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Neo-liberalism. “ The Luckiest Nut in the World ”. What is Neo-liberalism.
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What is Neo-liberalism • Neoliberalism, in theory, is essentially about making trade between nations easier. It is about freer movement of goods, resources and enterprises in a bid to always find cheaper resources, to maximize profits and efficiency.
Requirements • Neoliberalismrequires the removal of various controls deemed as barriers to free trade, such as: • Tariffs • Regulations • Certain standards, laws, legislation and regulatory measures • Restrictions on capital flows and investment
Main Points • The rule of the market — freedom for capital, goods and services, where the market is self-regulating allowing the “trickle down” notion of wealth distribution. It also includes the de-unionizing of labor forces and removals of any impediments to capital mobility, such as regulations. The freedom is from the state, or government. • Reducing public expenditure for social services, such as health and education, by the government • Deregulation, to allow market forces to act as a self-regulating mechanism • Privatization of public enterprise (things from water to even the internet) • Changing perceptions of public and community good to individualism and individual responsibility.
Guiding Principles • Sustained economic growth is the way to human progress • Free markets without government “interference” would be the most efficient and socially optimal allocation of resources • Economic globalization would be beneficial to everyone • Privatization removes inefficiencies of public sector • Governments should mainly function to provide the infrastructure to advance the rule of law with respect to property rights and contracts.
Going Global • Freedom of trade in goods and services • Freer circulation of capital • Freer ability to invest
Outcomes • many innovative products • Growth and development for some have been immense • Some 3 billion people — or half of humanity — live on under 2 dollars a day • 86 percent of the world’s resources are consumed by the world’s wealthiest 20 percent
Endgame: Divergent Views • The underlying assumption then is that the free markets are a good thing. • From a power perspective, “free” trade in reality is seen by many around the world as a continuation of those old policies of plunder.