Neoliberalism: Impacts and Criticisms

This assignment delves into the multifaceted theory of neoliberalism. It examines its positive contributions to globalization, international trade, and economic growth, highlighting concepts like market liberalization and reduced state intervention. However, it also critically analyzes the potential downsides of neoliberalism, including concerns over widening income inequality, social injustice, and environmental degradation. The text explores diverse perspectives on neoliberalism, considering both its proponents and critics within academic, political, and activist circles.

Neoliberalism
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Introduction
In 20th century there is a resurgence of 19th century idea of laissez-faire economic liberalism,
which are known as neoliberalism (Lazzarato, 2009). The concept encompasses economic
liberalization aspects as austerity, privatization, free trade, deregulation also decreasing
governmental spending for uplifting role of private sector’s role within the economy. It is a
market based idea which is a proposed paradigm shift from post war Keynesian consensus. The
scope of this analysis provides the theory’s approach towards human nature, conflict and
cooperation across international system. This analysis provides strengths and weaknesses
associated with the theory, with their perspective in international political scenario.
Analysis
The term neoliberalism has been used form 20th century but its conceptual meaning was on the
rise since 1970s and 1980s (Castree, 2011). The term originated in 1898 used by Charles Gide, a
French economist on the beliefs of Maffeo Pantaleoni an Italian economists. It was primary used
to be regarded as an intervention that opposed laissez-faire. However, most scholars in 1950s and
1960s regarded the concept as being a social market economy. It had been widely used by social
science scholars and also by modern critics. It is a social studies policy model that provides
economic factors transfers. This theory regards humans will emerge with competitive structure
of the market if the government takes certain steps. Some steps which governments can take in
such market structures includes limiting subsidies, making tax reforms, expansion of tax bases,
reduction I n deficit spending, opening markets to trade and limiting protectionism. Such types of
market often believes in abolishment of fixed rates of exchange, permitting of private property,
backing deregulation and privatization of businesses. Therefore, it does away with possible
barriers and regulations existing within the economy by freeing market participants to do what
they can do best. It is a laissez-faire approach towards economic development (Jackson, 2016).
Within the international systems of trade, there are trade barriers and regulations allowing for
export import policies and restriction on trade of goods. This theory provides a conflict within
the international system by doing away with all possible trade barriers and regulations. There are
various trade barriers in the international system, but according to this theory such barriers will
prohibit or restrict trade, not allowing participants in economic liberalism.
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Neoliberalism has various earlier theories associated with it, especially those connected to 19th
century ideas that initiated in 1970s and 1980s. These earlier theories focused reducing powers
or intervention of governmental powers in the state, meaning shutting down of the entire power
of the state. Therefore, the theory supports fiscal austerity, free trade, deregulation with
increasing of privatization in the state. Earlier theorists have connected and proposed its
connection with economic policies form United Kingdom by Margaret Thatcher also by Ronald
Reagan in the United States. It has also often been used to financialization that led to financial
crisis in 2008 and 2009, which is an approach to the economy. There are however changes to the
meaning in time that has transformed it to mean Chilean economic reforms as used by Augusto
Pinochet. His criticism of the then prevailing market reforms that were negatively connoted was
referred to as neoliberalism (Rubinstein, 2014). It came to reflect a radical laissez-faire capitalist
pool of ideas that were help more in connection to Milton Friedman and Friedrich Hayek. The
theory in its new forms was mostly associated with that of Spanish speaking scholars.
This theory conceptualized the role of private players for betterment of the state, hence the key
strength derived from this theory is that it focused on private participation. With private
participation, withdrawal of public funding or expenditures, there is bound to be competition and
resource allocation at suitable rates. It therefore, made market situations more compatible in
nature compared to government spending in various utilities. With private participation in
various sectors, there is bound to be rise in investment opportunities as well. The major
drawback of this theory however remains, inequitable distribution of resources. As government
is assumed to remove subsidies there is bound to be good available at prices higher, which might
lead to transfer of control in the hands of few wealthy. Only some people might have access to
scarce resource that might later lead to dis-balance within the economy. The concept was barely
used in the United States in its contemporary form. It had been attributed negative connotation
that was used to create a misunderstanding as regarded by various scholars.
International politics includes varied types of theories with each one having its own essence.
While some regards neoliberalism as acceptable others find capitalism as innovative (Braedley,
2010). It depends upon the political orientation of the state, especially neoliberalism with
democracy. It has been referred to as a middle way in conflicting economic policies of classical
liberalism and socialist planning. In the 1960s there was a high decline in the usage of the term
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neoliberal. It had primary come to mean a market economy that had a strong state model
popularly called the social market economy. Contemporarily the term has also been used to
demonstrate a developmental model that rejects structuralist economics as in Washington
Consensus. It connects to the idea of freedom for overarching social value for reducing state
functions (Keohane, 2011). It is primarily used to denote an academic paradigm in connection
with neoclassical economic theory. The concept has been used across multiple states and
countries in one form or the other. The theory has received various criticism in its crudest form
as the focus of the theory changed a great deal of way. There are various positive contributions
undertaken by the theory as well.
Conclusion
Globalisation has led to development and emergence of neoliberalism in all ways of life. Major
governments and enterprises have visualized benefits in adopting approach related to the concept
for internationalization. This theory has created positive impact around the globe, however there
are certain criticism to the theory as well. Critics argue that the primary focus of the theory is on
economic efficiency. Receiving criticism from politicians, academicians as well as myriad
activists. There has been criticism of the theory from left wing as well as from right wing of the
political front. This theory is said to ignore the social good for any activity, further this theory
has deeply impacted global health care systems. With its impact on international aid where
International Monetary Fund (IMF), World Bank and non-governmental organizations (NGOs)
are involved. There has been tremendous amounts of impact on infrastructure as well from rise
of neoliberalism that led to public sector infrastructure projects capital to private sector. There
are various counterpoints that has been developed in connection to neoliberalism as
globalization, as the theory provides ability for self-determination. One school of thought
proposes that removing governmental monopolies with private companies is bound to provide
better value to consumers. Neoliberalism is believed to enhance productivity however, it
proposes to erode away production for long periods of time. Exploitation critics considers that
such concepts promotes social injustice and exploitation. There is bound to be negative economic
consequences as well arising from neoliberalism.
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Reference Lists
Braedley, S. a. 2010. Neoliberalism and everyday life. McGill-Queen's Press-MQUP.
Castree, N. 2011. Neoliberalism and the biophysical environment 3: putting theory into practice.
Geography Compass, 35-49.
Jackson, R. a. 2016. Introduction to international relations: theories and approaches. Oxford
university press.
Keohane, R. 2011. Neoliberal institutionalism. Security Studies: A Reader.
Lazzarato, M. 2009. Neoliberalism in action: Inequality, insecurity and the reconstitution of the
social. Theory, culture & society, 109-133.
Rubinstein, R. L. 2014. “Successful aging,” gerontological theory and neoliberalism: A
qualitative critique. The Gerontologist, 34-42.
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