NEOLIBERALISM AND IMPACTS ON SOCIETY

January 31st, 2022

By Cemre Türkmen

Neoliberalism is a political ideology that emerged after 1970 on the basis of the economy.
While neoliberal thought aims to minimize the intervention of the state in the market, it aims
to provide all kinds of opportunities to private capital with the theory of deregulation. With
the collapse of the Keynesian economic model, it found application in the world in the 1970s.
In those years, an inextricable economic situation was seen in many countries. Hayek and
Friedman planted the seeds of neoliberalism in the world. As a result of the Great Depression
(1929), Keynesian economic policies came into play, the welfare state was formed, the
welfare state became regulated in many areas of society, in short, "re-distribution"
mechanisms were in question. Behind the historical emergence of neoliberalism is the critique
of the state's organization and existence in society. This criticism has two pillars: First, the
system will hinder free life (a political emphasis); second, that the system cannot ensure
efficiency (an economic emphasis).

The starting point in the relationship between the state and society after the 1970s is the
acceptance of the individual as a homo economicus. In other words, in neoliberalism,
individuals are driven by economic incentives. On the way to neoliberalism, people have
become "economic subjects", not "rights individuals". With this ideology, the administration
of states has completely changed. In the last thirty years, seeing education, health, the
environment and even the individual with a cost-benefit logic has entered our lives with
neoliberalism.

The basic philosophy of neo-liberal understanding; can be summarized as glorifying the

market, prioritizing individual interest over public benefit, making the labor market flexible
against capital power, and reducing labor costs. By minimizing the state, the following basic
principles of neo-liberal policies, which are served through international economic, financial,
and political institutions, come to the fore:
- Privatization of public enterprises,
- Ending the central government regulations in the economy,
- liberalization of trade and industry,
- Taking 'monetary' measures against inflation at the expense of increasing inequality,
- Ensuring strict control over the organized (Unionized) workforce,
- Reducing public spending, especially social spending and investment,
- The reduction of the state's field of activity and personnel,
- Removal of controls on global financial flows for the development of international markets,
- Reduction in taxes.

So what has been the harm of the ideology of neoliberalism?

With neoliberalism, the way for fast and easy movement of hot money between countries,
which completely excludes people and labor, and focuses only on economic efficiency, has
been opened. By imposing the privatization of public assets, regardless of the qualifications of
individuals or institutions, foreign capital was allowed to own and control sectors such as
energy, banking, telecommunications, security, transportation, and very important natural
resources. By restricting the workers' right to unionize, unemployment rates were increased to
unprecedented levels with layoffs. Agricultural lands were destroyed and the import regime
was adopted, and countries were faced with food and nutrition problems and the risk of
famine in possible crises. With these policies, austerity and privatization programs were
implemented to make capital markets illegal, free trade was opened by removing price
controls, and the productive class was left at the mercy of capital by reducing the effects of
governments on the economy. Many reasons such as the increasing welfare gap between
social classes, income inequalities, increasing poverty and interest rates, erosion in job
security, dissolution of the organization, increase in the level of unregistered employment
have increased the discontent in the social segments.

Instead of a political ideology based on freedom and the importance of freedom, the system
that strongly supports free markets, advocates the unequal distribution of wealth, property,
and natural resources instead of promoting equality, rejecting all these instead of developing
the democratic process and welfare state, is one step to the end in every crisis. got closer.

With neo-liberal policies, the right of nations to determine their own destiny has been taken
away. The system, whose only goal is economic efficiency, has actually collapsed a long time
ago due to its anti-democratic, exploitative, and social injustices by promoting globalization
that impoverishes countries.

Finally, the world saw once again with the COVID-19 epidemic that there would be no
economy without people. In 2020, neoliberalism could no longer hide the harm done to
humanity, and this time it also revealed its misery with its collapse.
References
https://dergipark.org.tr/tr/download/article-file/361178
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5688676/
https://www.theguardian.com/news/2017/nov/14/the-fatal-flaw-of-neoliberalism-its-bad-
economics
https://blogs.lse.ac.uk/politicsandpolicy/the-dark-side-of-economic-freedom/
https://en.wikipedia.org/wiki/Neoliberalism