What is Neoliberalism?

Published by 

National Network for Immigrant and Refugee Rights

 | By 

Elizabeth Martinez and Arnoldo Garcia

 |

Wednesday, January 1, 1997

A Brief Definition for Activists

"Neo-liberalism" is a set of economic policies that have become widespread during the last 25 years or
so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-
liberalism here as the rich grow richer and the poor grow poorer.

"Liberalism" can refer to political, economic, or even religious ideas. In the U.S. political liberalism has
been a strategy to prevent social conflict. It is presented to poor and working people as progressive
compared to conservative or Rightwing. Economic liberalism is different. Conservative politicians who
say they hate "liberals" -- meaning the political type -- have no real problem with economic liberalism,
including neoliberalism.

"Neo" means we are talking about a new kind of liberalism. So what was the old kind? The liberal school
of economics became famous in Europe when Adam Smith, an Scottish economist, published a book in
1776 called THE WEALTH OF NATIONS. He and others advocated the abolition of government
intervention in economic matters. No restrictions on manufacturing, no barriers to commerce, no tariffs,
he said; free trade was the best way for a nation's economy to develop. Such ideas were "liberal" in the
sense of no controls. This application of individualism encouraged "free" enterprise," "free" competition
-- which came to mean, free for the capitalists to make huge profits as they wished.

Economic liberalism prevailed in the United States through the 1800s and early 1900s. Then the Great
Depression of the 1930s led an economist named John Maynard Keynes to a theory that challenged
liberalism as the best policy for capitalists. He said, in essence, that full employment is necessary for
capitalism to grow and it can be achieved only if governments and central banks intervene to increase
employment. These ideas had much influence on President Roosevelt's New Deal -- which did improve
life for many people. The belief that government should advance the common good became widely
accepted.

But the capitalist crisis over the last 25 years, with its shrinking
profit rates, inspired the corporate elite to revive economic liberalism. That's what makes it "neo" or
new. Now, with the rapid globalization of the capitalist economy, we are seeing neo-liberalism on a
global scale.
A memorable definition of this process came from Subcomandante Marcos at the Zapatista-
sponsored Encuentro Intercontinental por la Humanidad y contra el Neo-liberalismo (Inter-continental
Encounter for Humanity and Against Neo-liberalism) of August 1996 in Chiapas when he said: "what the
Right offers is to turn the world into one big mall where they can buy Indians here, women there ...."
and he might have added, children, immigrants, workers or even a whole country like Mexico."

The main points of neo-liberalism include:

1. THE RULE OF THE MARKET. Liberating "free" enterprise or private enterprise from any bonds
imposed by the government (the state) no matter how much social damage this causes. Greater
openness to international trade and investment, as in NAFTA. Reduce wages by de-unionizing
workers and eliminating workers' rights that had been won over many years of struggle. No
more price controls. All in all, total freedom of movement for capital, goods and services. To
convince us this is good for us, they say "an unregulated market is the best way to increase
economic growth, which will ultimately benefit everyone." It's like Reagan's "supply-side" and
"trickle-down" economics -- but somehow the wealth didn't trickle down very much.

2. CUTTING PUBLIC EXPENDITURE FOR SOCIAL SERVICES like education and health care.
REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance of roads, bridges, water
supply -- again in the name of reducing government's role. Of course, they don't oppose
government subsidies and tax benefits for business.

3. DEREGULATION. Reduce government regulation of everything that could diminsh profits,

including protecting the environmentand safety on the job.

4. PRIVATIZATION. Sell state-owned enterprises, goods and services to private investors. This

includes banks, key industries, railroads, toll highways, electricity, schools, hospitals and even
fresh water. Although usually done in the name of greater efficiency, which is often needed,
privatization has mainly had the effect of concentrating wealth even more in a few hands and
making the public pay even more for its needs.

5. ELIMINATING THE CONCEPT OF "THE PUBLIC GOOD" or "COMMUNITY" and replacing it with

"individual responsibility." Pressuring the poorest people in a society to find solutions to their
lack of health care, education and social security all by themselves -- then blaming them, if they
fail, as "lazy."

Around the world, neo-liberalism has been imposed by powerful financial institutions like the
International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank. It is
raging all over Latin America. The first clear example of neo-liberalism at work came in Chile (with
thanks to University of Chicago economist Milton Friedman), after the CIA-supported coup against the
popularly elected Allende regime in 1973. Other countries followed, with some of the worst effects in
Mexico where wages declined 40 to 50% in the first year of NAFTA while the cost of living rose by 80%.
Over 20,000 small and medium businesses have failed and more than 1,000 state-owned enterprises
have been privatized in Mexico. As one scholar said, "Neoliberalism means the neo-colonization of Latin
America."

In the United States neo-liberalism is destroying welfare programs;

attacking the rights of labor (including all immigrant workers); and
cutbacking social programs. The Republican "Contract" on America is pure
neo-liberalism. Its supporters are working hard to deny protection to
children, youth, women, the planet itself -- and trying to trick us into
acceptance by saying this will "get government off my back." The
beneficiaries of neo-liberalism are a minority of the world's people. For
the vast majority it brings even more suffering than before: suffering
without the small, hard-won gains of the last 60 years, suffering without
end.

Elizabeth Martinez  is a longtime civil rights activist and author of several books, including "500 Years of
Chicano History in Photographs."

Arnoldo Garcia is a member of the Oakland-based Comite Emiliano Zapata, affiliated to the National
Commission for Democracy in Mexico.

Both writers attended the Intercontinental Encounter f

Article#2

What's the Difference Between Liberalism and "Neoliberalism"?

10/21/2016Ryan McMaken

It is possible that there is no term more abused in modern political discourse than "liberalism."
Originally meant to describe the ideology of free trade and limited government, the anti-capitalist left
adopted the term in the 1930s and changed its meaning to the opposite of what it meant in the 19th
century. 

Liberalism never quite lost its correct meaning in most of the world, however, and in Spanish-speaking
countries, for example, the word "liberalismo" still often means the ideology of free trade and free
markets. Only American right-wingers appear to use the term as a pejorative to sling at the anti-
capitalist left. Even in America, though, with the left having eschewed the term for the more trendy
"progressive," the use of "liberalism" in political invective appears to be fading. 

As if this weren't complicated enough, liberalism has now been saddled once again with a new variation,
the meaning of which remains unclear: "neoliberalism." 

What is neoliberalism? Well, it appears that, at least among its critics, "neoliberalism" usually means
nothing more than "liberalism." 

"Neoliberalism" As a Pejorative Term for Laissez-Faire Liberalism 

To get a sense of the common usage for a term, it never hurts to check Wikipedia, and in this case, we
find that neoliberalism is simply liberalism:

Neoliberalism is a controversial term that refers primarily to the 20th century resurgence of 19th
century ideas associated with laissez-faire economic liberalism. These include extensive economic
liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions
in government spending in order to enhance the role of the private sector in the economy.

But why is it a controversial term? The controversy stems from the fact that the term is primarily used as
a pejorative term and not as a good-faith descriptive term to denote an ideology. 

In a study of 148 articles on political economy that use the term, authors Taylor Boas and Jordan Gans-
Morse found that the term "neoliberalism" is almost never used in a positive light. The study found that
45 percent of the time, the term is used in a neutral fashion, but 45 percent of the time, is it used to
portray liberalism negatively. Only 3 percent of the time is the term used in a way designed to cast free
markets in a positive light. 

In other words, "neoliberalism" is really just an anti-liberal slogan.

Boas and Gans-Morse continue: 

One compelling indicator of the term’s negative connotation is that virtually no one self-identifies as a
neoliberal, even though scholars frequently associate others — politicians, economic advisors, and even
fellow academics — with this term. While a fifth of the articles on neoliberalism in our sample referred
prominently to other people as neoliberals, in all of our research, we did not uncover
a single contemporary instance in which an author used the term self-descriptively ...

Moreover, as Boas and Gans-Morse note, "neoliberalism" is often used to "denote... a radical, far-
reaching application of free-market economics unprecedented in speed, scope, or ambition." For those
wishing to appear "reasonable" or non-radical, neoliberalism's connotations as being radically in favor of
free markets provide an additional reason to avoid self-identifying with the term.

This unwillingness to self-identify extends to mises.org, although not for reasons of

avoiding radicalism.  As editor, I have published more than one article here that makes distinctions
between the liberalism of the Austrian school and the so-called neoliberals. Philipp Bagus's review essay,
"Why Austrians Are Not Neoliberals" explains many of these distinctions in detail. In another article,
Guido Hülsmann describes Ludwig von Mises's own battle against an early group of neoliberals at the
Mont Pelerin Society. In Mises's eyes, these neoliberals were relatively liberal — compared to
doctrinaire socialists — but were interventionists who favored central banking and the bureaucratic,
regulatory state. Then as now, the central problem with the neoliberals revolved around their blithe
attitude toward inherently anti-market central banks and government-created money. 

To those of us who keep up with the details of the marketplace in liberal ideas, these distinctions are
readily apparent. 

To anti-liberal leftists looking in from the outside, however, Austrians, Chicagoans, and neo-classicals all
probably look like pretty much the same thing. These "neoliberals" all say nice things about markets and
free trade, so they all must agree with those neoliberals at the International Monetary Fund. Or so it is
assumed. After all, don't we hear from the IMF about the importance of free trade and balanced
budgets and limiting government spending? The fact that the IMF supports central banking, bank
bailouts, and corporatist deals for the politically-connected is lost on those who only see the
IMF's ostensible support for markets. The anti-liberals then lump together IMF President Christine
Lagarde and Ludwig von Mises. 

In the UK, for example, it's easy to find articles that equate neoliberalism with the alleged free-
market policies of Ronald Reagan and Margaret Thatcher. In this article at The Guardian, for example,
George Monbiot views Thatcherism and Reaganism as the vanguards of a supposed hard-core free-
market hegemony we groan under today. 

The Anti-Neoliberalism Movement Is Just an Anti-Capitalist Movement

Naomi Klein, a perennial critic of neoliberalism, sees the popularity of the Bernie Sanders movement as
a defeat for neoliberalism. In a recent radio interview, she stated: 
So neoliberalism lost the argument. They lost the argument, to the extent that not only was Bernie out
there calling himself a socialist, not apologizing for it, making these arguments that, you know, we — not
reductions in tuition, but free college, you know, just pushing the envelope, 100 percent renewables,
just going all the way, and people were cheering. And he forced Hillary Clinton to move to the left. And
we also saw that even Donald Trump had to throw out the rule — the neoliberal rule book, trashed free
trade agreements, promised to defend the social safety net, in order to build his base.

In other words, in Klein's mind, a victory against neoliberalism brings with it hard-left environmentalism,
opposition to free trade, "free college," and "mov[ing] to the left" in general. 

Not surprisingly, sometimes Klein and other opponents of neoliberalism are right by  accident. They
often (correctly) oppose trade deals like the TPP, for example. But, they do so for the wrong reasons.
They oppose these trade agreements not because they are extensions of the regulatory, corporatist
state, but because the anti-liberals mistakenly view these trade deals as being for actual free trade and
free markets.

Opposing Both the Neoliberals and the Anti-Liberals 

The conclusion we're forced to draw is that consistent advocates for laissez-faire are stuck between
both the actual neoliberals (as identified by Mises) and the anti-capitalist, anti-neoliberal left. If they
could, the anti-neoliberals such as Klein and Sanders would happily expropriate and nationalize
entire industries. Entrepreneurship would wither, small business would be regulated out of business,
and the financial sector would function — even more than it already does — as a de facto state-owned
enterprise. 

Meanwhile, the neoliberals found at the IMF and central banks of the world continue to manipulate the
global economy through monetary policy, bail out favored cronies at major corporations, and support
corporatist policies in general. 

Both groups continue to present significant threats to the cause of laissez faire. 

Ryan McMaken  is the editor of Mises Wire and  The Austrian.  He is the author of Commie Cowboys: The
Bourgeoisie and the Nation-State in the Western Genre.  Contact:  email,  twitter.

Article#3

What's the difference between Neorealism and Neoliberalism?

Ask Question

Can someone explain to me the difference between Neorealism and Neoliberalism? What do these two
theories have in common and what are their differences?
Neorealism, in the context of international relations, is the field of study concerning itself with how
governments behave in the modern world. Neorealism can mean other things, but other definitions
would not normally be contrasted with neoliberalism. Neorealism seeks to explain why countries
interact the way they do with no higher power. Of course there are treaties and the U.N. But Neorealism
attempts to attribute structure to the patterns of foreign affairs. In Neorealism, assumptions are made
as to behavior of governmental entities and the basis for policies governing the relations of two or more
countries. Neorealism attributes systems to nations participating in world affairs. Much of these
attributes remain speculative.

Neoliberalism is the political ideology of progressive attitudes on social issues with an emphasis on
economic growth. Bill Clinton (and arguably JFK) were adherents of neoliberalism. Neoliberals favor
NGOs solving economic problems as opposed to the welfare state.

The primary difference is that one is a study of foreign affairs (with no political ideologies) and the other
is a complete political ideology (that applies domestically).

Neoliberalism and Neorealism Compared:

1. Nature and Consequences of Anarchy: Neorealists see concerns over physical security as

producing far more of the motivations of state action than do neoliberals.

2. Achievement of International Cooperation: Neorealists think that international cooperation is

much harder to achieve than do neoliberals.

3. Relative versus Absolute Gains: Neorealists stress the centrality of relative gains for decision-
makers in dealing with international cooperation, whereas, neoliberals stress the importance of
absolute gains.

4. National Security Issues versus Political Economy: Neorealists tend to deal with national
security issues, while neoliberals tend to look at political economy, with the result that each
sees rather different prospects for cooperation.

5. Capabilities versus Intentions and Perceptions: Neorealists concentrate on capabilities, rather

than intentions, whilst neoliberals look more at intentions and perceptions.

6. International Institutions: Neoliberals see institutions as able to mitigate international anarchy,

while neorealists doubt this.