Neoliberalism

ORIGIN

Industrial Revolution /Mercantilism

IDEAS - 1     Central banks · Corporations /Democracy/Denationalization/

Deregulation/Economic freedom/Economic integration/Economic interdependence/ Economic liberalization /Exchange rate /Fair trade/Fiat currency /Foreign exchange reserves /Foreign direct investment/
Free markets /Free trade (area) /Globalization /Harmonisation of law /Inflation adjustment/

 Inflation targeting /Intellectual property /Intergovernmentalism/ Liberalization /Marketization ·

Mixed economy /Negative income tax /Open market operations /Private finance initiative /

Private property ·/ Privatization /Public highway /School vouchers /Single market /Supranationalism

Tax cuts / Tax reform

IDEAS - 2

Political liberalism/Political freedom/Cultural liberalism/Democratic capitalism/Democratic education
Economic liberalism/Free trade · Individualism/Laissez faire/Liberal democracy/Liberal neutrality
Negative / positive liberty/Market economy · Open society/Popular sovereignty/Rights (individual)
Separation of church and state

Comparative advantage/Consumer price index/Economic growth/Economic rationalism/Friedman rule / k-percent rule/Gross domestic product/International economics/International finance/International trade
Laffer curve · Monetary theory/Quantity theory of money/Symmetrical inflation target

Neoliberalism describes a market-driven^[1] approach to economic and social policy based on neoclassical theories of economics that stresses the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the political and economic priorities of the state.

The term "neoliberalism" has also come into wide use in cultural studies to describe an internationally prevailing ideological paradigm that leads to social, cultural, and political practices and policies that use the language of markets, efficiency, consumer choice, transactional thinking and individual autonomy to shift risk from governments and corporations onto individuals and to extend this kind of market logic into the realm of social and affective relationships.

Policy implications

 

Neoliberalism seeks to transfer control of the economy from public to the private sector, under the belief that it will produce a more efficient government and improve the economic health of the nation.

the Washington-based international economic organizations (like the International Monetary Fund (IMF) and World Bank). Williamson's list included ten points:

1.      Fiscal policy Governments should not run large deficits that have to be paid back by future citizens, and such deficits can only have a short term effect on the level of employment in the economy.

2.      Constant deficits will lead to higher inflation and lower productivity, and should be avoided.

3.      Deficits should only be used for occasional stabilization purposes.

4.      Spending neoliberals deem wasteful toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment

5.      Tax reform– broadening the tax base and adopting moderate marginal tax rates to encourage innovation and efficiency;

6.      Interest rates that are market determined and positive in real terms;

7.      Floating exchange rates;

8.      Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions

9.      Trade protection to be provided by law and relatively uniform tariffs; thus encouraging competition and long term growth

10.  Liberalization of the "capital account" of the balance of payments, that is, allowing people the opportunity to invest funds overseas and allowing foreign funds to be invested in the home country

11.  Privatization of state enterprises; Promoting market provision of goods and services which the government cannot provide as effectively or efficiently, such as telecommunications, where having many service providers promotes choice and competition.

12.  Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudent oversight of financial institutions;

13.  Legal security for property rights; and,

14.  Financialisation of capital.

History

Within the developing world, several developments – among them decolonization, a desire for national independence and the destruction of the pre-war global economy,^[8] and the view that countries could not effectively industrialize under free market systems (e.g., the Singer–Prebisch thesis) – encouraged economic policies that were influenced by communist, socialist and import substitution precepts.

A number of theories concerning new systems began to develop, which led to extensive debate between those who advocated "social democracy and central planning on the one hand" and those "concerned with liberating corporate and business power and re-establishing market freedoms on the other.

Post-1970s economic liberalism

Global spread

Chronic economic crisis throughout the 1980s, and the collapse of the Communist bloc at the end of the 1980s, helped foster political opposition to state interventionism in favor of free market reform policies. From the 1980s onward, a number of communist countries initiated various neoliberal market reforms, such as the Socialist Federal Republic of Yugoslavia under the direction of Ante Markovic (until the country's collapse in the early 1990s), and the People's Republic of China under the direction of Deng Xiaoping.

Thatcher's political and economic philosophy emphasised reduced state intervention as well as free markets and "entrepreneurialism".^[68]

She vowed to end excessive government interference in the economy and attempted to do this through privatizing nationally-owned enterprises.

She began her economic reforms by increasing interest rates to slow the growth of the money supply and thus lower inflation.^[70] In accordance with her "less government intervention" views she introduced public spending cuts^[71] particularly on housing and industry subsidies. She also placed limits on the printing of money and legal restrictions on trade unions.

Reach and effects

Neoliberal movements ultimately changed the world's economies in many ways, but some analysts argue that the extent to which the world has liberalized may often be overstated. Some of the past thirty years' changes are clear and unambiguous, like:^[93]

1.      Growth in international trade and cross-border capital flows

2.      Elimination of trade barriers

3.      Cutbacks in public sector employment

4.      The privatization of previously public-owned enterprises

5.      The transfer of the share of countries' economic wealth to the top economic percentiles of the population.^[94]

Other changes are not so apparent, and are debated in the literature^[93]:

·Reduction in the size of governments. Governments do not appear to have shrunk wholesale. With the exception of exceptionally high-spending governments, government expenditures (as a percentage of GDP) appears to have stayed the same since 1980. Most of the cuts to government spending appear to have been a temporary phenomenon that took place during the 1990s.

Opposition

Opponents of neoliberalism argue the following points:

·      Globalization and liberalization subvert nations' ability for self-determination.

·      Exploitation: critics consider capitalist economics to be exploitative.

·      Negative economic consequences: Critics argue that neo-liberal policies produce inequality.

·      Increase in corporate power: some anti-corporate organizations believe neoliberalism, unlike liberalism, changes economic and government policies to increase the power of corporations and large business, and a shift to benefit the upper classes over the lower classes.^[99]

·      There are terrains of struggles for neoliberalism locally and socially. Urban citizens are increasingly deprived of the power to shape the basic conditions of daily life.^[30]

·      Trade-led, unregulated economic growth and state regulation of pollution and other environmental impacts economic growth.^[100]

·      It is claimed that deregulation of the labor market produces flexibilization and casualization of labor, greater informal employment, and a considerable increase in industrial accidents and occupational diseases.^[101]

Neo-Marxism

Neo-Marxism is a loose term for various twentieth-century approaches that amend or extend Marxism and Marxist theory, usually by incorporating elements from other intellectual traditions, such as: critical theory, psychoanalysis or Existentialism.

Erik Olin Wright's theory of contradictory class locations, which incorporates Weberian sociology and critical criminology, which incorporates anarchism, is an example of the syncretism in neo-Marxist theory.^[1] As with many uses of the prefix neo-,
many theorists and groups designated as neo-Marxist have attempted to supplement the perceived deficiencies of orthodox Marxism or dialectical materialism.
Neo-Marxism comes under the broader framework of the New Left. Neo-Marxism is also used frequently to describe opposition to inequalities experienced by Lesser Developed Countries in a globalized world.

History

There is no formal Neo-Marxist organization and seldom do people call themselves Neo-Marxists, so it is difficult to describe who belongs to this movement. Also there is no set definition as to what a Neo-Marxist is, which makes grouping and categorizing this idea even more difficult.
One idea that many "branches" of Neo-Marxism share is the desire to move away from the idea of a bloody revolution to one of a more peaceful nature.
Moving away from the violence of the red revolutions of the past while keeping the revolutionary message.
Neo-Marxist concepts can also follow an economic theory that attempts to move away from the traditional accusations of class warfare and create new economic theory models
Several important advances to Neo-Marxism came after World War I from Georg Lukács, Karl Korsch and Antonio Gramsci.

New Imperialism

       

New Imperialism refers to the colonial expansion adopted by Europe's powers and, later, Japan and the United States, during the 19th and early 20th centuries; expansion took place from the French conquest of Algeria to World War I: approximately 1830 - 1914. The period is distinguished by an unprecedented pursuit of overseas territorial acquisitions.

Rise of New Imperialism

        The American Revolution and the collapse of the Spanish Empire in the early 1810–20s, following the revolutions in the viceroyalties of New Spain, New Granada, Peru, and the Rio de la Plata ended the first era of European imperialism.

Especially in the United Kingdom (UK), these revolutions helped show

The deficiencies of mercantilism,

The doctrine of economic competition for finite wealth which had supported earlier imperial expansion.

        In 1846, The Corn Laws, which were the regulations governing the import and export of grain, were repealed after a great deal of protesting from the middle class. Because of the repeal, manufacturers were faced with a tremendous benefit, seeing that the regulations enforced by the Corn Laws had slowed their businesses.

        With the repeal in place, the manufacturers were then able to trade more freely.

Thus, the UK began to adopt the concept of free trade.

The Congress of Vienna by Jean-Baptiste Isabey, (1819).

The congress was actually a series of face-to-face meetings between colonial powers.

It served to divide and reappropriate imperial holdings.

        During this period, between the 1815 Congress of Vienna (after the defeat of Napoleonic France) and the end of the Franco-Prussian War (1870-1871), Britain reaped the benefits of being the world's sole modern, industrial power.

        As the "workshop of the world", the United Kingdom could produce finished goods so efficiently that they could usually undersell comparable, locally manufactured goods in foreign markets, even supplying a large share of the manufactured goods consumed by such nations as Germany, France, Belgium, and the United States.

        Economically, adding to the commercial competition of old rivals like France were now the newly industrializing powers, such as Germany and the United States. Needing external markets for their manufactured goods, all sought ways to challenge Britain's dominance in world trade – the consequence of its early industrialization.

        This competition was sharpened by the Long Depression of 1873-1896, a prolonged period of price deflation punctuated by severe business downturns, which put pressure on governments to promote home industry, leading to the widespread abandonment of free trade among Europe's powers.

        New overseas colonies would provide export markets free of foreign competition, while supplying cheap raw materials for their mother country to use as they saw fit.

        The revival of working-class militancy and emergence of socialist parties during the Depression decades led conservative governments to view colonialism as a force for national cohesion in support of the domestic status quo.

Also, in Italy, and to a lesser extent in Germany and Britain, tropical empires in India and Burma were seen as outlets for what was deemed a surplus home population.

        The main dominating powers of the conference were France, Germany, Great Britain, and Portugal.

        They remapped Africa without considering the cultural and linguistic borders that were already established. At the end of the conference, Africa was divided into 50 different countries.

        The attendants established who was in control of each of these newly divided countries.

        They also planned, noncommittally, to end the slave trade in Africa.

Britain during the era of New Imperialism

British Prime Minister Benjamin Disraeli and Queen Victoria

        In Britain, the latter half of the 19th century has been seen as the period of displacement of industrial capitalism by finance capitalism.

        Britain's entry into the old imperial age is often dated to 1875, when the government of Benjamin Disraeli bought the indebted Egyptian ruler Ismail's shareholding in the Suez Canal to secure control of this waterway, deemed a strategic holding since its opening six years earlier as a shipping lane between Britain and India. Joint Anglo-French financial control over Egypt ended in outright British occupation in 1882.

"Take up the White Man's burden"

"civilizing mission"

 

New Imperialism in Africa

        Between 1885 and 1914, Britain brought nearly 30% of Africa's population under its control, to 15% for France, 9% for Germany, 7% for Belgium and 1% for Italy: Nigeria alone contributed 15 million subjects to Britain, more than in the whole of French West Africa, or the entire German colonial empire. The only regions not under European control in 1914 were Liberia and Ethiopia.

 Motivations

        The British government gave many excuses to the public for the New Imperialism strategy. However, there were often underlying motivations behind what the government said.

Humanitarianism

One of the biggest motivations behind New Imperialism was the idea of humanitarianism and "civilizing" the "lower" class people in Africa and in other undeveloped places. This was a religious motive for many Christian missionaries, in attempt to save the souls of the "uncivilized" people, and of the idea that Christians and the people of the United Kingdom were morally superior.

        Most of the missionaries that supported imperialism did so because they felt the only true religion was their own.

        Similarly, the Roman Catholic missionaries opposed the British missionaries because the British missionaries were Protestant.

        At times, however, imperialism did help the people of the countries being invaded due to the fact that the missionaries ended up stopping some of the slavery in some areas. Therefore, Europeans claimed that they were only there because they wanted to protect the weaker tribal groups they conquered.

        The missionaries and other leaders suggested that they should stop such practices as cannibalism, child marriage, and other "savage" things.

This humanitarian ideal was described in poems such as the "White Man's Burden" and other literature.

Theories

        The accumulation theory adopted by Karl Kautsky, John A. Hobson and popularized by Lenin centered on the accumulation of surplus capital during and after the Industrial Revolution:

        restricted opportunities at home, the argument goes, drove financial interests to seek more profitable investments in less-developed lands with lower labor costs, unexploited raw materials and little competition.

The World-Systems theory approach of Immanuel Wallerstein sees imperialism as part of a general, gradual extension of capital investment from the "core" of the industrial countries to a less developed "periphery." Protectionism and formal empire were the major tools of "semi-peripheral," newly industrialized states, such as Germany, seeking to usurp Britain's position at the "core" of the global capitalist system.