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Neoliberalism

Neoliberalism means a theory, where government intervention in economic life should be kept to a minimum, while allowing maximum freedom for entrepreneurs. So the policy aims to cede control of business factors from the public sector to a private one. A majority of neoliberalism supporters intensify the influence of a free-market capitalism. 

Neoliberalism can be synonymous with Margaret Thatcher - former prime minister of the U.K. Lately, the concept of neoliberalism has been associated with fiscal austerity and efforts to limit public expenditures on community-based programmes.

Essence of Neoliberalism

Neoliberalism is closely related to laissez-faire principle, i.e. a non-intervention of state into the economic sector. It presupposes the following economic growth, and, as a result, pacing technologies and free market expansion.

The emergence of neoliberalism is associated with the advent of the "second globalization era". It was formed in the middle of the 20th century as the opposition to the ideas of social liberalism, which assumed: a public cooperation and protection, a combination of competition with state regulation and social programs, and the adoption of egalitarian and collectivist principles.

In some cases neoliberalism is mixed with libertarianism. But the first term intends a more interventionist approach of the public sector into the economic realm. For instance, neoliberalists take a stand in favor of graduated taxation, while libertarianism supporters prefer a fixed income-tax rate. 

Features of Liberalism and Neoliberalism 

Neoliberalism, unlike classical liberalism, does not completely deny economic intervention and regulation of the state. However, the concept recognizes the government, establishing competition principles and free market laws. At the same time, an unlimited competition and a free market are considered the main means of ensuring progress and achieving social justice.

Liberalism, on the other hand, values liberty in every manifestation and establishes all sectors of society, including, but not limiting, the government's role. While neoliberalism policy has a more narrow focus.

Views on a Neoliberalism policy

Nowadays, political science research can show many different interpretations of neoliberalism, its critical assessments and ways of interpretation. 

Let’s consider the major critical points, related to the term:

  • Monopolies.  In fact, despite all claims about competition merits, neoliberalism policy presupposes a growth in the monopolistic power of a few centralized multinational corporations. As a result, there is a sharp increase in economic, social and legal disaccord at the level of states, social groups and individuals.
  • Social inequality. Neoliberalism in a western world led to the reduction of the middle class. So highly skilled workers are able to ask for substantial wages, while the salaries of employees with a lower level remain unchanged. Thus, consumer purchasing power varies considerably. 
  • Financial uncertainty. Economic growth can't always be guaranteed by deregulation of capital. Moreover, large-scale perturbations in the economy happen, entailing massive shocks around the globe. Therefore, a risk of unfavorable financial consequences is present. 

Free market strategy to community facilities. Neoliberalism is criticized as it contemplates a protectiveness of free market approach. The strategy doesn’t take into account the healthcare system and education. The mentioned spheres are public, and the concept of profit-making there, is different.

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