Neoliberalism Study Cards

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Neoliberalism

An economic and political ideology that advocates for free markets, limited government intervention, and individual liberty.

Origins of Neoliberalism

Emerged in the 20th century as a response to the perceived failures of Keynesian economics and the desire for increased economic efficiency.

Key Principles

Belief in the efficiency of free markets, emphasis on individual responsibility, and the importance of competition and entrepreneurship.

Role of the State

Neoliberalism promotes a limited role for the state, focusing on maintaining law and order, protecting property rights, and enforcing contracts.

Free Market Economics

Neoliberalism advocates for minimal government intervention in the economy, allowing market forces to determine prices, wages, and resource allocation.

Deregulation

The removal of government regulations and restrictions on businesses and industries, aiming to increase competition and economic efficiency.

Privatization

The transfer of government-owned assets and services to private ownership and control, often with the goal of improving efficiency and reducing costs.

Globalization

The increasing interconnectedness and integration of economies, societies, and cultures through the exchange of goods, services, and ideas.

Critiques of Neoliberalism

Critics argue that neoliberal policies exacerbate inequality, prioritize profit over social welfare, and undermine democratic decision-making.

Impact on Inequality

Neoliberalism is criticized for widening the gap between the rich and the poor, as it often leads to reduced social spending and weakened labor protections.

Environmental Concerns

Critics argue that neoliberalism prioritizes economic growth at the expense of environmental sustainability, leading to ecological degradation.

Neoliberalism and Democracy

Debates exist regarding the compatibility of neoliberalism with democratic principles, as it can concentrate power in the hands of corporations and the wealthy.

Alternative Economic Models

Various alternative economic models, such as social democracy and democratic socialism, offer alternatives to the neoliberal approach.

Washington Consensus

A set of neoliberal policies promoted by international financial institutions, including fiscal discipline, trade liberalization, and privatization.

Chicago School of Economics

A school of economic thought associated with Milton Friedman and other economists who advocated for free market principles and deregulation.

Austerity Measures

Policies implemented to reduce government spending and debt, often through cuts to public services and social welfare programs.

Trickle-Down Economics

The belief that economic benefits provided to the wealthy and businesses will eventually benefit society as a whole through job creation and economic growth.

Market Fundamentalism

A term used to criticize the belief that free markets are always the most efficient and desirable way to organize economic activity.

Privilege

Neoliberalism is often criticized for reinforcing existing privilege and exacerbating social inequalities based on factors such as race, gender, and class.

Financialization

The increasing dominance of financial markets and institutions in shaping economic policies and outcomes, often at the expense of productive activities.

Trade Liberalization

The removal or reduction of barriers to international trade, such as tariffs and quotas, to promote economic integration and growth.

Labor Flexibility

The ability of employers to hire and fire workers easily, often resulting in precarious employment conditions and reduced worker protections.

Welfare State

A system in which the government provides social programs and support to ensure the well-being of its citizens, often targeted by neoliberal reforms.

Income Inequality

The unequal distribution of income within a society, often exacerbated by neoliberal policies that prioritize market outcomes over social welfare.

Social Safety Nets

Programs and policies designed to provide assistance and support to individuals and families facing economic hardship or vulnerability.

Regulatory Capture

The phenomenon where regulatory agencies become influenced or controlled by the industries or businesses they are supposed to regulate.

Rent-Seeking Behavior

The pursuit of economic gain through activities that do not create new wealth, such as lobbying for favorable regulations or monopolistic practices.

Corporate Power

Critics argue that neoliberalism can lead to the concentration of power in the hands of corporations, limiting democratic decision-making and accountability.

Financial Crisis

Neoliberal policies have been associated with financial crises, such as the 2008 global financial crisis, due to deregulation and speculative practices.

Commodification

The transformation of goods, services, and even social relationships into commodities that can be bought and sold in the market.

Externalities

The costs or benefits of economic activities that are not reflected in market prices, often leading to market failures and negative social or environmental impacts.

Monetary Policy

The use of interest rates, money supply, and other tools by central banks to control inflation, stabilize the economy, and promote economic growth.

Fiscal Policy

The use of government spending and taxation to influence the economy, often used to stimulate economic growth or control inflation.

Invisible Hand

A metaphor used by Adam Smith to describe how self-interested individuals, in pursuing their own interests, unintentionally benefit society as a whole.

Market Efficiency

The degree to which markets allocate resources and goods in the most efficient manner, often a key principle of neoliberal economic theory.

Laissez-Faire

A policy or attitude of non-interference or minimal government intervention in economic affairs, often associated with neoliberalism.

Economic Rationality

The assumption that individuals and firms make decisions based on rational calculations of costs and benefits, a key concept in neoliberal economics.

Global Economic Institutions

International organizations such as the International Monetary Fund (IMF) and World Bank that promote neoliberal policies and provide financial assistance.

Market Competition

The rivalry among sellers and buyers in a market, believed to lead to better products, lower prices, and increased innovation in a neoliberal framework.

Economic Liberalization

The removal of government restrictions and regulations on economic activities, often associated with neoliberal policies.

Social Market Economy

An economic system that combines elements of free markets with social policies to ensure social welfare and reduce inequality.

Development Economics

The study of economic and social development in low-income countries, often influenced by neoliberal theories and policies.

Marketization

The process of transforming public goods and services into market commodities, often through privatization and deregulation.

Economic Incentives

Rewards or penalties that influence individuals and firms to make certain economic choices, often emphasized in neoliberal economic theory.

Economic Globalization

The increasing integration and interdependence of national economies through trade, investment, and the flow of capital and technology.

Market Failures

Situations where markets do not efficiently allocate resources or produce socially desirable outcomes, often requiring government intervention.

Public Choice Theory

A theory that applies economic analysis to political decision-making, often used to support neoliberal policies and limited government intervention.

Economic Growth

An increase in the production of goods and services in an economy over time, often seen as a key goal of neoliberal policies.

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services, often emphasized in neoliberal economic theory.

Social Mobility

The ability of individuals or families to move up or down the social and economic ladder, often influenced by factors such as education and income inequality.

Market Society

A society in which market values and market relationships dominate various aspects of life, often associated with neoliberalism.

Economic Rationalism

The belief that economic decisions should be based on rational calculations of costs and benefits, often associated with neoliberal economic theory.

Economic Neoliberalism

The application of neoliberal principles and policies to economic systems, often characterized by free markets and limited government intervention.

Economic Liberalism

An economic philosophy that emphasizes individual freedom, free markets, and limited government intervention, often associated with neoliberalism.

Economic Individualism

The belief in the importance of individual freedom and self-interest in economic decision-making, often emphasized in neoliberal economic theory.