13 characteristics of neoliberalism

Neoliberalism is a theory about the political-economic practices that emerged in the second half of the 20th century based on the liberalism of the 19th century. To understand what it is and how it differs from liberalism, it is necessary to review its most important characteristics below.

Private property, free market and free trade

characteristics of neoliberalism

Neoliberalism maintains the foundations of liberalism, which are summarized in private property, free market and free trade. Where would the difference lie? For some experts, the difference would be that neoliberalism absolutizes economic growth by turning it into an objective in itself, which leaves aside the reformist moral discourse of classical liberalism.

Policy of “letting go” ( laissez faire )

Laissez faire is a French expression that means "letting go", and was used by liberals who feared that the State would act as a repressive entity in economic matters. Neoliberalism suggests that the State should not even act as an intervener, but should stimulate the development of the private business sector.

Criticism of state interventionism

According to David Harvey in his book A Brief History of Neoliberalism , neoliberal theory states that the State is incapable of predicting the behavior of the economy and of preventing “powerful interest groups from distorting and conditioning these state interventions” (Harvey, 2005) . In other words, neoliberalism is justified on the grounds that interventionism favors corruption. Neoliberalism also points out the paradox that the state is not subject to any type of social control.

Rethinking the role of the State

The only role of the state in the economy, according to neoliberalism, should be to create a legal framework that favors the market. In other words, it is not opposed to the State itself, but rather seeks to limit it to the purpose of private business growth, based on the stimulation and arbitration of competition. Therefore, neoliberalism allows the action of the State to control the monopoly, the lobby and the workers' unions.

Free market

characteristics of neoliberalism

Neoliberalism considers that the free market is the only one capable of guaranteeing the most adequate allocation of resources based on economic growth. From this point of view, the only way for the market to regulate itself is through free competition.

Privatization of state-owned companies

The privatization of state-owned companies is another of the foundations of neoliberalism, not only with regard to the productive sectors, but also with regard to services of public interest such as water, electricity, education, health and transportation, among others. .

Individual as a force of production

Neoliberalism sees individuals as the production force of the economic order, which confronts it with liberalism, which was concerned with the full development of the capabilities of the subjects and not only with abstract economic potentialities.

Market ethics

Neoliberalism is built on a market ethic, that is, on the conception of the market as an absolute, as a regulating principle of order and social behavior to which all aspects of life have been subjected and towards which all must be oriented, from material aspects to imaginary ones (cultures, individual interests, belief systems, sexuality, etc.).

Free movement of goods, capital and people

characteristics of neoliberalism

Neoliberalism proposes the free movement of goods, capital and people, which in some way challenges the limits and controls of the national state in matters of economy. Neoliberalism is rooted, in this way, with globalization. In this scenario, the limits and scope of responsibilities and wealth distribution mechanisms become porous.

It may interest you: globalization .

Priority of the world market over the domestic market

Since it is based on free trade, neoliberalism gives priority to the international market over the domestic market. This implies, among other things, that it favors foreign investments over national ones, which, on the one hand, generates movement of capital, but on the other, causes important imbalances in the distribution of power.

Economic growth as a fundamental objective

Neoliberalism has as its fundamental objective economic growth, an interest that dominates any other area of social development. This becomes the center of reference and orientation of economic policies.

Disinterest in social equality

Unlike classical liberalism, neoliberalism mistrusts the search for social equality, since it considers that social differences are what make the economy more dynamic.

Relativization of the value of democracy

Neoliberalism perceives democracy as a historical circumstance but does not conceive it as an inherent project of economic freedom. In that sense, he understands that the freedom to which he appeals transcends the political imaginary of democracy. In other words, there could be neoliberalism without democracy.

Update date: February 28, 2021.

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