neo-liberalism and its effects

1. A PRIMER ON NEO-LIBERALISM
FARHANA.K
2120200095
5-SEM,3-YEAR
B.PLANNING
SPA VIJAYAWADA

2. INTRODUCTION
Neo-liberalism is a largely unregulated capitalist system with a set of
economic policies that limits restrictions on manufacturing, reduces barriers
to commerce, reduces tariffs, and free trade that came up to develop a
nation's economy.
• It is essentially about making trade between nations easier.
• It is about freer movement of goods, resources and enterprises to
maximize profits and efficiency.

3. THE NEO-LIBERAL TURN
• Post-war period and the class compromise between capital and labour (‘embedded liberalism’).
• 1776- British economist Adam smith, published a book named the wealth of nations.
• 1950s and the 1960s- High rates of economic growth, redistributive politics, control over the mobility of
capital, Keynesian fiscal and monetary policies.
• Towards the end of the 1960s embedded liberalism began to collapse.
• 1980- Due to the debt crisis faced, neo-liberal programmes of restructuring were extended globally
through the efforts of US and G-7 States to subject their states to establish a discipline of capital markets.
• The capitalist crisis, with its reducing profit rates, encouraged the corporate groups to revive economic
liberalism, which is known as neo-liberalism.
• Neoliberalism emerged as a project to restore the power of economic elites.

4. It emphasises on
Liberating private
enterprise or free
enterprise from
any restrictions
the government
imposed, even if
the social damage
caused is high.
Reducing
expenditure on
public purposes
like education and
health care was to
be done.
Neo-Liberalism
limits government
regulation on
anything that will
reduce the safety
of jobs, and
profits
Neo-Liberalism helps
in selling state-owned
enterprises,
services and goods
to investors who
operate privately.
This includes key
industries, banks, toll
highways, railroads,
electricity, hospitals,
schools and fresh
water
Neo-liberalism has led
to pressurize the
poorest section in a
society to find
solutions for their lack
of education, health
and social security all
by their own selves
and to put the
responsibility of their
failure on themselves
and blame them for
their lack of effort.
The rule of the market Deregulation Privatisation Removing the concept of
Cutting public
expenditure for
social services
the community or public
good and replacing it
with individual
responsibility
CHARACTERISTICS OF NEO-LIBERALISM

5. INSTITUTIONS ESTABLISHED
• INTERNATIONAL MONETARYFUND (IMF)
• WORLD BANK (WB)
• WORLD TRADE ORGANIZATION (WTO)
1947: GENERAL AGREEMENT ON TARIFF AND TRADE (GATT)
It is a multilateral agreement among countries that provides a framework
for the conduct of international trade. It contains disciplines on matters
related to import and export of goods. Through this, countries committed
to reduce tariffs on certain imported goods.
Around the world, Neo-liberalism is forced by powerful financial institutions
like the world bank (WB), the international monetary fund (IMF) and World
trade organisation (WTO). WTO, WB and IMF transformed themselves in to
the agents of trans-national neo-liberals and were mobilised to
institutionalise the extension of market forces in the third world countries
through the process of structural adjustment.

6. CRITICAL ANALYSIS
• The underlying assumption is that the free markets are good for the
overall development. However, neo-liberalism can affects the market
in a negative way, influence and manipulate trade for certain interests.
• One major factor responsible for this is global inequality. Global
inequalities on various indicators have grown, as it is influenced by
politics. This is due to the reason that economics cannot be separated
from politics.
• Despite the good intentions of many policies framed due to structural
adjustment, they often led to more harm than good. In today’s
context, structural adjustment is regarded as a failure as it has failed to
bring third world countries out of Poverty and has also resulted in
causing more injuries to the poor.

7. POVERTY, OVERPRODUCTION AND LOCAL DISINTEGRATION
• Harsh economic measures have resulted in the gradual disintegration
of the Welfare State.
• Because of the large accumulation of public debts in western
countries, the financial elites have been given the power to dictate
government’s economic and social policy.
• This economic restructuring has made the divide between different
social and ethnic groups even deeper. Moreover, it has increased the
potential capacity of the economic system and expanded levels of
production without reducing poverty significantly.
• In developing countries, entire branches of industry producing for the
internal market are driven into bankruptcy on the orders of the WB
and IMF.

8. REFERENCE
• “What is neo-liberalism”, Elizabeth Martinez and Arnoldo Garcia, National Network for Immigrant and
Refugee Rights-corpwatch,1996
• “Free trade and Globalisation”, Dominica, de ab la publication, 2010
• “Neoliberalism: The economic model: origins, theory, definition”, Dandelion Salad, word press BlogSpot,
2005
• “A Primer on Neoliberalism”, Anup Shah, Global issues article, 2010
• “Neo-liberalism: Origins, theory, definition”, Paul Treanor, 2005

9. THANK YOU