interesting, only looks at one side of the coin.
You say Neo Liberalism serves a 'minority of the world's population'. Lets assume you're an advocate of state intervention, as you have made it quite obvious. As the premise of your argument is examples, here is one:- Recently, the EU stepped in to save the fish stocks from depletion, creating a scheme whereby half or more of a trawler’s catch would be returned to the sea, dead. Here is another:- The USA devoted 40% of the US corn harvest to feed cars with biofuel. Today, biofuels have direct, fuel‐cycle GHG emissions that are typically 30–90% lower than those for gasoline or diesel fuels. Another:- farmers used to earn a living growing what people wanted to eat, letting the feedback loops do the work. But the governments running North America and Europe thought food was so important they had to get involved. Now all those farmers lose money, depending on state subsidies to stay afloat. Why go so far away? Take Bhutto's policy of nationalisation. I'll leave you to decide whether it had a positive impact.
So these are examples of government intervention which wasn't exactly successful. In other words, the flip side of your coin.
Finally, Neo Liberalism has been defined a little too generally here, so it becomes hard to categorise.
Zara's comment on neoliberalism makes me wonder: While yes increased liberalization of financial markets and decreased regulation in the field education restricts the government's ability to manage its population and directly tackle problems, is it not a system whereby proactive individual action is incentivised and hence appropriate action is automatically encourage through market signalling mechanisms?
A few points.
First, neoliberalism is a bit more complex than how you describe it. In addition to promoting free trade and reduced government involvement in the economy, neoliberalism advocates for the privatization of public services and the deregulation of the financial markets. The latter point is a really sticky issue because this is a primary cause of the financial crisis of 2007/08.
Next, Faraz please provide citations for your claims. While you do note government intervention in a lot of Western economies, this does not necessarily build up the case against neoliberalism. Pure neoliberalism does not exist anywhere and this should be kept in mind when evaluating its overall impact.
Finally, Arsalaan the markets don't work perfectly. This is why government intervention is often needed to regulate the imperfect economy. This doesn't mean that the government needs heavy intervention into the economy, but it still should provide appropriate checks and balances to ensure the economic stability.
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