Organisational Change and Development in the Context of Neoliberalism - Essay Example

Task It is true that ‘everything must change so that everything can stay the same’. The concept of neoliberalism will try to justify this statement in this assignment. Neoliberalism has in the past, become an exhortation in many debates, ranging from academic to political (Laidler, 2006). Neoliberalism is seen as the resultant product of liberalism’s reincarnation. This view portrays liberalism as a political ideology, which has disappeared for a while, only to resurface recently in a reincarnated form. It suggests that liberalism has passed through (3) three processes- growth, decline and reincarnation (Laidler, 2006). Thus, the distinct ideology that is neoliberalism is said to have descended from, but different to liberalism. This interpretation portrays neoliberalism as sharing historical roots with liberalism. The study of neoliberal ideology in detail is somewhat hard since no writer has written about neoliberalism from sympathy or neutrality. Virtually everyone who has written about the subject has criticized the ideology. Neoliberalism has ushered the return of one liberal aspect: economic liberalism. Economic liberalism is the belief that state governments should not control their economies; instead, this should be left to individuals and market institutions in self and free-regulating markets. Economic liberalism and neoliberalism should be separated from liberalism in word and deed, which, as a political ideology is applicable to constitutional changes and reviews, legal/administrative reform implementation leaning towards democracy and freedom. According to Harvey (2005, 20), “we live in the age of neoliberalism.” Many neoliberals share the same sentiments, but not necessarily factual, that power and wealth are, to an increasing degree, concentrated within powerful transnational entities and elite groups because of neoliberalism, which is the practical implementation of a political and economic ideology. Neoliberalism is also a dominant ideology influencing the world today. Neoliberalism is seen as a wholly new paradigm for policymaking and economic theory and implementation (Doepke, 2005). This ideology is behind the recent stage in development of capitalist society. Neoliberalism includes monetarism and other correlated approaches, and dominates policy making in microeconomics, and the subsequent implementation. This is shown by relaxation of economic state regulations, and emphasis is put on economic policy stability. The possibility of the existence of a free regulating market is a vital assumption in classical liberalism and among neoliberals, as well. Efficient and effective resource allocation is the most important function of an economic mechanism, and market mechanisms are the most efficient ways for resource allocation. Government economic interventions are usually undesirable, because intervention usually undermines the gains of market fine-tuning, and thus reduction economic efficiency. Governments have to guarantee the integrity and quality of money (Doepke, 2005). They must also set up functional, legal structures needed to access and secure rights on private property. Governments also ought to guarantee survival and functioning of markets by use of alternative means like force if need be (Friedman, 2006). Beyond these state responsibilities, the government ought not to feature anywhere and must play in the confines of its roles. According to neoliberalism, once markets have been created; state interventions in these markets must be at minimum levels. This is attributed to the fact that the state cannot possibly have sufficient information to comprehend market signals/prices. Another explanation is the fact that powerful and influential interest groups or individuals will probably distort state interventions in pursuance of their personal whims. This mostly happens in democratic societies (Harvey, 2005, 5). ‘Everything changes so that everything remains the same’ expounds the belief that the world is experiencing massive turns towards neoliberalism in political and economic theories and practices. It has been proposed that neoliberalism should be viewed as a distinctive economic approach and not as a reincarnation of liberalism. Neoliberals argue that the approach lives independently from liberal policies and beliefs. Neoliberals who view the state primarily as a business entity can explain ‘everything changing so that everything can stay the same’. The state-firm is meant to market itself as an ideal investment destination, instead of just exporting goods. If no government official or agency believes in neoliberalism, it will be stale and useless. On the contrary, if a neoliberal government is ruling, it will pursue and implement policies designed to market the state as an attractive investment location. However, the ideology is neo-mercantilist: these are national policies, aiming at the general welfare of the populace and not the market (Friedman, 2006). Paradoxically, these policies form protection: existence of a worldwide market of investment destinations is unfair for governments to increase the attractiveness and serenity of their own independent countries. Such governments do not represent good market liberalism. Neoliberalism also advocates for the idea that everyone should venture into entrepreneurship. Classic liberals did not purport a large population percentage to own property or do business. The poor people in society were limited to accepting any job given to them, and their participation in the market was minimal. A flexible (not rigid) labor market would surprise the early liberals. For instance, people developed an employment agency based on one person with one books-person, themselves- for tax reasons, and satisfy the ideals of the entrepreneur (Doepke, 2005). Increasing entrepreneur numbers is a neo-liberal policy, though implementation is conducted by the State. It is suggested that transition from an unspecified world of political-economic development to neoliberalism’ is underway or already completed’ (Fukuyama, 2006). Neoliberalism believes that free market mechanisms are the only efficient ways of streamlining business. Free markets and trade will stimulate creativity and innovation potential, which is created and built on any society, thereby leading to liberties that are more individual. Human wellbeing is upheld through plausible resource allocation. Neoliberalism also includes moral virtue: a virtuous individual is able to access relevant markets and act as a competent actor in the market setting. He or she accepts the risks in free markets, and moulded to adapt to changes arising thereon in market participation. Individuals are solely responsible for the outcomes of their decisions and choices: instances of social injustice are morally acceptable, only to the degree in which they are because of decisions made freely. ‘If a person demands that the state should regulate the market or make reparations to the unfortunate who has been caught at the losing end of a freely initiated market transaction, this is viewed as an indication that the person in question is morally depraved and underdeveloped, and scarcely different from a proponent of a totalitarian state’ (Fukuyama, 2006). Thus, understood, neoliberalism guides the link between state and external environment and their operations. Neoliberalism is silent on whether there should be development of democracy and political ideas exchange in a free manner. As Harvey (2005) indicates, neoliberalism policies could be formulated and implemented in autocratic societies as well as in liberal democracies. Actually, neoliberals claim that the market and other forces and processes that people choose freely to participate in and subsequently that as little, be subjected to a political process that is genuine. Neoliberals are thus portrayed as ‘skeptics of democracy’: if democratic processes tend to derail neoliberal reforms, or disrupt individual/commercial liberty, which are scenarios that happen sometimes, then democracy should be abandoned. Replacement should be done using rules of experts/expertise or legal instruments/procedures that exist for that purpose. Thus, the statement ‘Everything changes so that everything can stay the same’ is very much true in the neoliberal context. List of References Doepke, M., 2005,’Show Me the Money: Retained Earnings and the Real Effects of Monetary Shocks’, Recherches Economiques de Louvain, Vol 71, No.1, pp 5- 34. Friedman, T., 2006, The World is Flat: The Globalized World in the Twenty-First Century. London: Penguin. Fukuyama, F., 2006, America at the Crossroads: Democracy, Power, and the Neoconservative Legacy. New Haven, Connecticut: Yale University Press. Harvey, D, 2005, ’A Brief History of Neoliberalism’, Oxford: Oxford University Press. Laidler, D., 2006, “Woodford and Wicksell on Interest and Prices - The Place of the Pure Credit Economy in the Theory of Monetary Policy,” Journal of the History of Economic Thought, Vol. 28, No.2, pp. 151-59. Read More