Until the 1970s, the post-war world was characterized in the West by an uneasy balance between government and private enterprise. Neoliberalism is a philosophical-social and politico-economic concept that aims to minimize the state’s influence on economic events. However, in the past few years, more and more experts have mentioned the death of neoliberalism. Is the era of neoliberalism finally over? Check out some opinions below.
Is the era of neoliberalism finally over? Discuss your position offering certain pros and cons if this is the case.
“Neoliberalism is a relatively new policy concept in economics and social sciences that entails the transfer of environmental control from the government to the private sector. The main difference between liberal and neoliberal economic policies is that liberals support freeing the economy by removing barriers to growth, whereas neoliberals advocate for a laissez-faire approach to economic development. In this respect, neoliberalism has enormous potential to strengthen the economy through fostering private ownership, open markets, stable exchange rates, and tax base development. Increased product distribution contributes to the establishment of a more competitive and inventive business environment in which companies compete to exceed one another by developing new products at competitive rates. As a result, shoppers seeking both affordable and high-quality products benefit significantly. Internationalized economies, enabled by free trade, also lead to the development and manufacture of previously unseen commodities and technologies thus accelerating economic and technical growth. Despite the fact that neoliberal proponents typically claim that their policy approach may allow a more equitable distribution of income from the top to the bottom, many scholars argue that it perpetuates the constant accumulation of wealth by the largest corporations, weakening democratic institutions. This, in turn, adds to the unequal distribution of wealth resources in both established and developing economies, resulting in a widening of the income gap between the richest and lowest earners. The neoliberal economic development view is based on centrist viewpoints that overlook private property values. Despite the fact that liberalism began as a movement for comprehensive social and economic liberty, neoliberalism has turned around and rejected these concepts by adopting somewhat dictatorial restrictions that encourage the development of profitable and competitive sectors of the economy. The unequal distribution of monetary resources also aids the growth of market monopolies which hinder the growth of smaller enterprises.”
“Neoliberalism is an imprecise theory about the primacy of economic growth to drive welfare for all, including the poor. Some derisively call this trickle-down economics and, to some extent, this is true. It focuses on economic growth – who benefits from that growth is incidental. All will benefit, some more, some less! According to Ostry, millions have been rescued from abject poverty (2017:38). The neoliberal agenda is about deregulation and opening up domestic markets including removing restrictions on foreign direct investment. The second aspect is a smaller role for the state, including privatization and restrictions on fiscal deficits and debt (Ostry, 2016:38). There are weaknesses in the neoliberal agenda in that short-term capital flows can increase domestic financial volatility. The impacts of austerity may also unfairly target those who are poor and/or economically disadvantaged. The rise of corporate behemoths like Google and Amazon are not part of the neoliberal agenda but point to a weakness in maintaining competitive markets and managing short-term capital controls (Birch, 2017:3). The privatization of state assets was messy, ineffective, and, in some cases, daylight robbery, which reinforces the concept that the state should stay away from the market. However, neoliberalism cannot be blamed for financial melt-downs, climate change, tax evasion, the slow collapse of education and health, resurgent child poverty, the epidemic of loneliness, Brexit, and Donald Trump (Monbiot, 2016:1) or COVID. These are all left-wing fantasies. Neoliberalism has struggled to have a coherent agenda to stave off the economic disruption of the pandemic. Its monetary tools are exhausted. Once the pandemic has faded and states face the fiscal drag of huge deficits, neoliberalism will still be available to remind politicians that they have no right to mortgage the future!! However, states should consider more nuanced neoliberalism that mitigates its inherent limitations.”
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