Neo Liberalism(Ed)

Neoliberalism, often referred to as 'neoclassical liberalism', is viewed as a modern take on classical liberalism, especially classical political economy. It argues that the economy functions best when the government stays out of it, promoting the idea of free markets and individualism. This view holds that when the market operates without restrictions, it leads to efficiency, growth, and overall wealth. In contrast, government involvement is seen as a hindrance that stifles initiative and discourages business. Essentially, the core belief of neoliberalism is that markets are good while the state is bad. Important policies associated with neoliberalism include privatisation, reducing public spending (mainly on social welfare), lowering taxes (especially for businesses and high earners), and removing regulations. Neoliberalism is frequently linked to market fundamentalism, which is the strong belief that markets can resolve all economic and social issues.

The economic problems affecting the West in the 1970s appeared to discredit Keynesianism and helped create a more receptive environment for neoliberal thinking. Liberal New Right ideas

call for:

• · a minimal state

• · self-reliant individuals capable of making rational decisions in their own interests

• · the rejection of collectivism and

• · the elimination of government intervention.

Neoliberalism, supported by economists like Milton Friedman and Friedrich von Hayek, strongly advocates for a free-market economy. It believes that the free market is the best way to efficiently meet consumer demand for goods and services, make the best use of resources, and achieve overall wealth. Neoliberals argue that government actions cannot fix economic issues, such as rising unemployment and inflation in the 1970s, and that government involvement only worsens these problems.

The liberal New Right argues that the free market needs protection from three main threats: monopolies, inflation, and government interference. They see monopolies as harmful because they limit competition, which results in unfair prices and fewer choices for consumers. Neoliberals view inflation as a major issue because it lowers the value of money, discouraging spending and investment. They believe that tackling inflation is the one important role for government in the economy.

Neoliberalism is against strong government control. It sees the state as a source of control that limits individual freedom, as collective approaches can hinder personal initiative and self-worth. No matter how well-meaning, government actions often harm society. Instead, the focus is on individuals and the market. People should be encouraged to rely on themselves and make smart choices that benefit them. The market is viewed as a system where individual choices lead to overall progress. Neoliberalism aims to promote libertarian ideas over more controlling, paternalistic views within conservative thought.

Friedman argued that Keynesian methods to boost demand cause inflation because they lead governments to print too much money or give too much credit. His approach, called monetarism, suggests that the government should control inflation by managing the money supply through reduced public spending. Both Margaret Thatcher and Ronald Reagan implemented monetarist policies to combat inflation in the 1980s, believing that the market would solve rising unemployment. This overall neoliberal strategy is termed 'supply-side' economics, in contrast to Keynesian focus on demand.

The liberal New Right sees government intervention as a significant threat to the free market. They reject state planning, nationalisation, and high taxes, arguing that these distort the market and worsen economic issues. In the 1980s, Thatcher introduced a wide-reaching privatisation programme that shifted state-owned industries to private ownership. She argued that nationalised industries were inefficient and lacked the drive of the private sector, which aims to make a profit. Similar concerns are held regarding state welfare. Neoliberals believe that welfare programs grow without real demand because of the interests of professionals like doctors and teachers, and politicians who promise more funding to win votes. This leads to higher taxes, increased inflation, and inefficient state services that are shielded from market competition. Therefore, many neoliberals argue that public services should face market competition to improve efficiency.

Finally, neoliberalism advocates atomistic individualism (the idea that individuals are rational, self-interested and self-sufficient) — which is clearly linked to the liberal New Right belief in free-market economics. According to the liberal New Right, the freedom of the market is the guarantee of individual freedom. Neoliberals view freedom in negative terms, stressing the need to remove external constraints or limitations on the individual. Individual freedom can only be preserved by opposing collectivism and 'rolling back' the state. In this context, neoliberals criticise state welfare policies for creating a dependency culture and infringing property rights by imposing high taxes on individuals to fund benefit payments. Such a system, in their view, actually institutionalises poverty and unemployment, and undermines atomistic individualism. If people no longer face government intervention and interference, they will be free to deal with each other without restrictions. These unhindered human interactions will create a 'natural' order vastly superior to any imposed model because it is based on everyone's consent.

The liberal New Right concludes that, although humans may be selfish, they are rational and entitled to pursue their own interests in their own way, as long as they accept others can do the same. This approach to individualism, claim neoliberals, releases human potential and creates natural harmony through free relations between people.