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Consequences of Neoliberalism. Economic Consequences of Neoliberalism - Essay Example

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Neoliberalism refers to a market-driven approach to the policy making process for running economy and society. Neoliberalism supports maximum role of the private sector in determining the dimensions of the political and economic policies and priorities of a country…
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Consequences of Neoliberalism. Economic Consequences of Neoliberalism
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Download file to see previous pages Neoliberalism supports maximum role of the private sector in determining the dimensions of the political and economic policies and priorities of a country (Klak, 1998, p76). Neoliberalism stresses upon the shift of control from the public to the private sector because it is based upon the belief that the greater involvement of public sector will allow efficient government and eventually the overall economic condition will also be improved by giving more control to the private sector. Neoliberalism proposes some crucial principles and policy proposals for transforming the traditional economic system (Touraine, 2001, p11). Neoliberal approach asserts that deficits should be avoided and used only for occasional stabilization purpose because large deficits little effect upon the employment level of the country whereas constant deficits generate high inflation and lower productivity. Similarly, this approach also demands transformation in the taxation system, floating exchange rate, redirection of public spending towards infrastructure development, education and healthcare etc. Privatization of the state enterprises is an important proposition of neoliberal approach because it is demonstrated by the neoliberal theorists that privatization will promote competition and increase the choices available to the people in several sectors like banking and telecommunication etc. Trade liberalization is proposed by suspending the regulations that act as barrier in market entry and restrict competition in the sector. These basic principles draw some very important and transformational impacts upon the societies and economies and after the implementation of neoliberal policies the world community has experiences some significant and critical impacts of this approach within their political and social system. The global spread of neoliberalism indicates its wide acceptance and popularity across the world however, despite this approbation there is consistent increase in the questions raised against neoliberal policies and the claimed benefits of this ideology have also frequently been challenged. There is mixed support for the neoliberal policies among the developed nations of the world and their economies and societies also reflect its benefits whereas the developing countries are not as open towards the neoliberalism as developed ones. The neoliberal policies are often challenged and questioned at global level. It is widely argues that neoliberalism has brought several positive and negative consequences to the economic, political and social systems of the countries. These consequences differ from country to country depending upon the level of enactment of the neoliberal policies. The consequences of neoliberalism could be examines from social, political and economic point of views because the systems of different countries have been responded towards neoliberal policies in distinct manner (Chomsky, 1999, p32). In the modern economic system the neoliberal policies are often challenged by the new institutional economics and evolving concepts of economies of information, risk and uncertainty. In developed countries like U.S and U.K. neoliberalism is often blamed for damaging the social safety nets whereas the developing nations including some African countries complain that adopting neoliberalism policies provide little benefit to their economies and there is inclusive or significant contribution made by these policies to the economic, social and political growth of these countries. In fact, it is also claimed that neoliberal policies have negatively affected the development policies and growth process initiated before the ...Download file to see next pagesRead More
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