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Neoliberalism is a political and
economic ideology An economic ideology is a set of views forming the basis of an ideology on how the economy should run. It differentiates itself from economic theory in being Normative economics, normative rather than just explanatory in its approach, whereas the ...
that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pejoratively. In scholarly use, the term is often left undefined or used to describe a multitude of phenomena. However, it is primarily employed to delineate the societal transformation resulting from market-based reforms. Neoliberalism originated among European liberal scholars during the 1930s. It emerged as a response to the perceived decline in popularity of
classical liberalism Classical liberalism is a political tradition and a branch of liberalism that advocates free market and laissez-faire economics and civil liberties under the rule of law, with special emphasis on individual autonomy, limited governmen ...
, which was seen as giving way to a social liberal desire to control markets. This shift in thinking was shaped by the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
and manifested in policies designed to counter the volatility of
free market In economics, a free market is an economic market (economics), system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of ...
s. One motivation for the development of policies designed to mitigate the volatility of
capitalist Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
free markets was a desire to avoid repeating the economic failures of the early 1930s, which have been attributed, in part, to the
economic policy ''Economic Policy'' is a quarterly peer-reviewed academic journal published by Oxford University Press, Oxford Academic on behalf of the Centre for Economic Policy Research, the Center for Economic Studies (University of Munich), and the Paris Scho ...
of classical liberalism. In the context of policymaking, ''neoliberalism'' is often used to describe a paradigm shift that was said to follow the failure of the post-war consensus and
neo-Keynesian economics The neoclassical synthesis (NCS), or neoclassical–Keynesian synthesisMankiw, N. Gregory. "The Macroeconomist as Scientist and Engineer". ''The Journal of Economic Perspectives''. Vol. 20, No. 4 (Fall, 2006), p. 35. is an academic movement and ...
to address the stagflation of the 1970s, though the
1973 oil crisis In October 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) announced that it was implementing a total oil embargo against countries that had supported Israel at any point during the 1973 Yom Kippur War, which began after Eg ...
, a causal factor, was purely external, which no economic modality has shown to be able to handle. The
dissolution of the Soviet Union The Soviet Union was formally dissolved as a sovereign state and subject of international law on 26 December 1991 by Declaration No. 142-N of the Soviet of the Republics of the Supreme Soviet of the Soviet Union. Declaration No. 142-Н of ...
and the end of the
Cold War The Cold War was a period of global Geopolitics, geopolitical rivalry between the United States (US) and the Soviet Union (USSR) and their respective allies, the capitalist Western Bloc and communist Eastern Bloc, which lasted from 1947 unt ...
also facilitated the rise of neoliberalism in the United States, the United Kingdom and around the world. ''Neoliberalism'' has become an increasingly prevalent term in recent decades.: "Neoliberalism is easily one of the most powerful concepts to emerge within the social sciences in the last two decades, and the number of scholars who write about this dynamic and unfolding process of socio-spatial transformation is astonishing."; "People rarely call themselves 'neoliberal'." It has been a significant factor in the proliferation of
conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...
and right-libertarian organizations,
political parties A political party is an organization that coordinates candidates to compete in a particular area's elections. It is common for the members of a party to hold similar ideas about politics, and parties may promote specific ideological or p ...
, and
think tank A think tank, or public policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governme ...
s, and predominantly advocated by them. Neoliberalism is often associated with a set of economic liberalization policies, including privatization, deregulation, depoliticisation, consumer choice, labor market flexibilization, economic globalization,
free trade Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
, monetarism,
austerity In economic policy, austerity is a set of Political economy, political-economic policies that aim to reduce government budget deficits through Government spending, spending cuts, tax increases, or a combination of both. There are three prim ...
, and reductions in
government spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual or ...
. These policies are designed to increase the role of the
private sector The private sector is the part of the economy which is owned by private groups, usually as a means of establishment for profit or non profit, rather than being owned by the government. Employment The private sector employs most of the workfo ...
in the
economy An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...
and
society A society () is a group of individuals involved in persistent social interaction or a large social group sharing the same spatial or social territory, typically subject to the same political authority and dominant cultural expectations. ...
.; "Neoliberalism represents a set of ideas that caught on from the mid to late 1970s, and are famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States following their elections in 1979 and 1981. The 'neo' part of neoliberalism indicates that there is something new about it, suggesting that it is an updated version of older ideas about 'liberal economics' which has long argued that markets should be free from intervention by the state. In its simplest version, it reads: markets good, government bad." Additionally, the neoliberal project is oriented towards the establishment of institutions and is inherently political in nature, extending beyond mere economic considerations. The term is rarely used by proponents of free-market policies. When the term entered into common academic use during the 1980s in association with
Augusto Pinochet Augusto José Ramón Pinochet Ugarte (25 November 1915 – 10 December 2006) was a Chilean military officer and politician who was the dictator of Military dictatorship of Chile, Chile from 1973 to 1990. From 1973 to 1981, he was the leader ...
's economic reforms in
Chile Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...
, it quickly acquired negative connotations and was employed principally by critics of market reform and
laissez-faire capitalism ''Laissez-faire'' ( , from , ) is a type of economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies or regulations). As a system of thought, ''laissez-faire' ...
. Scholars tended to associate it with the theories of economists working with the Mont Pelerin Society, including Friedrich Hayek,
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
, Ludwig von Mises, and James M. Buchanan, along with politicians and policy-makers such as
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...
,
Ronald Reagan Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was an American politician and actor who served as the 40th president of the United States from 1981 to 1989. He was a member of the Republican Party (United States), Republican Party a ...
, and Alan Greenspan. Once the new meaning of neoliberalism became established as common usage among Spanish-speaking scholars, it diffused into the English-language study of
political economy Political or comparative economy is a branch of political science and economics studying economic systems (e.g. Marketplace, markets and national economies) and their governance by political systems (e.g. law, institutions, and government). Wi ...
. By 1994, the term entered global circulation and scholarship about it has grown over the last few decades.


Terminology


Origins

An early use of the term in English was in 1898 by the French economist Charles Gide to describe the economic beliefs of the Italian economist Maffeo Pantaleoni, with the term previously existing in French; the term was later used by others, including the classical liberal economist
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
in his 1951 essay "Neo-Liberalism and its Prospects". In 1938, at the Colloque Walter Lippmann, ''neoliberalism'' was proposed, among other terms, and ultimately chosen to be used to describe a certain set of economic beliefs. The colloquium defined the concept of neoliberalism as involving "the priority of the price mechanism, free enterprise, the system of competition, and a strong and impartial state". According to attendees Louis Rougier and Friedrich Hayek, the competition of neoliberalism would establish an elite structure of successful individuals that would assume power in society, with these elites replacing the existing
representative democracy Representative democracy, also known as indirect democracy or electoral democracy, is a type of democracy where elected delegates represent a group of people, in contrast to direct democracy. Nearly all modern Western-style democracies func ...
acting on the behalf of the majority. To be ''neoliberal'' meant advocating a modern economic policy with state intervention. Neoliberal state interventionism brought a clash with the opposing ''laissez-faire'' camp of classical liberals, like Ludwig von Mises. Most scholars in the 1950s and 1960s understood neoliberalism as referring to the social market economy and its principal economic theorists such as Walter Eucken, Wilhelm Röpke, Alexander Rüstow, and Alfred Müller-Armack. Although Hayek had intellectual ties to the German neoliberals, his name was only occasionally mentioned in conjunction with neoliberalism during this period due to his more pro-free market stance. During the military rule under Augusto Pinochet (1973–1990) in Chile, opposition scholars took up the expression to describe the economic reforms implemented there and its proponents (the Chicago Boys). Once this new meaning was established among Spanish-speaking scholars, it diffused into the English-language study of political economy. According to one study of 148 scholarly articles, neoliberalism is almost never defined but used in several senses to describe ideology, economic theory, development theory, or economic reform policy. It has become used largely as a term of abuse and/or to imply a ''laissez-faire'' market fundamentalism virtually identical to that of classical liberalism – rather than the ideas of those who attended the 1938 colloquium. As a result, there is controversy as to the precise meaning of the term and its usefulness as a descriptor in the
social science Social science (often rendered in the plural as the social sciences) is one of the branches of science, devoted to the study of societies and the relationships among members within those societies. The term was formerly used to refer to the ...
s, especially as the number of different kinds of market economies have proliferated in recent years. Unrelated to the economic philosophy, ''neoliberalism'' is used to describe a centrist political movement from modern American liberalism in the 1970s. According to political commentator David Brooks, prominent neoliberal politicians included
Al Gore Albert Arnold Gore Jr. (born March 31, 1948) is an American former politician, businessman, and environmentalist who served as the 45th vice president of the United States from 1993 to 2001 under President Bill Clinton. He previously served as ...
and
Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...
of the Democratic Party. The neoliberals coalesced around two magazines, ''
The New Republic ''The New Republic'' (often abbreviated as ''TNR'') is an American magazine focused on domestic politics, news, culture, and the arts from a left-wing perspective. It publishes ten print magazines a year and a daily online platform. ''The New Y ...
'' and the '' Washington Monthly''; they also supported
Third Way The Third Way is a predominantly centrist political position that attempts to reconcile centre-right and centre-left politics by advocating a varying synthesis of Right-wing economics, right-wing economic and Left-wing politics, left-wing so ...
policies. The "godfather" of this version of neoliberalism was the journalist Charles Peters, who in 1983 published "A Neoliberal's Manifesto".


Current usage

Historian Elizabeth Shermer argued that the term gained popularity largely among left-leaning academics in the 1970s to "describe and decry a late twentieth-century effort by policymakers, think-tank experts, and industrialists to condemn social-democratic reforms and unapologetically implement free-market policies"; economic historian Phillip W. Magness notes its reemergence in academic literature in the mid-1980s, after French philosopher
Michel Foucault Paul-Michel Foucault ( , ; ; 15 October 192625 June 1984) was a French History of ideas, historian of ideas and Philosophy, philosopher who was also an author, Literary criticism, literary critic, Activism, political activist, and teacher. Fo ...
brought attention to it. ''Neoliberalism'' is contemporarily used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing, especially through privatization and
austerity In economic policy, austerity is a set of Political economy, political-economic policies that aim to reduce government budget deficits through Government spending, spending cuts, tax increases, or a combination of both. There are three prim ...
, state influence in the economy. It is also commonly associated with the economic policies introduced by
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...
in the United Kingdom and
Ronald Reagan Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was an American politician and actor who served as the 40th president of the United States from 1981 to 1989. He was a member of the Republican Party (United States), Republican Party a ...
in the United States. Some scholars note it has a number of distinct usages in different spheres: * As a development model, it refers to the rejection of structuralist economics in favor of the
Washington Consensus The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
. * As an
ideology An ideology is a set of beliefs or values attributed to a person or group of persons, especially those held for reasons that are not purely about belief in certain knowledge, in which "practical elements are as prominent as theoretical ones". Form ...
, it denotes a conception of freedom as an overarching social value associated with reducing state functions to those of a minimal state. * As a
public policy Public policy is an institutionalized proposal or a Group decision-making, decided set of elements like laws, regulations, guidelines, and actions to Problem solving, solve or address relevant and problematic social issues, guided by a conceptio ...
, it involves the privatization of public economic sectors or services, the deregulation of private corporations, sharp decrease of government budget deficits and reduction of spending on
public works Public works are a broad category of infrastructure projects, financed and procured by a government body for recreational, employment, and health and safety uses in the greater community. They include public buildings ( municipal buildings, ...
. There is debate over the meaning of the term. Sociologists Fred L. Block and Margaret Somers claim there is a dispute over what to call the influence of free-market ideas which have been used to justify the retrenchment of
New Deal The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression in the United States, Great Depressi ...
programs and policies since the 1980s: neoliberalism, '' laissez-faire'' or "free market ideology". Other academics such as Susan Braedley, Meg Luxton, and Robert W. McChesney, assert that neoliberalism is a political philosophy which seeks to "liberate" the processes of
capital accumulation Capital accumulation is the dynamic that motivates the pursuit of profit, involving the investment of money or any financial asset with the goal of increasing the initial monetary value of said asset as a financial return whether in the form ...
.Susan Braedley and Meg Luxton,
Neoliberalism and Everyday Life
'' ( McGill-Queen's University Press, 2010),
p. 3
/ref> In contrast, Frances Fox Piven sees neoliberalism as essentially hyper-
capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
. Robert W. McChesney, while defining neoliberalism similarly as "capitalism with the gloves off", goes on to assert that the term was largely unknown by the general public in 1998, particularly in the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. Lester Spence uses the term to critique trends in Black politics, defining neoliberalism as "the general idea that society works best when the people and the institutions within it work or are shaped to work according to market principles". According to Philip Mirowski, neoliberalism views the market as the greatest information processor, superior to any human being. It is hence considered as the arbiter of truth. Adam Kotsko describes neoliberalism as political theology, as it goes beyond simply being a formula for an economic policy agenda and instead infuses it with a moral ethos that "aspires to be a complete way of life and a holistic worldview, in a way that previous models of capitalism did not." Neoliberalism is distinct from liberalism insofar as it does not advocate ''laissez-faire'' economic policy, but instead is highly constructivist and advocates a strong state to bring about market-like reforms in every aspect of society. Anthropologist Jason Hickel also rejects the notion that neoliberalism necessitates the retreat of the state in favor of totally free markets, arguing that the spread of neoliberalism required substantial state intervention to establish a global 'free market'. Naomi Klein states that the three policy pillars of neoliberalism are " privatization of the public sphere, deregulation of the corporate sector, and the lowering of
income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. F ...
and corporate taxes, paid for with cuts to public spending". Neoliberalism has a history of being used as a
pejorative A pejorative word, phrase, slur, or derogatory term is a word or grammatical form expressing a negative or disrespectful connotation, a low opinion, or a lack of respect toward someone or something. It is also used to express criticism, hosti ...
by critics. Additionally, Neoliberalism has outpaced similar terms such as monetarism, neoconservatism, the
Washington Consensus The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
and "market reform" in scholarly writing. ''The Handbook of Neoliberalism'', for instance, posits that the term has "become a means of identifying a seemingly ubiquitous set of market-oriented policies as being largely responsible for a wide range of social, political, ecological and economic problems". Its use in this manner has been criticized by those who advocate for policies characterized as neoliberal. The ''Handbook'', for example, further argues that "such lack of specificity or the termreduces its capacity as an analytic frame. If neoliberalism is to serve as a way of understanding the transformation of society over the last few decades, then the concept is in need of unpacking." Historian Daniel Stedman Jones has similarly said that the term "is too often used as a catch-all shorthand for the horrors associated with globalization and recurring financial crises". Several writers have criticized ''neoliberal'' as an insult or slur used by leftists against liberals and varieties of liberalism that leftists disagree with. British journalist Will Hutton called neoliberal "an unthinking leftist insult" that "stifle debate." On the other hand, many scholars believe it retains a meaningful definition. Writing in ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in Manchester in 1821 as ''The Manchester Guardian'' and changed its name in 1959, followed by a move to London. Along with its sister paper, ''The Guardian Weekly'', ''The Guardi ...
'', Stephen Metcalf posits that the publication of the 2016 IMF paper "Neoliberalism: Oversold?" helps "put to rest the idea that the word is nothing more than a political slur, or a term without any analytic power". Gary Gerstle argues that neoliberalism is a legitimate term, and describes it as "a creed that calls explicitly for unleashing capitalism's power." He distinguishes neoliberalism from traditional conservatism, as the latter values respect for traditions and bolstering the institutions which reinforce them, whereas the former seeks to disrupt and overcome any institutions which stand in the way. Radhika Desai, director of the Geopolitical Economy Research Group at the University of Manitoba, argues that global capitalism reached its peak in 1914, just prior to the two great wars, anti-capitalist revolutions and Keynesian reforms, and the purpose of neoliberalism was to restore capitalism to the preeminence it once enjoyed. She argues that this process has failed as contemporary neoliberal capitalism has fostered a "slowly unfolding economic disaster" and bequeathed to the world increased inequalities, societal divisions, economic misery and a lack of meaningful politics.


Early history


Walter Lippmann Colloquium

The
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
in the 1930s, which severely decreased economic output throughout the world and produced high unemployment and widespread
poverty Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. Poverty can have diverse Biophysical environmen ...
, was widely regarded as a failure of economic liberalism. To renew the damaged ideology, a group of 25 liberal intellectuals, including a number of prominent academics and journalists like Walter Lippmann, Friedrich Hayek, Ludwig von Mises, Wilhelm Röpke, Alexander Rüstow, and Louis Rougier, organized the Walter Lippmann Colloquium, named in honor of Lippmann to celebrate the publication of the French translation of Lippmann's pro- market book ''An Inquiry into the Principles of the Good Society''. Meeting in Paris in August 1938, they called for a new liberal project, with "neoliberalism" one name floated for the fledgling movement. They further agreed to develop the Colloquium into a permanent think tank based in Paris called the Centre International d'Études pour la Rénovation du Libéralisme. While most agreed that the ''
status quo is a Latin phrase meaning the existing state of affairs, particularly with regard to social, economic, legal, environmental, political, religious, scientific or military issues. In the sociological sense, the ''status quo'' refers to the curren ...
'' liberalism promoting ''laissez-faire'' economics had failed, deep disagreements arose around the proper role of the state. A group of "true (third way) neoliberals" centered around Rüstow and Lippmann advocated for strong state supervision of the economy while a group of old school liberals centered around Mises and Hayek continued to insist that the only legitimate role for the state was to abolish barriers to market entry. Rüstow wrote that Hayek and Mises were relics of the liberalism that caused the Great Depression while Mises denounced the other faction, complaining that the ordoliberalism they advocated really meant "ordo-interventionism". Divided in opinion and short on funding, the Colloquium was mostly ineffectual; related attempts to further neoliberal ideas, such as the effort by Colloque-attendee Wilhelm Röpke to establish a journal of neoliberal ideas, mostly floundered. Fatefully, the efforts of the Colloquium would be overwhelmed by the outbreak of
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
and were largely forgotten. Nonetheless, the Colloquium served as the first meeting of the nascent neoliberal movement and would serve as the precursor to the Mont Pelerin Society, a far more successful effort created after the war by many of those who had been present at the Colloquium.


Mont Pelerin Society

Neoliberalism began accelerating in importance with the establishment of the Mont Pelerin Society in 1947, whose founding members included Friedrich Hayek,
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
,
Karl Popper Sir Karl Raimund Popper (28 July 1902 – 17 September 1994) was an Austrian–British philosopher, academic and social commentator. One of the 20th century's most influential philosophers of science, Popper is known for his rejection of the ...
,
George Stigler George Joseph Stigler (; January 17, 1911 – December 1, 1991) was an American economist. He was the 1982 laureate in Nobel Memorial Prize in Economic Sciences and is considered a key leader of the Chicago school of economics. Early life and e ...
and Ludwig von Mises. Meeting annually, it became a "kind of international 'who's who' of the classical liberal and neo-liberal intellectuals." While the first conference in 1947 was almost half American, the Europeans dominated by 1951. Europe would remain the epicenter of the community as Europeans dominated the leadership roles. Established during a time when central planning was in the ascendancy worldwide and there were few avenues for neoliberals to influence policymakers, the society became a "rallying point" for neoliberals, as Milton Friedman phrased it, bringing together isolated advocates of liberalism and
capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
. They were united in their belief that individual freedom in the developed world was under threat from collectivist trends, which they outlined in their statement of aims:
The central values of civilization are in danger. Over large stretches of the Earth's surface the essential conditions of human dignity and freedom have already disappeared. In others, they are under constant menace from the development of current tendencies of policy. The position of the individual and the voluntary group are progressively undermined by extensions of arbitrary power. Even that most precious possession of Western Man, freedom of thought and expression, is threatened by the spread of creeds which, claiming the privilege of tolerance when in the position of a minority, seek only to establish a position of power in which they can suppress and obliterate all views but their own...The group holds that these developments have been fostered by the growth of a view of history which denies all absolute moral standards and by the growth of theories which question the desirability of the rule of law. It holds further that they have been fostered by a decline of belief in private property and the competitive market... his group'sobject is solely, by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common, to contribute to the preservation and improvement of the free society.
The society set out to develop a neoliberal alternative to, on the one hand, the ''laissez-faire'' economic consensus that had collapsed with the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
and, on the other,
New Deal The New Deal was a series of wide-reaching economic, social, and political reforms enacted by President Franklin D. Roosevelt in the United States between 1933 and 1938, in response to the Great Depression in the United States, Great Depressi ...
liberalism and British
social democracy Social democracy is a Social philosophy, social, Economic ideology, economic, and political philosophy within socialism that supports Democracy, political and economic democracy and a gradualist, reformist, and democratic approach toward achi ...
, collectivist trends which they believed posed a threat to individual freedom. They believed that classical liberalism had failed because of crippling conceptual flaws which could only be diagnosed and rectified by withdrawing into an intensive discussion group of similarly minded intellectuals; however, they were determined that the liberal focus on
individualism Individualism is the moral stance, political philosophy, ideology, and social outlook that emphasizes the intrinsic worth of the individual. Individualists promote realizing one's goals and desires, valuing independence and self-reliance, and a ...
and economic freedom must not be abandoned to collectivism.


Post–World War II neoliberal currents

For decades after the formation of the Mont Pelerin Society, the ideas of the society would remain largely on the fringes of political policy, confined to a number of think-tanks and universities and achieving only measured success with the ordoliberals in
Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...
, who maintained the need for strong state influence in the economy. It would not be until a succession of economic downturns and crises in the 1970s that neoliberal policy proposals would be widely implemented. By this time, neoliberal thought had evolved. The early neoliberal ideas of the Mont Pelerin Society had sought to chart a middle way between the trend of increasing government intervention implemented after the
Great Depression The Great Depression was a severe global economic downturn from 1929 to 1939. The period was characterized by high rates of unemployment and poverty, drastic reductions in industrial production and international trade, and widespread bank and ...
and the ''laissez-faire'' economics many in the society believed had produced the Great Depression.
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
, wrote in his early essay "Neo-liberalism and Its Prospects" that "Neo-liberalism would accept the nineteenth-century liberal emphasis on the fundamental importance of the individual, but it would substitute for the nineteenth century goal of ''laissez-faire'' as a means to this end, the goal of the competitive order", which requires limited state intervention to "police the system, establish conditions favorable to competition and prevent monopoly, provide a stable monetary framework, and relieve acute misery and distress." By the 1970s, neoliberal thought—including Friedman's—focused almost exclusively on market liberalization and was adamant in its opposition to nearly all forms of state interference in the economy. One of the earliest and most influential turns to neoliberal reform occurred in
Chile Chile, officially the Republic of Chile, is a country in western South America. It is the southernmost country in the world and the closest to Antarctica, stretching along a narrow strip of land between the Andes, Andes Mountains and the Paci ...
after an economic crisis in the early 1970s. After several years of
socialist Socialism is an economic ideology, economic and political philosophy encompassing diverse Economic system, economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes ...
economic policies under president Salvador Allende, a 1973 coup d'état, which established a
military junta A military junta () is a system of government led by a committee of military leaders. The term ''Junta (governing body), junta'' means "meeting" or "committee" and originated in the Junta (Peninsular War), national and local junta organized by t ...
under dictator
Augusto Pinochet Augusto José Ramón Pinochet Ugarte (25 November 1915 – 10 December 2006) was a Chilean military officer and politician who was the dictator of Military dictatorship of Chile, Chile from 1973 to 1990. From 1973 to 1981, he was the leader ...
, led to the implementation of a number of sweeping neoliberal economic reforms that had been proposed by the Chicago Boys, a group of Chilean economists educated under
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
. This "neoliberal project" served as "the first experiment with neoliberal state formation" and provided an example for neoliberal reforms elsewhere. Beginning in the early 1980s, the Reagan administration and Thatcher government implemented a series of neoliberal economic reforms to counter the chronic stagflation the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
and
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...
had each experienced throughout the 1970s. Neoliberal policies continued to dominate American and British politics until the
Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
. Following British and American reform, neoliberal policies were exported abroad, with countries in
Latin America Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
, the Asia-Pacific, the
Middle East The Middle East (term originally coined in English language) is a geopolitical region encompassing the Arabian Peninsula, the Levant, Turkey, Egypt, Iran, and Iraq. The term came into widespread usage by the United Kingdom and western Eur ...
, and
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
implementing significant neoliberal reform. Additionally, the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
and
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
encouraged neoliberal reforms in many
developing countries A developing country is a sovereign state with a less-developed Secondary sector of the economy, industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. ...
by placing reform requirements on loans, in a process known as structural adjustment.


Germany

Neoliberal ideas were first implemented in
West Germany West Germany was the common English name for the Federal Republic of Germany (FRG) from its formation on 23 May 1949 until German reunification, its reunification with East Germany on 3 October 1990. It is sometimes known as the Bonn Republi ...
. The economists around Ludwig Erhard drew on the theories they had developed in the 1930s and 1940s and contributed to West Germany's reconstruction after the Second World War. Erhard was a member of the Mont Pelerin Society and in constant contact with other neoliberals. He pointed out that he is commonly classified as neoliberal and that he accepted this classification. The ordoliberal Freiburg School was more pragmatic. The German neoliberals accepted the classical liberal notion that competition drives economic prosperity. However, they argued that a ''laissez-faire'' state policy stifles competition, as the strong devour the weak since monopolies and cartels could pose a threat to freedom of competition. They supported the creation of a well-developed legal system and capable regulatory apparatus. While still opposed to full-scale Keynesian employment policies or an extensive
welfare state A welfare state is a form of government in which the State (polity), state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal oppor ...
, German neoliberal theory was marked by the willingness to place humanistic and social values on par with economic efficiency. Alfred Müller-Armack coined the phrase "social market economy" to emphasize the egalitarian and humanistic bent of the idea. According to Boas and Gans-Morse, Walter Eucken stated that "social security and social justice are the greatest concerns of our time". Erhard emphasized that the market was inherently social and did not need to be made so. He hoped that growing prosperity would enable the population to manage much of their social security by self-reliance and end the necessity for a widespread welfare state. By the name of ''Volkskapitalismus'', there were some efforts to foster private savings. Although average contributions to the public old age insurance were quite small, it remained by far the most important old age income source for a majority of the German population, therefore despite liberal rhetoric the 1950s witnessed what has been called a "reluctant expansion of the welfare state". To end widespread poverty among the elderly the pension reform of 1957 brought a significant extension of the German welfare state which already had been established under
Otto von Bismarck Otto, Prince of Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg (; born ''Otto Eduard Leopold von Bismarck''; 1 April 1815 – 30 July 1898) was a German statesman and diplomat who oversaw the unification of Germany and served as ...
. Rüstow, who had coined the label "neoliberalism", criticized that development tendency and pressed for a more limited welfare program. Hayek did not like the expression "social market economy", but stated in 1976 that some of his friends in Germany had succeeded in implementing the sort of social order for which he was pleading while using that phrase. In Hayek's view, the social market economy's aiming for both a market economy and social justice was a muddle of inconsistent aims. Despite his controversies with the German neoliberals at the Mont Pelerin Society, Ludwig von Mises stated that Erhard and Müller-Armack accomplished a great act of liberalism to restore the German economy and called this "a lesson for the US". According to different research Mises believed that the ordoliberals were hardly better than socialists. As an answer to Hans Hellwig's complaints about the interventionist excesses of the Erhard ministry and the ordoliberals, Mises wrote: "I have no illusions about the true character of the politics and politicians of the social market economy". According to Mises, Erhard's teacher Franz Oppenheimer "taught more or less the New Frontier line of" President Kennedy's "Harvard consultants ( Schlesinger, Galbraith, etc.)". In Germany, neoliberalism at first was synonymous with both ordoliberalism and social market economy. But over time the original term neoliberalism gradually disappeared since social market economy was a much more positive term and fit better into the (economic miracle) mentality of the 1950s and 1960s.


Latin America

In the 1980s, numerous governments in Latin America adopted neoliberal policies.


Chile

Chile was among the earliest nations to implement neoliberal reform.
Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
economic geographer David Harvey has described the substantial neoliberal reforms in Chile beginning in the 1970s as "the first experiment with neoliberal state formation", which would provide "helpful evidence to support the subsequent turn to neoliberalism in both Britain... and the United States." Similarly, Vincent Bevins says that Chile under
Augusto Pinochet Augusto José Ramón Pinochet Ugarte (25 November 1915 – 10 December 2006) was a Chilean military officer and politician who was the dictator of Military dictatorship of Chile, Chile from 1973 to 1990. From 1973 to 1981, he was the leader ...
"became the world's first test case for 'neoliberal' economics." The turn to neoliberal policies in Chile originated with the Chicago Boys, a select group of Chilean students who, beginning in 1955, were invited to the
University of Chicago The University of Chicago (UChicago, Chicago, or UChi) is a Private university, private research university in Chicago, Illinois, United States. Its main campus is in the Hyde Park, Chicago, Hyde Park neighborhood on Chicago's South Side, Chic ...
to pursue postgraduate studies in economics. They studied directly under
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
and his disciple, Arnold Harberger, and were exposed to Friedrich Hayek. Upon their return to Chile, their neoliberal policy proposals—which centered on widespread deregulation, privatization, reductions to government spending to counter high inflation, and other free-market policies—would remain largely on the fringes of Chilean economic and political thought for a number of years, as the presidency of Salvador Allende (1970–1973) brought about a
socialist Socialism is an economic ideology, economic and political philosophy encompassing diverse Economic system, economic and social systems characterised by social ownership of the means of production, as opposed to private ownership. It describes ...
reorientation of the economy. During the Allende presidency, Chile experienced a severe economic crisis, in which inflation peaked near 150%. Following an extended period of social unrest and political tension, as well as diplomatic, economic, and covert pressure from the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, the Chilean armed forces and national police overthrew the Allende government in a
coup d'état A coup d'état (; ; ), or simply a coup , is typically an illegal and overt attempt by a military organization or other government elites to unseat an incumbent leadership. A self-coup is said to take place when a leader, having come to powe ...
. They established a repressive military ''junta'', known for its violent suppression of opposition, and appointed army chief Augusto Pinochet Supreme Head of the nation. His rule was later given legal legitimacy through a controversial 1980 plebiscite, which approved a new
constitution A constitution is the aggregate of fundamental principles or established precedents that constitute the legal basis of a polity, organization or other type of entity, and commonly determines how that entity is to be governed. When these pri ...
drafted by a government-appointed commission that ensured Pinochet would remain as president for a further eight years—with increased powers—after which he would face a re-election referendum. The Chicago Boys were given significant political influence within the
military dictatorship A military dictatorship, or a military regime, is a type of dictatorship in which Power (social and political), power is held by one or more military officers. Military dictatorships are led by either a single military dictator, known as a Polit ...
, and they implemented sweeping economic reform. In contrast to the extensive
nationalization Nationalization (nationalisation in British English) is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...
and centrally planned economic programs supported by Allende, the Chicago Boys implemented rapid and extensive privatization of state enterprises, deregulation, and significant reductions in trade barriers during the latter half of the 1970s. In 1978, policies that would further reduce the role of the state and infuse competition and individualism into areas such as labor relations, pensions, health and education were introduced. Additionally, the central bank raised interest rates from 49.9% to 178% to counter high inflation. These policies amounted to a shock therapy, which rapidly transformed Chile from an economy with a protected market and strong government intervention into a liberalized, world-integrated economy, where market forces were left free to guide most of the economy's decisions. Inflation was tempered, falling from over 600% in 1974, to below 50% by 1979, to below 10% right before the economic crisis of 1982; GDP growth spiked (see chart) to 10%. however, inequality widened as wages and benefits to the working class were reduced. In 1982, Chile again experienced a severe economic recession. The cause of this is contested but most scholars believe the Latin American debt crisis—which swept nearly all of Latin America into financial crisis—was a primary cause.''Historia contemporánea de Chile III. La economía: mercados empresarios y trabajadores''. 2002. Gabriel Salazar and Julio Pinto. pp. 49–-62. Some scholars argue the neoliberal policies of the Chicago boys heightened the crisis (for instance, percent GDP decrease was higher than in any other Latin American country) or even caused it; for instance, some scholars criticize the high interest rates of the period which—while stabilizing inflation—hampered investment and contributed to widespread bankruptcy in the banking industry. Other scholars fault governmental departures from the neoliberal agenda; for instance, the government pegged the Chilean peso to the US dollar, against the wishes of the Chicago Boys, which economists believe led to an overvalued peso. After the recession, Chilean economic growth rose quickly, eventually hovering between 5% and 10% and significantly outpacing the Latin American average (see chart). Additionally, unemployment decreased and the percent of the population below the poverty line declined from 50% in 1984 to 34% by 1989. This led
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
to call the period the " Miracle of Chile", and he attributed the successes to the neoliberal policies of the Chicago boys. Some scholars attribute the successes to the re-regulation of the banking industry and a number of targeted social programs designed to alleviate poverty. Others say that while the economy had stabilized and was growing by the late 1980s, inequality widened: nearly 45% of the population had fallen into poverty while the wealthiest 10% had seen their incomes rise by 83%. According to Chilean economist Alejandro Foxley, when Pinochet finished his 17-year term by 1990, around 44% of Chilean families were living below the poverty line. Despite years of suppression by the Pinochet junta, a presidential election was held in 1988, as dictated by the 1980 constitution (though not without Pinochet first holding another plebiscite in an attempt to amend the constitution). In 1990, Patricio Aylwin was democratically elected, bringing an end to the military dictatorship. The reasons cited for Pinochet's acceptance of democratic transition are numerous. Hayek, echoing arguments he had made years earlier in '' The Road to Serfdom,'' argued that the increased economic freedom he believed the neoliberal reforms had brought had put pressure on the dictatorship over time, resulting in a gradual increase in political freedom and, ultimately, the restoration of democracy. The Chilean scholars Javier Martínez and Alvaro Díaz reject this argument, pointing to the long tradition of democracy in Chile. They assert that the defeat of the Pinochet regime and the return of democracy came primarily from large-scale mass rebellion that eventually forced party elites to use existing institutional mechanisms to restore democracy. In the 1990s, neoliberal economic policies broadened and deepened, including unilateral tariff reductions and the adoption of free trade agreements with a number of Latin American countries and Canada. At the same time, the decade brought increases in government expenditure on social programs to tackle poverty and poor quality housing. Throughout the 1990s, Chile maintained high growth, averaging 7.3% from 1990 to 1998. Eduardo Aninat, writing for the IMF journal ''Finance & Development'', called the period from 1986 to 2000 "the longest, strongest, and most stable period of growth in hile'shistory." In 1999, there was a brief recession brought about by the Asian financial crisis, with growth resuming in 2000 and remaining near 5% until the
Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
. In sum, the neoliberal policies of the 1980s and 1990s—initiated by a repressive authoritarian government—transformed the Chilean economy from a protected market with high barriers to trade and hefty
government intervention A market intervention is a policy or measure that modifies or interferes with a market, typically done in the form of state action, but also by philanthropic and political-action groups. Market interventions can be done for a number of reas ...
into one of the world's most open free-market economies. Chile experienced the worst economic bust of any Latin American country during the Latin American debt crisis (several years into neoliberal reform), but also had one of the most robust recoveries, rising from the poorest Latin American country in terms of GDP per capita in 1980 (along with Peru) to the richest in 2019. Average annual economic growth from the mid-1980s to the Asian crisis in 1997 was 7.2%, 3.5% between 1998 and 2005, and growth in per capita real income from 1985 to 1996 averaged 5%—all outpacing Latin American averages. Inflation was brought under control. Between 1970 and 1985 the infant mortality rate in Chile fell from 76.1 per 1000 to 22.6 per 1000, the lowest in Latin America. Unemployment from 1980 to 1990 decreased, but remained higher than the South American average (which was stagnant). And despite public perception among Chileans that economic inequality has increased, Chile's
Gini coefficient In economics, the Gini coefficient ( ), also known as the Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income distribution, income inequality, the wealth distribution, wealth inequality, or the ...
has in fact dropped from 56.2 in 1987 to 46.6 in 2017. While this is near the Latin American average, Chile still has one of the highest Gini coefficients in the
OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
, an organization of mostly developed countries that includes Chile but not most other Latin American countries. Furthermore, the Gini coefficient measures only income inequality; Chile has more mixed inequality ratings in the OECD's Better Life Index, which includes indexes for more factors than only income, like
housing Housing refers to a property containing one or more Shelter (building), shelter as a living space. Housing spaces are inhabited either by individuals or a collective group of people. Housing is also referred to as a human need and right to ...
and
education Education is the transmission of knowledge and skills and the development of character traits. Formal education occurs within a structured institutional framework, such as public schools, following a curriculum. Non-formal education als ...
. Additionally, the percentage of the Chilean population living in poverty rose from 17% in 1969 to 45% in 1985 at the same time government budgets for education, health and housing dropped by over 20% on average. The era was also marked by economic instability. Overall, scholars have mixed opinions on the effects of the neoliberal reforms. The
CIA World Factbook ''The World Factbook'', also known as the ''CIA World Factbook'', is a reference resource produced by the United States' Central Intelligence Agency (CIA) with almanac-style information about the countries of the world. The official print ve ...
states that Chile's "sound economic policies", maintained consistently since the 1980s, "have contributed to steady economic growth in Chile and have more than halved poverty rates,"Chile
''
The World Factbook ''The World Factbook'', also known as the ''CIA World Factbook'', is a Reference work, reference resource produced by the United States' Central Intelligence Agency (CIA) with almanac-style information about the countries of the world. The off ...
''.
Central Intelligence Agency The Central Intelligence Agency (CIA; ) is a civilian foreign intelligence service of the federal government of the United States tasked with advancing national security through collecting and analyzing intelligence from around the world and ...
.
and some scholars have even called the period the " Miracle of Chile". Other scholars have called it a failure that led to extreme inequalities in the distribution of income and resulted in severe socioeconomic damage. It is also contested how much these changes were the result of neoliberal economic policies and how much they were the result of other factors; in particular, some scholars argue that after the Crisis of 1982 the "pure" neoliberalism of the late 1970s was replaced by a focus on fostering a social market economy that mixed neoliberal and social welfare policies. As a response to the 2019–20 Chilean protests, a national plebiscite was held in October 2020 to decide whether the Chilean constitution would be rewritten. The "approve" option for a new constitution to replace the Pinochet-era constitution, which entrenched certain neoliberal principles into the country's basic law, won with 78% of the vote. However, in September 2022, the referendum to approve a rewritten the constitution was rejected with 61% of the vote.


Peru

Peruvian economist
Hernando de Soto Hernando de Soto (; ; 1497 – 21 May 1542) was a Spanish explorer and conquistador who was involved in expeditions in Nicaragua and the Yucatan Peninsula. He played an important role in Francisco Pizarro's conquest of the Inca Empire in Peru, ...
, the founder of one of the first neoliberal organizations in Latin America, Institute for Liberty and Democracy (ILD), began to receive assistance from
Ronald Reagan Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was an American politician and actor who served as the 40th president of the United States from 1981 to 1989. He was a member of the Republican Party (United States), Republican Party a ...
's administration, with the National Endowment for Democracy's Center for International Private Enterprise (CIPE) providing his ILD with funding. The economic policy of President Alan García distanced Peru from international markets, resulting in lower foreign investment in the country. Under García, Peru experienced
hyperinflation In economics, hyperinflation is a very high and typically accelerating inflation. It quickly erodes the real versus nominal value (economics), real value of the local currency, as the prices of all goods increase. This causes people to minimiz ...
and increased confrontations with the guerrilla group Shining Path, leading the country towards high levels of instability. The Peruvian armed forces grew frustrated with the inability of the García administration to handle the nation's crises and began to draft an operation – Plan Verde – to overthrow his government. The military's Plan Verde involved the " total extermination" of impoverished and indigenous Peruvians perceived as a drain on the economy, the control or
censorship Censorship is the suppression of speech, public communication, or other information. This may be done on the basis that such material is considered objectionable, harmful, sensitive, or "inconvenient". Censorship can be conducted by governmen ...
of media in the nation and the establishment of a
neoliberal Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pej ...
economy in Peru. During his campaigning for the 1990 Peruvian general election, Alberto Fujimori initially expressed concern against the proposed neoliberal policies of his opponent Mario Vargas Llosa. Peruvian magazine '' Oiga'' reported that, following the election, the armed forces were unsure of Fujimori's willingness to fulfill the plan's objectives, though they planned to convince Fujimori to agree to the operation prior to his inauguration. After taking office, Fujimori abandoned his campaign's economic platform, adopting more aggressive neoliberal policies than those espoused by his election competitor Vargas Llosa. With Fujimori's compliance, plans for a coup as designed in Plan Verde were prepared for two years and finally executed during the 1992 Peruvian coup d'état, which ultimately established a civilian-military regime. Shortly after the inauguration of Fujimori, his government received a $715 million grant from United States Agency for International Development (USAID) on 29 September 1990 for the Policy Analysis, Planning and Implementation Project (PAPI) that was developed "to support economic policy reform in the country". De Soto proved to be influential to Fujimori, who began to repeat de Soto's advocacy for deregulating the Peruvian economy. Under Fujimori, de Soto served as "the President's personal representative", with ''
The New York Times ''The New York Times'' (''NYT'') is an American daily newspaper based in New York City. ''The New York Times'' covers domestic, national, and international news, and publishes opinion pieces, investigative reports, and reviews. As one of ...
'' describing de Soto as an "overseas salesman", while others dubbed de Soto as the "informal president" for Fujimori. In a recommendation to Fujimori, de Soto called for a "shock" to Peru's economy. The policies included a 300% tax increase, unregulated prices and privatizing two-hundred and fifty state-owned entities. The policies of de Soto led to the immediate suffering of poor Peruvians who saw unregulated prices increase rapidly. Those living in poverty saw prices increase so much that they could no longer afford food. ''The New York Times'' wrote that de Soto advocated for the collapse of Peru's society, with the economist saying that a civil crisis was necessary to support the policies of Fujimori. Fujimori and de Soto would ultimately break their ties after de Soto recommended increased involvement of citizens within the government, which was received with disapproval by Fujimori. USAID would go on to assist the Fujimori government with rewriting the 1993 Peruvian constitution, with the agency concluding in 1997 that it helped with the "preparation of legislative texts" and "contributed to the emergence of a private sector advisory role". The policies promoted by de Soto and implemented by Fujimori eventually caused macroeconomic stability and a reduction in the rate of
inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
, though Peru's poverty rate remained largely unchanged with over half of the population living in poverty in 1998. According to the Foundation for Economic Education, USAID, the United Nations Population Fund (UNFPA) and the Nippon Foundation also supported the sterilization efforts of the Fujimori government. E. Liagin reported that from 1993 to 1998, USAID "basically took charge of the national health system of Peru" during the period of forced sterilizations. At least 300,000 Peruvians were victims of forced sterilization by the Fujimori government in the 1990s, with the majority being affected by the PNSRPF. The policy of sterilizations resulted in a generational shift that included a smaller younger generation that could not provide economic stimulation to rural areas, making such regions more impoverished. Though economic statistics show improved economic data in Peru in recent decades, the wealth earned between 1990 and 2020 was not distributed throughout the country; living standards showed disparities between the more-developed capital city of Lima and similar coastal regions while rural provinces remained impoverished. Sociologist Maritza Paredes of the Pontifical Catholic University of Peru stated, "People see that all the natural resources are in the countryside but all the benefits are concentrated in Lima." In 2020, the COVID-19 pandemic in Peru compounded these disparities, with political scientist Professor Farid Kahhat of the Pontifical Catholic University of Peru stating that, "market reforms in Peru have yielded positive results in terms of reducing poverty ... But what the pandemic has laid bare, particularly in Peru, is that poverty was reduced while leaving the miserable state of public services unalteredmost clearly in the case of health services." The candidacy of Pedro Castillo in the 2021 Peruvian general election brought attention to the disparities between urban and rural Peruvians, with much of his support being earned in the exterior portions of the country. Castillo ultimately won the election, with ''The New York Times'' reporting his victory as the "clearest repudiation of the country's establishment".


Argentina

In the 1960s,
Latin America Latin America is the cultural region of the Americas where Romance languages are predominantly spoken, primarily Spanish language, Spanish and Portuguese language, Portuguese. Latin America is defined according to cultural identity, not geogr ...
n intellectuals began to notice the ideas of ordoliberalism; they often used the Spanish term "neoliberalismo" to refer to this school of thought. They were particularly impressed by the social market economy and the
Wirtschaftswunder The ''Wirtschaftswunder'' (, "economic miracle"), also known as the Miracle on the Rhine, was the rapid reconstruction and development of the Economy, economies of West Germany and Austria after World War II. The expression was first used to re ...
("economic miracle") in Germany and speculated about the possibility of accomplishing similar policies in their own countries. Neoliberalism in 1960s Argentina meant a philosophy that was more moderate than entirely Laissez-faire free-market
capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
and favored using state policy to temper social inequality and counter a tendency towards monopoly. In 1976, the
military dictatorship A military dictatorship, or a military regime, is a type of dictatorship in which Power (social and political), power is held by one or more military officers. Military dictatorships are led by either a single military dictator, known as a Polit ...
's economic plan led by José Alfredo Martínez de Hoz was the first attempt at establishing a neoliberal program in Argentina. They implemented a fiscal
austerity In economic policy, austerity is a set of Political economy, political-economic policies that aim to reduce government budget deficits through Government spending, spending cuts, tax increases, or a combination of both. There are three prim ...
plan that reduced money printing in an attempt to counter inflation. In order to achieve this, salaries were frozen; however, they were unable to reduce inflation, which led to a drop in the real salary of the working class. They also liberalized trade policy so that foreign goods could freely enter the country. Argentina's industry, which had been on the rise for 20 years after the economic policies of former president
Arturo Frondizi Arturo Frondizi Ércoli (Paso de los Libres, October 28, 1908 – Buenos Aires, April 18, 1995) was an Argentine lawyer, journalist, teacher, statesman, and politician. He was elected president of Argentina and governed from May ...
, rapidly declined as it was not able to compete with foreign goods. Following the measures, there was an increase in poverty from 9% in 1975 to 40% at the end of 1982. From 1989 to 2001, more neoliberal policies were implemented by Domingo Cavallo. This time, the privatization of public services was the main focus, although financial deregulation and free trade with foreign nations were also re-implemented. Along with an increased labour market flexibility, the unemployment rate dropped to 18.3%. Public perception of the policies was mixed; while some of the privatization was welcomed, much of it was criticized for not being in the people's best interests. Protests resulted in the death of 29 people at the hands of police.


Mexico

Along with many other Latin American countries in the early 1980s,
Mexico Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
experienced a debt crisis. In 1983 the Mexican government ruled by the PRI, the Institutional Revolutionary Party, accepted loans from the IMF. Among the conditions set by the IMF were requirements for Mexico to privatize state-run industries, devalue their currency, decrease
trade barrier Trade barriers are government-induced restrictions on international trade. According to the comparative advantage, theory of comparative advantage, trade barriers are detrimental to the world economy and decrease overall economic efficiency. Most ...
s, and restrict governmental spending. These policies were aimed at stabilizing Mexico's economy in the short run. Later, Mexico tried to expand these policies to encourage growth and foreign direct investment (FDI). The decision to accept the IMF's neoliberal reforms split the PRI between those on the right who wanted to implement neoliberal policies and those the left who did not. Carlos Salinas de Gortari, who took power in 1988, doubled down on neoliberal reforms. His policies opened up the financial sector by deregulating the banking system and privatizing commercial banks. Though these policies did encourage a small amount of growth and FDI, the growth rate was below what it had been under previous governments in Mexico, and the increase in foreign investment was largely from existing investors. On 1 January 1994 the Zapatista Army of National Liberation, named for Emiliano Zapata, a leader in the Mexican revolution, launched an armed rebellion against the Mexican government in the Chiapas region. Among their demands were rights for indigenous Mexicans as well as opposition to the North American Free Trade Agreement (NAFTA), which solidified a strategic alliance between state and business.  NAFTA, a trade agreement between the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
,
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
, and Mexico, significantly aided in Mexico's efforts to liberalize trade. In 1994, the same year of the Zapatista rebellion and the enactment of NAFTA, Mexico faced a
financial crisis A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with Bank run#Systemic banki ...
. The crisis, also known as the "Tequila Crisis" began in December 1994 with the devaluation of the peso. When investors' doubts led to negative speculation they fled with their capital. The central bank was forced to raise
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...
s which in turn collapsed the banking system as borrowers could no longer pay back their loans. After Salinas, Ernesto Zedillo (1995–2000) maintained similar economic policies to his predecessor. Despite the crisis, Zedillo continued to enact neoliberal policies and signed new agreements with the
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
and the IMF. As a result of these policies and the 1994 recession, Mexico's economy did gain stability. Neither the 2001 or 2008 recessions were caused by internal economic forces in Mexico. Trade increased dramatically, as well as FDI; however, as Mexico's
business cycle Business cycles are intervals of general expansion followed by recession in economic performance. The changes in economic activity that characterize business cycles have important implications for the welfare of the general population, governmen ...
synced with that of the United States, it was much more vulnerable to external economic pressures. FDI benefited the Northern and Central regions of Mexico while the Southern region was largely excluded from the influx of investment. The crisis also left the banks mainly in the hands of foreigners. The PRI's 71-year rule ended when Vicente Fox of the PAN, the National Action Party, won the election in 2000. Fox and his successor, Felipe Calderón, did not significantly diverge from the economic policies of the PRI governments. They continued to privatize the financial system and encourage foreign investment. Despite significant opposition, Enrique Peña Nieto, president from 2012 to 2018, pushed through legislation that would privatize the oil and electricity industries. These reforms marked the conclusion to the neoliberal goals that had been envisioned in Mexico in the 1980s.


Brazil

Brazil adopted neoliberal policies in the late 1980s, with support from the worker's party on the left. For example, tariff rates were cut from 32% in 1990 to 14% in 1994. During this period, Brazil effectively ended its policy of maintaining a closed economy focused on import substitution industrialization in favor of a more open economic system with a much higher degree of privatization. The market reforms and trade reforms ultimately resulted in price stability and a faster inflow of capital but had little effect on income inequality and poverty. Consequently, mass protests continued during the period.


United Kingdom

During her tenure as
Conservative Conservatism is a cultural, social, and political philosophy and ideology that seeks to promote and preserve traditional institutions, customs, and values. The central tenets of conservatism may vary in relation to the culture and civiliza ...
Prime Minister from 1979 to 1990,
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...
oversaw a number of neoliberal policies, including tax reduction,
exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
reform, deregulation, and privatisation. These policies were continued and supported by her successor
John Major Sir John Major (born 29 March 1943) is a British retired politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party (UK), Leader of the Conservative Party from 1990 to 1997. Following his defeat to Ton ...
. Although opposed by the Labour Party, the policies were, according to some scholars, largely accepted and left unaltered when Labour returned to power in 1997 during the New Labour era under
Tony Blair Sir Anthony Charles Lynton Blair (born 6 May 1953) is a British politician who served as Prime Minister of the United Kingdom from 1997 to 2007 and Leader of the Labour Party (UK), Leader of the Labour Party from 1994 to 2007. He was Leader ...
. The Adam Smith Institute, a United Kingdom–based free-market think tank and lobbying group formed in 1977 which was a major driver of the aforementioned neoliberal policies, officially changed its libertarian label to neoliberal in October 2016. According to economists Denzau and Roy, the "shift from Keynesian ideas toward neoliberalism influenced the fiscal policy strategies of New Democrats and New Labour in both the White House and Whitehall.... Reagan, Thatcher, Clinton, and Blair all adopted broadly similar neoliberal beliefs."


United States

While a number of recent histories of neoliberalism in the United States have traced its origins back to the urban renewal policies of the 1950s,
Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
economic geographer David Harvey argues the rise of neoliberal policies in the United States occurred during the 1970s energy crisis, and traces the origin of its political rise to Lewis Powell's 1971 confidential memorandum to the Chamber of Commerce in particular. A call to arms to the business community to counter criticism of the free enterprise system, it was a significant factor in the rise of conservative and libertarian organizations and think-tanks which advocated for neoliberal policies, such as the Business Roundtable, The Heritage Foundation, the
Cato Institute The Cato Institute is an American libertarian think tank headquartered in Washington, D.C. It was founded in 1977 by Ed Crane, Murray Rothbard, and Charles Koch, chairman of the board and chief executive officer of Koch Industries.Koch ...
, Citizens for a Sound Economy, Accuracy in Academia and the Manhattan Institute for Policy Research. For Powell, universities were becoming an ideological battleground, and he recommended the establishment of an intellectual infrastructure to serve as a counterweight to the increasingly popular ideas of Ralph Nader and other opponents of big business. The original neoliberals included, among others,
Michael Kinsley Michael E. Kinsley (born March 9, 1951) is an American political journalist and commentator. Primarily active in print media as both a writer and editor, he also became known to television audiences as a co-host on '' Crossfire''. Early life and ...
, Charles Peters, James Fallows, Nicholas Lemann, Bill Bradley, Bruce Babbitt, Gary Hart, and Paul Tsongas. Sometimes called " Atari Democrats", these were the men who helped to remake American liberalism into neoliberalism, culminating in the election of
Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...
in 1992. These new liberals disagreed with the policies and programs of mid-century figures like progressive labor organizer Walter Reuther, economist
John Kenneth Galbraith John Kenneth Galbraith (October 15, 1908 – April 29, 2006), also known as Ken Galbraith, was a Canadian-American economist, diplomat, public official, and intellectual. His books on economic topics were bestsellers from the 1950s through the ...
or even noted historian Arthur Schlesinger. Early roots of neoliberalism were laid in the 1970s during the Nixon administration, with appointment of associates of
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
to Departments of Treasury, Agriculture and Justice, and the Council of Economic Advisors and encouraged funding of the American Enterprise Institute and defunding of the more centrist
Brookings Institution The Brookings Institution, often stylized as Brookings, is an American think tank that conducts research and education in the social sciences, primarily in economics (and tax policy), metropolitan policy, governance, foreign policy, global econo ...
,Gibbs, David N. (2024) ''Revolt of the rich: How the politics of the 1970s widened America's class divide.'' Columbia University Press. and during the Carter administration, with deregulation of the
trucking Road transport or road transportation is a type of transport using roads. Transport on roads can be roughly grouped into the transportation of goods and transportation of people. In many countries licensing requirements and safety regulations ...
, banking and airline industries, the appointment of Paul Volcker to chairman of the
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...
as well as increased military spending at the end of his term leading to fiscal austerity in US nonmilitary budget diverting funds away from social programs. This trend continued into the 1980s under the Reagan administration, which included tax cuts, increased defense spending, financial deregulation and trade deficit expansion. Likewise, concepts of supply-side economics, discussed by the Democrats in the 1970s, culminated in the 1980 Joint Economic Committee report "Plugging in the Supply Side". This was picked up and advanced by the Reagan administration, with Congress following Reagan's basic proposal and cutting federal income taxes across the board by 25% in 1981. The Clinton administration embraced neoliberalism by supporting the passage of the North American Free Trade Agreement (NAFTA), continuing the deregulation of the financial sector through passage of the Commodity Futures Modernization Act and the repeal of the Glass–Steagall Act and implementing cuts to the
welfare state A welfare state is a form of government in which the State (polity), state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal oppor ...
through passage of the Personal Responsibility and Work Opportunity Act. The American historian Gary Gerstle writes that while Reagan was the ideological architect of the neoliberal order which was formulated in the 1970s and 1980s, it was Clinton who was its key facilitator, and as such this order achieved dominance in the 1990s and early 2000s. The neoliberalism of the Clinton administration differs from that of Reagan as the Clinton administration purged neoliberalism of neoconservative positions on militarism, family values, opposition to
multiculturalism Multiculturalism is the coexistence of multiple cultures. The word is used in sociology, in political philosophy, and colloquially. In sociology and everyday usage, it is usually a synonym for ''Pluralism (political theory), ethnic'' or cultura ...
and neglect of ecological issues. Writing in '' New York'', journalist Jonathan Chait disputed accusations that the Democratic Party had been hijacked by neoliberals, saying that its policies have largely stayed the same since the New Deal. Instead, Chait suggested these accusations arose from arguments that presented a false dichotomy between free-market economics and socialism, ignoring mixed economies. American feminist philosopher Nancy Fraser says the modern Democratic Party has embraced a "progressive neoliberalism", which she describes as a "progressive-neoliberal alliance of financialization plus emancipation". Historian Walter Scheidel says that both parties shifted to promote free-market capitalism in the 1970s, with the Democratic Party being "instrumental in implementing financial deregulation in the 1990s". Historians Andrew Diamond and Thomas Sugrue argue that neoliberalism became a "'dominant rationality' precisely because it could not be confined to a single partisan identity." Economic and political inequalities in schools, universities, and libraries and an undermining of democratic and civil society institutions influenced by neoliberalism has been explored by Buschman.


Asia-Pacific

Scholars who emphasized the key role of the developmental state in the early period of fast industrialization in East Asia in the late 19th century now argue that South Korea, Taiwan and Singapore have transformed from developmental to close-to-neoliberal states. Their arguments are matter of scholarly debate.


China

Following the death of
Mao Zedong Mao Zedong pronounced ; traditionally Romanization of Chinese, romanised as Mao Tse-tung. (26December 18939September 1976) was a Chinese politician, revolutionary, and political theorist who founded the People's Republic of China (PRC) in ...
in 1976,
Deng Xiaoping Deng Xiaoping also Romanization of Chinese, romanised as Teng Hsiao-p'ing; born Xiansheng (). (22 August 190419 February 1997) was a Chinese statesman, revolutionary, and political theorist who served as the paramount leader of the People's R ...
led the country through far ranging market-centered reforms, with the slogan of Xiǎokāng, that combined neoliberalism with centralized
authoritarianism Authoritarianism is a political system characterized by the rejection of political plurality, the use of strong central power to preserve the political ''status quo'', and reductions in democracy, separation of powers, civil liberties, and ...
. These focused on agriculture, industry, education and science/defense. Experts debate the extent to which traditional Maoist communist doctrines have been transformed to incorporate the new neoliberal ideas. In any case, the Chinese Communist Party remains a dominant force in setting economic and business policies. Throughout the 20th century, Hong Kong was the outstanding neoliberal exemplar inside China.


Taiwan

Taiwan exemplifies the impact of neoliberal ideas. The policies were pushed by the United States but were not implemented in response to a failure of the national economy, as in numerous other countries.


Japan

Neoliberal policies were at the core of the leading party in Japan, the Liberal Democratic Party (LDP), after 1980. These policies had the effect of abandoning the traditional rural base and emphasizing the central importance of the Tokyo industrial-economic region. Neoliberal proposals for Japan's agricultural sector called for reducing state intervention, ending the protection of high prices for rice and other farm products, and exposing farmers to the global market. The 1993 Uruguay Round of the General Agreement on Tariffs and Trade negotiations opened up the rice market. Neoconservative leaders called for the enlargement, diversification, intensification, and corporatization of the farms receiving government subsidies. In 2006, the ruling LDP decided to no longer protect small farmers with subsidies. Small operators saw this as favoritism towards big corporate agriculture and reacted politically by supporting the
Democratic Party of Japan The was a Centrism, centristThe Democratic Party of Japan was widely described as centrist: * * * * * * * to Centre-left politics, centre-left, Liberalism, liberal or Social liberalism, social-liberal List of political parties in Japan, ...
(DPJ), helping to defeat the LDP in nationwide elections.


South Korea

In South Korea, neoliberalism had the effect of strengthening the national government's control over economic policies. These policies were popular to the extent that they weakened the historically very powerful
chaebol A chaebol ( , ; , ) is a large industrial South Korean conglomerate run and controlled by an individual or family. A chaebol often consists of multiple diversified affiliates, controlled by a person or group. Several dozen large South Kore ...
family-owned conglomerates.


India

In India, Prime Minister
Narendra Modi Narendra Damodardas Modi (born 17 September 1950) is an Indian politician who has served as the Prime Minister of India, prime minister of India since 2014. Modi was the chief minister of Gujarat from 2001 to 2014 and is the Member of Par ...
took office in 2014 with a commitment to implement neoliberal economic policies. This commitment would shape national politics and foreign affairs and put India in a race with China and Japan for economic supremacy in East Asia.


Australia

In Australia, neoliberal economic policies (known at the time as " economic rationalism" or "economic fundamentalism") have been embraced by governments of both the Labor Party and the
Liberal Party The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left. For example, while the political systems ...
since the 1980s. The Labor governments of Bob Hawke and Paul Keating from 1983 to 1996 pursued a program of economic reform focused on economic liberalisation. These governments privatised government corporations, deregulated factor markets, floated the
Australian dollar The Australian dollar (currency sign, sign: $; ISO 4217, code: AUD; also abbreviated A$ or sometimes AU$ to distinguish it from other dollar, dollar-denominated currencies; and also referred to as the dollar or Aussie dollar) is the official ...
and reduced trade protections. Another key policy was the accords which was an agreement with unions to agree to a reduction in strikes, wage demands and a real wage cut in exchange for the implementation of social policies, such as Medicare and superannuation. The Howard government continued these policies, whilst also acting to reduce union power, cut welfare and reduce government spending. Keating, building on policies he had introduced while federal treasurer, implemented a compulsory superannuation guarantee system in 1992 to increase national savings and reduce future government liability for old age pensions. The financing of universities was deregulated, requiring students to contribute to university fees through a repayable loan system known as the Higher Education Contribution Scheme (HECS) and encouraging universities to increase income by admitting full-fee-paying students, including foreign students. The admission of domestic full-fee-paying students to public universities was abolished in 2009 by the Rudd Labor government. Immigration to the mainland capitals by refugees have seen capital flows follow soon after, such as from war-torn
Lebanon Lebanon, officially the Republic of Lebanon, is a country in the Levant region of West Asia. Situated at the crossroads of the Mediterranean Basin and the Arabian Peninsula, it is bordered by Syria to the north and east, Israel to the south ...
and
Vietnam Vietnam, officially the Socialist Republic of Vietnam (SRV), is a country at the eastern edge of mainland Southeast Asia, with an area of about and a population of over 100 million, making it the world's List of countries and depende ...
. Later economic migrants from mainland
China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...
also, up to recent restrictions, had invested significantly in the property markets.


New Zealand

In New Zealand, neoliberal economic policies were implemented under the Fourth Labour Government led by Prime Minister David Lange. These neoliberal policies are commonly referred to as Rogernomics, a portmanteau of "Roger" and "economics", after Lange appointed Roger Douglas minister of finance in 1984. Lange's government had inherited a severe balance of payments crisis as a result of the deficits from the previously implemented two-year freeze on wages and prices by preceding Prime Minister Robert Muldoon, who had also maintained an
exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
many economists now believe was unsustainable. The inherited economic conditions lead Lange to remark "We ended up being run very similarly to a Polish shipyard." On 14 September 1984, Lange's government held an Economic Summit to discuss the underlying problems with New Zealand's economy, which lead to calls for dramatic economic reforms previously proposed by the Treasury Department. A reform program consisting of deregulation and the removal of tariffs and
subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...
was put in place. This had an immediate effect on New Zealand's agricultural community, who were hit hard by the loss of subsidies to farmers. A superannuation surcharge was introduced, despite having promised not to reduce superannuation, resulting in Labour losing support from the elderly. The financial markets were also deregulated, removing restrictions on interests rates, lending and foreign exchange. In March 1985, the New Zealand dollar was floated. Additionally, a number of government departments were converted into state-owned enterprises, which lead to significant job losses: 3,000 within the Electricity Corporation; 4,000 within the Coal Corporation; 5,000 within the Forestry Corporation; and 8,000 within the New Zealand Post. New Zealand became a part of the global economy. The focus in the economy shifted from the productive sector to finance as a result of zero restrictions on overseas money coming into the country. Finance capital outstripped industrial capital and the manufacturing industry suffered approximately 76,000 job losses.


Middle East

Beginning in the late 1960s, a number of neoliberal reforms were implemented in the Middle East. For instance,
Egypt Egypt ( , ), officially the Arab Republic of Egypt, is a country spanning the Northeast Africa, northeast corner of Africa and Western Asia, southwest corner of Asia via the Sinai Peninsula. It is bordered by the Mediterranean Sea to northe ...
is frequently linked to the implementation of neoliberal policies, particularly with regard to the 'open-door' policies of President
Anwar Sadat Muhammad Anwar es-Sadat (25 December 1918 – 6 October 1981) was an Egyptian politician and military officer who served as the third president of Egypt, from 15 October 1970 until Assassination of Anwar Sadat, his assassination by fundame ...
throughout the 1970s, and
Hosni Mubarak Muhammad Hosni El Sayed Mubarak (; 4 May 1928 – 25 February 2020) was an Egyptian politician and military officer who served as the fourth president of Egypt from 1981 to 2011 and the 41st Prime Minister of Egypt, prime minister from 1981 to ...
's successive economic reforms between 1981 and 2011. These measures, known as '' al-Infitah'', were later diffused across the region. In Tunisia, neoliberal economic policies are associated with former president and ''de facto'' dictator Zine El Abidine Ben Ali; his reign made it clear that economic neoliberalism can coexist and even be encouraged by authoritarian states. Responses to globalisation and economic reforms in the
Gulf A gulf is a large inlet from an ocean or their seas into a landmass, larger and typically (though not always) with a narrower opening than a bay (geography), bay. The term was used traditionally for large, highly indented navigable bodies of s ...
have also been approached via a neoliberal analytical framework.


International organizations

The adoption of neoliberal policies in the 1980s by international institutions such as the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) and the
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
had a significant impact on the spread of neoliberal reform worldwide. To obtain loans from these institutions, developing or crisis-wracked countries had to agree to institutional reforms, including privatization, trade liberalization, enforcement of strong
private property Private property is a legal designation for the ownership of property by non-governmental Capacity (law), legal entities. Private property is distinguishable from public property, which is owned by a state entity, and from Collective ownership ...
rights, and reductions to
government spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual or ...
. This process became known as structural adjustment, and the principles underpinning it the
Washington Consensus The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
.


European Union

The
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...
(EU), created in 1992, is sometimes considered a neoliberal organization, as it facilitates
free trade Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
and freedom of movement, erodes national
protectionism Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations ...
and limits national
subsidies A subsidy, subvention or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having acce ...
. Others underline that the EU is not completely neoliberal as it leaves the development of welfare policies to its constituent states.


Traditions


Austrian School

The
Austrian School The Austrian school is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivat ...
is a school of economic thought originating in late-19th and early-20th century
Vienna Vienna ( ; ; ) is the capital city, capital, List of largest cities in Austria, most populous city, and one of Federal states of Austria, nine federal states of Austria. It is Austria's primate city, with just over two million inhabitants. ...
with a strong focus around the faculty of the
University of Vienna The University of Vienna (, ) is a public university, public research university in Vienna, Austria. Founded by Rudolf IV, Duke of Austria, Duke Rudolph IV in 1365, it is the oldest university in the German-speaking world and among the largest ...
. It bases its study of economic phenomena on the interpretation and analysis of the purposeful actions of individuals. In the 21st century, the term has increasingly been used to denote the free-market economics of Austrian economists Ludwig von Mises and Friedrich Hayek, including their criticisms of government intervention in the economy, which has tied the school to neoliberal thought. Economists associated with the school, including Carl Menger, Eugen Böhm von Bawerk, Friedrich von Wieser, Friedrich Hayek, and Ludwig von Mises, have been responsible for many notable contributions to economic theory, including the
subjective theory of value The subjective theory of value (STV) is an theory of value (economics), economic theory for explaining how the value of goods and services are not only set but also how they can fluctuate over time. The contrasting system is typically known as the ...
,
marginalism Marginalism is a theory of economics that attempts to explain the discrepancy in the value of goods and services by reference to their secondary, or marginal, utility. It states that the reason why the price of diamonds is higher than that of wa ...
in price theory, Friedrich von Wieser's theories on opportunity cost, Eugen von Böhm-Bawerk's theories on time preference, the formulation of the
economic calculation problem The economic calculation problem (ECP) is a criticism of using central economic planning as a substitute for Market (economics), market-based allocation of the factors of production. It was first proposed by Ludwig von Mises in his 1920 article ...
, as well as a number of criticisms of Marxian economics. Former
Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...
Chairman Alan Greenspan, speaking of the originators of the School, said in 2000 that "the Austrian School have reached far into the future from when most of them practiced and have had a profound and, in my judgment, probably an irreversible effect on how most mainstream economists think in he United States.


Chicago School

The
Chicago school of economics The Chicago school of economics is a Neoclassical economics, neoclassical Schools of economic thought, school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and populari ...
is a neoclassical school of thought within the academic community of economists, with a strong focus around the faculty of the
University of Chicago The University of Chicago (UChicago, Chicago, or UChi) is a Private university, private research university in Chicago, Illinois, United States. Its main campus is in the Hyde Park, Chicago, Hyde Park neighborhood on Chicago's South Side, Chic ...
. Chicago
macroeconomic Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output/ GDP ...
theory rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics heavily based on the concept of rational expectations. The school is strongly associated with University of Chicago economists such as
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
,
George Stigler George Joseph Stigler (; January 17, 1911 – December 1, 1991) was an American economist. He was the 1982 laureate in Nobel Memorial Prize in Economic Sciences and is considered a key leader of the Chicago school of economics. Early life and e ...
, Ronald Coase and Gary Becker. In the 21st century, economists such as Mark Skousen refer to Friedrich Hayek as a key economist who influenced this school in the 20th century having started his career in Vienna and the Austrian school of economics. The school emphasizes non-intervention from government and generally rejects regulation in markets as inefficient, with the exception of the regulation of the money supply by central banks (in the form of monetarism). Although the school's association with neoliberalism is sometimes resisted by its proponents, its emphasis on reduced government intervention in the economy and a '' laissez-faire'' ideology have brought about an affiliation between the Chicago school and neoliberal economics.


Washington Consensus

The Washington Consensus is a set of standardized policy prescriptions often associated with neoliberalism that were developed by the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF), the
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
, and the US Department of Treasury for crisis-wracked developing countries. These prescriptions, often attached as conditions for loans from the IMF and World Bank, focus on market liberalization, and in particular on lowering barriers to trade, controlling
inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
, privatizing
state-owned enterprise A state-owned enterprise (SOE) is a business entity created or owned by a national or local government, either through an executive order or legislation. SOEs aim to generate profit for the government, prevent private sector monopolies, provide goo ...
s, and reducing government budget deficits. John Williamson, a British-born economist defined the
Washington Consensus The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
by making in 1989 10 rules that were imposed by the World Bank, the International Monetary Fund and the US government on developing nations.Williamson J. (2002)
''Did the Washington Consensus Fail?''
/ref> He came to strongly oppose the way those recommendations were actually imposed and their use by neoliberals.


Geneva School

Historian Quinn Slobodian proposed in 2018 the existence of a so-called Geneva School of economics to describe a group of economists and political economists who gravitated in the 1920s and 1930s around the Geneva Graduate Institute, and the
Geneva Geneva ( , ; ) ; ; . is the List of cities in Switzerland, second-most populous city in Switzerland and the most populous in French-speaking Romandy. Situated in the southwest of the country, where the Rhône exits Lake Geneva, it is the ca ...
-based General Agreement on Tariffs and Trade (GATT) and
League of Nations The League of Nations (LN or LoN; , SdN) was the first worldwide intergovernmental organisation whose principal mission was to maintain world peace. It was founded on 10 January 1920 by the Paris Peace Conference (1919–1920), Paris Peace ...
. The particular strand of political philosophy revolved around renowned economists such as Friedrich von Hayek, Wilhelm Röpke, Jacob Viner, as well as Gottfried Haberler. Slobodian describes them as "ordo-globalists" who promoted the creation of global institutions to safeguard the unimpeded movement of capital across borders. He argues the school combined the "Austrian emphasis on the limits of knowledge and the global scale with the German ordoliberal emphasis on institutions and the moment of the political decision."


Political policy aspects

Neoliberal policies center around economic liberalization, including reductions to trade barriers and other policies meant to increase
free trade Free trade is a trade policy that does not restrict imports or exports. In government, free trade is predominantly advocated by political parties that hold Economic liberalism, economically liberal positions, while economic nationalist politica ...
, deregulation of industry, privatization of state-owned enterprises, reductions in
government spending Government spending or expenditure includes all government consumption, investment, and transfer payments. In national income accounting, the acquisition by governments of goods and services for current use, to directly satisfy the individual or ...
, and monetarism. Neoliberal theory contends that
free market In economics, a free market is an economic market (economics), system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of ...
s encourage economic efficiency,
economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
, and
technological innovation Technological innovation is an extended concept of innovation. While innovation is a rather well-defined concept, it has a broad meaning to many people, and especially numerous understanding in the academic and business world. Innovation refers to ...
. State intervention, even if aimed at encouraging these phenomena, is generally believed to worsen economic performance.


Economic and political freedom

Many neoliberal thinkers advance the view that economic and political freedom are inextricably linked.
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
argued in his book '' Capitalism and Freedom'' that economic freedom, while itself an extremely important component of absolute freedom, is also a necessary condition for political freedom. He claimed that centralized control of economic activities is always accompanied by political repression. In his view, the voluntary character of all transactions in an unregulated market economy and the wide diversity of choices that it permits pose fundamental threats to repressive political leaders by greatly diminishing their power to coerce people economically. Through the elimination of centralized control of economic activities, economic power is separated from political power and each can serve as a counterbalance to the other. Friedman feels that competitive capitalism is especially important to minority groups since impersonal market forces protect people from discrimination in their economic activities for reasons unrelated to their productivity. In '' The Road to Serfdom'', Friedrich Hayek offered a similar argument: "Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends".


Free trade

A central feature of neoliberalism is the support of free trade, and policies that enable free trade, like the North American Free Trade Agreement, are often associated with neoliberalism. Neoliberals argue that free trade promotes
economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
, reduces
poverty Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. Poverty can have diverse Biophysical environmen ...
, produces gains of trade like lower prices as a result of
comparative advantage Comparative advantage in an economic model is the advantage over others in producing a particular Goods (economics), good. A good can be produced at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior t ...
, maximizes consumer choice, and is essential to freedom, as they believe voluntary trade between two parties should not be prohibited by government. Relatedly, neoliberals argue that
protectionism Protectionism, sometimes referred to as trade protectionism, is the economic policy of restricting imports from other countries through methods such as tariffs on imported goods, import quotas, and a variety of other government regulations ...
is harmful to
consumer A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...
s, who will be forced to pay higher prices for goods; incentivizes individuals to misuse resources; distorts investment; stifles innovation; and props up certain industries at the expense of consumers and other industries.


Monetarism

Monetarism is an economic theory commonly associated with neoliberalism. Formulated by
Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and ...
, it focuses on the macroeconomic aspects of the supply of money, paying particular attention to the effects of
central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...
ing. It argues that excessive expansion of the money supply is inherently inflationary and that monetary authorities should focus primarily on maintaining price stability, even at the cost of other macroeconomic factors like
economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
. Monetarism is often associated with the policies of the U.S. Federal Reserve under the chairmanship of economist Paul Volcker, which centered around high interest rates that are widely credited with ending the high levels of inflation seen in the United States during the 1970s and early 1980s as well as contributing to the 1980–1982 recession. Monetarism had particular force in Chile, whose central bank raised interest rates to counter inflation that had spiraled to over 600%. This helped to successfully reduce inflation to below 10%, but also resulted in job losses.


Criticism

Neoliberalism has faced criticism by academics, journalists, religious leaders, and activists from both the political left and
right Rights are law, legal, social, or ethics, ethical principles of freedom or Entitlement (fair division), entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people according to some legal sy ...
. Notable critics of neoliberalism in theory or practice include economists Joseph Stiglitz, Amartya Sen, Michael Hudson,
Ha-Joon Chang Ha-Joon Chang (; ; born 7 October 1963) is a South Korean economist and academic. Chang specialises in institutional economics and development, and lectured in economics at the University of Cambridge from 1990–2021 before becoming pro ...
, Robert Pollin, Thomas Piketty, and Richard D. Wolff; linguist
Noam Chomsky Avram Noam Chomsky (born December 7, 1928) is an American professor and public intellectual known for his work in linguistics, political activism, and social criticism. Sometimes called "the father of modern linguistics", Chomsky is also a ...
; geographer and anthropologist David Harvey; Slovenian continental philosopher Slavoj Žižek, political activist and public intellectual
Cornel West Cornel Ronald West (born June 2, 1953) is an American philosopher, theologian, political activist, politician, social critic, and public intellectual. West was an independent candidate in the 2024 United States presidential election and is an ou ...
; Marxist feminist Gail Dines; British musician and political activist
Billy Bragg Stephen William Bragg (born 20 December 1957) is an English singer, songwriter, musician, author and political activist. His music blends elements of folk music, punk rock and protest songs, with lyrics that mostly span political or romantic th ...
; author, activist and filmmaker Naomi Klein; head of the Catholic Church
Pope Francis Pope Francis (born Jorge Mario Bergoglio; 17 December 1936 – 21 April 2025) was head of the Catholic Church and sovereign of the Vatican City State from 13 March 2013 until Death and funeral of Pope Francis, his death in 2025. He was the fi ...
; journalist and environmental activist George Monbiot; Belgian psychologist Paul Verhaeghe; journalist and activist Chris Hedges; conservative philosopher Roger Scruton; and the alter-globalization movement, including groups such as ATTAC. The impact of the
Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
in 2008 also gave rise to a surge in new scholarship that criticized neoliberalism.


Market fundamentalism

Neoliberal thought has been criticized for supposedly having an undeserved "faith" in the efficiency of markets, in the superiority of markets over centralized economic planning, in the ability of markets to self-correct, and in the market's ability to deliver economic and political freedom. Economist Paul Krugman has argued that the " laissez-faire absolutism" promoted by neoliberals "contributed to an intellectual climate in which faith in markets and disdain for government often trumps the evidence". Political theorist Wendy Brown has gone even further and asserted that the overriding objective of neoliberalism is "the economization of all features of life". A number of scholars have argued that, in practice, this "market fundamentalism" has led to a neglect of social goods not captured by economic indicators, an erosion of
democracy Democracy (from , ''dēmos'' 'people' and ''kratos'' 'rule') is a form of government in which political power is vested in the people or the population of a state. Under a minimalist definition of democracy, rulers are elected through competitiv ...
, an unhealthy promotion of unbridled
individualism Individualism is the moral stance, political philosophy, ideology, and social outlook that emphasizes the intrinsic worth of the individual. Individualists promote realizing one's goals and desires, valuing independence and self-reliance, and a ...
and social Darwinism, and economic inefficiency. Some critics contend neoliberal thinking prioritizes economic indicators like GDP growth and
inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
over social factors that might not be easy to quantify, like
labor rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, the ...
and access to higher education. This focus on economic efficiency can compromise other, perhaps more important, factors, or promote exploitation and social injustice. For example, anthropologist Mark Fleming argues that when the performance of a transit system is assessed purely in terms of economic efficiency, social goods such as strong
workers' rights Labor rights or workers' rights are both legal rights and human rights relating to labor relations between workers and employers. These rights are codified in national and international labor and employment law. In general, ...
are considered impediments to maximum performance. He supports this assertion with a case study of the San Francisco Municipal Railway (Muni), which is one of the slowest major urban transit systems in the US and has one of the worst on-time performance rates. This poor performance, he contends, stems from structural problems including an aging fleet and maintenance issues. He argues that the neoliberal worldview singled out transit drivers and their
labor unions A trade union (British English) or labor union (American English), often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages ...
, blaming drivers for failing to meet impossible transit schedules and considering additional costs to drivers as lost funds that reduce system speed and performance. This produced vicious attacks on the drivers' union and brutal public smear campaigns, ultimately resulting in the passing of Proposition G, which severely undermined the powers of the Muni drivers' union. American scholar and cultural critic Henry Giroux alleges that neoliberal market fundamentalism fosters a belief that market forces should organize every facet of society, including economic and social life, and promotes a social Darwinist ethic that elevates self-interest over social needs. Giroux states that the United States has entered a Second Gilded Age "more savage and anti-democratic than its predecessor" as a result of the enforcement of neoliberal policies and adherence to market fundamentalist principles.
Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
economic geographer David Harvey argues that neoliberalism promotes an unbridled individualism that is harmful to social solidarity. While proponents of economic liberalization have often pointed out that increasing economic freedom tends to raise expectations on political freedom, some scholars see the existence of non- democratic yet market-liberal regimes and the seeming undermining of democratic control by market processes as evidence that this characterization is ahistorical. Some scholars contend that neoliberal focuses may even undermine the basic elements of democracy. Kristen Ghodsee, ethnographer at the
University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...
, asserts that the triumphalist attitudes of Western powers at the end of the
Cold War The Cold War was a period of global Geopolitics, geopolitical rivalry between the United States (US) and the Soviet Union (USSR) and their respective allies, the capitalist Western Bloc and communist Eastern Bloc, which lasted from 1947 unt ...
and the fixation on linking all leftist political ideals with the excesses of
Stalinism Stalinism (, ) is the Totalitarianism, totalitarian means of governing and Marxism–Leninism, Marxist–Leninist policies implemented in the Soviet Union (USSR) from History of the Soviet Union (1927–1953), 1927 to 1953 by dictator Jose ...
, permitted neoliberal, free-market capitalism to fill the void, which undermined democratic institutions and reforms, leaving a trail of economic misery, unemployment and rising economic inequality throughout the former
Eastern Bloc The Eastern Bloc, also known as the Communist Bloc (Combloc), the Socialist Bloc, the Workers Bloc, and the Soviet Bloc, was an unofficial coalition of communist states of Central and Eastern Europe, Asia, Africa, and Latin America that were a ...
and much of the West that fueled a resurgence of extremist
nationalism Nationalism is an idea or movement that holds that the nation should be congruent with the state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation, Smith, Anthony. ''Nationalism: Theory, I ...
. Costas Panayotakis has argued that the economic inequality engendered by neoliberalism creates inequality of political power, undermining democracy and the citizen's ability to meaningfully participate. Despite the focus on economic efficiency, some critics allege that neoliberal policies actually produce economic inefficiencies. The replacement of a government-owned
monopoly A monopoly (from Greek language, Greek and ) is a market in which one person or company is the only supplier of a particular good or service. A monopoly is characterized by a lack of economic Competition (economics), competition to produce ...
with privately owned companies might reduce the efficiencies associated with
economies of scale In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale of operation, and are typically measured by the amount of Productivity, output produced per unit of cost (production cost). A decrease in ...
. Structurally, some economists argue that neoliberalism is a system that socializes costs and privatizes profits. They argue this results in an abdication of private responsibility for socially destructive economic choices and may result in regressive governmental controls on the economy to reduce damages by private individuals. American political theologian Adam Kotsko argues that contemporary right-wing populism, exemplified by Brexit and the Trump Administration, represent a "heretical" variant of neoliberalism, which accepts its core tenets but pushes them to new, almost "parodic" extremes.


Inequality

Critics have argued that neoliberal policies have increased economic inequality and exacerbated global
poverty Poverty is a state or condition in which an individual lacks the financial resources and essentials for a basic standard of living. Poverty can have diverse Biophysical environmen ...
. The Center for Economic and Policy Research's (CEPR) Dean Baker argued in 2006 that the driving force behind rising inequality in the United States has been a series of deliberate neoliberal policy choices, including anti-
inflation In economics, inflation is an increase in the average price of goods and services in terms of money. This increase is measured using a price index, typically a consumer price index (CPI). When the general price level rises, each unit of curre ...
ary bias, anti- unionism and profiteering in the healthcare industry. The economists David Howell and Mamadou Diallo contend that neoliberal policies have contributed to a United States economy in which 30% of workers earn low wages (less than two-thirds the median wage for full-time workers) and 35% of the labor force is underemployed while only 40% of the working-age population in the country is adequately employed. The globalization of neoliberalism has been blamed for the emergence of a " precariat", a new social class facing acute socio-economic insecurity and alienation. In the United States, the "neoliberal transformation" of industrial relations, which considerably diminished the power of unions and increased the power of employers, has been blamed by many for increasing precarity, which could be responsible for as many as 120,000 excess deaths per year. In
Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many Federal Dependencies of Venezuela, islands and islets in the Caribbean Sea. It com ...
, prior to the Venezuelan crisis, deregulation of the labor market resulted in greater informal employment and a considerable increase in industrial accidents and occupational diseases. Even in
Sweden Sweden, formally the Kingdom of Sweden, is a Nordic countries, Nordic country located on the Scandinavian Peninsula in Northern Europe. It borders Norway to the west and north, and Finland to the east. At , Sweden is the largest Nordic count ...
, in which only 6% of workers are beset with wages the
OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
considers low, some scholars argue that the adoption of neoliberal reforms—in particular the privatization of public services and the reduction of state benefits—is the reason it has become the nation with the fastest growing income inequality in the OECD. A 2016 report by researchers at the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) was critical of neoliberal policies for increasing economic inequality. While the report included praise for neoliberalism, saying "there is much to cheer in the neoliberal agenda," it noted that certain neoliberal policies, particularly freedom of capital and fiscal consolidation, resulted in "increasing inequality", which "in turn jeopardized durable conomicexpansion". The report contends that the implementation of neoliberal policies by economic and political elites has led to "three disquieting conclusions": * The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries. * The costs in terms of increased inequality are prominent. Such costs epitomize the trade-off between the growth and equity effects of some aspects of the neoliberal agenda. * Increased inequality in turn hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects. A number of scholars see increasing inequality arising out of neoliberal policies as a deliberate effort, rather than a consequence of ulterior motives like increasing
economic growth In economics, economic growth is an increase in the quantity and quality of the economic goods and Service (economics), services that a society Production (economics), produces. It can be measured as the increase in the inflation-adjusted Outp ...
.
Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
economic geographer David Harvey describes neoliberalism as a "
class Class, Classes, or The Class may refer to: Common uses not otherwise categorized * Class (biology), a taxonomic rank * Class (knowledge representation), a collection of individuals or objects * Class (philosophy), an analytical concept used d ...
project" "carried out by the corporate capitalist class", and argued in his book ''A Brief History of Neoliberalism'' that neoliberalism is designed to increase the class power of economic elites.Archived a
Ghostarchive
and th
Wayback Machine
Also see .
Economists Gérard Duménil and Dominique Lévy posit that "the restoration and increase of the power, income, and wealth of the upper classes" are the primary objectives of the neoliberal agenda. Economist David M. Kotz contends that neoliberalism "is based on the thorough domination of labor by capital". Similarly, Elizabeth S. Anderson writes that neoliberalism has "shifted economic and political power to private businesses, executives, and the very rich" and that "more and more, these organizations and individuals govern everyone else." Sociologist Thomas Volscho argues that the imposition of neoliberalism in the United States arose from a conscious political mobilization by capitalist elites in the 1970s, who faced two self-described crises: the legitimacy of capitalism and a falling rate of profitability in industry. SSRN Pre-publication is free access ; SAGE Journals doi publication is closed access . In ''The Global Gamble'', Peter Gowan argued that "neoliberalism" was not only a free-market ideology but "a social engineering project". Globally, it meant opening a state's political economy to products and financial flows from the core countries. Domestically, neoliberalism meant the remaking of social relations "in favour of creditor and rentier interests, with the subordination of the productive sector to financial sectors, and a drive to shift wealth, power and security away from the bulk of the working population." According to Jonathan Hopkin, the United States took the lead in implementing the neoliberal agenda in the 1980s, making it "the most extreme case of the subjection of society to the brute force of the market." As such, he argues this made the United States an outlier with economic inequality hitting "unprecedented levels for the rich democracies," and notes that even with average incomes "very high by global standards," US citizens "face greater material hardship than their counterparts in much poorer countries." These developments, along with financial instability and limited political choice, have resulted in political polarization, instability and revolt in the United States. A 2022 study published in '' Perspectives on Psychological Science'' found that in countries where neoliberal institutions have significant influence over policy the psychology of those populations are molded not only to be more willing to tolerate large levels of income inequality, but actually prefer it over more egalitarian outcomes.


Right-wing populism and nationalism

Research by Kristen Ghodsee, ethnographer and Professor of Russian and East European Studies at the
University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...
, argues that widespread discontent with neoliberal capitalism has led to a " red nostalgia" in much of the former Communist bloc. She argues that "the political freedoms that came with democracy were packaged with the worst type of unregulated, free-market capitalism, which completely destabilized the rhythms of everyday life and brought crime, corruption and chaos where there had once been comfortable predictability." This ultimately fueled a resurgence of
nationalist Nationalism is an idea or movement that holds that the nation should be congruent with the State (polity), state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation,Anthony D. Smith, Smith, A ...
politicians and parties, such as
Vladimir Putin Vladimir Vladimirovich Putin (born 7 October 1952) is a Russian politician and former intelligence officer who has served as President of Russia since 2012, having previously served from 2000 to 2008. Putin also served as Prime Minister of Ru ...
in
Russia Russia, or the Russian Federation, is a country spanning Eastern Europe and North Asia. It is the list of countries and dependencies by area, largest country in the world, and extends across Time in Russia, eleven time zones, sharing Borders ...
,
Viktor Orbán Viktor Mihály Orbán (; born 31 May 1963) is a Hungarian lawyer and politician who has been the 56th prime minister of Hungary since 2010, previously holding the office from 1998 to 2002. He has also led the Fidesz political party since 200 ...
in
Hungary Hungary is a landlocked country in Central Europe. Spanning much of the Pannonian Basin, Carpathian Basin, it is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia and ...
,
Alexander Lukashenko Alexander Grigoryevich Lukashenko (also transliterated as Alyaksandr Ryhoravich Lukashenka; born 30 August 1954) is a Belarusian politician who has been the first and only president of Belarus since the office's establishment in 1994, making hi ...
in
Belarus Belarus, officially the Republic of Belarus, is a landlocked country in Eastern Europe. It is bordered by Russia to the east and northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Belarus spans an a ...
, and the
Law and Justice Law and Justice ( , PiS) is a Right-wing populism, right-wing populist and National conservatism, national-conservative List of political parties in Poland, political party in Poland. The party is a member of European Conservatives and Refo ...
party in
Poland Poland, officially the Republic of Poland, is a country in Central Europe. It extends from the Baltic Sea in the north to the Sudetes and Carpathian Mountains in the south, bordered by Lithuania and Russia to the northeast, Belarus and Ukrai ...
. The aftermath of the
Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
and decline of the Rust Belt have been cited as contributing to the rise of
right-wing populism Right-wing populism, also called national populism and right populism, is a political ideology that combines right-wing politics with populist rhetoric and themes. Its rhetoric employs anti- elitist sentiments, opposition to the Establis ...
in the United States, including the victory of Donald Trump in the 2016 U.S. presidential election.


Corporatocracy

Some organizations and economists argue that neoliberal policies increase the power of
corporations A corporation or body corporate is an individual or a group of people, such as an association or company, that has been authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law as ...
and shift wealth to the upper classes. For instance, Jamie Peck and Adam Tickell argue that urban citizens are increasingly deprived of the power to shape the basic conditions of daily life, which are instead shaped by corporations involved in the competitive economy. The
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) and
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
, two major international organizations which often espouse neoliberal views, have been criticized for advancing neoliberal policies around the world. Sheldon Richman, editor of the libertarian journal '' The Freeman'', argues that the IMF has imposed a "corporatist-flavored 'neoliberalism' on the troubled countries of the world." He contends that IMF policies of spending cuts and tax increases, as well as subjection to paternalistic supranational bureaucrats, have fostered "long-term dependency, perpetual indebtedness, moral hazard, and politicization" in the developing world, which has undermined "real market reform" and "set back the cause of genuine liberalism." Ramaa Vasudevan, associate professor of economics at Colorado State University, states that trade policies and treaties fostered by the United States in the neoliberal era, along with bailouts brokered by the World Bank and the IMF, have allowed corporate capital to expand around the world unimpeded by trade protections or national borders, "sucking countries in different regions of the world into global corporations' logic of accumulation." This expansion of global corporate capital, Vasudevan says, has buttressed its ability to "orchestrate a global division of labor most conducive to the demands of profitability" which in turn has facilitated "a brutal, global race to the bottom". Mark Arthur, a Senior Fellow at the Center for Global Development Research in Denmark, has written that the influence of neoliberalism has given rise to an " anti-corporatist" movement in opposition to it. This "anti-corporatist" movement is articulated around the need to reclaim the power that corporations and global institutions have stripped from governments. He says that
Adam Smith Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...
's "rules for mindful markets" served as a basis for the anti-corporate movement, "following government's failure to restrain corporations from hurting or disturbing the happiness of the neighbor mith.


Mass incarceration

Several scholars have linked mass incarceration of the poor in the United States with the rise of neoliberalism. Sociologist Loïc Wacquant and
Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
economic geographer David Harvey have argued that the criminalization of poverty and mass incarceration is a neoliberal policy for dealing with social instability among economically marginalized populations. According to Wacquant, this situation follows the implementation of other neoliberal policies, which have allowed for the retrenchment of the social
welfare state A welfare state is a form of government in which the State (polity), state (or a well-established network of social institutions) protects and promotes the economic and social well-being of its citizens, based upon the principles of equal oppor ...
and the rise of punitive workfare, whilst increasing
gentrification Gentrification is the process whereby the character of a neighborhood changes through the influx of more Wealth, affluent residents (the "gentry") and investment. There is no agreed-upon definition of gentrification. In public discourse, it has ...
of urban areas, privatization of public functions, the shrinking of collective protections for the working class via economic deregulation and the rise of underpaid, precarious wage labor. By contrast, it is extremely lenient in dealing with those in the upper echelons of society, in particular when it comes to economic crimes of the upper class and corporations such as
fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...
, embezzlement, insider trading, credit and
insurance fraud Insurance fraud is any intentional act committed to deceive or mislead an insurance company during the application or claims process, or the wrongful denial of a legitimate claim by an insurance company. It occurs when a claimant knowingly attem ...
,
money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...
and violation of commerce and labor codes. According to Wacquant, neoliberalism does not shrink government, but instead sets up a "centaur state" with little governmental oversight for those at the top and strict control of those at the bottom. In expanding upon Wacquant's thesis, sociologist and political economist John L. Campbell of
Dartmouth College Dartmouth College ( ) is a Private university, private Ivy League research university in Hanover, New Hampshire, United States. Established in 1769 by Eleazar Wheelock, Dartmouth is one of the nine colonial colleges chartered before the America ...
suggests that through privatization the prison system exemplifies the centaur state. He states that "on the one hand, it punishes the lower class, which populates the prisons; on the other hand, it profits the upper class, which owns the prisons, and it employs the middle class, which runs them." In addition, he argues that the prison system benefits corporations through outsourcing, as inmates are "slowly becoming a source of low-wage labor for some US corporations". Both through privatization and outsourcing, Campbell argues, the penal state reflects neoliberalism. Campbell also argues that while neoliberalism in the United States established a penal state for the poor, it also put into place a debtor state for the middle class and that "both have had perverse effects on their respective targets: increasing rates of incarceration among the lower class and increasing rates of indebtedness—and recently home foreclosure—among the middle class." David McNally, Professor of Political Science at
York University York University (), also known as YorkU or simply YU), is a public university, public research university in Toronto, Ontario, Canada. It is Canada's third-largest university, and it has approximately 53,500 students, 7,000 faculty and staff, ...
, argues that while expenditures on social welfare programs have been cut, expenditures on prison construction have increased significantly during the neoliberal era, with California having "the largest prison-building program in the history of the world". The scholar Bernard Harcourt contends the neoliberal concept that the state is inept when it comes to economic regulation, but efficient in policing and punishing "has facilitated the slide to mass incarceration". Both Wacquant and Harcourt refer to this phenomenon as "Neoliberal Penality".


Financialization

The implementation of neoliberal policies and the acceptance of neoliberal economic theories in the 1970s are seen by some academics as the root of financialization, with the
Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
as one of its results. In particular, various neoliberal ideologies that had long been advocated by elites, such as monetarism and supply-side economics, were translated into government policy by the Reagan administration, which resulted in decreased government regulation and a shift from a tax-financed state to a debt-financed one. While the profitability of industry and the rate of economic growth never recovered to the heyday of the 1960s, the political and economic power of Wall Street and finance capital vastly increased due to debt-financing by the state. A 2016
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) report blames certain neoliberal policies for exacerbating financial crises around the world, causing them to grow bigger and more damaging.


Globalization

Neoliberalism is commonly viewed by scholars as encouraging of
globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...
, which is the subject of much
criticism Criticism is the construction of a judgement about the negative or positive qualities of someone or something. Criticism can range from impromptu comments to a written detailed response. , ''the act of giving your opinion or judgment about the ...
. The emergence of the " precariat", a new class facing acute socio-economic insecurity and alienation due to
offshoring Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state gover ...
and a global race to the bottom, has been attributed to the globalization of neoliberalism. In a 2022 article for the journal '' Global Environmental Change'', Jason Hickel et al. argued that unequal exchange between the
Global North and Global South Global North and Global South are terms that denote a method of grouping countries based on their defining characteristics with regard to socioeconomics and Global politics, politics. According to UN Trade and Development (UNCTAD), the Global S ...
in the era of neoliberal globalization led to a quantified $242 trillion in net appropriation of raw materials, energy and labor from the latter to the former (constant 2010 USD) between 1990 and 2015.


Economic nationalism

Some critics of neoliberalism view it as weakening the
sovereignty Sovereignty can generally be defined as supreme authority. Sovereignty entails hierarchy within a state as well as external autonomy for states. In any state, sovereignty is assigned to the person, body or institution that has the ultimate au ...
of nations in favor of cosmopolitanism and
globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...
. Neoliberalism favors immigration, in contrast to right-wing populist political parties that oppose immigration. Neoliberalism also favors investor–state dispute settlement in free trade agreements, which has been criticized as violating
sovereign immunity Sovereign immunity, or crown immunity, is a legal doctrine whereby a monarch, sovereign or State (polity), state cannot commit a legal wrong and is immune from lawsuit, civil suit or criminal law, criminal prosecution, strictly speaking in mode ...
and the capacity of governments to implement reforms and legislative programs related to
public health Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals". Analyzing the de ...
, environmental protection, and human rights.


Imperialism

A number of scholars have alleged neoliberalism encourages or covers for imperialism. For instance, Ruth J Blakeley, Professor of Politics and International Relations at the University of Sheffield, accuses the United States and its allies of fomenting state terrorism and mass killings during the
Cold War The Cold War was a period of global Geopolitics, geopolitical rivalry between the United States (US) and the Soviet Union (USSR) and their respective allies, the capitalist Western Bloc and communist Eastern Bloc, which lasted from 1947 unt ...
as a means to buttress and promote the expansion of
capitalism Capitalism is an economic system based on the private ownership of the means of production and their use for the purpose of obtaining profit. This socioeconomic system has developed historically through several stages and is defined by ...
and neoliberalism in the developing world. As an example of this, Blakeley says the case of Indonesia demonstrates that the U.S. and the UK put the interests of capitalist elites over the human rights of hundreds of thousands of Indonesians by supporting the Indonesian Army as it waged a Indonesian mass killings of 1965–66, campaign of mass killings, which resulted in the annihilation of the Communist Party of Indonesia and its civilian supporters. Historian Bradley R. Simpson posits that this campaign of mass killings was "an essential building block of the neoliberal policies that the West would attempt to impose on Indonesia after Sukarno's ouster." Geographer David Harvey argues neoliberalism encourages an indirect form of imperialism that focuses on the extraction of resources from developing countries via financial mechanisms. This is practiced through international institutions like the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) and
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
who negotiate debt relief with developing nations. He alleges that these institutions prioritize the financial institutions that grant the loans over the debtor countries and place requirements on loans that, in effect, act as financial flows from debtor countries to developed countries (for example, to receive a loan a state must have sufficient foreign exchange reserves—requiring the debtor state to buy US Treasury bonds, which have interest rates lower than those on the loan). Economist Joseph Stiglitz, Chief Economist of the World Bank from 1997 to 2000, has said of this: "What a peculiar world in which poor countries are in effect subsidizing the richest."


Global health

The neoliberal approach to global health advocates privatization of the healthcare industry and deregulation, reduced government interference in the market, and focuses on non-governmental organizations (NGOs) and international organizations like the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(IMF) and the
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
rather than government. This approach has faced considerable criticism, such as the TRIPS Agreement hampering access to essential medicines in the Global South (i.e. during the AIDS and COVID-19 pandemics). James Pfeiffer, Professor of Global Health at the University of Washington, has criticised the use of Structural adjustment, Structural Adjustment Programs (SAPs) by the World Bank and IMF in Mozambique, which resulted in reduced government health spending, leading international NGOs to fill service holes previously filled by government. Rick Rowden, a Senior Economist at Global Financial Integrity, has criticised the IMF's monetarism, monetarist approach of prioritising price stability and fiscal restraint, which he alleges was unnecessarily restrictive and prevented developing countries from scaling up long-term investment in public health infrastructure. Within the developed capitalist world, according to Dylan Sullivan and Jason Hickel, neoliberal countries like the United States have inferior health outcomes and more poverty compared to Social democracy, social democracies with universalist welfare states, in particular the Nordic model, Nordics. Some commentators have blamed neoliberalism for various social ills, including mass shootings, increased Homelessness in the United States, homelessness, and deaths of despair in the United States, sense of Social isolation, social disconnection, competition, and loneliness.


Environmental impact

It has been argued that trade-led, unregulated economic activity and lax state regulation of pollution have led to environmental degradation. Furthermore, modes of production encouraged under neoliberalism may reduce the availability of natural resources over the long term, and may therefore not be sustainable within the world's resource depletion, limited geographical space. In Robert Fletcher's 2010 piece, "Neoliberal Environmentality: Towards a Poststructuralist Political Ecology of the Conservation Debate" his premise is that there is a conflict of ideas in conservation; that on one side of things you have deep ecology and protectionist paradigms and on the other side you have community based conservation efforts. There are problems with both approaches, and on either side they frequently fail to do conservation work in a substantial way. In the middle, Fletcher sees a space where social sciences are able to critique both sides of and blend the approaches, forming not a triangle of ideologies, but a spectrum. The relationship between capitalism and conservation is one that has to be reckoned with due to an overarching neoliberal framework guiding most conservation efforts. According to ecologist William E. Rees, the "neoliberal paradigm contributes significantly to planetary unraveling" by treating the economy and the ecosphere as totally separate systems, and by neglecting the latter.
Marxist Marxism is a political philosophy and method of socioeconomic analysis. It uses a dialectical and materialist interpretation of historical development, better known as historical materialism, to analyse class relations, social conflic ...
economic geographer David Harvey argues neoliberalism is to blame for Holocene extinction, increased rates of extinction. Notably, he observes that "the era of neoliberalization also happens to be the era of the fastest mass extinction of species in the Earth's recent history." American philosopher and animal rights activist Steven Best argues that three decades of neoliberal policies have "marketized the entire world" and intensified "the assault on every ecosystem on the earth as a whole". Neoliberalism reduces the "tragedy of the commons" to an argument for private ownership. The Friedman doctrine, which Nicolas Firzli has argued defined the neoliberal era, may lead companies to neglect concerns for the environment. Firzli insists that prudent, fiduciary-driven long-term investors cannot ignore the environmental, social and corporate governance consequences of actions taken by the CEOs of the companies whose shares they hold as "the long-dominant Friedman stance is becoming culturally unacceptable and financially costly in the boardrooms of pension funds and industrial firms in Europe and North America". Critics like Noel Castree focus on the relationship between neoliberalism and the biophysical environment explain that critics of neoliberals see the free market as the best way to mediate the relationship between producers and consumers, as well as maximize freedom in a more general sense which they view as inherently good. Castree also asserts that the assumption that markets will allow for the maximization of individual freedom is incorrect. Conservation and management of natural resources has also been impacted by neoliberal policies and development. Prior to the neoliberalization of conservation efforts, conservation was done on the part of governmental and regulatory entities. Although conservation has typically been considered the "antithesis of production", with the global shift towards neoliberalization, conservation programs have also shifted towards becoming a "mode of capitalist production". It's done so through the reliance on private entities, non-governmental organizations, resource commodification and entrepreneurship (big and small). Access to the market through natural resource commodification became a neoliberal tool for communities and regions to further develop. One scholar and critic of neoliberal conservation, Dan Klooster, published a study on forest certification in Mexico which demonstrated the socio-environmental consequences of neoliberal conservation networks. In this example, global markets and a desire for sustainably-sourced products led to the adoption of forest certification programs, such as the Forest Conservation Fund, by Mexican companies. These certifications require that forest managers make improvements to the environmental and social aspects of harvesting wood and in return they gain access to international markets that prefer the consumption of certified wood. Today, 12 percent of Mexico's logged forests do so under a certification. However, many small logging businesses aren't able to successfully compete amongst the global market forces without accepting inaccessible costs to certification and unsatisfactory market prices and demand. Klooster uses this conservation example to demonstrate how the social impacts of conservation commodification can be both positive and negative. On the one hand the certification can create networks of producers, certifiers and consumers that oppose the socio-environmental disparities caused by the forestry industry, but on the other hand they might also widen further the north–south divisions.


Religious opposition

Catholic political scientist Albert Bikaj considers the neoliberal concept of free market "fundamentally nihilistic" because it's profit-oriented, neglecting Christian ethics and undermining human dignity, common good, environment, and civilisation. In his 84-page apostolic exhortation , Pope, Catholic Pope Pope Francis, Francis described unfettered capitalism as "a new tyranny" and called on world leaders to fight rising poverty and inequality, stating:


Political opposition

In political science, disillusionment with neoliberalism is seen as a cause of de-politicization and the growth of anti-political sentiment, which can in turn encourage populist politics and re-politicization. Instances of political opposition to neoliberalism from the late 1990s onward include: * Research by Kristen Ghodsee, ethnographer and Professor of Russian and East European Studies at the
University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...
, argues that widespread discontent with neoliberal capitalism has led to a " red nostalgia" in much of the former Communist bloc. She argues that "the political freedoms that came with democracy were packaged with the worst type of unregulated, free-market capitalism, which completely destabilized the rhythms of everyday life and brought crime, corruption and chaos where there had once been comfortable predictability", which ultimately fueled a resurgence of extremist
nationalism Nationalism is an idea or movement that holds that the nation should be congruent with the state. As a movement, it presupposes the existence and tends to promote the interests of a particular nation, Smith, Anthony. ''Nationalism: Theory, I ...
. * In Latin America, the "pink tide" that swept leftist governments into power at the turn of the millennium can be seen as a reaction against neoliberal hegemony and the notion that "there is no alternative" (TINA) to the
Washington Consensus The Washington Consensus is a set of ten economic policy prescriptions considered in the 1980s and 1990s to constitute the "standard" reform package promoted for Economic crisis, crisis-wracked developing country, developing countries by the Was ...
. * In protest against neoliberal globalization, South Korean farmer and former president of the Korean Advanced Farmers Federation Lee Kyung-hae committed suicide by stabbing himself in the heart during a meeting of the World Trade Organization in Cancun, Mexico, in 2003. He was protesting against the decision of the South Korean government to reduce subsidies to farmers. *The rise of anti-austerity parties in Europe and SYRIZA's victory in the Greek legislative election, January 2015, Greek legislative elections of January 2015 have some proclaiming "the end of neoliberalism". *In the 2016 U.S. presidential election, both Donald Trump from the Republican Party (United States), Republican Party and Bernie Sanders from the Democratic Party ran on platforms opposing neoliberalism, including opposition to the Trans Pacific Partnership and
offshoring Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state gover ...
. *In 2018, the yellow vests protests in France and the 2019–2021 Chilean protests emerged in direct opposition to neoliberal governments and policies, including privatization and
austerity In economic policy, austerity is a set of Political economy, political-economic policies that aim to reduce government budget deficits through Government spending, spending cuts, tax increases, or a combination of both. There are three prim ...
, that were blamed for the rising cost of living, surging personal debts, and increased economic inequality. In 2019, protests against neoliberal reforms, policies and governments have taken place in scores of countries on 5 continents, with opposition to austerity, privatization and tax hikes on the working classes being a common theme among many of them. * During the 2021 Chilean general election, president-elect Gabriel Boric promised to end the country's neoliberal economic model, stating that "if Chile was the cradle of neoliberalism, it will also be its grave."


Repression of worker's union

While neoliberalism itself doesn't directly imply the repression of worker's union, global trading benefits from the repression of trade unions.
Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...
, a former UK prime minister and known prominent leader of neoliberalism (while
Ronald Reagan Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was an American politician and actor who served as the 40th president of the United States from 1981 to 1989. He was a member of the Republican Party (United States), Republican Party a ...
in the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
promoted a set of
neoliberal Neoliberalism is a political and economic ideology that advocates for free-market capitalism, which became dominant in policy-making from the late 20th century onward. The term has multiple, competing definitions, and is most often used pej ...
reforms known as "Reaganomics"), introduced a series of policies to reduce the power and influence of trade unions and various social benefits. According to BBC News, Thatcher reportedly "managed to destroy the power of the trade unions for almost a generation".


See also

* Anarcho-capitalism * Capitalism * Capitalist realism * Classical liberalism * Conservative liberalism * Cultural globalization * Economic globalization * Economic liberalism * Elite theory * Globalism * Globalization * History of macroeconomic thought * Inverted totalitarianism * Late capitalism * Neoclassical economics * Neoclassical liberalism * Neoconservatism * Neo-libertarianism * Political Economy * Reagan Democrat * Right libertarianism * Shock therapy (economics) * The Managerial Revolution *
Third Way The Third Way is a predominantly centrist political position that attempts to reconcile centre-right and centre-left politics by advocating a varying synthesis of Right-wing economics, right-wing economic and Left-wing politics, left-wing so ...
* Triangulation (politics), Triangulation


References


Sources

* * * * * * * * * ** Book version: * * * * * * * * * * * * *


Further reading


Summaries and histories

* Albo, Gregory. "Neoliberalism from Reagan to Clinton." ''Monthly Review'' 52.11 (2001): 81–89, in US
online
* * * * Budd, John M. and Bart M. Harloe."Higher Learning and the American Academic Library in the Twilight Era of Neoliberalism." ''Progressive Librarian'' 46 Winter 2017/2018: 159–178. * * * Campbell, John L., and Ove K. Pedersen, eds. ''The Rise of Neoliberalism and Institutional Analysis'' Princeton University Press, 2001. 288 pp. * * * * * * * * * * *


Criticisms

* * * * Brady, David. 2008. ''Rich Democracies, Poor People: How Politics Explain Poverty''. New York: Oxford University Press. * Wendy Brown (political scientist), Brown, Wendy (2005). "Neoliberalism and the End of Liberal Democracy" in ''Edgework: critical essays on knowledge and politics'' Princeton University Press, ch 3
Abstract
* * Buschman, John. ''Libraries, Classrooms, and the Interests of Democracy: Marking the Limits of Neoliberalism''. The Scarecrow Press. Rowman & Littlefield. 2012. 239 pp. notes. bibliog. index. . * * Crouch, Colin.
The Strange Non-death of Neo-liberalism
', Polity Press, 2011. (Reviewed in
The Montreal Review
') * * Davies, William.
The Limits of Neoliberalism: Authority, Sovereignty and the Logic of Competition.
' SAGE Publications, 2014. * * * * * * * Henry Giroux, Giroux, Henry (2008). ''Against the Terror of Neoliberalism: Politics Beyond the Age of Greed (Cultural Politics and the Promise of Democracy).'' Paradigm Publishers. * Giroux, Henry (2013)
''Public Intellectuals Against the Neoliberal University''
''philosophersforchange.org''. * Giroux, Henry (2014). ''Neoliberalism's War on Higher Education.'' Haymarket Books. * Bernard Harcourt, Harcourt, Bernard (2012).
The Illusion of Free Markets: Punishment and the Myth of Natural Order
'' Harvard University Press. * * * * * * * * Vicente Navarro, Navarro, Vicente, ed. ''Neoliberalism, Globalization, and Inequalities: Consequences for Health and Quality of Life (Policy, Politics, Health, and Medicine Series).'' Baywood Publishing Company, 2007. * * Overbeek, Henk and Bastiaan van Apeldoorn (2012).
Neoliberalism in Crisis
'' Palgrave Macmillan. * * * * * Springer, Simon (2015).
Violent Neoliberalism: Development, Discourse, and Dispossession in Cambodia
'' Palgrave Macmillan. * Stiglitz, Joseph (13 May 2019)
"Three decades of neoliberal policies have decimated the middle class, our economy, and our democracy"
Market Watch. * * Paul Verhaeghe, Verhaeghe, Paul (2014). ''What About Me? The Struggle for Identity in a Market-Based Society.'' Scribe Publications. * Loïc Wacquant, Wacquant, Loïc (2009).
Prisons of Poverty
'' University of Minnesota Press. *


Other academic articles

* * * Cahill, Damien. "The End of Laissez-Faire?: On the Durability of Embedded Neoliberalism". Edward Elgar Publishing. 2014. * * Cooper, Melinda (2017). ''Family Values: Between Neoliberalism and the New Social Conservatism.'' Zone Books. * * Ferris, Timothy. ''The Science of Liberty'' (2010) HarperCollins 384 pages * Foucault, Michel. ''The Birth of Biopolitics'' Lectures at the College de France, 1978–1979. London: Palgrave, 2008. * Griffiths, Simon, and Kevin Hickson, eds. ''British Party Politics and Ideology after New Labour'' (2009) Palgrave Macmillan 256 pp. * * * * * * Ingar Solty, Solty, Ingar (2012). "After Neoliberalism: Left versus right projects of leadership in the global crisis," in Stephen Gill (political scientist), Stephen Gill (Ed) (2012). ''Global Crises and the Crisis of Global Leadership'' (Cambridge University Press), pp. 199–214. * * Stahl, Garth; "Identity, Neoliberalism and Aspiration: Educating White Working-Class Boys" (London, Routledge, 2015). *


External links


Neoliberalism
– entry at ''Encyclopædia Britannica''
"Neoliberalism 101"
– podcast by The Cato Institute
"What is Neoliberalism?"
– video by the Barnard Center for Research on Women
"Monetarism"
– The New School's Economics Department's History of Economic Thought website
"Neoliberalism and the State"
– discussion between Toronto Metropolitan University, Ryerson University professors John Shields and Bryan Evans
"A Look at Argentina's 2001 Economic Rebellion"
– video report by ''Democracy Now!''
"The Scorecard on Development, 1960–2010: Closing the Gap?"
– report by the Center for Economic and Policy Research, April 2011
"The crisis of neoliberalism"
– 2010 interview with economist Gérard Duménil on ''The Real News''
"Henry Giroux on Resisting the Neoliberal Revolution"
– interview with Henry Giroux by Bill Moyers, February 21, 2014.
The Politics of the Anthropocene in a World After Neoliberalism
''Boston Review''. March 10, 2021.
Capitalism: What Makes Us Free?
NPR. July 1, 2021.
Has Covid ended the neoliberal era?
''The Guardian''. September 2, 2021

'' New York''. October 14, 2021.


Online lectures


"The Neoliberal City"
David Harvey. University Channel. October 4, 2010.
"Wall St. Crisis Should Be for Neoliberalism What Fall of Berlin Wall Was for Communism"
Naomi Klein.
University of Chicago The University of Chicago (UChicago, Chicago, or UChi) is a Private university, private research university in Chicago, Illinois, United States. Its main campus is in the Hyde Park, Chicago, Hyde Park neighborhood on Chicago's South Side, Chic ...
. ''Democracy Now!''. October 2008.
"Neo-Liberalism: An Accounting"
Noam Chomsky Avram Noam Chomsky (born December 7, 1928) is an American professor and public intellectual known for his work in linguistics, political activism, and social criticism. Sometimes called "the father of modern linguistics", Chomsky is also a ...
. University of Massachusetts Amherst. April 19, 2017. {{Authority control Neoliberalism, Anti-communism Anti-Marxism Classical liberalism Conservative liberalism Conservatism in the United States Conservatism in the United Kingdom Economic globalization Economic liberalism Ideologies of capitalism Imperialism studies Liberalism Political terminology Political theories Right-wing politics in the United States Right-wing politics in the United Kingdom Pejorative terms