The fatal flaw of neoliberalism: it’s bad economics
Added on 2021-04-17
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EconomicsPolitical Science
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‘THE FATAL FLAW OF NEOLIBERALISM: IT’S BAD ECONOMICS’ 1NameTutorCourseDate
‘THE FATAL FLAW OF NEOLIBERALISM: IT’S BAD ECONOMICS’ 2Rooted in the free market principles of economics, the concept of neoliberalism has been linked with famous political leaders such as Bill Clinton, Ronald Reagan, Pinochet, Margaret Thatcher, Tony Blair, Junichiro Koizumi and Augusto.In its glory days as recorded in the late 1990s, the concept of neoliberalism was one of the world's successful economic approaches rightfrom the Anglo-American focus on capitalism to the earlier communist bloc and right to the developing areas in the global South. However, at the dawn of 21st century, neoliberalism concept has been condemned as a global economy which is fabricated on its own principles and shaken to its core by the financial calamities unperceivable since the doom years of the 1930s.So, is neoliberalism doomed as it has been criticized by authors like Dani Rodrik or still has some firm basis as defended by others like Ellen Meiksins Wood? This essay reveals how Ellen Meiksins Wood challenges the assumptions rampant in Rodrik’s ‘The fatal flaw of neoliberalism: it’s bad economics’ under the bases of markets preference over the government.According to Rodrik’s opinion in response to the concept of neoliberalism, he outlined that there was no single neoliberalism. And the elements behind the concept were just but basic economics which could only be beneficial if used under right situation and being accompanied by political lodestars like equality, justice, social inclusion and democratic deliberation. He then concluded that neoliberalism was just but a fatal flaw which did not even get the principles of economics right and thus was supposed to be rejected because it insinuated bad economics (Hudson, 2010).Rodrik mentions some of the countries whose history record shows that they survived and cherished under the concept of neoliberalism. And these are China, South Korea, Japan, Mauritius and Taiwan (Wood, 2016, p.75). They all embraced globalization fully rather than turning their backs on it, and eventually benefited from it handsomely. However, their success
‘THE FATAL FLAW OF NEOLIBERALISM: IT’S BAD ECONOMICS’ 3has been misused by many defenders of the current economic order who quickly points to the examples whenever globalization is questioned. What they rarely reveal is that most of them joined the world economy through going against neoliberal parameters. South Korea and Taiwan, are good examples, they heavily subsidized their exporters both through financial systems as well as tax incentives. And eventually, they removed all their import restrictions, sometime later after the economic growth had taken off. He then proposes on the way people should approach ow then the concept of globalization to liberate it from the grip of neoliberal bias. He suggests the first step to be the understanding of the positive potential associated with global markets. Like the access to global markets in services, goods, capital and technologies which played crucial roles in almost all the economic miracles of the time Evidently, the reason behind the hard feelings of Rodrik in his work can be associated with the assumption he made right from the word go. He sees no need for the government intervention in the scenario as he terms it as a push by giving the government full credit without considering the efforts of entrepreneurs. This is a challengeable if a different case can be put intoconsideration (Palley, 2012). Where the government subsidizes the efforts of its business owners but they fail to go the extra mile. This would definitely mean that the efforts would not bear fruits but in the scenario at hand, the countries which subsidized its business community by giving the necessary support while on the other hand the community embraced the support inputting the extra effort, the fruits were realized (Shibata, 2013, p.92).In his response to the assumptions made by Rodrik in his work and which had raised a compelling debate on the importance of government involvement in modern capitalism, Ellen Meiksins Wood argued on support of the government was more important than ever as far as
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