Neoliberalism is a political ideology that seeks to transfer control of the economy to
the private sector, as opposed to government.
Neoliberalism is often associated with Thatcher and Reagan and the 1980s more generally, but
it actually has its roots in an ideology more than 100 years older,
classical liberalism.
But first, hit the subscribe button and like this video for more great content. So, without
further ado, here’s Neoliberalism.
The best way to understand neo liberalism is an ideology that came about in response
to the economic stagnation and high debt of the 1970s.
As a result of this a group of economists, the chiefest amongst which were Milton Friedman
and Friedrich Hayek, called for a return to classical liberalism,
which helps explain the name, neoliberalism, neo meaning in this case, a revived form of
something.
But what’s classical Liberalism?
Classical Liberalism is generally associated with an ideology that became popular in the
19th century, that stressed individual freedom
and democracy, that is the right of the people to choose their own government
However in the early 20th century across the world a different type of liberalism began
to replace classical liberalism, known as social liberalism or modern liberalism.
This kind of liberalism focused more on removing the things that were seen as obstacles to
individual freedom,
like poverty, wealth inequality,
and social injustices, like racism and discrimination.
Because of this many aspects of the early welfare state, like government provided healthcare,
benefits to the unemployed and elderly, and regulations, or rules, on working conditions,
were formulated by social liberals in the early 20th century.
Social liberals in the 1930s like Beveredge and Keynes also called for full employment
which is where everybody has a job and spending during recessions to curb unemployment,
when these ideas were eventually enacted after the second world war, this became known as
the Post-war consensus
Neoliberals like Hayek and Friedman on the other hand favoured a return to classical
liberalism
and with the successive elections of right wing governments in the 1980s, they helped
lay waste to this social liberal consensus
that they saw as being responsible for the economic stagnation and high debt of the 1970s.
The neoliberal approach in its emphasis of the values of classical liberalism prides
the economic rights of the individual above all else.
Because of this, neoliberals believe that government policies such as taxation
and regulation
reduce the freedom of the individual to do what he or she wants with their own money.
Neoliberals also believe that competition improves businesses,
and they can only experience the full brunt of this when free of regulation
and subsidies which is money that the government gives to businesses
As a result, neoliberal governments in the USA and UK in the 1980s implemented what is
called ‘laissez faire’ economics, coming from the french phrase ‘leave alone’
this means the government stays out of the economy as much as possible
This manifested itself as major deregulation,
reduced taxes
as well as more free trade
and cutting subsidies to manufacturing industries.
Also whereas John Maynard Keynes’ economic approach
pushed for the government intervening in the economy to make sure everybody had a job
and spending lots during recessions to ward off unemployment,
neoliberals favoured governments staying out of the economy as much as possible
and thus believed the best way to stabilise an economy was to control the money supply
as opposed to spending more, this is called called monetarism.
However because of Neoliberalism’s emphasis on the economic rights of the individual right
to do as he or she pleases with their own money,
it means that if they lose money,
or lose their job,
that’s their own fault.
Because of this under a neoliberal system, inequality, or some have more than others
is inevitable, even desirable, .
This approach costs a lot to pay for things like tax cuts,
money which often comes from raiding public services that help the weakest in society.
Also because of the stress neoliberalism places on individuals over the government, there
is less of the emphasis on democracy that classical liberalism and social liberalism
share,
neoliberals tend to fear the mob rule effect of democracy,
that people could vote in governments that could infringe on the economic rights of individuals,
like socialist governments.
Fredriech Hayek even went as far as to argue that neoliberalism could be brought about
under a dictatorship.
There is an extent to which this has in fact happened in many countries,
what with crony capitalism and the housing crisis in 2008,
the government supported the interests of banks and big businesses
contrary to what people actually wanted them to do, they effectively subverted democracy
To conclude neoliberalism is a political ideology that became popular during the 1980s as a
response to the economic stagnation of the previous decade.
a primarily economic ideology, neoliberalism prides the individuals right to do as he or
she chooses with their own money,
so wants to cut away at all barriers to this, including high taxes, regulations and even
subsidies and benefits
that risk freeing individuals and businesses from the competition they supposedly need
to thrive.
However going hand in hand with this emphasis on the individual is an almost passivity or
even desire for inequality,
as well as passivity towards how the neoliberal agenda is implemented, democratic
or otherwise.
That's neoliberalism. don't forget to like, share and subscribe. thanks for watching