Neoliberalism is a disparate set of ideologies and policies that govern the contemporary institution and implementation of capitalism. Under neoliberalism, everything either is for sale or is plundered for profit (Giroux 2). Neoliberal policy upholds a system of free-market capitalism by protecting the interests of large corporations, while public services are systematically deregulated and privatized.
Neoliberalism's Perversion of Classical Liberalism
While the capitalist system has its origins centuries if not millennia ago, contemporary neoliberal systems and ideologies are far more recent developments. The industrial revolution was incredibly vital to the development of neoliberalism. Some economists of the time began to theorize that the free market might be capable of governing itself. Adam Smith, an 18th century Scottish economist, theorized of an 'Invisible hand' of the market, positing that a free market would correct for human malevolence and reward actions that furthered humanity. However, contemporary neoliberalism has augmented Smith's ideals: "In contrast to a classical economic liberalism (popularly represented in Adam Smith’s invisible hand), which regards the market as a quasi-natural domain that delivers beneficial outcomes if unencumbered by excessive governmental regulation, neoliberalism often appears to rely on an increasingly authoritarian legal and regulatory apparatus to construct the conditions of such a market" (Gray et al. 375-376). The neoliberal regulatory dilution of Smith's simple free market is the crux of contemporary economic discourse, especially within the ongoing push for civil and human rights: "Classical political liberalism, derived from the Enlightenment more broadly, is associated with political humanism, respect for the individual, and concepts of rights. Neoliberalism seems to regard such values as often incurring additional state burdens and prefers instead a model of individual subjectivity based on the entrepreneur" (Gray et al. 376). While based in classical liberalist ideals and ideology, neoliberalism has proven to be a more ruthless governing force, and more profitable when political humanist concerns are disregarded. Thus, neoliberalism can be viewed as a perversion of classical liberalism, more concerned with the liberties and wellbeing of corporate practice than those of human individuals.
(Chappatte)
Reaganomics and Thatcherism
In the early 1980s, to quell fears of economic stagnation and inflation, US President Ronald Reagan and UK Prime Minister Margaret Thatcher began a campaign of market privatization and deregulation, termed by Kenneth R. Hoover as ‘conservative capitalism,’ that continues to influence economic policy and diplomacy throughout global markets. Reagan and Thatcher’s socio-economic reforms “reversed the growth of taxation, shifted resources away from human service programs, resuscitated traditionalist prescriptions for personal behavior, and advanced the apparent substitution of the market for government as the key institution of society” (Hoover 245). Thatcher and Reagan have proven to be divisive figures both in their respective countries and in broader spheres of US and UK economic influence due to their lingering effects on world economics and class dynamics.
These policies are influenced through the flawed logic of the Laffer Curve. This theory, which was promoted by Reagan, suggests that lowering taxes will increase government revenue by stimulating economic growth and investment. In essence, this flawed idea is stating that by cutting taxes the government will make it up by getting more money in taxes when the economy grows. This logic goes hand in hand with “trickle down economics”, a staple of Reaganomics. Where the idea that when the tax cuts happen and the rich accumulate more wealth, it will trickle down to lower parts of society (Goolsbee). In theory, this benefits everyone financially, but in reality it is far from the truth.
There were severe ramifications for many in America due to Reaganomics and neoliberalism, particularly in low-income and working-class areas because of the spending cuts involved. There was a mass erosion of social safety nets, including funding for mental health services, affordable housing initiatives, and welfare programs (Wacquant). Many of these social cuts led to significantly increased crime, unemployment, poverty, and homelessness in urban areas. The continued practice and effects of these policies are still negatively affecting many Americans and global citizens today.
(Kitwood)
(Evans)
(Hiller)
Bretton Woods Organizations and the Global South
In the aftermath of World War II, delegates from 44 allied nations assembled in Bretton Woods, New Hampshire to formulate an international financial system to stabilize and rebuild the world economy. The 'Bretton Woods Conference,' as the event was known, established the International Monetary Fund (IMF) and the World Bank (WB) as well as the in order to monitor the economic systems and policies of individual nations, and to offer financing to countries with unstable economies and infrastructure. While the Bretton Woods organizations were effective at stabilizing European economies after World War II, they had no initial plan for the emergence and industrialization of the global south. However, in the 1980s as world powers recognized the potential of the global south for labor and trade, the Bretton Woods organizations began to offer 'structural adjustment loans,' the conditions of which often called for trade deregulation and assimilative capitalist policy changes. For example, the structural adjustment loans with Turkey (1980-1984), Korea (1981-1983) and Philippines (1980-82) were made under the condition that the participating nations lowered their tariff rates and eliminated tariff quotas (Bajpai 794). The structural adjustment loans administered to developing countries by Bretton Woods subsidized industrial infrastructure while simultaneously loosening trade restrictions and indebting impoverished nations, creating an ideal system of trade and labor extraction. Industrializing nations became global factories, exporting manufactured goods and refined resources for global consumption, fueling the increasingly individualized lifestyle in the West. Thus, the good-faith economic restoration of post-war Europe set the precedent for decades of neoliberal economic expansion and extraction.
(AP Images)
(U.S. Treasury Department)
(World Bank)
Neoliberal policies have also influenced the global economy, leading many countries towards policies of deregulation and privatization. However, this approach has also led to greater income inequality and the degradation of services that benefit the public. Therefore, while neoliberalism in government may promote a certain level of freedom that can cause economic growth and innovation, it is also critical for writers to consider alternatives and the potential drawbacks of neoliberalism and the need for responsible government intervention to ensure fair practices and protect the interests of all members of society.
Healthcare
Neoliberalism emphasizes free markets and capitalism through deregulation. However, the deregulation of healthcare systems endangers the well-being of individuals. Specifically, maternal mortality is a result of limited medical treatment. The World Health Organization highlights the importance of accessible and affordable healthcare services: "About 88 to 89% of maternal mortality could be avoided provided they [mothers] could access and utilize healthcare services" (Maitanmi et al. 2). Universal healthcare can prevent maternal mortality; however, neoliberalism prioritizes profits and competition instead of affordable and accessible medical care. Additionally, Rama V. Baru and Malu Mohan explain the role of consumption in neoliberalism: "Consumption becomes the mark of citizenship, and all those individuals and communities who are incapable of consumption and competition become 'disposable'" (6). Patients consume medicine, surgeries, and treatments to save their lives. However, prioritizing preventative healthcare minimizes a patient's reliance on medical care. Specifically, an emphasis on nutrition, exercise, immunization, and adequate sanitary systems will minimize the consumption of medical products. Neoliberalism does not promote preventative healthcare because adopting a healthy lifestyle decreases an individual's reliance on large pharmaceutical and healthcare industries.
(Datta)
(Minasi)
Education
Neoliberalism prioritizes free markets and profits while neglecting social equality and the public good. Specifically, neoliberal policies and ideals allow the public school system to deteriorate as legislation and state budgets do not invest enough money into education. Teachers in Alaska are not offered a pension, and school districts experience teacher shortages and budget cuts (Bohrer np). Becky Bohrer explains the primary reason for inconsistent state funding for education in Alaska: “Unpredictable state support in part to Alaska’s fluctuating oil wealth make long-term planning nearly impossible [for schools]” (Bohrer np). Oil is prioritized over education because the oil industry produces a profit; therefore, in a neoliberal society, the market is prioritized over an effective education system. Furthermore, the governor of Alaska is promoting the adoption of a charter school system that will decentralize the government’s role in education, another pillar of neoliberalism (Bohrer np). Currently, multiple school districts will be unable to offer athletic, art, and theater programs because state funds do not cover these costs (Bohrer np). The well-being and development of children will deteriorate because the United States education system is influenced by neoliberalism. However, a state budget that allocates sufficient funds to the public education system will improve the livelihood of teachers and students.
(Teachers on Strike to Defend Livelihoods)
(Samora)
Housing
Neoliberalism has a direct impact on housing through policies that emphasize deregulation and privatization, which oftentimes leads to financialization, displacement, and ultimately, a lack of affordable housing. Meagan Gibeson explores how neoliberalism negatively affects housing by prioritizing market-driven solutions, leading to the decline of public housing and greater inequality. Gibeson argues that deregulation and mass privatization “allow capitalist predators to descend upon once publicly provided services, including housing” (17). Furthermore, programs like Housing Opportunities for People Everywhere (HOPE VI) and the Rental Assistance Demonstration Program (RAD) have encouraged the “redevelopment, demolition, and the selling off of publicly owned property,” resulting in a shortened stock of affordable homes (17). Under the neoliberal ideology, homes are no longer mainly seen as a place people live in but rather as a source of profit. The new economic system favors private renting, which is another contributor to the uneven wealth distribution, with “(generally poorer) tenants who are unable to purchase their own home contributing to the profits of those with property to spare” (Glynn 43). Consequently, most of these families suffer from housing insecurity, forced moves, and the accompanying stress (Glynn 44). The neoliberal approach to housing magnifies social and economic inequalities, making stable and affordable housing increasingly difficult to obtain for lower-income families. Without significant policy shifts against housing financialization and mass privatization, the housing crisis will continue to deepen, further promoting inequalities in wealth and housing security.
(Rudderdam)
(Krause)
Media and Culture Wars
Culture wars, another consequence of neoliberalism, encourage adversarial social narratives and forced separation between two groups. Encouraging hyper-individualism prevents community interdependency, which is essential for reinforcing democratic values and ensuring public safety. The existence of a dominant two-party system in the United States divides Democrats and Republicans, creating a culture war. When members of Congress are unable to compromise on certain laws or programs, policy gridlock ensues, which can harm the American people. This occurred during the COVID-19 pandemic when Democrats and Republicans in the House of Representatives had a 50-50 vote about healthcare program funding, resulting in the rise of death rates from the disease (Fram np). If US politicians worked together and were more vulnerable, both parties and the public would benefit. Instead, no funds were provided, adding to the damage from the pandemic and jeopardizing the health of entire populations.
The rise of modern technology and online media heightens tensions in the American political landscape and eliminates news neutrality. Media outlets, such as radio hosts and newspaper columnists, encourage a culture war by overstating the divide in partisanship. As a result, the public views partisan politics as more separated than reality, encouraging division between the people. Mark Davis investigated the influence of media platforms on culture wars, “Their role is to endlessly promote the above divide and its sustaining narrative that society’s so-called ills, from cruelty to asylum seekers, to sexism and the inequality of women, to racism and multiculturalism, to global warming, are little more than the pure-spun product of the fevered imaginations of a ‘politically correct’ Left” (27). Different media outlets enhance the culture war by exaggerating the political polarization between conservatives and liberals. The shift away from traditional media sources fosters animosity, individualism, and neoliberalism as a whole. Both Republicans and Democrats accuse the media of bias towards the opposing party, adding to the separation between the political parties. While conservatives argue that Twitter promotes a liberal agenda by censoring the laptop contents of Joe Biden's son, Hunter, liberals state that tweets from right-wing politicians receive more exposure to viewers (Johnson np). Conservatives and liberals have accusations about media bias on the same online platform, Twitter. The partisan disagreements about opinion visibility divides U.S. citizens and representatives, which eliminates community interdependency.
(Enten)
(Elbouez)
Case Studies
England
Neoliberalism in England altered politics, economics, and everyday life when economists, think tanks, and politicians introduced the right-wing ideology in the 1970s. After World War II, Keynesian economics emerged, which promoted government spending to manage economic demand. Sarwat Jahan et al., analyzing Keynesian economics, assert that “Keynesian economists justify government intervention through public policies that aim to achieve full employment and price stability” (53). However, influential economists and free-market capitalists like Fredrich Hayek and Milton Freidman developed theories emphasizing deregulation and privatization and challenging Keynesianism. In the 1980s, Margaret Thatcher implemented Hayek’s and Freidman’s theories to create a neoliberal agenda. The effects of her agenda led to significant economic growth but increased inequality and exacerbated unemployment (a recurring trend with neoliberalism). Florance Sutcliffe-Braithwaite et al., examining the history of neoliberalism in England, argue, “Neoliberalism has supposedly remained dominant until the present, although the financial crisis in 2008 and the rise of nationalist populism in the 2010s are now sometimes identified as possible endpoints of the neoliberal age” (1). This period in England was under a Conservative-Liberal Democrat coalition government led by David Cameron and Nick Clegg, where severe austerity arose in response to the economic decline. Measures such as cutting funding to public services and welfare benefits deepened inequality, poverty, and vulnerability for citizens in England. The Cameron-Clegg coalition enforced austerity as a core part of neoliberalism, believing that government spending should be limited to achieve a stable economy. In recent events, the 2016 Brexit referendum involved neoliberalism approaches to sovereignty, immigration, and economic policy, leading to debates about the future of neoliberalism in England, especially as the government is facing numerous challenges. Brigid Francis-Devine et al., examining inflated energy and food prices, argue, “The increase in trade barriers with the EU following Brexit may also be a factor in rising inflation” (22). Many people are struggling financially because neoliberal social structures determine how vulnerable individuals are. For example, people have been protesting in England against the rising energy and food prices (see Fig. 1). Those rendered vulnerable by social and political circumstances are more likely to face marginalization and housing instability. To address the shortcomings of the neoliberal model, a new economic paradigm may be required, one that balances free-market principles with a more inclusive approach to social equity, ensuring that the benefits of growth are shared more widely across society.
Figure 1 (Macfarlane)
South Korea
South Korea’s adoption of neoliberal economic policies since the late 20th century has intensified inequality, unstable employment, and mass privatization. Following the Asian Financial Crisis in 1997, South Korea accepted a bailout from the International Monetary Fund (IMF) that came with mandatory neoliberal economic programs (Lee 261). Neoliberal policies were justified on the basis that they would encourage a swift recovery from the economic crisis and “further enhance economic competitiveness in the global economy” (Lee 262). However, these reforms included deregulation, privatization, and labor market flexibility, leading to the weakening of lifetime employment guarantees, mass layoffs, and the privatization of state-owned enterprises like banking, utilities, and telecommunications. The shift from stable, full-time jobs to temporary and contract jobs has left many South Korean workers vulnerable to job insecurity. Irregular, or non-permanent, employees now account for about forty percent of the workforce, with lower wages, fewer benefits, and weaker labor protections (Jeong np). Furthermore, much of South Korea’s state-owned enterprises, such as banks and telecommunications, have been privatized, but education has undergone the most extensive privatization. Education has been heavily commercialized, leading to an expensive private tutoring industry that favors wealthy families. As private alternatives expand, public school funding has suffered, reinforcing class divisions in education. The extremely competitive nature of South Korea’s education system has led to mental health issues among students, resulting in one of the highest youth suicide rates overall in the entire Organization for Economic Co-operation and Development (OCED) (Mani np). These neoliberal reforms have not only deepened economic inequality but also widened social divisions, making lasting wealth increasingly difficult for lower-income individuals to achieve. As job insecurity rises and education costs soar, the gap between the wealthy and working class continues to expand, raising concerns about the long-term social stability and economic sustainability in South Korea.
(The Struggle Against Neoliberalism in South Korea)
Germany
Neoliberalism’s ideals and ramifications are found in just about every society today. Germany is an example of how Neoliberalism is prevalent in many different aspects of the country. Germany is typically a more leftist country but is also an economic powerhouse in Europe. The most notable example of Neoliberalism in Germany is the Alternative for Germany party, or AfD. They are a typical far-right minority party that is built on the pillars of anti-immigrant sentiment, nationalism, and, of course, neoliberalism. Although there are no direct ties to it, many compare its rhetoric, conservative nature, and certain policies to the Nazi party (Eckdart). The AfD specifically advocates for deregulation, tax cuts, less state intervention, promotion of nationalism, anti-immigrant policy, and policies promoting self-responsibility (Havertz). With its economy not being what it used to be, there is a new majority party called the Christian Democratic Union, also known as CDU, that is pushing forth new neoliberal-influenced policies in the political sphere. Historically, under former Chancellor Angela Merkle, the CDU has supported neoliberal policies such as the prioritization of balanced budgets, corporate tax cuts, and deregulation for business (Streeck 2014). In recent times, the CDU has continued this trend of neoliberalism with the current energy crisis and economic slowdown. The party is planning on reducing taxes and subsidizing energy costs for corporations while also reducing welfare programs in hopes of encouraging private-sector investment (Schmidt 2023). Despite Germany being viewed as a liberal European country, its political and social core, like that of most nations, is deeply rooted in neoliberalism. With the growing influence of Neoliberalism in Germany it is bringing cultural and social effects. There is an increasing individualization of social responsibility. There is a growing privatization of transportation services, healthcare, and energy. Additionally, many German cities have sold off large portions of public housing to private companies. Increasing the rent and burden for many low-income earners. The post system and telecommunications were once fully state-owned; however, both have been privatized. Finally, the public universities remain fee-free, but many are now introducing tuition fees. Neoliberalism is expanding its way into many ways of life and is affecting millions.
(AFP)
Hyper-individualism: Neoliberalism places a strong emphasis on individual freedom. Individuals are equipped to make decisions for themselves, including economic decisions, and are responsible for their economic success and well-being. This freedom also extends toward personal freedoms, such as freedom of speech and expression. Neoliberals believe that this given freedom is the catalyst required for economic prosperity and productiveness in the market.
Privatization: Under neoliberalism, state-controlled entities, enterprises, and sectors could be transferred to private businesses and groups to promote competition and innovation. These industries often include health care, transportation, and utilities, which are vital for the well-being of individuals. However, privatization in neoliberal countries raises consumer expenses and reduces the access to vulnerable groups.
Deregulation: A key aspect of neoliberalism is the deregulation of businesses. Excessive regulations often oppress economic growth, entrepreneurship, and productivity. Deregulation aims to reduce the regulatory burden on businesses by simplifying administrative procedures, eliminating redundant rules, and streamlining regulatory frameworks. The intention is to free up businesses to operate more efficiently and flexibly.
Fiscal Austerity: Neoliberalism promotes reduced government spending through fiscal austerity, a process that enforces economic policies that cut government budgets. This shifts investments from the government to private entities such as welfare programs, potentially increasing economic and social inequalities. Austerity may reduce the government’s debt in the short term, but the slowed economic growth and increased unemployment can undermine long-term economic prosperity.
Income Inequality and Wealth Distribution: Neoliberalism leads to a concentration of wealth for those who are already wealthy, which widens income disparities. The focus this ideology has on individual responsibility puts people at different starting points, leading to income inequality that spans generations. The wealthy continue to prosper while the poor struggle to rise in the social classes formed under neoliberalism.
Social Mobility: Social mobility is the movement, or lack thereof, of people within or between the social classes of any given society. Neoliberal policies can enhance social mobility by promoting economic growth. However, unequal starting points and structural barriers can limit upward mobility, particularly for those from disadvantaged backgrounds.
Vulnerability: Vulnerability significantly increases for individuals because neoliberalism promotes polices like deregulation, privatization, and austerity. This often leads to reduced social safety nets and heightened economic injustice. Governments and institutions manipulate vulnerable individuals, which increases hardships related to inequality and economic exploitation. Those rendered vulnerable by social and political circumstances are more likely to face marginalization, housing instability, and a lack of systematic support.
Free Markets: Under neoliberalism, market forces determine the allocation of resources, as well as the prices of goods and services. Governments should be prohibited from creating price controls, deregulating capital markets, and reducing trade barriers, especially through privatization and austerity. In general, a shift to more public control and regulation can dismantle neoliberalism’s effect on the free market. It is believed that minimal governmental interference towards the market is where market efficiency is the most preeminent.
A fundamental counterpoint to individualism, a product of neoliberalism, is collective society. A collective society provides a framework marked by a sense of social cohesion, an engaged public sphere, and an impressive level of unionization among labor forces. The motto changes from "every [person] for [themselves]" to an avocation for the betterment and well-being of everyone.
A prime example of collective society can be found within Nordic countries. With an impressive unionization rate of 90.7% as reported in Iceland and an average of 60% across the other Nordic nations, these countries stand as a testament to the practicability of an alternative to neoliberalism (OECD).
(Hamilton)
A collective society is an alternative to the neoliberalism ideology, demonstrating a neo-liberalist approach is not the only viable system for socioeconomic governance. Recognizing that nations governed by an economic model which opposes standard neoliberal ideals can still thrive, generates a compelling counterargument and builds credibility. By understanding the principles and outcomes of a collective society, students can more effectively defend or critique neoliberalism.
