Political and Cultural Consequences of Neo-Liberalism - Essay Example

?Political and Cultural Consequences of Neo-Liberalism Introduction The word neo-liberalism can be rooted from globalisation. The term neo-liberalismcould also imply fundamentalism, and these two terms are in most cases interchangeably used. Neo-liberalism can be defined as a conjecture of political economics, which holds that the ultimate wellbeing of people can only be improved through liberating their individual entrepreneurial skills. This theory suggests that individual entrepreneurial freedom can be achieved inside an institutional framework that is distinguished by strong private property rights, free markets, and free trade. Neo-liberalism, as a theory, requires that the role of the state should be to create and protect the already developed institutional framework. The state, therefore, should set up all the necessary mechanisms such as the military, defence, police, and legal structures to secure such institutions. When this is done, the state would have guaranteed property rights and proper functioning markets. Furthermore, the law of neo-liberalism states that if markets are nonexistent, then the government must create them (Harvey, 2005:1). The state is not supposed to go beyond creation of markets and necessary institutions. This means that the state should not interfere with the markets once created. It should keep a minimal role because according to this theory, the government does not have sufficient knowledge on market undertakings. Moreover, some people in the market may influence state policy for their own gains. Deregulation of market functioning, privatisation of companies, and removal of the government interference have been the strongest terms of neo-liberalism in the world today (Foucault, 2008:2). A neoliberal government is thus committed to instituting and favouring strong individual property rights, effective rule of law for all its citizens, and freely enabled trade. According to the theory, these are the fundamental institutional structures regarded indispensable to guarantee freedom of the market. The market then requires a legal structure that is liberally bargained in terms of contractual efforts among the market players. These contractual obligations between individuals, would lead to the protection of individual rights to freedom of operation, right to expression, and choice. According to the theory of liberalism, therefore, the state has to use its monopoly power to supervise and oversee the markets at all costs. On the other hand, while the state ensures individual rights in the marketplace, each person is held accountable and liable for their own wellbeing. The principle of neo-liberalism in many countries has extended into economical, political and social-cultural spheres (Leys, 2001:14). Having neo-liberalism defined in the above discussion, this paper seeks to unveil the political and cultural consequences of neo-liberalism. First, this paper puts the political consequences of neo-liberalism into perspective. Therefore, the political consequences of the theory of liberalism as destroying the global democracy, governance, and security of individuals take centre stage. The political neoliberals have distorted the fundamental pillars of global social organisation. Political neo-liberalism is the interaction between the state organs and individuals to influence choices. It is a form of social structure, which moulds the behaviours and actions of individuals. Neo-liberalism as a subset of globalisation has led to neoliberal politics that have caused massive deprivation among the poor in many regions around the world. Moreover, neo-liberalism policies qualify as both positive and negative depending of the degree of application (Leys, 2001:14). Neo-liberalism in most parts of the world has led to the formation of strong fiscal policies. Many governments have had to practice strict criteria in the effort to limit budget deficiencies and debts. Through this practice, most of the states have given priorities to public expenditure. Such that, far from subsidies and other forms of foreign aid, many countries have developed high economical foundations, and improved on infrastructural facilities such as roads, communication, and even health. The politics of neo-liberalism has also had a significant impact on tax reforms in many governments. Most countries that had to embrace the wheels of neo-liberalism have had to broaden their tax level, while at the same time reducing marginal tax levels. Financial liberalisation has been because of neo-liberalism in many economies, due to free markets that ideally determine interest rates. Political liberals have always argued in support of free market, freedom of choice, and free movement of factors of production. Free markets, which have resulted from neo-liberalism, have led to the development of mega buildings in many countries. The development of infrastructure such as roads and good communication systems has witnessed many economies move to greater heights. Neo-liberalism has brought the world into one. The world has become a global village, with easy movement of factors of production. Technology and other leading innovations have found their way to every part (Bauman, 2001:75). Through neo-liberalism, many economies of the world have had to undertake radical reforms. Many of the third world nations have been able to achieve sustained development and growth. Legal frameworks, social, and economic reforms have been carried out. This has allowed the poor countries to amplify their resource level (Bauman, 2001:75). Through the practice of neo-liberalism, many nations in the world have benefited from foreign direct investment. Neo-liberalism has led to the abolishment of trade barriers and enhanced the quality of domestic industries. Privatisation and deregulation have also been because of neo-liberalism. Many state enterprises have been privatised. Abolishing rules that impede free entry of new firms has been successful. Property rights in the informal sector in many economies have been secured through politics of neo-liberalism (Snyder, 2001: 41). On the contrary, the politics of neo-liberalism have caused the dilemma of levels of unemployment in the world. There has been massive destruction of the social contracts, which hold people. At the dawn of neo-liberalism, majority of people anticipated accelerated development due to the free nature of markets, little did they realise that this would haunt them. A vast number of individuals in the globe today lack employment opportunities. The strong social bonds that held people together have been severely wiped out. The world political economy has been taken over by autocracy of financial institutions such as the World Bank and the International Monetary Fund. These institutions have developed rigid structures of hierarchy that impose stringent rules on less developed countries more than any time in history. Their fundamental doctrines and decisions that lead to dislocation and displacement of people have affected more than seventy percent of human life on the planet. The politics of neo-liberalism in these institutions have led to destruction of the environment and concentration of resources into the hands of few people. Consequently, this has resulted to the suffering of scores of people. This can explain why the global governance’s attempts to promote intercontinental organisations have failed (Elliott and Atkinson, 2008:45). Such fundamentalism from the politics of neo-liberalism has created and undermined the world democracy. These institutions have policies which reflect the financial and industrial concerns of former perpetrators. Anti-democracy practices are evident from the way these institutions conduct their business behind closed doors (Clarke and Newman, 1997:245). With the demise of global democracy, the free market as one of the architects of neo-liberalism, has failed to ensure equality and fairness in the market. Developed countries had seized the adoption of free market at the expense of poor countries. More than half of the world populace has been rendered poorer in the liberal world. With such high levels of poor people in the world, the core concept of neo-liberalism of universal security has also failed. The security that is supposed to address poverty and related mayhem is no more. Another outcome of the politics of neo-liberalism is that policies tend to be biased in support of the governing groups. Thus, all over the world, the ravaging effects of neo-liberalism have become very apparent as contained in the application of performance standards. Depreciation of national currencies has also led to substantial inflation, sharp decline in public expenditures, cut in wages, and the elimination of subsidies from the social cycle among other human injustices. This has brought about widespread poverty and misery. This has not done any good to the deteriorating condition many economies have faced over the years. Moreover, the main case brought forward the proponents of neo-liberalism for depreciation of currencies was that, it could discourage imports while supporting exports, thereby relocating resources to farmers. However, given the nature of demand for farm goods, this delusion has not given birth. On the other hand, the provoking consequences of depreciation of currencies have worsened the market situation. This creates setting of low prices of goods and services, thus increasing the woes of farmers. In fact, many farmers around the globe have been put in a bad place as concerns trade. The policy of trade liberalisation is another critical effect of neo-liberalism politics. The supporters of this paradigm argue that, through the removal of all the bureaucratic regimes over the foreign exchange market, many enterprises would be able to import necessary inputs and increase foreign investment. In addition, they argue that, reducing government interference and direct involvement in the market, would decrease farmers exploitation and increase their income levels. This according to the neo-liberalists would lead to increased production by the farmers. The impact of this paradigm has lead to the creation of division of labour (Clarke, 2004:12). Neo-liberalism politics has promoted dependence, capitalism and even worse, underdevelopment in third world nations. In many states all over the world, state owned firms perform better than the private ones. Efficiency levels of majority of these industries are on the decline. Neo-liberalism having created dependency has made economies in the world interdependent. Specialization has also not been left out. Countries concentrate in producing goods that they have a greater advantage (Clarke, 2004:12). Neo-liberalism has seen the western countries try to pass their influence on the African economies. Thus, gaining control on the operation and running of these countries. Influence on political appointments on third world countries by the developed world has also taken an inclined position. This has resulted into massive corruption (Macpherson, 1964:124). On the cultural front, neo-liberalism has had a profound impact. All around the world, neo-liberalism countries have created both positive and negative effects. Cultural policies have affected public attention, technological innovation, and other interventions in the face of both external and internal pressures. The changes in the global trade governance have conflicted with traditional norms and values of countries. Neo-liberalism policies have placed a lot of emphasis on the market and consumer related aspects while neglecting the values founding most countries in the world. By this, neo-liberalism has downplayed the importance of collective and culture-based concerns. The introduction of communication technologies and their convergence with various industries such as television and radios have undermined countries to provide good treatment for the domestic cultures. Neo-liberalism policies were imposed to people and countries around the world. They were forced to acknowledge that the market mechanism was the only way forward for development and elevated living standards (Clarke, 2004:12). Although those who support neo-liberalism commend the virtues of the free market, privatisation, and free trade, the effects of neo-liberalism policies on the culture of the people is quite different. These policies have lead to the protectionist markets, which are dominated by few individuals. Many sectors of most economies in the world today are oligopolies that are highly centralised. These economies are highly shaped by completion and rivalry that have altered the nature of national culture. Thus, these effects of neo-liberalism policies on people’s culture around the globe have been devastating. There has been a wide gap between the poor and the rich. In addition, this disparity in wealth has increased in many folds both between and within countries. Inflation rates have also been on the rise in most of the developing countries. Neo-liberalism consequences on culture have been primarily examined from the international and national perspective. These effects have been related to the emergence of new instruments of administration and governance such as the World Trade Organisation, to emerging transnational arrangements (Harvey, 2005:478). These organisations have limited the capacities of nations to develop and maintain cultural, social, and economic policies. Neo-liberalism has led to the convergence of cultural practices between various countries in the world. Consequently, there has been increased product deviance and reduced capacity for the markets to produce. This process has intensified the practice of people adjusting their values and norms in order to conform to the available market situation. Moreover, many countries have had their values eroded due to the emerging trends in the world culture. The inertia of multiple decisions making has been a result of cultural neo-liberalism. The market generates a general conventional effect due to these decisions. Most markets have become command based with rapid decision-making. Neo-liberalism structures have blocked and filtered innovations causing violation of the national values. It, therefore, makes it had to abolish and destroy liberal structures (Bauman, 2001:48). The flexibility of the market structures makes possible to destroy the unity of buyers and customers. There is lack of the ability to pursue common objectives within the market. In the market structures, there is a collective decision making, which destroys the moral autonomy of subjects. This in return generates failure for persons since their ideas and plans do not match the combined decision of the market. Neo-liberalism culture has caused chaos and many profound changes in the world. It has resulted in frustrations, threats, and attacks on people. This has increased suffering and poverty in third world nations. Moreover, neo-liberalism has changed most societies from work value based to workless societies. There has been a lot of moral panic among many people in the world. The point is that not only has cultural liberalism caused moral degradation, but also depicted in various areas, its inflictions into difficult life conditions that raise the cruelty of the existing global culture. Most significant cases of cultural destruction happened in the milieu of hard life conditions. It has helped to destroy the most important social fabrics of world societies. The overall social disorganisation has made countries sustain unbearable social costs for human culture (Bauman, 2001:58). The culture of neo-liberalism leads to national prejudices and stereotyping at both ethnic and individual level. It has also resulted into multiculturalism and manipulation of basic human rights, thus, creating sanctions on what individuals should buy. This is an anaesthetic normalisation of the human mind and rights. The institutionalisation and ethnic effects of cultural neo-liberalism have increased among nations, especially in the developing world. It creates disintegration of social relations and threatens liberal values (Elliott and Atkinson, 2008:478). The discourse of neo-liberalism is contradictory. Market gains are increasingly dominated by personal goals and extrinsic profit in individuals who are consumers of the market products. There is a need to ensure efficiency in the creation of these products to improve the economic conditions of the individual involved. On the other hand, there are various positive consequences of cultural neo-liberalism. Through its application, it has created cultural pluralism and enabled the acknowledgement and protection of the minorities of the world. Reduction of racial discrimination, reforms in cultural differences, and ignoring of the principle of priority of individual rights. Cultural pluralism has allowed many people in the world to intermingle freely (Foucault, 2008:47). This has in effect increased production of many goods and improved relationship of various groups in the globe. Peace that has been witnessed on the planet could not be possible without the introduction of neo-liberalism. The world is composed of dynamic cultural backgrounds. Many people vary in their degree of cultural diversity. In order to create unity and bring harmony among these groups, liberalism has made it possible through the power of the market, to bring these groups together. The human rights that have been for the longest time undermined have been also restored through neo-liberalism. These have been facilitated by the reduction of social prejudice around the world. Free markets have brought about easy transportation and movement of factors of production. Through this, many people have the opportunity to contact with a lot of life aspects, and thus improving the quality of life. The power of cultural diversity has created a unified choice and decision among the people. These have increased their choices of products. Cultural neo-liberalism has allowed the advent of technology. In today’s world, the level of technology in many countries has been increased. Many countries enjoy the power of various innovations both in the field of production and development. Economies around the world have grown with a tremendous impact. All these can be attributed to the advancement from the traditional methods of food production. Cultural orientations of various groups have also been boosted (Harvey, 2005:547). There have been high levels of increased integration between various nations. People have been brought together through sports and entertainment. During such occasions, people from varied backgrounds have had to share their experiences and skills. This has made the world a better place to stay since the lives of people have been improved. Through sports and entertainment, the cultural diversity of people has been integrated (Foucault, 2008:2). Conclusion Cultural neo-liberalism has allowed easy access to resources and opportunities. This has helped to improve the quality and equity among individuals to use and apply basic abilities through economic assets, such as land, housing, income, and employment opportunities. It has also improved political opportunities, characterised in the representation of people in various positions. Thus, given that there are no such opportunities, both economical and political capacities are hard to obtain. Many people would lack employment opportunities, therefore, endangering their lives and that of their families (Elliott and Atkinson, 2008:584). Cultural neo-liberalism has enhanced global security. In the world today, there is freedom from violence, and threats of conflict. Since violence and conflict lead to physical and mental harm of individuals and communities, liberal security provides avenues for increased harmony and fulfilment of potentials. Rights facilitation around the world has been achieved too. Basic legal and pragmatic methods have been developed. This has facilitated human rights and providing further avenues of advancement. Guidelines for right-based approaches have taken the lead among many countries (Touraine, 2001:120). References Bauman, Z. (2001) The individualised society, Polity. Clarke, J. & Newman, J. (1997) The managerial state, Sage. Clarke, J. (2004) Changing welfare, changing states, Sage. Elliott, L. & Atkinson, D. (2008) Gods that failed: how blind faith in markets has cost us our future, Bodley Head. Foucault, M. (2008) The birth of biopolitics: lectures at the College de France 1978-1979. Picador. Harvey, D. (2005) A brief history of neoliberalism, Oxford University Press. Leys, C. (2001) Market driven politics: neoliberal democracy and the public interest, Clarke. Macpherson, C.B. (1964) The political theory of possessive individualism, Oxford University Press. Touraine, A. (2001) Beyond neoliberalism, Cambridge, UK, Polity Press. Snyder, R. (2001) Politics after neoliberalism reregulation in Mexico, Cambridge, Cambridge University Press. Read More