Neo what? (download in pdf format)
Emily Kawano, Center for Popular Economics

What is neoliberalism?
Neo-liberalism is the economic ideology that currently rules the capitalist world, emerging in the 1980s with Thatcherism and Reaganomics. Put crudely, its slogan would be, “markets good, state bad.” Neo-liberals argue that when markets are ‘free’ from meddling by the state it’s good for business which is good for the economy and good for the people. 
So neo-liberal policies aim to ‘liberate’ markets by removing controls on trade, corporate investment and international finance. At the same time they try to roll back the state – restricting the ability of the state to stimulate the economy, and demanding de-regulation, privatisation, and cutbacks, particularly of social welfare programs.

Neo-liberalism displaced another economic ideology called Keynesianism that came to dominate the capitalist world following the Great Depression. It’s slogan would be “markets imperfect, state fix.” Keynesian policies put the state front and centre in addressing market failures such as economic instability, recession, unemployment, poverty, inequality, and corporate and financial abuses. Controls on trade, corporate investment and international finance were seen as necessary to provide economic stability and to promote full employment.  

What’s the problem with neo-liberalism?
Neo-liberals believe that markets, free from the meddling of the state, are good for business and what’s good for business is good for the economy. Neoliberalism has been very good for some and very bad for others:

• Throughout the world as well as in the U.S. inequality has risen dramatically since the 1980s.
• On a global level, the Human Development Report found that 54 countries experienced a fall in income over the last ten years.
• At the same time, between 1983 and 1999, the profits of the Top 200 corporations grew by 362.4%.

What about the argument that ‘there is no alternative’ to neo-liberalism?
Seen in historical perspective, neo-liberalism is quite young – a little over twenty years old. Keynesianism dominated capitalist economics for round about fifty years. What should be clear is that there are different schools of economics that vie for dominance in the real world. There is nothing inevitable about neo-liberalism.

For that matter, there is nothing inevitable about capitalism, which is also relatively young. Capitalism has only been around for around 400 years. European Feudalism was around for at least 600-800 years, while many so-called ‘primitive’ economies persisted for more than a millennia.

Finally the fact is there is a growing resistance throughout the world to neo-liberalism. Look at the uprisings against neo-liberalism:

• In Latin America populist and leftist governments have swept to power on anti-neoliberal platforms in Brazil, Venezuela, Uruguay, Argentina and most recently Bolivia.
• Meetings of the global capitalist elite, such as the IMF, the World Bank, the WTO, the G-8, and the World Economic Forum have been consistently dogged by protests from Seattle to Genoa to Doha.
• The World Social Forum and all its regional ‘editions’ represent a global opposition to neo-liberalism and the belief that ‘another world is possible.’

Why not use a more user-friendly term like globalization?
Globalization is a very mushy term. All it really means is a process of increasing international linkages which, if it meant greater international solidarity, cooperation, prosperity, multiculturalism, exchange, and so on, would be a great thing. What we stand against is a particular model of globalization. That particular model is neo-liberalism which has a clearly defined ideology, policies, and institutions that promote it. As a non-mushy term, neo-liberalism is far preferable to globalization.
The other reason that we should use the term neo-liberalism is that it is very widely used and understood throughout the world. It is a term that is already in play and we shouldn’t shy away from it just because it seems more like jargon than globalization. Have faith that people are smart enough to learn a new term.

Isn’t it confusing that liberals stand for pretty much the opposite of neo-liberals?
Admittedly it is a bit confusing. Neo-liberalism, or ‘new liberalism’, harks back to the original 18th century concept of economic liberalism which seeks freedom from government interference – free markets, free enterprise and private property. Political liberalism means different things in different countries, but in the U.S. it upholds ‘positive’ freedoms – the right to food, clothing, shelter and so forth – and so the support for social welfare programs follows from that logic. Both terms grew out of the same philosophical roots, but emphasize different aspects of freedom. The bottom line is that the meaning of neo-liberalism is clear, non-mushy, and widely used throughout the world.