Neoliberalism

Neoliberalism, also neo-liberalism,

Historian Elizabeth Shermer argued that the term gained popularity largely among left-leaning academics in the 1970s to "describe and decry a late twentieth-century effort by policymakers, think-tank experts, and industrialists to condemn social-democratic reforms and unapologetically implement free-market policies";[52] economic historian Phillip W. Magness notes its reemergence in academic literature in the mid-1980s, after French philosopher Michel Foucault brought attention to it.^[53]

Neoliberalism is contemporarily used to refer to market-oriented reform policies such as "eliminating

• As a
  development model, it refers to the rejection of structuralist economics in favor of the Washington Consensus
  .
• As an
  minimal state
  .
• As a
  government budget deficits and reduction of spending on public works
  .

There is debate over the meaning of the term. Sociologists Fred L. Block and Margaret Somers claim there is a dispute over what to call the influence of free-market ideas which have been used to justify the retrenchment of New Deal programs and policies since the 1980s: neoliberalism, laissez-faire or "free market ideology".^[55] Other academics such as Susan Braedley and Med Luxton assert that neoliberalism is a political philosophy which seeks to "liberate" the processes of capital accumulation.^[56] In contrast, Frances Fox Piven sees neoliberalism as essentially hyper-capitalism.^[57] Robert W. McChesney, while defining neoliberalism similarly as "capitalism with the gloves off", goes on to assert that the term is largely unknown by the general public, particularly in the United States.^[58] Lester Spence uses the term to critique trends in Black politics, defining neoliberalism as "the general idea that society works best when the people and the institutions within it work or are shaped to work according to market principles".^[59] According to Philip Mirowski, neoliberalism views the market as the greatest information processor, superior to any human being. It is hence considered as the arbiter of truth. Adam Kotsko describes neoliberalism as political theology, as it goes beyond simply being a formula for an economic policy agenda and instead infuses it with a moral ethos that "aspires to be a complete way of life and a holistic worldview, in a way that previous models of capitalism did not."^[60]

Neoliberalism is distinct from liberalism insofar as it does not advocate laissez-faire economic policy, but instead is highly constructivist and advocates a strong state to bring about market-like reforms in every aspect of society.

According to some scholars, neoliberalism is commonly used as a pejorative by critics, outpacing similar terms such as monetarism, neoconservatism, the Washington Consensus and "market reform" in much scholarly writing.^[9] The Handbook of Neoliberalism, for instance, posits that the term has "become a means of identifying a seemingly ubiquitous set of market-oriented policies as being largely responsible for a wide range of social, political, ecological and economic problems".^[12] Its use in this manner has been criticized by those who advocate for policies characterized as neoliberal.^[64] The Handbook, for example, further argues that "such lack of specificity [for the term] reduces its capacity as an analytic frame. If neoliberalism is to serve as a way of understanding the transformation of society over the last few decades, then the concept is in need of unpacking".^[12] Historian Daniel Stedman Jones has similarly said that the term "is too often used as a catch-all shorthand for the horrors associated with globalization and recurring financial crises".^[65]

Several writers have criticized the term "neoliberal" as an insult or slur used by leftists against liberals and varieties of liberalism that leftists disagree with.

The

While most agreed that the status quo liberalism promoting laissez-faire economics had failed, deep disagreements arose around the proper role of the state. A group of "true (third way) neoliberals" centered around Rüstow and Lippmann advocated for strong state supervision of the economy while a group of old school liberals centered around Mises and Hayek continued to insist that the only legitimate role for the state was to abolish barriers to market entry. Rüstow wrote that Hayek and Mises were relics of the liberalism that caused the Great Depression while Mises denounced the other faction, complaining that the ordoliberalism they advocated really meant "ordo-interventionism".^[80]

Divided in opinion and short on funding, the Colloquium was mostly ineffectual; related attempts to further neoliberal ideas, such as the effort by Colloque-attendee Wilhelm Röpke to establish a journal of neoliberal ideas, mostly floundered.^[76] Fatefully, the efforts of the Colloquium would be overwhelmed by the outbreak of World War II and were largely forgotten.^[81] Nonetheless, the Colloquium served as the first meeting of the nascent neoliberal movement and would serve as the precursor to the Mont Pelerin Society, a far more successful effort created after the war by many of those who had been present at the Colloquium.^[82]

Mont Pelerin Society

Neoliberalism began accelerating in importance with the establishment of the Mont Pelerin Society in 1947, whose founding members included Friedrich Hayek, Milton Friedman, Karl Popper, George Stigler and Ludwig von Mises. Meeting annually, it became a "kind of international 'who's who' of the classical liberal and neo-liberal intellectuals."^[83][84] While the first conference in 1947 was almost half American, the Europeans dominated by 1951. Europe would remain the epicenter of the community as Europeans dominated the leadership roles.^[85]

Established during a time when

The central values of civilization are in danger. Over large stretches of the Earth's surface the essential conditions of human dignity and freedom have already disappeared. In others, they are under constant menace from the development of current tendencies of policy. The position of the individual and the voluntary group are progressively undermined by extensions of arbitrary power. Even that most precious possession of Western Man, freedom of thought and expression, is threatened by the spread of creeds which, claiming the privilege of tolerance when in the position of a minority, seek only to establish a position of power in which they can suppress and obliterate all views but their own...The group holds that these developments have been fostered by the growth of a view of history which denies all absolute moral standards and by the growth of theories which question the desirability of the rule of law. It holds further that they have been fostered by a decline of belief in private property and the competitive market...[This group's] object is solely, by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common, to contribute to the preservation and improvement of the free society.[86]

The society set out to develop a neoliberal alternative to, on the one hand, the laissez-faire economic consensus that had collapsed with the Great Depression and, on the other, New Deal liberalism and British social democracy, collectivist trends which they believed posed a threat to individual freedom.^[82] They believed that classical liberalism had failed because of crippling conceptual flaws which could only be diagnosed and rectified by withdrawing into an intensive discussion group of similarly minded intellectuals;^[87] however, they were determined that the liberal focus on individualism and economic freedom must not be abandoned to collectivism.^[88]

Post–World War II neoliberal currents

For decades after the formation of the

Neoliberal ideas were first implemented in West Germany. The economists around Ludwig Erhard drew on the theories they had developed in the 1930s and 1940s and contributed to West Germany's reconstruction after the Second World War.^[93] Erhard was a member of the Mont Pelerin Society and in constant contact with other neoliberals. He pointed out that he is commonly classified as neoliberal and that he accepted this classification.^[94]

The

Erhard emphasized that the market was inherently social and did not need to be made so.^[95] He hoped that growing prosperity would enable the population to manage much of their social security by self-reliance and end the necessity for a widespread welfare state. By the name of Volkskapitalismus, there were some efforts to foster private savings. Although average contributions to the public old age insurance were quite small, it remained by far the most important old age income source for a majority of the German population, therefore despite liberal rhetoric the 1950s witnessed what has been called a "reluctant expansion of the welfare state". To end widespread poverty among the elderly the pension reform of 1957 brought a significant extension of the German welfare state which already had been established under Otto von Bismarck.^[96] Rüstow, who had coined the label "neoliberalism", criticized that development tendency and pressed for a more limited welfare program.^[95]

Hayek did not like the expression "social market economy", but stated in 1976 that some of his friends in Germany had succeeded in implementing the sort of social order for which he was pleading while using that phrase. In Hayek's view, the social market economy's aiming for both a market economy and

In Germany, neoliberalism at first was synonymous with both ordoliberalism and social market economy. But over time the original term neoliberalism gradually disappeared since social market economy was a much more positive term and fit better into the Wirtschaftswunder (economic miracle) mentality of the 1950s and 1960s.^[95]

Latin America

In the 1980s, numerous governments in Latin America adopted neoliberal policies.^{[100][101][102]}

Chile

Chile was among the earliest nations to implement neoliberal reform. Marxist economic geographer David Harvey has described the substantial neoliberal reforms in Chile beginning in the 1970s as "the first experiment with neoliberal state formation", which would provide "helpful evidence to support the subsequent turn to neoliberalism in both Britain... and the United States."^[103] Similarly, Vincent Bevins says that Chile under Augusto Pinochet "became the world's first test case for 'neoliberal' economics."^[104]

The turn to neoliberal policies in Chile originated with the

During the Allende presidency, Chile experienced a severe economic crisis, in which inflation peaked near 150%.[107] Following an extended period of social unrest and political tension, as well as diplomatic, economic, and covert pressure from the United States,^[108] the Chilean armed forces and national police overthrew the Allende government in a coup d'état.^[109] They established a repressive military junta, known for its violent suppression of opposition, and appointed army chief Augusto Pinochet Supreme Head of the nation.^[110] His rule was later given legal legitimacy through a controversial 1980 plebiscite, which approved a new constitution drafted by a government-appointed commission that ensured Pinochet would remain as President for a further eight years—with increased powers—after which he would face a re-election referendum.^[111]

The Chicago Boys were given significant political influence within the

These policies amounted to a shock therapy, which rapidly transformed Chile from an economy with a protected market and strong government intervention into a liberalized, world-integrated economy, where market forces were left free to guide most of the economy's decisions.^[116] Inflation was tempered, falling from over 600% in 1974, to below 50% by 1979, to below 10% right before the economic crisis of 1982;^[117] GDP growth spiked (see chart) to 10%.^[118] however, inequality widened as wages and benefits to the working class were reduced.^[119][120]

In 1982, Chile again experienced a severe economic recession. The cause of this is contested but most scholars believe the Latin American debt crisis—which swept nearly all of Latin America into financial crisis—was a primary cause.^[121] Some scholars argue the neoliberal policies of the Chicago boys heightened the crisis (for instance, percent GDP decrease was higher than in any other Latin American country) or even caused it;^[121] for instance, some scholars criticize the high interest rates of the period which—while stabilizing inflation—hampered investment and contributed to widespread bankruptcy in the banking industry. Other scholars fault governmental departures from the neoliberal agenda; for instance, the government pegged the Chilean peso to the US dollar, against the wishes of the Chicago Boys, which economists believe led to an overvalued peso.^[122][123]

After the recession, Chilean economic growth rose quickly, eventually hovering between 5% and 10% and significantly outpacing the Latin American average (see chart). Additionally, unemployment decreased^[124] and the percent of the population below the poverty line declined from 50% in 1984 to 34% by 1989.^[125] This led Milton Friedman to call the period the "Miracle of Chile", and he attributed the successes to the neoliberal policies of the Chicago boys. Some scholars attribute the successes to the re-regulation of the banking industry and a number of targeted social programs designed to alleviate poverty.^[125] Others say that while the economy had stabilized and was growing by the late 1980s, inequality widened: nearly 45% of the population had fallen into poverty while the wealthiest 10% had seen their incomes rise by 83%.^[126] According to Chilean economist Alejandro Foxley, when Pinochet finished his 17-year term by 1990, around 44% of Chilean families were living below the poverty line.^{[127][128][non-primary source needed]}

Despite years of suppression by the Pinochet junta, in 1988 a presidential election was held, as dictated by the 1980 constitution (though not without Pinochet first holding another plebiscite in an attempt to amend the constitution).^[111] In 1990, Patricio Aylwin was democratically elected, bringing an end to the military dictatorship. The reasons cited for Pinochet's acceptance of democratic transition are numerous. Hayek, echoing arguments he had made years earlier in The Road to Serfdom,^[129] argued that the increased economic freedom he believed the neoliberal reforms had brought had put pressure on the dictatorship over time, resulting in a gradual increase in political freedom and, ultimately, the restoration of democracy.^{[citation needed]} The Chilean scholars Javier Martínez and Alvaro Díaz reject this argument, pointing to the long tradition of democracy in Chile. They assert that the defeat of the Pinochet regime and the return of democracy came primarily from large-scale mass rebellion that eventually forced party elites to use existing institutional mechanisms to restore democracy.^[130]

In the 1990s, neoliberal economic policies broadened and deepened, including unilateral tariff reductions and the adoption of free trade agreements with a number of Latin American countries and Canada.

Peruvian economist Hernando de Soto, the founder of one of the first neoliberal organizations in Latin America, Institute for Liberty and Democracy (ILD), began to receive assistance from Ronald Reagan's administration, with the National Endowment for Democracy's Center for International Private Enterprise (CIPE) providing his ILD with funding.^{[151][152][153]} The economic policy of President Alan García distanced Peru from international markets, resulting in lower foreign investment in the country.^[154] Under García, Peru experienced hyperinflation and increased confrontations with the guerrilla group Shining Path, leading the country towards high levels of instability.^[155] The Peruvian armed forces grew frustrated with the inability of the García administration to handle the nation's crises and began to draft an operation – Plan Verde – to overthrow his government.^[155]

The military's Plan Verde involved the "

Shortly after the inauguration of Fujimori, his government received a $715 million grant from United States Agency for International Development (USAID) on 29 September 1990 for the Policy Analysis, Planning and Implementation Project (PAPI) that was developed "to support economic policy reform in the country".^[161] De Soto proved to be influential to Fujimori, who began to repeat de Soto's advocacy for deregulating the Peruvian economy.^[162] Under Fujimori, de Soto served as "the President's personal representative", with The New York Times describing de Soto as an "overseas salesman", while others dubbed de Soto as the "informal president" for Fujimori.^[163][151] In a recommendation to Fujimori, de Soto called for a "shock" to Peru's economy.^[151] The policies included a 300% tax increase, unregulated prices and privatizing two-hundred and fifty state-owned entities.^[151] The policies of de Soto led to the immediate suffering of poor Peruvians who saw unregulated prices increase rapidly.^[151] Those living in poverty saw prices increase so much that they could no longer afford food.^[151] The New York Times wrote that de Soto advocated for the collapse of Peru's society, with the economist saying that a civil crisis was necessary to support the policies of Fujimori.^[164] Fujimori and de Soto would ultimately break their ties after de Soto recommended increased involvement of citizens within the government, which was received with disapproval by Fujimori.^[165] USAID would go on to assist the Fujimori government with rewriting the 1993 Peruvian constitution, with the agency concluding in 1997 that it helped with the "preparation of legislative texts" and "contributed to the emergence of a private sector advisory role".^[166][161] The policies promoted by de Soto and implemented by Fujimori eventually caused macroeconomic stability and a reduction in the rate of inflation, though Peru's poverty rate remained largely unchanged with over half of the population living in poverty in 1998.^{[151][167][168]}

According to the Foundation for Economic Education, USAID, the United Nations Population Fund (UNFPA) and the Nippon Foundation also supported the sterilization efforts of the Fujimori government.^[169] E. Liagin reported that from 1993 to 1998, USAID "basically took charge of the national health system of Peru" during the period of forced sterilizations.^[169] At least 300,000 Peruvians were victims of forced sterilization by the Fujimori government in the 1990s, with the majority being affected by the PNSRPF.^[156] The policy of sterilizations resulted in a generational shift that included a smaller younger generation that could not provide economic stimulation to rural areas, making such regions more impoverished.^[170]

Though economic statistics show improved economic data in Peru in recent decades, the wealth earned between 1990 and 2020 was not distributed throughout the country; living standards showed disparities between the more-developed capital city of Lima and similar coastal regions while rural provinces remained impoverished.^{[171][172][173]} Sociologist Maritza Paredes of the Pontifical Catholic University of Peru stated, "People see that all the natural resources are in the countryside but all the benefits are concentrated in Lima."^[171] In 2020, the COVID-19 pandemic in Peru compounded these disparities,^[172][173] with political scientist Professor Farid Kahhat of the Pontifical Catholic University of Peru stating that, "market reforms in Peru have yielded positive results in terms of reducing poverty ... But what the pandemic has laid bare, particularly in Peru, is that poverty was reduced while leaving the miserable state of public services unaltered – most clearly in the case of health services."^[172] The candidacy of Pedro Castillo in the 2021 Peruvian general election brought attention to the disparities between urban and rural Peruvians, with much of his support being earned in the exterior portions of the country.^[173] Castillo ultimately won the election, with The New York Times reporting his victory as the "clearest repudiation of the country's establishment".^[174][175]

Argentina

In the 1960s, Latin American intellectuals began to notice the ideas of ordoliberalism; they often used the Spanish term "neoliberalismo" to refer to this school of thought. They were particularly impressed by the social market economy and the Wirtschaftswunder ("economic miracle") in Germany and speculated about the possibility of accomplishing similar policies in their own countries. Neoliberalism in 1960s Argentina meant a philosophy that was more moderate than entirely Laissez-faire free-market capitalism and favored using state policy to temper social inequality and counter a tendency towards monopoly.^[9]

In 1976, the military dictatorship's economic plan led by José Alfredo Martínez de Hoz was the first attempt at establishing a neoliberal program in Argentina. They implemented a fiscal austerity plan that reduced money printing in an attempt to counter inflation. In order to achieve this, salaries were frozen; however, they were unable to reduce inflation, which led to a drop in the real salary of the working class. They also liberalized trade policy so that foreign goods could freely enter the country. Argentina's industry, which had been on the rise for 20 years after the economic policies of former president Arturo Frondizi, rapidly declined as it was not able to compete with foreign goods. Following the measures, there was an increase in poverty from 9% in 1975 to 40% at the end of 1982.^[119]

From 1989 to 2001, more neoliberal policies were implemented by Domingo Cavallo. This time, the privatization of public services was the main focus, although financial deregulation and free trade with foreign nations were also re-implemented. Along with an increased labour market flexibility, the unemployment rate dropped to 18.3%.^[176] Public perception of the policies was mixed; while some of the privatization was welcomed, much of it was criticized for not being in the people's best interests. Protests resulted in the death of 29 people at the hands of police.^[177]

Mexico

Along with many other Latin American countries in the early 1980s, Mexico experienced a debt crisis. In 1983 the Mexican government ruled by the PRI, the Institutional Revolutionary Party, accepted loans from the IMF. Among the conditions set by the IMF were requirements for Mexico to privatize state-run industries, devalue their currency, decrease trade barriers, and restrict governmental spending.^[178] These policies were aimed at stabilizing Mexico's economy in the short run. Later, Mexico tried to expand these policies to encourage growth and foreign direct investment (FDI).

The decision to accept the IMF's neoliberal reforms split the PRI between those on the right who wanted to implement neoliberal policies and those the left who did not.^[179] Carlos Salinas de Gortari, who took power in 1988, doubled down on neoliberal reforms. His policies opened up the financial sector by deregulating the banking system and privatizing commercial banks.^[178][179] Though these policies did encourage a small amount of growth and FDI, the growth rate was below what it had been under previous governments in Mexico, and the increase in foreign investment was largely from existing investors.^[179]

On 1 January 1994 the Zapatista Army of National Liberation, named for Emiliano Zapata, a leader in the Mexican revolution, launched an armed rebellion against the Mexican government in the Chiapas region.^[180] Among their demands were rights for indigenous Mexicans as well as opposition to the North American Free Trade Agreement (NAFTA), which solidified a strategic alliance between state and business.^[181]  NAFTA, a trade agreement between the United States, Canada, and Mexico, significantly aided in Mexico's efforts to liberalize trade.

In 1994, the same year of the Zapatista rebellion and the enactment of NAFTA, Mexico faced a financial crisis. The crisis, also known as the "Tequila Crisis" began in December 1994 with the devaluation of the peso.^[179][182] When investors' doubts led to negative speculation they fled with their capital. The central bank was forced to raise interest rates which in turn collapsed the banking system as borrowers could no longer pay back their loans.^[182]

After Salinas, Ernesto Zedillo (1995–2000) maintained similar economic policies to his predecessor. Despite the crisis, Zedillo continued to enact neoliberal policies and signed new agreements with the World Bank and the IMF.^[179] As a result of these policies and the 1994 recession, Mexico's economy did gain stability. Neither the 2001 or 2008 recessions were caused by internal economic forces in Mexico. Trade increased dramatically, as well as FDI; however, as Mexico's business cycle synced with that of the United States, it was much more vulnerable to external economic pressures.^[178] FDI benefited the Northern and Central regions of Mexico while the Southern region was largely excluded from the influx of investment. The crisis also left the banks mainly in the hands of foreigners.

The PRI's 71-year rule ended when Vicente Fox of the PAN, the National Action Party, won the election in 2000. Fox and his successor, Felipe Calderón, did not significantly diverge from the economic policies of the PRI governments. They continued to privatize the financial system and encourage foreign investment.^[179] Despite significant opposition, Enrique Peña Nieto, president from 2012 to 2018, pushed through legislation that would privatize the oil and electricity industries. These reforms marked the conclusion to the neoliberal goals that had been envisioned in Mexico in the 1980s.^[179]

Brazil

Brazil adopted neoliberal policies in the late 1980s, with support from the worker's party on the left. For example, tariff rates were cut from 32% in 1990 to 14% in 1994. During this period, Brazil effectively ended its policy of maintaining a closed economy focused on import substitution industrialization in favor of a more open economic system with a much higher degree of privatization. The market reforms and trade reforms ultimately resulted in price stability and a faster inflow of capital but had little effect on income inequality and poverty. Consequently, mass protests continued during the period.^[183][184]

United Kingdom

During her tenure as

The Adam Smith Institute, a United Kingdom–based free-market think tank and lobbying group formed in 1977 which was a major driver of the aforementioned neoliberal reforms,^[186] officially changed its libertarian label to neoliberal in October 2016.^[187]

According to economists Denzau and Roy, the "shift from Keynesian ideas toward neoliberalism influenced the fiscal policy strategies of New Democrats and New Labour in both the White House and Whitehall.... Reagan, Thatcher, Clinton, and Blair all adopted broadly similar neoliberal beliefs."^[188][189]

United States

While a number of recent histories of neoliberalism[190]^[191][192] in the United States have traced its origins back to the urban renewal policies of the 1950s, Marxist economic geographer David Harvey argues the rise of neoliberal policies in the United States occurred during the 1970s energy crisis,^[193] and traces the origin of its political rise to Lewis Powell's 1971 confidential memorandum to the Chamber of Commerce in particular.^[194] A call to arms to the business community to counter criticism of the free enterprise system, it was a significant factor in the rise of conservative and libertarian organizations and think-tanks which advocated for neoliberal policies, such as the Business Roundtable, The Heritage Foundation, the Cato Institute, Citizens for a Sound Economy, Accuracy in Academia and the Manhattan Institute for Policy Research.^[195] For Powell, universities were becoming an ideological battleground, and he recommended the establishment of an intellectual infrastructure to serve as a counterweight to the increasingly popular ideas of Ralph Nader and other opponents of big business.^{[196][197][193]} The original neoliberals on the left included, among others, Michael Kinsley, Charles Peters, James Fallows, Nicholas Lemann, Bill Bradley, Bruce Babbitt, Gary Hart, and Paul Tsongas. Sometimes called "Atari Democrats", these were the men who helped to remake American liberalism into neoliberalism, culminating in the election of Bill Clinton in 1992. These new liberals disagreed with the policies and programs of mid-century figures like progressive labor organizer Walter Reuther, economist John Kenneth Galbraith or even noted historian Arthur Schlesinger.^[198]

Early roots of neoliberalism were laid in the 1970s during the

Support for neoliberalism declined in the United States after the Great Recession, with some believing that Trump's 2016 presidential campaign succeeded by promising a revolt against neoliberal globalization, and pundits on the left have called for the Democratic party to similarly mobilize against it.^{[214][215][216][page needed]}

Asia-Pacific

Scholars who emphasized the key role of the developmental state in the early period of fast industrialization in East Asia in the late 19th century now argue that South Korea, Taiwan and Singapore have transformed from developmental to close-to-neoliberal states. Their arguments are matter of scholarly debate.^[217]

China

Following the death of Mao Zedong in 1976, Deng Xiaoping led the country through far ranging market-centered reforms, with the slogan of Xiǎokāng, that combined neoliberalism with centralized authoritarianism. These focused on agriculture, industry, education and science/defense.^[103]

Experts debate the extent to which traditional Maoist communist doctrines have been transformed to incorporate the new neoliberal ideas. In any case, the Chinese Communist Party remains a dominant force in setting economic and business policies.^[218][219] Throughout the 20th century, Hong Kong was the outstanding neoliberal exemplar inside China.^[220]

Taiwan

Taiwan exemplifies the impact of neoliberal ideas. The policies were pushed by the United States but were not implemented in response to a failure of the national economy, as in numerous other countries.^[221]

Japan

Neoliberal policies were at the core of the leading party in Japan, the Liberal Democratic Party (LDP), after 1980. These policies had the effect of abandoning the traditional rural base and emphasizing the central importance of the Tokyo industrial-economic region.^[222] Neoliberal proposals for Japan's agricultural sector called for reducing state intervention, ending the protection of high prices for rice and other farm products, and exposing farmers to the global market. The 1993 Uruguay Round of the General Agreement on Tariffs and Trade negotiations opened up the rice market. Neoconservative leaders called for the enlargement, diversification, intensification, and corporatization of the farms receiving government subsidies. In 2006, the ruling LDP decided to no longer protect small farmers with subsidies. Small operators saw this as favoritism towards big corporate agriculture and reacted politically by supporting the Democratic Party of Japan (DPJ), helping to defeat the LDP in nationwide elections.^[223]

South Korea

In South Korea, neoliberalism had the effect of strengthening the national government's control over economic policies. These policies were popular to the extent that they weakened the historically very powerful chaebol family-owned conglomerates.^[224]

India

In India, Prime Minister Narendra Modi took office in 2014 with a commitment to implement neoliberal economic policies. This commitment would shape national politics and foreign affairs and put India in a race with China and Japan for economic supremacy in East Asia.^[225][226]

Australia

In Australia, neoliberal economic policies (known at the time as "

Immigration to the mainland capitals by refugees have seen capital flows follow soon after, such as from war-torn Lebanon and Vietnam. Later economic migrants from mainland China also, up to recent restrictions, had invested significantly in the property markets.^{[234][citation needed]}

Australia was one of few developed countries not to go through a recession during the Great Recession; Australia's last recession before the COVID-19 recession occurred in 1991.^[235]

New Zealand

In New Zealand, neoliberal economic policies were implemented under the Fourth Labour Government led by Prime Minister David Lange. These neoliberal policies are commonly referred to as Rogernomics, a portmanteau of "Roger" and "economics", after Lange appointed Roger Douglas minister of finance in 1984.^[236]

Lange's government had inherited a severe balance of payments crisis as a result of the deficits from the previously implemented two-year freeze on wages and prices by preceding Prime Minister Robert Muldoon, who had also maintained an exchange rate many economists now believe was unsustainable.^[237] The inherited economic conditions lead Lange to remark "We ended up being run very similarly to a Polish shipyard."^[238] On 14 September 1984, Lange's government held an Economic Summit to discuss the underlying problems with New Zealand's economy, which lead to calls for dramatic economic reforms previously proposed by the Treasury Department.^[239]

A reform program consisting of

New Zealand became a part of the global economy. The focus in the economy shifted from the productive sector to finance as a result of zero restrictions on overseas money coming into the country. Finance capital outstripped industrial capital and the manufacturing industry suffered approximately 76,000 job losses.[242]

Middle East

Beginning in the late 1960s, a number of neoliberal reforms were implemented in the Middle East.^[243][244] For instance, Egypt is frequently linked to the implementation of neoliberal policies, particularly with regard to the 'open-door' policies of President Anwar Sadat throughout the 1970s,^[245] and Hosni Mubarak's successive economic reforms between 1981 and 2011.^[246] These measures, known as al-Infitah, were later diffused across the region. In Tunisia, neoliberal economic policies are associated with former president and de facto dictator^[247] Zine El Abidine Ben Ali;^[248] his reign made it clear that economic neoliberalism can coexist and even be encouraged by authoritarian states.^[249] Responses to globalisation and economic reforms in the Gulf have also been approached via a neoliberal analytical framework.^[250]

International organizations

The adoption of neoliberal policies in the 1980s by international institutions such as the

The

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The

The school emphasizes non-intervention from government and generally rejects regulation in markets as inefficient, with the exception of the regulation of the money supply by central banks (in the form of monetarism). Although the school's association with neoliberalism is sometimes resisted by its proponents,^[271] its emphasis on reduced government intervention in the economy and a laissez-faire ideology have brought about an affiliation between the Chicago school and neoliberal economics.^[14][273]

Washington Consensus

The Washington Consensus is a set of standardized policy prescriptions often associated with neoliberalism that were developed by the

Many neoliberal thinkers advance the view that economic and political freedom are inextricably linked.

A central feature of neoliberalism is the support of free trade,^{[281][282][283][284][285]} and policies that enable free trade, like the North American Free Trade Agreement, are often associated with neoliberalism.^[286] Neoliberals argue that free trade promotes economic growth,^[287] reduces poverty,^[287][281] produces gains of trade like lower prices as a result of comparative advantage,^[288] maximizes consumer choice,^[289] and is essential to freedom,^[290][291] as they believe voluntary trade between two parties should not be prohibited by government.^[292] Relatedly, neoliberals argue that protectionism is harmful to consumers,^[293] who will be forced to pay higher prices for goods;^[294] incentivizes individuals to misuse resources;^[295] distorts investment;^[295] stifles innovation;^[296] and props up certain industries at the expense of consumers and other industries.^[297]

Monetarism

Monetarism is an economic theory commonly associated with neoliberalism.

Neoliberalism has faced criticism by academics, journalists, religious leaders, and activists from both the

The impact of the Great Recession in 2008 has given rise to a surge in new scholarship that criticizes neoliberalism.^[322]

Market fundamentalism

Neoliberal thought has been criticized for supposedly having an undeserved "faith" in the efficiency of

Critics have argued that neoliberal policies have increased

A 2016 report by researchers at the International Monetary Fund (IMF) was critical of neoliberal policies for increasing economic inequality.^[69] While the report included praise for neoliberalism, saying "there is much to cheer in the neoliberal agenda," it noted that certain neoliberal policies, particularly freedom of capital and fiscal consolidation, resulted in "increasing inequality", which "in turn jeopardized durable [economic] expansion". The report contends that the implementation of neoliberal policies by economic and political elites has led to "three disquieting conclusions":

• The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.
• The costs in terms of increased inequality are prominent. Such costs epitomize the trade-off between the growth and equity effects of some aspects of the neoliberal agenda.
• Increased inequality in turn hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects.^[358]

A number of scholars see increasing inequality arising out of neoliberal policies as a deliberate effort, rather than a consequence of ulterior motives like increasing

According to Jonathan Hopkin, the United States took the lead in implementing the neoliberal agenda in the 1980s, making it "the most extreme case of the subjection of society to the brute force of the market." As such, he argues this made the United States an outlier with economic inequality hitting "unprecedented levels for the rich democracies," and notes that even with average incomes "very high by global standards," US citizens "face greater material hardship than their counterparts in much poorer countries." These developments, along with financial instability and limited political choice, have resulted in political polarization, instability and revolt in the United States.^[365]

A 2022 study published in Perspectives on Psychological Science found that in countries where neoliberal institutions have significant influence over policy the psychology of those populations are molded not only to be more willing to tolerate large levels of income inequality, but actually prefer it over more egalitarian outcomes.^[366][367]

Corporatocracy

Some organizations and economists believe neoliberal policies increase the power of

Several scholars have linked

In expanding upon Wacquant's thesis, sociologist and political economist John L. Campbell of Dartmouth College suggests that through privatization the prison system exemplifies the centaur state. He states that "on the one hand, it punishes the lower class, which populates the prisons; on the other hand, it profits the upper class, which owns the prisons, and it employs the middle class, which runs them." In addition, he argues that the prison system benefits corporations through outsourcing, as inmates are "slowly becoming a source of low-wage labor for some US corporations". Both through privatization and outsourcing, Campbell argues, the penal state reflects neoliberalism.^[388]: 61 Campbell also argues that while neoliberalism in the United States established a penal state for the poor, it also put into place a debtor state for the middle class and that "both have had perverse effects on their respective targets: increasing rates of incarceration among the lower class and increasing rates of indebtedness—and recently home foreclosure—among the middle class."^[388]: 68

The implementation of neoliberal policies and the acceptance of neoliberal economic theories in the 1970s are seen by some academics as the root of financialization, with the Great Recession as one of its results.^{[56][393][394]} In particular, various neoliberal ideologies that had long been advocated by elites, such as monetarism and supply-side economics, were translated into government policy by the Reagan administration, which resulted in decreased government regulation and a shift from a tax-financed state to a debt-financed one. While the profitability of industry and the rate of economic growth never recovered to the heyday of the 1960s, the political and economic power of Wall Street and finance capital vastly increased due to debt-financing by the state.^[363] A 2016 International Monetary Fund (IMF) report blames certain neoliberal policies for exacerbating financial crises around the world, causing them to grow bigger and more damaging.^[69][395]

Globalization

Neoliberalism is commonly viewed by scholars as encouraging of globalization,^[397] which is the subject of much criticism.

The emergence of the "precariat", a new class facing acute socio-economic insecurity and alienation due to offshoring and a global race to the bottom, has been attributed to the globalization of neoliberalism.^[352]

In a 2022 article for the journal Global Environmental Change, Jason Hickel et. al. argued that unequal exchange between the Global North and Global South in the era of neoliberal globalization led to a quantified $242 trillion in net appropriation of raw materials, energy and labor from the latter to the former (constant 2010 USD) between 1990 and 2015.^[398]

Economic Nationalism

Some critics of neoliberalism view it as weakening the sovereignty of nations in favor of cosmopolitanism and globalization. Neoliberalism favors immigration, in contrast to right-wing populist political parties that oppose immigration.^[399][400]

Neoliberalism also favors investor–state dispute settlement in free trade agreements, which has been criticized as violating sovereign immunity and the capacity of governments to implement reforms and legislative programs related to public health, environmental protection, and human rights.^[401][402]

Imperialism

A number of scholars have alleged neoliberalism encourages or covers for imperialism.^{[403][404][405]} For instance, Ruth J Blakeley, Professor of Politics and International Relations at the University of Sheffield, accuses the United States and its allies of fomenting state terrorism and mass killings during the Cold War as a means to buttress and promote the expansion of capitalism and neoliberalism in the developing world.^[406] As an example of this, Blakeley says the case of Indonesia demonstrates that the U.S. and the UK put the interests of capitalist elites over the human rights of hundreds of thousands of Indonesians by supporting the Indonesian Army as it waged a campaign of mass killings, which resulted in the annihilation of the Communist Party of Indonesia and its civilian supporters. Historian Bradley R. Simpson posits that this campaign of mass killings was "an essential building block of the neoliberal policies that the West would attempt to impose on Indonesia after Sukarno's ouster."^[407] Geographer David Harvey argues neoliberalism encourages an indirect form of imperialism that focuses on the extraction of resources from developing countries via financial mechanisms.^[408]

This is practiced through international institutions like the International Monetary Fund (IMF) and World Bank who negotiate debt relief with developing nations. He alleges that these institutions prioritize the financial institutions that grant the loans over the debtor countries and place requirements on loans that, in effect, act as financial flows from debtor countries to developed countries (for example, to receive a loan a state must have sufficient foreign exchange reserves—requiring the debtor state to buy US Treasury bonds, which have interest rates lower than those on the loan). Economist Joseph Stiglitz has said of this: "What a peculiar world in which poor countries are in effect subsidizing the richest."^[147]

Global health

This section needs to be updated. Please help update this article to reflect recent events or newly available information. (July 2023)

The neoliberal approach to global health advocates

James Pfeiffer, Professor of Global Health at the University of Washington, has criticised the use of Structural Adjustment Programs (SAPs) by the World Bank and IMF in Mozambique, which resulted in reduced government health spending, leading international NGOs to fill service holes previously filled by government.^[413] Rick Rowden, a Senior Economist at Global Financial Integrity, has criticised the IMF's monetarist approach of prioritising price stability and fiscal restraint, which he alleges was unnecessarily restrictive and prevented developing countries from scaling up long-term investment in public health infrastructure.^[411]

Within the developed capitalist world, according to Dylan Sullivan and

In Robert Fletcher's 2010 piece, "Neoliberal Environmentality: Towards a Poststructuralist Political Ecology of the Conservation Debate"[424] his premise is that there is a conflict of ideas in conservation; that on one side of things you have deep ecology and protectionist paradigms and on the other side you have community based conservation efforts. There are problems with both approaches, and on either side they frequently fail to do conservation work in a substantial way. In the middle, Fletcher sees a space where social sciences are able to critique both sides of and blend the approaches, forming not a triangle of ideologies, but a spectrum. The relationship between capitalism and conservation is one that has to be reckoned with due to an overarching neoliberal framework guiding most conservation efforts.

According to ecologist William E. Rees, the "neoliberal paradigm contributes significantly to planetary unraveling" by treating the economy and the ecosphere as totally separate systems, and by neglecting the latter.^[425] Marxist economic geographer David Harvey argues neoliberalism is to blame for increased rates of extinction.^[426] Notably, he observes that "the era of neoliberalization also happens to be the era of the fastest mass extinction of species in the Earth's recent history." American philosopher and animal rights activist Steven Best argues that three decades of neoliberal policies have "marketized the entire world" and intensified "the assault on every ecosystem on the earth as a whole".^[427] Neoliberalism reduces the "tragedy of the commons" to an argument for private ownership.^[428]

The

Critics like Noel Castree focus on the relationship between neoliberalism and the biophysical environment explain that critics of neoliberals see the free market as the best way to mediate the relationship between producers and consumers, as well as maximize freedom in a more general sense which they view as inherently good. Castree also asserts that the assumption that markets will allow for the maximization of individual freedom is incorrect.[431]

Conservation and management of natural resources has also been impacted by neoliberal policies and development. Prior to the neoliberalization of conservation efforts, conservation was done on the part of governmental and regulatory entities. Although conservation has typically been considered the "antithesis of production",^[432] with the global shift towards neoliberalization, conservation programs have also shifted towards becoming a "mode of capitalist production".^[432] It’s done so through the reliance on private entities, non-governmental organizations, resource commodification and entrepreneurship (big and small). Access to the market through natural resource commodification became a neoliberal tool for communities and regions to further develop.

One scholar and critic of neoliberal conservation, Dan Klooster, published a study on forest certification in Mexico which demonstrated the socio-environmental consequences of neoliberal conservation networks.^[433] In this example, global markets and a desire for sustainably-sourced products led to the adoption of forest certification programs, such as the Forest Conservation Fund, by Mexican companies. These certifications require that forest managers make improvements to the environmental and social aspects of harvesting wood and in return they gain access to international markets that prefer the consumption of certified wood. Today, 12 percent of Mexico’s logged forests do so under a certification. However, many small logging businesses aren’t able to successfully compete amongst the global market forces without accepting inaccessible costs to certification and unsatisfactory market prices and demand. Klooster uses this conservation example to demonstrate how the social impacts of conservation commodification can be both positive and negative. On the one hand the certification can create networks of producers, certifiers and consumers that oppose the socio-environmental disparities caused by the forestry industry, but on the other hand they might also widen further the North-South divisions.

Religious opposition

Catholic political scientist Albert Bikaj considers the neoliberal concept of free market "fundamentally nihilistic" because it's profit-oriented, neglecting Christian ethics and undermining human dignity, common good, environment, and civilisation.^[434] In his 84-page apostolic exhortation Evangelii gaudium, Catholic Pope Francis described unfettered capitalism as "a new tyranny" and called on world leaders to fight rising poverty and inequality, stating:^[435]

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.^[436]

Political opposition

In political science, disillusionment with neoliberalism is seen as a cause of de-

• Research by Kristen Ghodsee, ethnographer and Professor of Russian and East European Studies at the University of Pennsylvania, argues that widespread discontent with neoliberal capitalism has led to a "red nostalgia" in much of the former Communist bloc. She argues that "the political freedoms that came with democracy were packaged with the worst type of unregulated, free-market capitalism, which completely destabilized the rhythms of everyday life and brought crime, corruption and chaos where there had once been comfortable predictability",^[438] which ultimately fueled a resurgence of extremist nationalism.^[340]
• In Latin America, the "pink tide" that swept leftist governments into power at the turn of the millennium can be seen as a reaction against neoliberal hegemony and the notion that "there is no alternative" (TINA) to the Washington Consensus.^[439]
• In protest against neoliberal globalization, South Korean farmer and former president of the Korean Advanced Farmers Federation Lee Kyung-hae committed suicide by stabbing himself in the heart during a meeting of the World Trade Organization in Cancun, Mexico, in 2003.^[440] He was protesting against the decision of the South Korean government to reduce subsidies to farmers.^[441]
• The rise of anti-austerity parties in Europe and
  Greek legislative elections of January 2015 have some proclaiming "the end of neoliberalism".^[442]
• In the
  Trans Pacific Partnership and offshoring.^{[443][216][page needed][365]}
• In 2018, the
  2019–2021 Chilean protests emerged in direct opposition to neoliberal governments and policies, including privatization and austerity, that were blamed for the rising cost of living, surging personal debts, and increased economic inequality.^[444][445] In 2019, protests against neoliberal reforms, policies and governments have taken place in scores of countries on 5 continents, with opposition to austerity, privatization and tax hikes on the working classes being a common theme among many of them.^[446]
• During the 2021 Chilean general election, president-elect Gabriel Boric promised to end the country's neoliberal economic model, stating that "if Chile was the cradle of neoliberalism, it will also be its grave."^[447]

Repression of worker's union

While neoliberalism itself doesn't directly imply the repression of worker's union, global trading benefits from the repression of trade unions.