Neoliberialism

From the growing wealth inequality in our country, to the Koch Brothers clandestinely funding the tea party movement, to the environmentally collapse of the world’s ecosystems, to the rise of Donald Trump, neoliberalism has been a dominating force in US politics and economics.  Yet most people in this country have never heard to hear this word.

“Imagine if the people of the Soviet Union had never heard of communism. The ideology that dominates our lives has, for most of us, no name. Mention it in conversation and you’ll be rewarded with a shrug. Even if your listeners have heard the term before, they will struggle to define it. Neoliberalism: do you know what it is?”

Well, “neoliberal” is somebody of any color who sees a social problem and does three things; privatize, financialize and militarize. You’ve got a problem in the schools, privatize the schools, push back public education. Bring in the financiers, the profiteers. Make money on the test, make money on the teachers while you push out the teachers unions, and then you militarize the schools. You bring in security. We’ve got precious young brothers and sisters in the hoods going to schools like you and I going through the airport. That’s the militarization of the schools. Police, the same way. Outsource, militarize right across the board, so that a neoliberal is somebody who is obsessed with markets.

Cornel West

Definitions of neoliberalism

1. A modern politico-economic theory favouring free trade, privatization, minimal government intervention in business, reduced public expenditure on social services, etc
2. A political theory of the late 1900s holding that personal liberty is maximized by limiting government interference in the operation of free markets.
3. A policy model of social studies and economics that transfers control of economic factors to the private sector from the public sector.
George Monbiot describes neoliberialism as follows:
“Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.
We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.
After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed: massive tax cuts for the rich, the crushing of trade unions, deregulation, privatisation, outsourcing and competition in public services. Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world.
Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.”

Examples of neoliberalism

Trump policies

  • cut social programs while increasing military spending
  • reduce the federal income tax and capital gains tax
  • reduce government regulation
  • reduce labor unions

Reaganomics/trickle down theory

  • cut social programs while increasing military spending
  • reduce the federal income tax and capital gains tax
  • reduce government regulation
  • reduce unions
  • tighten the money supply in order to reduce inflation

Deregulation of US financial institutions
(largely responsible for the 2008 recession)

Removal of Federal Protections

  • environmental protections
  • labor protections
  • labor unions

The rise of income inequality

CBO Chart, U.S. Holdings of Family Wealth 1989 to 2013

Free trade agreements
(NAFTA, WTO, FTAA, TPP)

Learn about downfalls of free trade agreements

Neocolonialism
(the use of economic, political, cultural, or other pressures to control or influence other countries, especially former dependencies)

  • Organizations like World Bank give large loans to small countries who often can’t pay it back.  These loans are often given to corrupt governments.
  • When these countries default on their loans they are forced to take IMF (International Monetary Fund) restructureing adjustment program (SAP), with neoliberal requirements, that force countries to take measures such as :
    • Austerity, or cutting government expenditures such as social programs
    • Focusing economic output on direct export and resource extraction
    • Devaluation of currencies
    • Trade liberalization, or lifting import and export restrictions
    • Removing price controls and state subsidies
    • Privations of all or part of state-owned enterprises
    • Enhancing the rights of foreign investors over national laws
    • Slimming down public bureaucracies and general downsizing of government
    • Implementation of fee-for service regimes in education and healthcare

The rise of neoliberal institutions

  • Funded by the people like the Koch Brothers, who stand to gain the most, by attacking anything that opposes neoliberal ideology from issues like climate change to financial regulations

American Enterprise Institute
The Heritage Foundation
The Cato Institute
The Institute of Economic Affairs
The Centre for Policy Studies
The Adam Smith Institute

 

Learn More

Guardian Series on Neoliberalism

Neoliberalism – the ideology at the root of all our problems

Neoliberalism: the deep story that lies beneath Donald Trump’s triumph

It was the Democrats’ embrace of neoliberalism that won it for Trump

Neoliberalism is creating loneliness. That’s what’s wrenching society apart

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Inequality.org

Inequality Media