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Neo-Liberalism

Neoliberalism is a concept that refers to business reform techniques such "removing

pricing controls, privatising capital markets, lowering trade barriers, and reducing
governmental influence in the sector, largely through outsourcing and recession."

A Critique of Neo-liberalism

Few would argue that it has been the political age's philosophy. It has ruled western
politics since the 1980s, underpinning the government, shaping culture, and leaving a
lasting effect on society. Its essential concepts were rarely questioned throughout this
time, and only minor details were altered. The financial crisis of 2008, on the other
hand, shattered trust in a philosophy whose name had never been used before. People
demanded explanations and started questioning the system that had permitted such a
calamity as a result of the loss of savings, rising inequality, and deteriorating living
standards that followed. 
Despite more than a decade of neoliberalism, its hold on power has weakened
significantly. The virus and all its concomitant unfairness have provoked the most
severe confrontation with its flaws so far. It's a real-time process, with modern
progressive groupings forming both on the right and the left. Alternatives that would
have been disregarded in earlier years as too extreme, utopian, or even backward are
now being seriously addressed as people seek a way out of the present political
model.
The term "neoliberalism" is used so frequently and carelessly that its meaning has
become fuzzy and its tenets are ambiguous. That's where a lot of its strength comes
from. People must first comprehend it to escape its clutches: how it developed, to
whom it accumulated authority, and by what methods it has been perpetuated. In the
subsections that follow, we will examine the phrase by looking at its origins, the
legislation that stemmed from its reasoning, and its societal impacts. 

Conception

Although it is most closely identified with Margaret Thatcher and Ronald Reagan,
neoliberalism has a long history that precedes both of them—the phrase was most
likely coined in the late 1800s. It did, however, find an institutional home fifty years
later, when a group of frightened economists gathered at Mont Pelerin in 1947 and
ominously warned that "the basic prerequisites of human dignity and freedom
vanished." The origins of the issue were evident to those in attendance who would go
on to form the Mont Pelerin Society and could be found in the "declining conviction
in personal property and the market system." Only by defending an increasingly
attacked free-market capitalism and excluding the government from economic life
could liberty be saved. 
Because of this dread of government interference, social democracy was lumped in
with both Nazism and communism. According to this argument, a government
bureaucracy threatens individuality, another of the general societal principles, whether
in the New Deal or the emerging welfare state. Any form of government action, it was
thought, could, and most likely would, escalate to dictatorial tyranny.
While these notions may appear bombastic to a modern ear, it is important to
understand the period in which they were developed. The Road to Serfdom, a polemic
by Friedrich Hayek that is regarded as a founding document of the ideology, was
originally published in 1944, while the Second World War was still raging and people
were witnessing firsthand the dreadful possibility of absolute state rule. Hayek saw
German and Soviet economic management as the origins of these tyrannies and
advocated an economic libertarian, or a significant reduction in government
participation in the market, as the most successful countermeasure. 
As the century continued, the nascent philosophy drew the attention of the wealthy,
who viewed it as a way to avoid unwelcome government restrictions, particularly
public safeguards and high taxes. A network of think tanks spanning both sides of the
Ocean was swiftly developed thanks to extravagant funding from these elites, to
spread the neoliberal message among academics and policymakers. Despite the
funding, the ideology stayed on the periphery. The wartime agreement was in full
motion, and much of the Western world was eager to implement Keynes' economic
suggestions. Governments were unafraid to raise taxes — in the United Kingdom,
income tax reached 75% – while also boosting public services and social security.
Meanwhile, neoliberals were regarded as relics of the past and had to wait their turn.
Neoliberalism was not given a chance until the 1970s economic crisis. However,
when it did, its environment of think tanks, political groups, and organizations was
ready. When Keynesian theory began to collapse and people were rushing for change,
as its influential advocate, Milton Friedman, put it at the time, "there was an
alternative waiting there to be taken up." The globe hasn't turned back since.

Comparison between two states

Neo-Liberalism and Neo-Confucianism are the two dominant worldviews that shape
the international political economy. Neo-Liberalism rests on the premise that markets
are the primary mechanism of production, while Neo-Confucianism emphasizes that
the production of goods and services should focus on the common good. The Neo-
Confucian viewpoint has also been linked to the Chinese Communist Party's thought,
which has pushed for the growth of the country's state-controlled economy. Although
the Neo-Confucian system has been tremendously successful in China, it has been
challenged by the rest of the world for its inability to handle major issues such as
pollution and poverty. 
The Neo-Confucian model takes a very different approach to the economics of trade.
Neo-Confucianism is an ancient philosophy whose ideas were revived and codified by
Confucius (551-479 BC) and his disciples. Confucianism is a major influence on
Chinese culture, and its influence on the nation’s economy is apparent in its political
leadership, which favors the Neo-Confucian philosophy as the preferred model for
economic development. The government of China has even adopted the Neo-
Confucian model and its basic tenets as the guiding principles of its economic
philosophy.
In the past few decades, Western countries have become increasingly concerned about
the state of their economies. The 2008 financial crisis and the subsequent recession
caused a sharp decline in manufacturing, industrial production, and employment.
While some politicians advocated for increased government spending and investment
as a way to stimulate the economy and repair existing damage, others instead pursued
a policy of economic liberalism, which called for reduced government spending,
lower taxes, and less regulation. While economic liberalism proved to be a somewhat
successful strategy in the decades before the Great Recession, critics argue that it has
failed to provide a long-term solution to the current economic malaise.
When we think of economic power in today's world, we usually think of it in terms of
military and political dominance. Countries like the United States and Germany have
used their vast military forces to extract resources from weaker nations, which has
resulted in a global economic and political hegemony. In today's world, however,
economic power can also be defined as the ability to provide a nation's population
with a high standard of living. Nations such as Norway and Sweden have achieved a
high standard of living for their populations through a combination of socialist social
programs and a dynamic trade sector, which has allowed them to provide their
populations with high-quality education, healthcare, and social services.
China is a major participant in international trade and financial institutions. It also has
a vast population of 1.3 billion people, which means it is the world's most populous
nation. With its economic and political institutions in place, it is an attractive
alternative for countries that desire to follow the neoliberal model. In contrast, China's
model, which has been called "neo-Confucianism," is significantly different from the
neoliberal model that has prevailed for the past four decades.
The study of neoliberal policies and other economic development models yields
opposing views, implying a complex examination of the ideas and their outcomes.
Many scholars have stated that the Neoliberal school's theories have long been viewed
as an ideology fabrication rather than a valid theoretical approach to the study of
economic development factors. Empirical data does not support the broad
generalizations of "free markets" and "economic prosperity," implying a universal
intellectual bankruptcy. The United States' acceptance of neoliberal values arose as a
result of the de-industrialization period, during which the labor movement lost
strength. It was during Reagan's presidency that neoliberal concepts would acquire
more traction.
Neoliberal practises, which were idealised and institutionalised from the onset by
countries such as The U.s. and the United Kingdom, would soon bring financial and
political turbulence throughout Europe. While the Neo-liberal argument claimed that
rising oil prices were to blame for the economic meltdown, the fallout resulted in
higher inflation and interest rates, undermining Neo-ideological capitalism's position.
Organizations like the European Union and the World Bank would exacerbate state-
level economic problems. The International Monetary Fund and the European Union
intervened in Greece's financial downturn, which swiftly escalated into a far historical
and political disaster.

How the neo-Confucian state functions better

Western scholars have long struggled to understand China's economic and political
framework. The country's worldview differs significantly from what was once
considered a capitalist age. The Beijing Consensus deviates from the original
Washington Consensus's established understandings of economic theories and policy.
Having become accustomed to tailor-made answers to unique challenges, Chinese
philosophers have moved away from these understandings. Based on the three
underlying principles of Chinese growth, the Beijing consensus proposes a distinct
model for emerging countries. These include things like innovation, pursuing dynamic
objectives, and the role of self-determination in economic policymaking.
Neo-Confucianism, a separate political philosophy, also underlies the Beijing model
of social and economic growth. The Neo-Confucius mode of thinking places a strong
emphasis on the importance of traditional customs in promoting economic
development. Neo-conservatives took note of this and backed it up, claiming that East
Asian growth was due to "cultural roots" rather than "traditional Neo-liberal ideas of
social purpose, Gross domestic product degree of a nation, and international aid."
(Miller 2020 ). Traditional Confucian thought about the growth of the inner self and
metaphysical life was revived as part of the Confucian thinking resurgence. They also
attempted to incorporate these ideas while creating the ascetic qualities that are
important to Confucian ideology.
Regarding the Greek debt crisis, there were several common themes: the Greek state's
inability to meet the standards of the European Growth and Stability Pact, as well as
its reasonableness in disclosing to enter the European Union, it must improve its
economic, financial, and budgetary status.. The so-called "troika" loan of
approximately 252 billion euros was given to Greece to save it from default. The
neoliberal banking system overlooked the damage caused by reckless lending. This
level of risk-taking and hazard would be used to bail out private banks that had taken
an outrageous amount of risk and pushed the burden of responsibility onto the Greek
people. Acquiring Greek bonds at a discount helped European markets. 
The global financial meltdown of 2008–2009 was undoubtedly the most major
consequence of neoliberal globalization, and it had a long-term impact on global
economic policy. Although economists disagree over the source of the financial crisis,
certain characteristics point to the banking sector's playing a greater role. The banking
systems in the United States are providing mortgage loans to subprime borrowers.
Banks gained large share gains, with subprime loan shares climbing to over 15% in
2004-2007, despite the lack of a chance that ownership would be able to pay back the
loans (Duignan 2019).
According to research conducted by the Federal Banking System of San Francisco,
the effect resulted in a large drop in macroeconomic indices of the economy, with the
overall Gdp per capital state decreasing by at least 7%. The economic crisis would
have a significant inter-state impact. A lot of banks throughout the international
market were hit by shock and had to react as a result of many lost jobs and
unemployment rates skyrocketing. According to the World Economic Outlook, its
long-term repercussions are still being felt. The analysis of 25 economic factors found
a opposite departure in growth trends, indicating a long-term impact of the financial
crisis. Neoliberal values, which had previously been championed, were once again
demonstrating a dangerous trend of widespread unemployment, state insolvency, and
an ongoing circle of aristocratic exploitation.
The Chinese model of industry and business differs from the market capitalism
practiced in the West. As previously said, scholars and western policymakers are
baffled by its political structure and economic policies. After being diplomatically
confined for a major portion of the late 1970s, China undertook a broad-scale
investigation to determine the means of its success. Even though it is a politically
authoritarian government, it does not fit well into Western definitions of liberal
democracies and dictatorial governments. Much of China's economic policy is based
on a liberalized version of market processes.
The application of "Chinese features" to any foreign political/social philosophy has
resulted in financial and political problems being overcome. The Chinese economic
vision is largely concerned with state development to promote growth and eliminate
inconsistencies in financial gain caused by the market system (Li 2015). As it tries to
generate steady growth and secure widespread social uplift for the average working
class, the Chinese model keeps growing among Western researchers and
policymakers. According to the World Bank, Over 800 individuals have been brought
out of extreme poverty in China thanks to sound economic policies, strong
governance models, and a desire for development. (World Bank 2021).
China's trade strategy was implemented when Chinese trade flows exceeded analysts'
predictions. These trade policies are the result of China's substantial transition toward
a market-oriented strategy, which has resulted in more economic success. Based on
data, the amount of international economic integration suggests that China has
excelled in increasing trade intensity. The gravity model was employed to measure
China's trade prowess in recent studies on the country's emergence as a trading
superpower. The gravity model was used to develop new trade integration indicators.
Because of these factors plus dramatic policy and governance reforms, China was
able to increase its share of world Growth from 10 per cent to 16 per cent between
1995 and 2005. The Chinese permeable ratio, which assessed at the volumes of
foreign trade, climbed from 34 percent to 63 percent within the same time period.
(Schnatz, 2006). As a result, the Chinese perspective offered a solid financial and
security model for emerging countries, one that would allow for steady growth rates
and increasing global connectivity. After conducting thorough research on over 3500
bi-lateral trade connections, the Chinese study on economic integration was
completed. Other variables, such as trade volumes, have increased from 18.1 percent
of exports to 17.7 percent of imports in the previous 21 years.
Economic models have had a significant effect in determining a country's political
view and foreign policy. The effect of a theoretical paradigm on policymaking is used
to define an ideological attitude. Both of the models examined so far have similar
strengths and potential. China, however, continues to support a holistic model that
addresses major governmental issues while ensuring economic growth. We can expect
to see how the Chinese model adapts to new international and internal obstacles, as
well as its adoption as the new paradigm for economic and political globalization.

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