Neoliberalism or neo-liberalism[1] is the 20th-century resurgence of 19th-century ideas associated with economic liberalism and free-market capitalism.[2]:7[3] It is generally associated with policies of economic liberalization, including privatization, deregulation, globalization, free trade, austerity, and reductions in government spending in order to increase the role of the private sector in the economy and society;[4][12] however, the defining features of neoliberalism in both thought and practice have been the subject of substantial scholarly debate.[13][14] In policymaking, neoliberalism was part of a paradigm shift that followed the failure of the Keynesian consensus in economics to address the stagflation of the 1970s.[15][16]
English-speakers have used the term neoliberalism since the start of the 20th century with different meanings,[17] but it became more prevalent in its current meaning in the 1970s and 1980s, used by scholars in a wide variety of social sciences[18][19] as well as by critics.[20][21] The term is rarely used by proponents of free-market policies.[22] Some scholars have described the term as meaning different things to different people as neoliberalism has "mutated" into geopolitically distinct hybrids as it travelled around the world.[23][24][5] Neoliberalism shares many attributes with other concepts that have contested meanings, including representative democracy.[25]
The definition and usage of the term have changed over time.[6] As an economic philosophy, neoliberalism emerged among European liberal scholars in the 1930s as they attempted to revive and renew central ideas from classical liberalism as they saw these ideas diminish in popularity, overtaken by recognition of the need to control markets, following the Great Depression and manifested in policies designed to counter the volatility of free markets, and mitigate their negative social consequences.[26]:14–15 One impetus for the formulation of policies to mitigate free-market volatility was a desire to avoid repeating the economic failures of the early 1930s, failures sometimes attributed principally to the economic policy of classical liberalism.
When the term entered into common use in the 1980s[citation needed] in connection with Augusto Pinochet's economic reforms in Chile, it quickly took on negative connotations and was employed principally by critics of market reform and laissez-faire capitalism. Scholars tended to associate it with the theories of Mont Pelerin Society economists Friedrich Hayek, Milton Friedman, and James M. Buchanan, along with politicians and policy-makers such as Margaret Thatcher, Ronald Reagan and Alan Greenspan.[6][27] Once the new meaning of neoliberalism became established as a common usage among Spanish-speaking scholars, it diffused into the English-language study of political economy.[6] By 1994, with the passage of NAFTA and with the Zapatistas' reaction to this development in Chiapas, the term entered global circulation.[5] Scholarship on the phenomenon of neoliberalism has grown over the last few decades.[19][28]
A 2016 report by researchers at the International Monetary Fund (IMF) was critical of neoliberal policies for increasing economic inequality.[52] 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 [economic] expansion". The report contends that the implementation of neoliberal policies by economic and political A 2016 report by researchers at the International Monetary Fund (IMF) was critical of neoliberal policies for increasing economic inequality.[52] 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 [economic] expansion". The report contends that the implementation of neoliberal policies by economic and political elites has led to "three disquieting conclusions":
A number of scholars see increasing inequality arising out
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. Marxist economic geographer David Harvey describes neoliberalism as a "class 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.[139][286][64] 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.[287] Economist David M. Kotz contends that neoliberalism "is based on the thorough domination of labor by capital".[50]:43 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.[288] 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."[289]
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 as one of its results.[290]financialization, with the Great Recession as one of its results.[290][41][291][292][50][293] 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.[288] A 2016 International Monetary Fund (IMF) report blames certain neoliberal policies for exacerbating financial crises around the world, causing them to grow bigger and more damaging.[52][294]
Several scholars have linked mass incarceration of the poor in the United States with the rise of neoliberalism.[2]:3, 346[296][297][298] Sociologist Loïc Wacquant and Marxist economic geographer David Harv