Neoliberalism: Theory, Practice, Crisis - Coursework Example

Neoliberalism: Theory, Practice, Crisis Table of Contents Introduction 3 Neoliberalism Theory 3 Assumptions and Factors leading towards Neoliberalism5 Conclusion 9 References 11 Introduction This paper is based on the theory of neoliberalism, its practice and conflicts including Marxism, Idealism along with socialism. PBS documentary, ‘The commanding Heights’, episode one ‘The battle of ideas’ has been an appropriate example of this battle about liberalism. The assumptions and philosophical arguments among the economists of the world have depicted an immense understanding about neoliberalism. This documentary was about the new economy, which considered the change situation of political ideas that led to neoliberalism in the global economy representing market as well as states system. This documentary evaluated the ideas of neoliberalism according to unprecedented flows of money and people, enlightened the areas of market economic strengths and weaknesses. To discuss this situation elaborately, it is needed to have some ideas about neoliberalism, its theory, practice and crisis (Klein, 2007). In this context, the essay discusses about the different aspects relating to neoliberalism. In addition, discussion has been made about assumptions and factors leading towards neoliberalism as identified from the documentary, ‘The commanding Heights’, episode one ‘The battle of ideas’. Neoliberalism Theory Neoliberalism is related to the concept of finances, which basically switches the aspects of economics that is moved from both the sectors i.e. private and public. The principles of neoliberalism suggested that the government reduces limitation of subsidies, deficit spending, and reformation of tax law to broaden the base of tax, removed the fixed exchange rates, open up the market to free trade without protectionism, allow private property development and mitigate deregulation (Braithwaite, 2008). Neoliberalism is also utilized as moral philosophy; it is qualitatively different from general liberalism. Neoliberalism is extensively used in Latin America, as occurrence of liberalism is higher in the rich western market republic than the poor regions. The essence of neoliberalism is mostly observed with historical development in the western democratic market areas. The basic idea of the neoliberalism is free market base as well as free trade. This particular thought reflected the possibility that the state cab suppress the market and on the other hand, could promote it as well. The market and the state have interrelated connectivity, specifically the dependency to each other for growth sustainability in this competitive world. The market needs internal regulations in order to perform functions in the state in form of legal system, which ensures contracts are enforced. Aspect of neoliberalism prevents theft and swindles, as well as also forms a uniform measures and currency. Without these types of situations, there would be no free market, no market forces, as well as no market resulting society (Davidson, 2010; Braithwaite, 2008). In order to protect neoliberalism from unconsecrated coalition, the free marketers have nationalized some of the largest financial institutions in the world, socialized financial market risks and pumped huge amounts of public money into the economy. In ‘The commanding Heights’, episode one ‘The battle of ideas’, ‘battle’ is reflected a struggle between free market and governmental control in the era of globalization. In this documentary, iconic economists named John Keynes and F. V. Hayek represented this battle. The term, ‘commanding heights’ was derived from Lenin’s speech. According to Keynes, the government must have the regulation over these commanding heights, it was the exactly same that most nations had accepted during the post war period. On the other hand, Hayek asserted the concept of free market trade, without the control of the government (Beder, 2009). Assumptions and Factors leading towards Neoliberalism In the year 1914, the global economy faced with technical changes and an unparalleled flow of money along with downfalls in the terrorist attacks, the same scenario was reflected in the PBS documentary, ‘The commanding Heights’, episode one ‘The battle of ideas’. In the 1980s, the western economy suffered and critically struggled with the situation of deficit as well as inflation. Failure of the economy behind the concealment of military power was hidden by communism. The fortune of the global free market trend discredited through the communism. Communism or Marxism is a specific form of higher and advanced socialism. There is a debate about the differences between Marxism and socialism or idealism (Farmer & et. al., 2012). In 1990s, economic market of world faced radical changes with new rules, expansion of trades as well as globalization. Furthermore, it different aspects can be observed in the same decade, the growth of stock market, trade down barriers, access of internet, and down rising of Communism or Marxism. These criteria were enlightened new ideas for the development of the global economy. On the other hand, this era witnessed a battle between old thoughts of economies, socialism, idealism and new ideas of liberalism for different changes in the global economy as depicted as battle in the documentary (Farmer & et. al., 2012). During 1980s, transformation as well as changes witnessed on the global economy has been based on the concept of idealism as well as Marxism. In addition, neoliberalism has been observed for institutional approach. The changes have also led towards the development of tow thoughts that elite-centered thought and idea-centered thought. Elite-centered thought approach has been majorly based the political decision-making. On the other hand, the idea-centered thought included the pluralist approach based on different concepts relating trade, privatization and fiscal deregulation. Both the approaches were guided towards the democratic solution of a nation. Rowell (2011) supported these particular thoughts leading towards the development of a democratic country. Based on these changing thoughts, politics of western countries was completely controlled by a specific ideology i.e. neoliberalism. The observable patterns of socioeconomic changes were thoroughly enlightened through the local elites. In the 1990’s era, economists supported the fact that politics was completely dominated by ideology and neoliberalism theory along with observable changes in socio-economic base of a nation (Rowell, 2011). In addition, international financial institutions disseminated those ideas on states and global economy as well. The assumptions made in the documentary revealed the ongoing global financial crisis as well as attempted to save the neoliberal political economic system from the evaluated crisis that have transformed the institutions, which helped to establish as well as reproduce the neoliberal economic reasoning. Based on these thoughts as identified in the documentary, international financial institutions such as the World Bank, the International Monetary Fund (IMF) and World Trade Organization (WTO) have been influenced towards shaping the countries, financial practices through those policies, which were compatible with the neoliberal thoughts (Beder, 2009). The battle of ideas of change theory was argued as the process of adaptation of the emerging neoliberal regime based on which international bureaucracies actively reorganized it in agreement with institutional cultures, which were not necessarily compatible with the original neoliberal principles. Correspondingly, some neoliberal principles were successfully transmitted, but others were transformed. This situation clearly rationalized the positions of international financial institutions’ dissemination on the global economic thoughts along with neoliberalism regimes to resolve conflicts during the critical time of global economy in 1980s (Foucault, 2008). In this same era, an economist named Polanyi directly attacked the casual chain of economic liberal thoughts. Polanyi claimed that human behavior was motivated through social goals and not on individual idealism. Moreover, neoliberalism has been demonstrated on the basis of two movements that include protection and laissez faire (Polanyi, n. d.). In addition, according to French philosopher named Foucault, the social issue of 19th century was the oppression of the working class in European industries. In this particular time period, industrial jobs were shrunken, while social welfare programs and unions played an important role towards the improvement of the personal as well as professional life of the workers. In this respect, the workers as well as various excluded parties associated with the same were the main concern of the economic society. However, the excluded parties were not in a position to seize the commanding heights of the economy during that time. According to the neoliberal policies, the solution was hidden in reducing the barriers of market participation for the excluded parties (Foucault, 2008). Mass movements have been playing a central role in bringing transformation of global capitalism. In that particular period, global economy was in crisis and the concept of globalization led to the transformation of neoliberal form by a sole capitalist global force, the US. In this context, a new regulated global economy with a multipolar base of economy as well as military power defined the nature along with diminuendos of globalization in the 21st century. The main driving force of the capitalist’s expansionary process on a global context during the past few decades was neoliberal globalization. This was the most progressive stage of capitalist interventionism in the late twentieth century. The economies of less- developed capitalists States can be dominated through this progression. Additionally, it assisted in the conversion of the societies along with capitalist lines as well as effected their integration in the global economy to enhance the process of capital accumulation on a worldwide scale. Based on the outcome of this process, most of the countries are identified to be forced to bear the cost owing to factors that include privatization of industries and increasing foreign debt in the market. Along with uneven distribution of income as well as wealth in the society, large-scale corporate control, declining terms of trade and increasing class polarization were the reason of denationalization of economics (Beder, 2009). The battle of ideas was developing rage amid the independent nations of the emerging world in relation to the assorted economies of the European and regulated capitalism of the US. In this regard, government planning has been identified to be playing the role of commanding heights. Additionally, it highlighted that neoliberalism effected the class polarization. As identified from the documentary, a British grocer’s daughter and a former Hollywood actor joined the forces around the ideas of Hayek and accordingly, new political and economic policies were initiated, which led to the transformation of the world economy and other relevant criteria (Beder, 2009). Privatization and transformation of the economic society have been recognized in the global economy for the twisting change. Demand and opportunities of in the global market generated a new trend of liberalism. In this new capitalistic revolution, enterprise and sarcastic exploration have been witnessed. In addition, as previously mentioned, the global wealth expanded on the other hand, unequal distribution increased leading towards economic regeneration (Barnett, 2007). All the global free market participated to attract the industrialized world’s investment and capital leading towards reduction in tariff barriers. In the US, both republican and democratic managements encirclement, unrestricted globalization over the objection of organized labor. As new technology and ideas drove profound economic change, unpredicted trials were unfolded through these socio-economic changes. This documentary film seemed like a realistic annotation for the history of global modern economics. It emphasized the era of globalization regarding the revolutionary ideas of the world economy (Farmer & et. al., 2012). This documentary covered the vivid assessment as well as chronological courses of power struggle in between market power and government control. The same has been observed during the global transformation phase in terms of clashes between market and government. The situation was still confused among the power related to major issues that include excessive power can ruin the economic stability or not and market freedom can be measured as positive aspects or abnormality. In addition, opposition centers were reformed through globalization as well as debates building rage, which regenerated the rules. It was clearly stated that imbalances were too dangerous for the economic system, which was not ignorable as well as terrorism and war destroyed the economic stability of the connected world (Farmer & et. al., 2012). Conclusion From the above discussion in relation to this documentary, there were two thoughts were discussed thoroughly regarding the balance of power. This balance of power defined free market power and government control. The relationship stands as clash within both the factors. The economists named John Keynes and F. V. Hayek represented this clash on their point of view. Keynes signified that the government controls over the commanding heights; on the other hand, Hayek represented the free market view aspect of neoliberalism without any regulations of the government. In this respect, vivid areas of neoliberalism, market growth, expansion, Socialism and Communism or Marxism, differentiations within those aspects as well as purpose in the global economy has been enlightened. Along with the impacts and influences of international financial institutions with new evolving political ideas, interpretations of ideas as well as centered elites of economics has been presented in the documentary. In addition, the market system regarding neoliberalism in contrast to governmental control has been recognized to be an important debatable topic in the past few decades. In this respect, the arguments presented in the documentary have provided an important understanding about the positives and negative aspects associated with free market system and government control. The documentary, ‘The commanding Heights’, episode one ‘The battle of ideas’ revealed different arguments in relation to balance of power. A specific decision making process of every economic policy has been developed for ascertaining a flawless economic premise for ensuring a perfect equilibrium in the global economy. In the documentary, there has been a lack of an effective conclusion. However, the economists must learn from the predecessors’ mistakes and move forward for the development of the global economy. References Barnett, C., 2007. Theorizing Neoliberalism as a political Project. Publics and Markets: What’s wrong with Neoliberalism? pp. 2-33. Beder, S., 2009. Neoliberalism and the global financial crisis. Faculty of Arts - Papers (Archive), Vol. 8, Iss. 1, pp. 17-21. Braithwaite, J., 2008. Regulatory Capitalism: How it Works, Ideas for making it Work Better. Edward Elgar Publishing. Davidson, N., 2010. Holding Fast to an Image of the Past: Explorations in the Marxist Tradition. Haymarket Books. Farmer, J. & et. al., 2012. Community Co-production: Social Enterprise in Remote and Rural Communities. Edward Elgar Publishing. Foucault, M., 2008. The Birth of Biopolitics: Lectures at the College de France. Palgrave. Klein, N., 2007. The Shock Doctrine: The Rise of Disaster Capitalism. Penguin UK. Polanyi, K., No Date. Societies and Economic Systems. The Great Transformation, pp. 163-294. Rowell, D., 2011. The Power of Ideas: A Political Social-Psychological Theory of Democracy, Political Development and Political Communication. Universal-Publishers. Read More