7 junio, 2024

The 12 Most Outstanding Characteristics of Neoliberalism

Between the characteristics of neoliberalism The most relevant highlights the little intervention of the State, the confidence in the free market as a way for progress or the deregulation of economic processes.

In the 1980s, this doctrine experienced a boom. Margaret Thatcher, former British Prime Minister, and Ronald Reagan, former US President, are two of the most representative state figures of neoliberalism.

Opinions against this doctrine have emerged that define neoliberalism as a harmful model for societies, since it carries out actions to the detriment of the least favored sectors.

Critics point out that the free market, one of the key precepts of neoliberalism, translates into more wealth for the richest and more poverty for the poorest.

Neoliberalism has been applied in different ways in different countries, such as Chile, the United States, England, Mexico, Argentina, among others. However, there are some common characteristics, typical of this model, despite the differences in their applications due to the particularities of each region.

Main characteristics of neoliberalism

1- Free market

Neoliberalism is committed to a free market, arguing that it is the most efficient way to allocate resources.

The main characteristic of the free market is that the prices of goods and services are agreed by sellers and buyers, according to demand and supply, due to the fact that regulations or government interventions are minimal, or even non-existent.

Neoliberalism proposes deregulating trade, nationally and internationally, and giving rise to a self-regulated market.

Some indicate that, for this self-regulation to be effective, certain fundamental values ​​must exist in society, such as respect, recognition of the other, empathy, honesty and solidarity, among other virtues.

2- Privatization

Neoliberal ideology indicates that it is necessary for the private sector to have an active participation in spheres traditionally dominated by the State.

Neoliberals consider that areas such as health, education, security, banking, electrical services, among others, should be privatized.

Detractors of neoliberalism indicate that neoliberals have sought to privatize almost the entire public sector, with sectors in charge of administrative actions closely related to the State.

We can mention, for example, the collection of taxes or the allocation of fines, which must continue to belong to the public sphere.

The critics of neoliberalism also expose that the privatization of all areas promotes the increase of wealth in the wealthiest, and demands a higher cost of the services to the users.

3- Deregulation

With deregulation, neoliberalism seeks to create a scenario with greater opportunities for investment.

The intention is that companies see reduced taxes applied to them and regulations that could interfere, in one way or another, in the supply of their goods and services at a national or international level.

This scenario of little or no regulation can generate arbitrariness in terms of the employment status of employees.

Critics of neoliberalism argue that, in this space without rules, benefits that protect the work environment or the health of employees can also be reduced.

4- Competition

Competitiveness is one of the main characteristics of neoliberalism. According to this doctrine, human relations are based on competitiveness; all actions are carried out in this context, with the endorsement of the State.

5- Economic growth as a way to progress

Neoliberalism considers that the State impedes the economic, social and cultural development of societies because it slows down individual progress initiatives.

According to neoliberal precepts, it is through economic development that it will be possible for humanity to progress. And this development will be achieved through participation in a market without regulations and open to the private sector.

6- Tax reduction

Neoliberalism is characterized by demanding a market with less taxes. This tax reduction seeks to reduce the State’s participation in economic actions.

Some detractors of this model indicate that lower taxes result in fewer state resources for social programs for the most vulnerable populations.

7- Flexibility in the labor market

Among the characteristic precepts of neoliberalism is:

The desire for labor markets to be designed in a way that allows them greater freedom in hiring employees
In the general organization of your workforce
In some cases, in the possibility of carrying out their activities outside the country of origin.

The criticism of this demand of neoliberalism is that workers are left completely unprotected, because there are no longer regulations that guarantee them an adequate work environment and salary, among other benefits.

8- Individual responsibility over the collective

According to neoliberalism, individuals are equal before the law but, at the same time, they have different skills and abilities that must be recognized and allowed to flourish, so that it is the individuals themselves who generate progress in the economic and social spheres of a country.

Some opponents of this doctrine indicate that this creates a lot of pressure on individuals, because, for example, they blame themselves for job failures without considering that the context may have influenced said failure.

These individuals end up feeling defeated and end up being considered as such by society.

9- Simplified economic operations

The neoliberal precepts expose that, since the State does not direct the economic operations, there is less bureaucracy, which allows the processes to be more fluid and fast.

Opponents of neoliberalism indicate that bureaucracy has not disappeared, but has been transformed into economic exchanges between public and private actors.

10- Cut public spending

One of the main precepts of neoliberalism is the intention to cut public spending; this action allows taxes to be reduced.

However, some critics of neoliberalism consider that the reduction of public spending can cause discontent in the population and economic and social instability.

11- Reduction of protectionism

The neoliberals demand a greater opening of the borders and a reduction of protectionist methods such as tariffs, customs and other taxes designed to protect the internal product against the external one.

However, neoliberals argue that these measures only reduce the possibilities of trade and make goods and services more expensive. In other words, it is closely linked to the concept of competition, applied at an international level.

12- Elimination or reduction of power of unions

Neoliberalism understands unionism as an even greater obstacle than political parties.

An example of this could be when Margaret Thatcher faced the trade (British unions) in a struggle with the mining sector as a battlefield. The “iron lady” sided with the businessmen and, finally, the unionists gave in to her pressure.

The neoliberals argue that the worker is not well represented or advised by the union, which has come to generate more unemployment than employment due to its «exaggerated» demands that all they did was generate unproductiveness and difficulty in competing.

References

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Davies, W. “How ‘competitiveness’ became one of the great unquestioned virtues of contemporary culture” in The London School of Economics and Political Science. Retrieved on July 25, 2017 from The London School of Economics and Political Science: blogs.lse.ac.uk.
Vallejo, S. «Free trade and the paradox of neoliberalism» (July 22, 2016) in El Telégrafo. Retrieved on July 25, 2017 from El Telégrafo: eltelegrafo.com.ec.
Martínez, E. and García, A. “What is Neoliberalism?” at Corp Watch. Retrieved on July 25, 2017 from Corp Watch: corpwatch.org.
Monbiot, G. “Neoliberalism – the ideology at the root of all our problems” (April 15, 2016) in The Guardian. Retrieved on July 25, 2017 from The Guardian: amp.theguardian.com
«Neoliberalism» in Encyclopedia Britannica. Retrieved on July 25, 2017 from Encyclopedia Britannica: britannica.com.
«Free market» in Encyclopedia Britannica. Retrieved on July 25, 2017 from Encyclopedia Britannica: britannica.com.
«Neoliberalism» in Encyclopedia. Retrieved on July 25, 2017 from Encyclopedia: encyclopedia.com.
Alonso, L. and Fernández, C. «The neoliberal bureaucracy and the new functions of the norms» (2016) in Crossroads. Retrieved on July 25, 2017 from Encrucijadas: encrucijadas.org.
Garzón, A. «Neoliberalism, characteristics and effects» (July 1, 2010) in ATTAC Spain. Retrieved on July 25, 2017 from ATTAC Spain: attac.es.

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