Neo liberalism free#
They believe that if governments promote a business friendly environment that encourages companies to invest and produce, then this will lead to exports which will encourage free trade.
The argument is that, if allowed to work freely, capitalism will generate wealth which will trickle down to everyone.Īnother way of putting this is that neoliberals believe that private enterprise, or companies should take the lead in development. Neoliberalism insists that developing countries remove obstacles to free market capitalism and allow capitalism to generate development. How can countries develop? Chile – The First Neoliberal Experiment Neoliberals are also critical of the role of Western aid money – They point to the many corrupt African dictatorships which emerged in Africa in the 1960s -1980s – These were often propped up by aid money from Western governments and during this period billions of dollars were siphoned off into the pockets of government officials in those countries and not used for development at all.
Similarly neoliberals argue that even in Capitalist countries where there is too much ‘red tape’ – or too many rules, regulations, taxes and so on, it’s harder to do business and so harder for economies to develop. Neoliberals argue that there is some pretty powerful evidence for this – Think of communist regimes in Eastern Europe, although these governments forced through industrialisation, they would not allow people enough freedom to bring about the kind of consumer culture (based on individual freedom of choice and expression) that emerged in Western Europe in the 1960s, so development stagnated in those countries because of governments having too much power. Neoliberals argue that governments prevent development – When governments get too large they restrict the freedom of dynamic individuals who drive development forwards. The agreement by the World Bank and IMF that neoliberal policies were the best path to development is referred to as the Washington Consensus following a meeting in Washington by world leaders in 1989. It focuses on economic policies and institutions which are seen as holding back development because they limit the free market. Neoliberalism replaced modernisation theory as the official approach to development in the 1980s. While the usage of the term neoliberalism varies considerably, for the purpose of this post i use the term to refer to that set of economic policies which have become popular in economic development over the last 30 years (since the late 1980s) – namely increased privatisation, economic deregulation and lowering taxation. What is Neoliberalsm? Neoliberalism – The Dominant Ideology since Reagan and Thatcher This post outlines the neoliberal approach development and then briefly assesses the effectiveness of neoliberal policies. According to neoliberalism big government and too much official development aid prevent economic and social development, while deregulation, privatisation and lowering taxation are required to achieve economic growth.
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