A PRIMER ON NEO-LIBERALISM

FARHANA.K

2120200095

5-SEM,3-YEAR

B.PLANNING

SPA VIJAYAWADA

INTRODUCTION

Neo-liberalism is a largely unregulated capitalist system with a set of economic policies that limits restrictions on manufacturing, reduces barriers to commerce, reduces tariffs, and free trade that came up to develop a nation's economy.

• It is essentially about making trade between nations easier.• It is about freer movement of goods, resources and enterprises to

maximize profits and efficiency.

THE NEO-LIBERAL TURN

• Post-war period and the class compromise between capital and labour (‘embedded liberalism’).

• 1776- British economist Adam smith, published a book named the wealth of nations.

• 1950s and the 1960s- High rates of economic growth, redistributive politics, control over the mobility of capital, Keynesian fiscal and monetary policies.

• Towards the end of the 1960s embedded liberalism began to collapse.

• 1980- Due to the debt crisis faced, neo-liberal programmes of restructuring were extended globally through the efforts of US and G-7 States to subject their states to establish a discipline of capital markets.

• The capitalist crisis, with its reducing profit rates, encouraged the corporate groups to revive economic liberalism, which is known as neo-liberalism.

• Neoliberalism emerged as a project to restore the power of economic elites.

It emphasises on Liberating private enterprise or free enterprise from any restrictions the government imposed, even if the social damage caused is high.

Reducing expenditure on public purposes like education and health care was to be done.

Neo-Liberalism limits government regulation on anything that will reduce the safety of jobs, and profits

Neo-Liberalism helps in selling state-owned enterprises, services and goods to investors who operate privately. This includes key industries, banks, toll highways, railroads, electricity, hospitals, schools and fresh water

Neo-liberalism has led to pressurize the poorest section in a society to find solutions for their lack of education, health and social security all by their own selves and to put the responsibility of their failure on themselves and blame them for their lack of effort.

Cutting public expenditure for social services

The rule of the market Deregulation Privatisation Removing the concept of the community or public good and replacing it with individual responsibility

CHARACTERISTICS OF NEO-LIBERALISM

INSTITUTIONS ESTABLISHED

• INTERNATIONAL MONETARYFUND (IMF)

• WORLD BANK (WB)

• WORLD TRADE ORGANIZATION (WTO)

1947: GENERAL AGREEMENT ON TARIFF AND TRADE (GATT)

It is a multilateral agreement among countries that provides a framework

for the conduct of international trade. It contains disciplines on matters

related to import and export of goods. Through this, countries committed

to reduce tariffs on certain imported goods.Around the world, Neo-liberalism is forced by powerful financial institutions like the world bank (WB), the international monetary fund (IMF) and World trade organisation (WTO). WTO, WB and IMF transformed themselves in to the agents of trans-national neo-liberals and were mobilised to institutionalise the extension of market forces in the third world countries through the process of structural adjustment.

• The underlying assumption is that the free markets are good for the overall development. However, neo-liberalism can affects the market in a negative way, influence and manipulate trade for certain interests.

• One major factor responsible for this is global inequality. Global inequalities on various indicators have grown, as it is influenced by politics. This is due to the reason that economics cannot be separated from politics.

• Despite the good intentions of many policies framed due to structural adjustment, they often led to more harm than good. In today’s context, structural adjustment is regarded as a failure as it has failed to bring third world countries out of Poverty and has also resulted in causing more injuries to the poor.

CRITICAL ANALYSIS

POVERTY, OVERPRODUCTION AND LOCAL DISINTEGRATION

• Harsh economic measures have resulted in the gradual disintegration of the Welfare State.

• Because of the large accumulation of public debts in western countries, the financial elites have been given the power to dictate government’s economic and social policy.

• This economic restructuring has made the divide between different social and ethnic groups even deeper. Moreover, it has increased the potential capacity of the economic system and expanded levels of production without reducing poverty significantly.

• In developing countries, entire branches of industry producing for the internal market are driven into bankruptcy on the orders of the WB and IMF.

REFERENCE

• “What is neo-liberalism”, Elizabeth Martinez and Arnoldo Garcia, National Network for Immigrant and Refugee Rights-corpwatch,1996

• “Free trade and Globalisation”, Dominica, de ab la publication, 2010

• “Neoliberalism: The economic model: origins, theory, definition”, Dandelion Salad, word press BlogSpot, 2005

• “A Primer on Neoliberalism”, Anup Shah, Global issues article, 2010

• “Neo-liberalism: Origins, theory, definition”, Paul Treanor, 2005

THANK YOU