10 Characteristics of Neoliberalism

Neoliberalism is a theory about the political-economic practices that emerged in the second half of the 20th century based on the liberalism of the 19th century. To understand what it is and to what extent it differs from liberalism, it is necessary to review its most important characteristics below.

Private property, free market, and free trade

Neoliberalism maintains the fundamentals of liberalism, which are summarized in private property, free markets, and free trade. What would be the difference? For some experts, the difference would be that neoliberalism absolutizes economic growth by turning it into an objective in itself, which leaves aside the reformist moral discourse of classical liberalism.

Policy of “ laissez faire ”

Laissez-faire is a French expression that means “let do”, and was used by liberals who feared that the State would act as a repressive entity in economic matters. Neoliberalism posits that the State should not even act as an intervenor, but rather should stimulate the development of the private business sector.

Criticism of state interventionism

According to David Harvey in his book A Brief History of Neoliberalism, the neoliberal theory posits that the state is incapable of predicting the behavior of the economy and of preventing "powerful interest groups from distorting and conditioning these state interventions" (Harvey, 2005). . In other words, neoliberalism is justified on the grounds that interventionism favors corruption. Neoliberalism also points out the paradox that the State is not subject to any type of social control.

 

Rethinking the role of the State

The only role of the State in the economy, according to neoliberalism, should be to create a legal framework that favors the market. That is to say, it is not opposed to the State itself but rather seeks to limit it to the purpose of private business growth, based on the stimulation and arbitration of competition. Therefore, neoliberalism consents to the action of the State in the control of the monopoly, the lobby, and the workers' unions.

Free market

Neoliberalism considers that the free market is the only one capable of guaranteeing the most appropriate allocation of resources based on economic growth. From this point of view, the only way for the market to regulate itself is through free competition.

Privatization of state companies

The privatization of state companies is another of the foundations of neoliberalism, not only in regard to the productive sectors, but also in regard to services of public interest such as water, electricity, education, health, and transportation, among others.

Individual as a force of production

Neoliberalism sees individuals as a force of production of the economic order, which confronts it with liberalism, which was concerned with the full development of the capacities of the subjects and not only of abstract economic potentialities.

market ethics

Neoliberalism is armed on a market ethic, that is, on the conception of the market as an absolute, as a regulatory principle of order and social behavior to which all aspects of life have been subject and towards which all must be oriented, from material to imaginary aspects (cultures, individual interests, belief systems, sexuality, etc.).

Free movement of goods, capital, and people

Neoliberalism proposes the free movement of goods, capital, and people, which in some way challenges the limits and controls of the national State in terms of the economy. Neoliberalism is rooted, in this way, with globalization. In this scenario, the limits and scope of responsibilities and wealth distribution mechanisms become porous.

 

Priority of the world market over the domestic market

Since it is based on free trade, neoliberalism gives priority to the international market over the internal market. This implies, among other things, that it favors foreign investments over national ones, which, on the one hand, generates movement of capital, but on the other, causes significant imbalances in the distribution of power.

Economic growth as a fundamental objective

Neoliberalism's fundamental objective is economic growth, an interest that dominates any other sphere of social development. This becomes the center of reference and orientation of economic policies.

Disinterest in social equality

Unlike classical liberalism, neoliberalism views the search for social equality with mistrust, since it considers that social differences are what drive the economy.

Relativization of the value of democracy

Neoliberalism perceives democracy as a historical circumstance but does not conceive it as a consubstantial project of economic freedom. In this sense, he understands that the freedom to which he appeals transcends the political imaginary of democracy. That is, there could be neoliberalism without democracy.

 

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