The Impact of Neoliberal Economic Policies - Essay Example

Media Journal Analysis Name: Tutor: Course: Date: Neoliberalism Neoliberalism is increasing inequality and stunting economic growth http://www.independent.co.uk/news/uk/politics/neoliberalism-is-increasing-inequality-and-stunting-economic-growth-the-imf-says-a7052416.html. This article by John Stone highlights the impact of neoliberal economic policies on the global economy. Neoliberalism is associated with the period of deregulation, public spending cuts and privatization. Well, the ideologies of Ronald Reagan and Margaret Thatcher informed the role that the public sector plays in the global economy. While this opinion was taken up by Tony Blair in the British Labor government, it has faced a number of criticisms including its role in curtailing durable expansion and increasing inequality (Stone, 2016). However, in some quarters, it has reduced poverty in some developing countries and efficiency of operations in industries. According to Beder (2009), the neoliberal agenda has not been fully delivered due to a focus on freedom of capital and increased attention to austerity. It is possible that the trade-off between equity and growth has increased the costs owing to inequalities. More attention should be given to the distributional effects given the opening of national borders to transnational companies. Austerity measures, as evidenced in Britain, should be inflicted by the country itself. Perhaps austerity policies are going to hurt demand as it generates substantial welfare costs worsening both unemployment and employment. It seems the neoliberal agenda has been exaggerated as the benefits of the policies have not been taken into account. International Monetary Fund (IMF) draws on the consensus among economists that instability and inequality are increased by Osborne (UK finance minister)-style austerity and likely to undermine growth. Indeed, austerity policies have failed. So, what is next? The UK Chancellor of the Exchequer needs to create high-wage and high-technology economy backed by an industrial strategy from government. Perhaps there is need to change course and listen to the experts. While the IMF is deemed as critical in driving neoliberalism in third world countries, it sustains the condition that loans and financial aid should be implemented by the target country. Possibly, the recommendations by IMF and the austerity measures may not be favorable to trade among developing countries. Growth of developing countries will still be subject to inequalities and skewed growth if they do not adjust to policies of deregulation and privatization. On the other hand, there is a probability that austerity measures will force the UK and US government to cut spending on Foreign Aid but increase its Foreign Direct Investment (FDI). Stone (2016) may be advocating for neoliberal policies that started with Reagan and Thatcher and is not likely to end with current governments. Conceivably, neoliberal policies are more likely to stunt global economic growth while increasing income inequalities between the rich developed countries and the poor developing countries. Reference list Beder, S. (2009). Neoliberalism and the Global Financial Crisis, Social Alternatives, Vol. 28, no. 1, pp. 17-21. Stone, J. (2016, May 27). Neoliberalism is increasing inequality and stunting economic growth. Independent News, http://www.independent.co.uk/news/uk/politics/neoliberalism-is-increasing-inequality-and-stunting-economic-growth-the-imf-says-a7052416.html. Energy, resources and the environment Would ‘Robin Hood’ help us Fight Climate Change? http://www.resilience.org/stories/2016-07-12/would-robin-hood-help-us-fight-climate-change. This article by Bardi attempts to relate environmental damage to unequal wealth distribution around the world. The author recognizes the fact that wealth is placed in the hands of a few as the struggling majority is left to deplete resource and necessitate climate change. There are two competing views on environmental emissions; egalitarian distribution and reduction of global warming. Empirical studies have associated monetary wealth to carbon emissions. An example of Cuba is given in this article that it is a low-impact country yet it is relatively egalitarian (Bardi, 2016). However, the super-rich emit less than the poor and redistributing wealth is more likely to worsen the climate change problem by raising emissions. Bardi may be right in arguing about high emissions from poor segment of the population. The world consumes about 90 billion barrels of fossil fuel daily which is originating from coal and gas (see Heede, 2014, p. 230). There is doubt that redistributing the monetary wealth is likely to change production levels. However, this change if inevitable, potentially witnesses more small cars being driven on the roads than personal jets. Perhaps the rich few are falling below par in terms of personal spending hence unable to cause significant changes in resource depletion and carbon emissions. If at all the economic system is going to favor wealth redistribution, then there will be sensible reduction in mortality and increase among the young population. On the contrary, it is not possible for the super rich to turn their assets into hospitals and charities for the poor (Bardi, 2016). Once more, demographic transition is about to happen or is happening as mansions are being turned into public schools and better-educated women having fewer children. This would be the best way to reduce emissions as more educated people tend to be environmentally conscious and apply policies supported by research to save the ailing planet. Anyway, there will be little effect on the world wealth if redistribution is egalitarian. Perhaps there will be long-term uncertainties where the rich will continue getting richer as the poor become poorer. In the arguments of ‘Robin Hood’, greenhouse gas emissions are happening at a fast rate that ever recorded in history (Bardi, 2016). While the developing countries are experiencing difficulties in sustainable resource extraction, the global trend is inclined towards renewable energy. Robin Hood may be a creative philanthropist who is willing to help the planet but has parochial understanding about sustainable development and resource depletion. First, redistributing wealth is not possible in the short-terms since more interventions have to be done to the world poor. Secondly, the climate change problem is originating from wealthier countries than poor countries. Finally, resource depletion is being challenged by better-educated people in all continents and will be reversed. Reference list Bardi, U. (2016, July 12). Would Robin Hood Help us Fight Climate Change. Resilience, http://www.resilience.org/stories/2016-07-12/would-robin-hood-help-us-fight-climate-change. Heede, R. (2014). Tracing anthropogenic carbon dioxide and methane emissions to fossil fuel and cement producers, 1854–2010, in Climatic Change, Vol. 122, No. 1-2, p.229- 234. The Rise of China and the New Geography of Production ‘Made in China’ labor is not actually that cheap http://money.cnn.com/2016/03/17/news/economy/china-cheap-labor-productivity/. Yan, in this article, is surprised that goods being manufactured in China are expensive after all. Oxford economists agree that labor costs in China are inexpensive by about 4 percent compared to that of United States (Yan, 2016). Yet, this figure is quickly reducing as Chinese wages are increasing compared to the levels of productivity. Moreover, the Yuan is strengthening alongside growth in labor costs which is in tandem with improvements in US productivity that is keeping the labor costs to its low (Charlton & Stiglitz, 2005). Yan observes that Chinese manufacturing can no longer depend on low labor costs as a form of cost saving to make profits. China recently came under attack by the Republican presidential nominee, Donald Trump, for boosting its exports through low currencies. Maybe is the reason why the manufacturing sector in the United States is declining. There is a going concern among the Western media on the growth China in terms of infrastructure and manufacturing. From automobiles to textiles, Chinese enterprises are gaining speed and soon take the lead position. On the other hand, American exporters are finding difficulties in trading with China given the strength of the Yuan that is gaining against the dollar (Yan, 2016). China is able to use it firepower to strengthen its Yuan if it falls. Statistics show that output per employee in the US has increased by 40 percent while in China; it has risen by 50 percent. Perhaps it is time the United States considers China as a formidable force in the manufacturing sector despite its huge domestic market, stable regulatory environment and lower energy costs. The US dollar will lose its position as the universal currency once the Chinese Yuan comes to the fore. China has massive consumptive population as well as an active workforce that is capable of settling at average wages. Well, it is sending shockwaves around the world as it invests in massive projects that will generate significant streams of income to the country in the coming decades. As an emerging economy, it recognizes its position in fighting poverty and accumulating wealth (Charlton & Stiglitz, 2005). China is soon overtaking the US in terms of manufacturing capacity and value of exports. Economic dominance will soon lead to political strengths that will challenge the position of United States as the global super power. There is little to worry about the rise in labor costs (See Kotler & Keller, 2006). China has strong neighbors like Singapore, Taiwan, South Korea and Japan who are willing to engage in active trade and further challenge the US in manufacturing. While the American capitalism tends towards free labor and higher wages, China still operates under communism and collective output (Yan, 2016). Politics and culture still plays out at work. It is unlikely that cost of production in China will be low compared to the United States that has a highly regulated work environment and minimum wages. Reference list Charlton, A. & Stiglitz, J. E. (2005). Fair Trade for All, Oxford: Oxford University Press. Yan, S. (2016, March 17). ‘Made in China’ labor is not actually that cheap. CNN News. http://money.cnn.com/2016/03/17/news/economy/china-cheap-labor-productivity/. Kotler, P. & Keller, K. (2006). Marketing Management. ( 12th edition). United states of America: Pearson Prentice Hall. Work and the Self under Neo-Liberalism Neoliberalism has brought out the worst in us https://www.theguardian.com/commentisfree/2014/sep/29/neoliberalism-economic-system-ethics-personality-psychopathicsthic. This article analyzes how neoliberalism has brought out the worst of mankind. People are being influenced by personalities and values tending towards achievement. Indeed, certain personality traits are being favored as others are penalized. Being able to articulate issues at workplace and freely interacting with the human kind asserts the thought of overdramatizing achievement. Current work environment talks about employee capacity and experience emphasized with less guilt and convincing lies. This could be the reason why individuals are no longer taking responsibility over their behavior. As people look out for impulsive and flexible stimuli to new challenges, they conflict the neoliberal meritocracy (Kelsey, 1995). Temporary alliances are being created in regional economies such as the Eurozone to increase production and leverage of its companies. However, emotional commitment and social ties are being weakened in the process. As the workplace experiences more bullying than it does in schools, it leads to displaced aggression and performance anxiety. Workers begin to be jealous on trivial matters, lose of temper and feelings of revenge. Maybe neoliberalism is failing to treat employees as adults or think independently. Policies of privatization and deregulation are seriously damaging self-respect among people (Verhaeghe, 2014). People are being told to work hard while overstretching and exhausting others. When some people fail, in a neoliberal meritocracy, they feel ashamed, guilty and humiliated. As a result the social security system condemns them as scroungers or losers. Indeed, Psychopathic personality traits are quickly changing people’s personalities and ethics where an economic system is driven by neoliberalism. Freedom to achieve in a neoliberal meritocracy is based on individual talents and efforts. However, frequent political messages show the desire for self-management, self-government and unrestricted choices. One of the sociologists, Bauman Zygmunt cited by Verhaeghe contends that although there is freedom of work, there will be increase in bureaucracy. The workplace is no longer balancing with family relationships as values and norms in our culture are changing. Neoliberal economic system is changing work ethics and is bringing about change in identity. Therefore, the worst in mankind is demonstrated in the current economic system. Perhaps the success narrative is a mirage when people are given freedom to choose life and work. The self has been overtaken by greed and selfishness that is slowly creating rifts in people and dividing them along social classes (Verhaeghe, 2014). In the neoliberal economy, people will have deemed hopes and expectations as others contend with the few they have. Verhaeghe has been critical and balanced in arguing about work expectations and the self. Yet, continued emphasis on being articulated and talented in certain professions is alienating many people with mediocre abilities. Reference list Kelsey, J. (1995). Economic Fundamentalism,  London: Pluto Press. Verhaeghe, P. (2014, September 29). Neoliberalism has brought out the worst in us. The Guardian, https://www.theguardian.com/commentisfree/2014/sep/29/neoliberalism-economic-system-ethics-personality-psychopathicsthic. Globalization Is globalization coming to an end? http://www.abc.net.au/news/2016-06-20/verrender-is-globalisation-coming-to-an-end/7524732. Verrender elicits emotions by citing ‘Brexit’ as one of the episodes that marks an end to globalization. This articles points out to the stark reality of disillusion and anger by many countries over globalization and free movement of labor. More than 80 countries in the past year have protested the growing wealth disparities and the behavior of the elite at Wall Street (Verrender, 2016). Mainstream politics represented by left wing movements have been working against globalization and capitalism. The key issue is immigration in which it is tied to economic performance, population dynamics and cultural identity. Donald Trump, the US republican nominee, is also advocating for closed borders with Mexico which is likely to hinder free trade. When the US had started looking inwards, there is less chance for globalization to survive another term. Financial crisis of 2009 dampened global trade, exchange rates and commodity prices. Although this catastrophe did not spare even the Chinese, the developed world is sending a message of disenchantment over inequality and inequity (Stiglitz, 2013). It is difficult to contend that income growth is moderating and a small band of wealthy people is being concentrated at the top. Trade barriers and limitations to global trade is not about to bring changes in poverty reduction and improvements in standards of living among people. Globalization was fueled by internet and mobile technology out of which nations developed closer relationships (Verrender, 2016). Physical movement of people is being thwarted by fears among right-wing politicians in many developed countries. This could mark an end to globalization as limited movement of people is likely to curtail movement of goods and services across borders. The developed world is not likely to survive without the input of emerging economies like Brazil, India, Nigeria, South Africa and China. This is because a larger share of heavy industry and manufacturing has shifted to these regions with new technology changing the sphere. Possibly, employment is going to stabilize as does profits as the wealthy receives heavy taxes. The market indicators point to a potential financial crisis and real estate boom that is likely to affect interest rates. Again, interest rates have increased asset prices for property and stocks further alienating the poor from accessing wealth (Verrender, 2016). While Australian government protects its domestic industries, the US and UK is agitating for restrictive trade and control to immigration, it is instead reducing chances of getting the right skills and competencies. Fortunately, the internet has increased trade in services across borders as it furthers the globalization agenda (Martin, et al., 2006). The US and UK will not be attractive places to invest once they impose tariffs, employment restrictions and market entry among transnational companies. Reference list Martin, D., Metzger, U., & Pierre, P. (2006). The Sociology of Globalization. International Sociology, 21(4): 499-521. Stiglitz, J.E. (2013). The Price of Inequality, New York: Norton & Company Press. Verrender, I. (2016, June 20). Is globalization coming to an end? The Drum, ABC News. http://www.abc.net.au/news/2016-06-20/verrender-is-globalisation-coming-to-an-end/7524732. Read More