Neoliberalism is the resurgence of ideas associated with laissez-faire economic liberalism beginning in the 1970s and 1980s, whose advocates support extensive economic liberalization, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy.
The usage and definition of the term have changed over time.
Originally neoliberalism was an economic philosophy that emerged among European liberal scholars in the 1930s attempting to trace a so-called ‘Third’ or ‘Middle Way’ between the conflicting philosophies of classical liberalism andcollectivist central planning. The impetus for this development arose from a desire to avoid repeating the economic failures of the early 1930s, which were mostly blamed on the economic policy of classical liberalism. In the decades that followed, neoliberal theory tended to be at variance with the more laissez-faire doctrine of classical liberalism and promoted instead a market economy under the guidance and rules of a strong state, a model which came to be known as the social market economy.
In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman. Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.
Neoliberalism also represents a set of ideas that are famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States.
Today the term neoliberalism is mostly used pejoratively as a general condemnation of economic liberalization policies, such as privatization, open markets, and deregulation. The transition of consensus towards neoliberal policies, and the acceptance of neoliberal economic theories in the 1970s is seen by some academics as the root of financializationwith the Financial crisis of 2007–08 claimed to be one of the ultimate results
The usage and definition of the term have changed over time.
Originally neoliberalism was an economic philosophy that emerged among European liberal scholars in the 1930s attempting to trace a so-called ‘Third’ or ‘Middle Way’ between the conflicting philosophies of classical liberalism andcollectivist central planning. The impetus for this development arose from a desire to avoid repeating the economic failures of the early 1930s, which were mostly blamed on the economic policy of classical liberalism. In the decades that followed, neoliberal theory tended to be at variance with the more laissez-faire doctrine of classical liberalism and promoted instead a market economy under the guidance and rules of a strong state, a model which came to be known as the social market economy.
In the 1960s, usage of the term "neoliberal" heavily declined. When the term was reintroduced in the 1980s in connection with Augusto Pinochet’s economic reforms in Chile, the usage of the term had shifted. It had not only become a term with negative connotations employed principally by critics of market reform, but it also had shifted in meaning from a moderate form of liberalism to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it with the theories of economists Friedrich Hayek and Milton Friedman. Once the new meaning of neoliberalism was established as a common usage among Spanish-speaking scholars, it diffused directly into the English-language study of political economy.
Neoliberalism also represents a set of ideas that are famously associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States.
Today the term neoliberalism is mostly used pejoratively as a general condemnation of economic liberalization policies, such as privatization, open markets, and deregulation. The transition of consensus towards neoliberal policies, and the acceptance of neoliberal economic theories in the 1970s is seen by some academics as the root of financializationwith the Financial crisis of 2007–08 claimed to be one of the ultimate results
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