Article on Political Economy 2022

Running head: SOCIOLOGY
Political Economy
Name of the Student:
Name of University:
Author Note

SOCIOLOGY
Dani Rodrik in the article, The fatal flaw of neoliberalism: it's bad economics, intends to
underline how neoliberalism is linked to markets and governance. The article focuses on how
neoliberalism is based on the preference for markets as opposed to governance. Neoliberalism
can be defined in terms of economics, to be characterized with free market trade, privatization,
deregulation, individualism and which is a bit distant from the provision of the welfare of the
state. The author points out, that it has gained negative criticism as well, because of the rise in
economic inequality and insecurity. The political value, which is possessed by Neoliberalism has
been decreased heavily after it received criticism and backlash.
Neoliberalism, what it was almost three decades earlier, as put across A Neo Liberal’s
Manifesto and what it is today, has slight resemblance. In the contemporary world, financial
deregulation is often the reason behind the crash in market. The economic globalization ensured
financial flow which allowed trade agreements which had greater ambitions to fulfil. And thus,
globalization and financialization of trades are the most dominant expressions of the neoliberal
approach in the recent times. Thus, the idea of neoliberalism is constantly shifting according to
the changes in the market scenario, and economic conditions. United Kingdom and United States
of America imbibed some of the features of Neoliberalism by following the ideas put across by
Margaret Thatcher and Ronald Regan as they resorted to privatization, individual enterprises,
deregulation and financial liberalization (Rodrik 2020). The intention was to develop policies
which are based on the concepts of Homo Economicus of being rational and capable of pursuing
the best interest which serve non-financial as well as financial goals (Poole 2020).
However, the author has also pointed out that the criticism which is gained by
Neoliberalism also often rejects and ignores the very idea that privatization and liberalization of
the market might lead to good outcomes, which, if they are utilized and executed with precision.