THE 12 MOST OUTSTANDING CHARACTERISTICS OF NEOLIBERALISM - ECONOMY - 2024

Among the most relevant characteristics of neoliberalism are the little intervention of the State, the confidence in the free market as a way to progress or deregulate economic processes.

In the 1980s, this doctrine boomed. Margaret Thatcher, former British Prime Minister, and Ronald Reagan, former President of the United States, are two of the most representative state figures of neoliberalism.

Faced with this doctrine, opinions have arisen that define neoliberalism as a harmful model for societies, since it carries out actions to the detriment of the least favored sectors.

Detractors 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 its 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, because regulations or government interventions are minimal, or even non-existent.

Neoliberalism proposes deregulating trade, nationally and internationally, and creating 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

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

Neoliberals believe that areas such as health, education, security, banking, electricity 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.

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

3- Deregulation

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

The intention is that companies see reduced the taxes that are applied to them and the 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 regarding the employment situation of employees.

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

4- Competition

Competitiveness is one of the main characteristics of neoliberalism. According to this doctrine, human relationships 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

Source: pixabay.com

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

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 the reduction of taxes brings as a consequence a smaller amount of State resources for social programs destined to the most susceptible 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 overall 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 from neoliberalism is that workers are completely unprotected, because there are no more regulations that guarantee them an adequate working environment and salary, among other benefits.

8- Individual responsibility over the collective

Source: pxhere.com

According to neoliberalism, individuals are equal before the law but, at the same time, have different abilities and capacities 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 puts a lot of pressure on individuals, because, for example, they hold themselves responsible for job failures without considering that the context may have influenced such failure.

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

9- Simplified economic operations

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Neoliberal precepts state that, since the state does not direct economic operations, there is less bureaucracy, which allows processes to be more fluid and faster.

People opposed to neoliberalism indicate that the 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 bring discontent in the population and economic and social instability.

11- Reduction of protectionism

This cartoon makes a defense of free trade against protectionism. Library of the London School of Economics and Political Science / No restrictions

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 manage to reduce the possibilities of trade and make goods and services more expensive. That is to say, it is closely linked to the concept of competition, being applied internationally.

12- Elimination or reduction of power of unions

Meeting in Barcelona of the CNT trade unionist Federica Montseny

Manel Armengol / CC BY-SA (https://creativecommons.org/licenses/by-sa/2.0)

Neoliberalism understands trade 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 battle with the mining sector as a battlefield. The "iron lady" sided with the employers, and eventually the unionists gave in to their 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 the only thing they did was generate unproductiveness and difficulty in competing.

References

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