What is neoliberalism? »Its Definition and Meaning

We can define that neoliberalism a set of capitalist political and economic ideas that defends the non-participation of the State in the economy, leaving out any government interference, promoting production private with unique capital without government subsidy.According to this definition of neoliberalism, there must be freedom of trade, since this guarantees the economic growth and social development of a country.Surgical in 1970 through Milton Friedman's monetary school as a solution to the crisis that affected the world economy in 1973, caused by the increase in oil prices.

What is Neoliberalism

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The definition of neoliberalism is usually related to policies that lead to a broad liberalization of the economy , free trade in general, large reductions in taxes and spending public as well or the minimization of State intervention in the economy and in society, in favor of the private sector, mainly composed of businessmen and consumers; The latter are those who can go on to play certain roles, since in some countries the state finances and assumes some taxpayer expenses.

Neoliberalism is the revival of ideas connected to classical liberalism or The first liberalism that began in 1970 and 1980, although another concept of neoliberalism dates back to its appearance since the decade of 1039.

The expression and meaning of neoliberalism is a neologism created by the word “neo-”, Which comes from the Greek νέος (neos) and means 'new', the noun of Latin liberālis, and the suffix related to systems or doctrine"-ism ".

The main promoters and ideologues of the that is neoliberalism are Milton Friedman and Friedrich August von Hayek, who expose it as an alternative model to protect the economy of the twentieth century.

The political leaders in Latin America of the level of Margaret Thatcher, Ronald Reagan or Augusto Pinochet, they were the first to apply neoliberal policies in each of their countries, however, it is currently one of the ideological movements most expanded in the West, being the quintessential example of the United States.

For other sectors of criticism, some of the marked measures of neoliberalism and globalization have been those that have promoted the countries that associate with them, resulting in an average increase of 1.5 points above that of those countries that They did not.For these groups that are largely liberal, it has been shown that the countries that have been most incorporated into what is called "globist neoliberalism" have fewer indices of extreme poverty than those who have not done so.

History of Neoliberalism

The use and definition of neoliberalism has changed over the years and there is currently no single opinion to determine the concept of neoliberalism, so which is usually used as a word associated to the right and is managed colloquially to cover a wide variety of very different ideas within the range of conservatism, liberalism, fascism or feudalism.

Initially it is said that neoliberalism is a economic philosophy that emerged among the European liberal sages in the 1930s, who were trying to find a third way or a middle way, of the discussion that was then leading between the economic planning proposed by socialism and classical liberalism.In the following decades the concept of neoliberalism was inclined to be against the laissez-faire system of liberalism, fostering a market economy protected by a State , this model came to be recognized as the social market economy.However, the meaning of neoliberalism today is known with certain variants by which it has its beginning in the The so-called Mont Pelerin company, created in Switzerland at the end of the 40s, as an initiative of economists Ludwig Von Mises and Friedrich von Hayek.

Economic neoliberalism brought with it a series of advantages and consequences after the implementation of this system, among the advantages of Most prominent neoliberalism are:

The Free Market

one of its most important aspects is the preference that is possessed by the free market , for a mercantilism Without borders, where governments can make way in their countries and businesses can reach more consumers.The state authority decreases, so that companies have more freedom to show their products without prices to stop them, in addition to emulating with companies to attract more customers, new ideas that favor the consumer are encouraged.

The Competition

when referring to the word competition is spoken in the sense that they have more options to choose a certain product or service in the market.For this reason, this model is oriented more towards the improvement of results and of all things in general, so that in the end, only the best options are maintained, either school, companies or even people.

With the initiation that occurs with the point mentioned above, foreign companies seeking to offer the same, but with their own resources and unique styles, are also allowed access in this competition.

On the other hand, this economic system also had negative effects, some of the consequences of neoliberalism are:

1) Interests of a few : with the neoliberalist amendments commonly observe how many people become wealthy overnight thanks to the companies of the industrial sector that were managed by the State.With more consumers worldwide, their wealth increases and although that can be interpreted from different points from view , it becomes very much for the benefit of very few.

2) Monopolies : it is related to the previous point, since, at transferring power to a small elite group, monopolies are created that and cover all services, leaving the town with few options.In this sense, the development of small businesses is also limited because they compete against much larger ones and with a greater number of staff and resources, who choose to work for large firms.

3) Inequality : Due to neoliberal reforms, there is a great difference between social classes, where the rich become richer and the poor even more simply.It has no comparison.There are some locations where health and education are even privatized, but because of the nature of these sectors, these issues do not evolve much.Even so, just thinking about offering better doctors or teachers to those who have the possibility of paying more, shows the propensity of neoliberalism towards inequality.

4) Economic problems : many of the negative effects are exhibited in doubt, the increase in fuel the aum Ento of the cost of food, decrease in employment and basic wages.

5) Environmental and rights issues : entrepreneurs in order to see their business grow and generate more money, they forget many other factors that affect the lives of other people.On the one hand, the ecosystem for the construction of factories is destroyed, the displacement of animals from their natural habitat is caused, or also the contamination of the waters thanks to the chemical wastes that are dumped.

At present, different currents and terms are used to refer to the same meaning of neoliberalism, for example: neomercantilism, Corporativism, lobbyism or cronyism, Anarchocapitalism, monetarism neoclassical, socioliberalism and minarchism.

The neoliberalism in Mexico is an example of this movement, which emerged in this country in the 1980s, during an economic crisis, in the government of M Iguel de la Madrid Hurtado, who begins to implement the neoliberalism system through a series of neoliberal reforms that were characterized by the privatization of state-owned companies, the reduction of public spending, the contracting of the state, among other things.

Characteristics of neoliberalism

Characteristics of Neoliberalism (basic principles):

• The minimum participation of the State in the configuration of the economy of a country.
• The little government intervention in the labor market .
• State privatization policy.
• Free movement of international capitals and the emphasis on globalization.
• The economy opens the doors for multinationals to invest.
• Adoption of measures against economic protectionism.
• The operation of the economic activities are notoriously more simplified, since the bureaucracy of the state in the process is summarized.
• Opposition to the excess of taxes and levies.
• Increase of the production, to achieve the basic objective of the economic development of the investment circle.
• It is against the price control of the products and services by the State, that is, the law of supply and Demand is sufficient to regulate prices.
• The economic base must be formed by private companies.
• Based entirely on capital ismo.
• Another characteristic of very relevant neoliberalism is privatization, neoliberalism believes that by privatizing companies tend to be more effective and productive than if they are public.Likewise, the State should not interpose so that in this way, profit is more effective and the private sector can generate wealth.

Differences between Neoliberalism and other movements

Differences between Neoliberalism and Liberalism

Neoliberals and liberals not only do not have the same principles , but have antagonistic views of each other.On the one hand, liberalism is a philosophical, political and economic method, which promotes civil liberties; it contradicts any form of despotism, promoting republican principles, being the movement on which representative democracy is based and the division of powers.

The word neoliberalism, meanwhile, alludes only to an economic policy that seeks to minimize state mediation in social and economic matters, protecting the free trade capitalist as the best guarantee of the institutional balance and economic development of a country.Although this movement does not It has a philosophical or moral component, because it only refers to the economic aspect in countries where it has evolved with more strength, and has always been connected to a very conservative and quite restrictive moral, usually associated with religious positions.

Differences between Neoliberalism and Socialism

Socialism on the one hand is a method of social and economic organization, whose foundation is that the means of production be part of the collective goods and that it is the same inhabitants who administer it, one of the main objectives of a socialist order, is the fair distribution of goods and a rational structure of the economy, it is by This is the reason for the extinction of private property and the elimination of social classes .

On the other hand, neoliberalism is an economic style established in the framework of the doctrine of economic liberalism, but in turn within the capitalist method.Neoliberals show their full support for liberalization in a matter of economy, which leads to the markets being completely open, thus promoting the free trade, based on a deregulation of the markets.

Differences between Neoliberalism and Globalization

There is a disparity between what is neoliberalism and globalization; On the one hand, globalization focuses on the development of capitalism.Its current acceleration is due to the fall of socialism as an economy and the incorporation of the countries of the socialist side to the probabilities of the globalizing market.Globalization is essentially a group of Capitalist economic processes that have led to the incorporation of regional mega markets, whose mechanism involves the promotion of processes of transnationalization and denationalization of relations between labor and capital.

Unlike globalization, neo-liberalism seeks to replace the political class with the business class , taking away from the state its regulatory work of some economic actions, as well as its power to subsidize companies and offer basic services to the population such as housing, health, communication routes, retirement plans, among others, will support globalization with the need to reduce the state and enlarge the entrepreneur.