Neo-Liberalism: A Critical Analysis of Human Development Effects

This essay provides a comprehensive overview of neo-liberalism, tracing its historical roots and core concepts. It examines the effects of neo-liberal policies on human development, focusing on health concerns, income inequality, and the role of globalization and privatization. The analysis highlights how neo-liberalism, while promoting free markets and deregulation, has contributed to widening disparities in wealth and well-being. The essay discusses the impact of these policies on social programs, the weakening of labor unions, and the overall consequences for the health and economic stability of various nations. It uses examples from countries like Latin America, Africa, New Zealand, the USA, and the UK to illustrate the diverse effects of neo-liberal reforms on human development outcomes.

NEO- LIBERALISM

Introduction:
As far as the history is concerned, it has been analysed that neo-liberalism is the term that is
inspired by liberalism. The liberal population wanted to establish the world having unregulated
financial and globalised market. At this time, it has been witnessed that Western powers took all
the control on other weaker sections and countries. It has been analysed that neo-liberalism
policies have resulted in disastrous experiences in some of the countries like Latin America and
Africa but some of the international institutions are still implementing these policies (Castree,
2006). In the recent times, it has been identified that many of the Latin American countries have
restricted the use of neo-liberalism policies and started implementing the practices that are
related to their national interest and not as per the foreign rules. It has been analysed that it is not
the economic sect that has experienced dark side under neo-liberalism but the development of the
society and humans have also gone through some downsides after the neo-liberalism reforms in
various countries like Nigeria (Brenner, Peck and Theodore, 2010). The below discussion clearly
discusses about the concept of neoliberalism, its history and the impact of neo-liberalism on
human development in context of health concern, income inequality etc.
Concept of neo-liberalism:
Neo-liberalism is the theory or the ideology that has been developed by reforming the policies of
liberalism ideology. Neo-liberalism is the ideology that is basically based on the free market or
deregulation of the policies. Globalization is one of the most important elements of brining neo-
liberalism in the countries (Brenner, Peck and Theodore, 2010). Globalisation allows the
companies to trade freely between the international markets. The major driving force behind the
policies of neo-liberalism is the international financial institutions. The concept of neo-liberalism
has been introduced in order to bring harmony and making the one peaceful and harmonious
world market. But, it has been analysed that there are no significant changes observed in the
conditions of the developing countries as the developed countries are still dominating the free
market (Robertson, 2004). The ideology of neo-liberalism was thought to be implemented in
order to bring global capitalism but implementation of neo-liberalism has instead widened the
gap between the developed and the developing nations. The ideologies of neo-liberalism is
bringing inequalities in the market and often resulting in bad governance and domination by the
developed countries.

On the whole, it has been analysed that neo-liberalism is the theory that is related to the
economic theory of political framework that is proposed in order to develop the human wellbeing
by providing them the entrepreneurial and business freedom through some of the policies like
free trade, freedom of markets and string property rights (Harvey, 2005).
The neo-liberalism supporters argues that the instability in the economy of the world is growing
because of the excessive regulation and interference of government in the business practices but
the critiques of this theory argues that in the case of East Asian crisis of year 1996, the major
reason for this crisis is the deregulation of the financial systems. As the regulation policies were
not there thus this resulted in situation of lending from the western banks. Western banks argue
that rather than following the free market practices, the regulated practices can be helpful for the
East Asian countries to be stable (Ward and England, 2007). The people who remain in the
support of neo-liberalism believe that people can be served efficiently in the free market
conditions and less interference of the government and the state. According to them, the roles of
the governmental parties should be restricted and limited to creation of market and rest should be
on the shoulders of the private organisations and enterprises (Benoit, Zadoroznyj,
Hallgrimsdottir, Treloar and Taylor, 2010). It has also been argued that if the people in the
businesses are left freely to trade in the market then they will do everything to earn profit and
take optimum benefits of opportunities available in the market with mutual concerns.
Neo-liberalism in context of human development:
Neo liberalism is being distinguished from the theory of neo conservatism is because neo
conservatism is concerned with social aspects and supports the traditional values of the family
and the society (Campbell and Pedersen, 2001). The neo-liberalism deals only with market
situation and considered people a consumer and manufacturers. Thus, there are many negative
impact of neo-liberalism on the human development. It was claimed that neo-liberalism is the
concept that is made for human wellbeing but in reality, it is not the case (Birch, Levidow and
Papaioannou, 2010). There are many aspects of the society that are affected by neo-liberalism
and thus limiting the development of humans. Some of the aspects of society that are getting
affected are inequality, health of the people etc.

Neo liberalisation and globalisation:
Neo liberalisation is the result of globalisation and privatisation. It has been analysed that
globalisation is the process in which the companies and the business are allowed to work with
the international countries and the free trade facility is variable with the companies. The
privatisation on the other hand results in depowering the government of the state or the country
and all the function in the countries are in the hand of the private institutions (Purcell, 2009).
This stage or the phase is called as neo liberalisation phase where the business are enjoying the
power of doing business freely with the other countries and earning more and more from the
foreign currencies. It has been analysed that this is bringing development to the country. Along
with this development, there were many things that has been faced by the countries and the
population and that were the loss of power by the government and loss of access of the public on
the facilities that were used to be public before (Mayer, 2007). Because of privatisation the
facilities that were used by public are also in control of the private companies. This is because
privatisation of the government companies allows the business individuals to implement their
processes and policies to the company and thus raise the quality and the price of the products and
the services offered. Privatisation itself suggests that the organisation focuses on earning profits
and not focus on the welfare of the public.
Neo-liberalism and inequality:
Neo liberalism is not concerned about equality. According to this concept, it has been analysed
that market is the only source of goods and resources and thus the population should accept what
the market brings. It has been analysed that since 1970”s inequality among the developing and
the developed countries are rising because of the policies of neo liberalisation. As per the report
of the international NGO called Oxfam, it has been identified that 62 individuals have the wealth
of around 3.6 billion people in 2015 (Lazzarato, 2009). Only the people from wealthy sections
are growing in terms of their wealth by 44% but half of the world population wealth has
decreased by 41%. From a long time, it has been identified that the economists are only focusing
on the growth and not on the aspect of distribution of the income (McDonald, 2012).
Neoliberalism has brought growth in the economy but it has increases the gap between the rich
and the poor because the growth is undistributed equally among the people. Inequality has not
been seen only in the case of income but inequality has been identified in other areas as well

such as health, education etc. there are many argument made against the neoliberal policies
because it was a topic of debate that whether the neoliberal policies are developing the people or
reducing the interference of the government in the policies and making the wealthy people more
wealthy. This is because, it has been analysed that most of the programs related to neoliberal
policies have reduced the interference of state programs that used to be conducted for the
benefits of the society and for the benefits of the working class people. The evidence of this is
weakening the labour unions from the companies (Navarro, 2007). For instance, The America
president Ronald breaks down the PATCO strike in the year of 1981 and fire around 13,000
workers. Another example that shows the evidence of weakening of working class has been seen
in Britain where the Prime Minister Margaret has defeated the unions of miners in 1984 and
1985. All these evidence suggests that the government and the businesses want to bring the
smaller unions and wants to snatch their powers from them. There are various types of neoliberal
policies that can be identified and observed in different nations (Navarro, 2007). The interference
of state is the major thing that has been considered in this study for understand neoliberal
policies because change in the tax structure and the market policies along with spending of
government on the social programs affect the distribution of income among the people and
reduction in his spending somehow affect the income and wages of the working class people in
negative way (Hursh and Martina, 2003). Neo liberalisation have actually not restricted the
interference of government but made the government and state as their drivers and driving the
whole market economies as per their rules. Under the neoliberal policies, it has been observed
that the major focus is on earning and economic growth and not to the factors such as
unemployment that act as the major cause of poverty amongst the working class people that
makes the largest share of the population. After neo liberalisation in 1980 to 2000, it has been
identified that the unemployment rate was varying between the low of 6.4% in US to 10% in
France and 10.7% in Italy (Armada, et al. 2009).
Under neoliberal policies, it has also been identified that the spending in the social programs that
were used to be conducted for helping the middle and poorer class people by the government has
also reduced (Western, et al 2007). In the states with neoliberal policies, the spending on social
wage programs, subsidies and like insurance on unemployment, insurance on disability, pension
schemes, education subsidies etc. has been found to be reduced very much (López Rivera, 2013).
The privatization of the good and services that were earlier sold by the government and

cooperatives results in increase of prices of such goods and services that are very basic. This has
ultimately affected the income of middle class people and increases their expenses.
The next aspect of neo liberalisation is structure of tax by the government. Relaxation in the
business activities and trading results in lowering of tax for the rich people and the payoff needs
to be paid by the middle class who ultimately suffers from inflation and high tax structure (Hill
and Kumar, 2012).
After the analysis of income inequality, it has also been analysed that in terms of health as well,
the human development has been restricted and the gap of development has been increased after
neo liberalisation (Collins, et al.2015). It has been analysed that the change in the results of neo
liberalisation has been observed in many countries in the sector of health. In the country like
New Zealand, neo liberalisation policies and reforms have led to development of income
inequalities and also observed that there aware sharp increase in the mortality inequalities across
the nation. In USA as well, similar case was witnessed and it has been analysed that political
inclination towards neo liberalisation results in slowing down of average health of the whole
population along with increase in inequalities in health (Armada, etal. 2009). In UK, the
inclination of government of Thatcher, PM of UK towards neo liberalisation also experiences
decrease in income equality and rise in health inequality among the nation. In terms of health, the
consequences were very shocking as the people who were healthy were benefited with more
facilities in health improvement sector and those who were suffering from health issues facing
the negative improvement in their conditions. The overall result was massive increase in the
health inequalities.

(Gwynne and Cristobal, 2014).

Above both the figure clearly defines the overall situation of USA and UK after the era of neo
liberalisation in the countries.it has been analysed from the above figures that mortality rate of
the country is directly proportional to the income inequality in the country. This suggests that
inequality in income of the people also affects the health factors. This is obvious because if one
of the sector in the country is not getting income then this leads to reduction in the expenses of
the people and they cannot focus on their health and ultimately have to face heath issues.
The health status of Russia along with any other countries and states of USSR were improving
till the time the countries were under the governance of neo liberalisation. But, after
implementation of the neo liberalisation policies in the countries, the rise in development of the
countries has also resulted in decrease in the health situation and the inequalities. The alignment
of neo liberal policies in the countries resulted in many types of inequalities such as income
inequality, health inequality, etc.
Neo liberalisation has a long history and it has evolved gradually in the market of all over the
world. The impact of neo liberalisation policies has been observed directly in different countries.
It has been analysed that most of the countries have faced some of the issues in negative way.
With the development of the economy of the countries, the decline in income distribution and
health is clearly defined by the above explanation (Ataguba and Alaba, 2012).
It has been found that neoliberal monetary changes have a tendency to discourage monetary
development and highlight imbalances in riches. Without a doubt, the appearance of the
Washington Accord matched with poorer monetary execution around the world: the general rate
of total national output (Gross domestic product) development per capita on the planet economy
was 2.6 for every penny amid the Brilliant period (between 1960 furthermore, 1979), however
just 1.0 for every penny amid the neoliberal time frame (in the vicinity of 1980 and 1998)
Neoliberal changes have been related with expanding financial imbalances between nations, as
well as inside nations (Ataguba and Alaba, 2012).After the approach of these strategies, the
income gap between the most astounding versus the least social classes has for the most part
broadened. For instance, in the Joined States, in 1980, a president of the big company on an
average earned around 40 times as much as the normal specialist; by 1990, in any case, a similar
rate expanded to 100 times to end up noticeably 350 times in 2002 (Robertson, 2004).

Conclusion:
To conclude, it can be suggested that neo liberalisation is the model that has been used in the
social economic environment of the countries so as to bring the positive changes in the economy
of the world. The analysis suggests that it has brought up many positive changes in the economy
but at the same time there are some of the negative impact that has been observed in the different
countries because of neo liberalisation. It has been analysed that neo-liberalism policies have
resulted in disastrous experiences in some of the countries like Latin America and Africa but
some national institutions are still implementing these policies (Passas, 2000). In the recent
times, it has been identified that many of the Latin American countries have restricted the use of
neo-liberalism policies and started implementing the practices that are related to their national
interest and not as ore the foreign rules. Globalization is one of the most important elements of
brining neo-liberalism in the countries. Globalisation allows the companies to trade freely
between the international markets. The major driving force behind the policies of neo-liberalism
is the international financial institutions. Neo liberalism is not concerned about equality.
According to this concept, it has been analyse that market is the only source of goods and
resources and thus the population should accept what the market brings. It has been analysed that
since 1970s inequality among the developing and the developed countries are rising because of
the policies of neoliberalism. Inequalities were not only terns of income nut in terms of health as
well. Neo liberalisation have actually not restricted the interference of government but made the
government and state as their drivers and driving the whole market economics as per their rules.
Under the neoliberal policies, it has been observed that the major focus is on earning and
economic growth and not to the factors such as unemployment that is the major cause of poverty
amongst the working class people that makes the largest share of the population. After the
analysis of income inequality, it has also been analysed that in terms of health as well, the human
development has been restricted and the gap between the poor and the rich has increased after
implementation of neo liberalisation policies.

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