Neoliberal Globalization, Advocate And Austerity

Neoliberal Globalization and Austerity Student: Professor: Course title: Date: Introduction Neoliberalism is seen to be another version of classical liberal economic school of thought. This was very common in the 1930s during the Great Depression. Neoliberalism argues that capitalism is good for any economy to grow. However, it argues that in order for capitalism to be practical, there is a need for regulation by the state. Neoliberalism is of the view that while it is necessary for the state to intervene, such intervention must be very limited. According to this school of thought, a system of capitalism that is by and large unregulated allows for optimum performance of the economy. However, the theory notes that the state must be allowed to play some role, albeit small, which include a definition of property rights, regulation of the supply of money and enforcement of contracts. The intervention of the State to correct any failure and anomalies that may be in the market is viewed with a suspicious eye with the argument being that intervention from such quotas will only serve to complicate matters further (Kotz, 2015). Neoliberalism is a form of capitalism only that it is more aggressive. It seeks to ensure that the wealthy in society or the wealthy countries reap maximum benefit in a process that is seemingly mutually beneficial. Therefore, the global northern countries that are stable economically continue to retain their powerful economies while struggling economies remain in the murky waters. What does Neoliberalism advocate? According to neoliberalism, there ought to be free movement of services and goods across borders and countries with minimal restrictions. Neoliberalism, however, does not advocate for the movement of people. Neoliberalism advocates for inter-border exchange which is the same concept that has been embraced by globalization. Globalization, together with neocolonialism has seen an increase in the exchange of goods and services across various borders thereby expanding the world of trade. Globalization and neoliberalism have brought the concept of the global north and the global south. Global north refers to the first world countries whose economies are well developed and stable. Global south on the other hand refers to third world countries whose economies are still struggling and are not stable (Veltmeyer, 2013). Globalization and neoliberalism has opened up the barriers that existed between the two regions so that there is no cross-border trade. However, with neoliberalism, do both the global south and global north benefit mutually or are there those that are short-changed? Neoliberalism as version of Capitalism Neoliberalism is very similar ideologically with capitalism, the only difference being that the former is more aggressive. Capitalism is about every man for himself. It is about wealth creation in a society where there is no regulation. It is about the creation of ‘fair ground’ where every person has the opportunity to climb up the social ladder and achieve the ‘American Dream’. With neoliberalism, the ideology is still the same only that in this case, there is a specific group of people who are expected to benefit at the expense and exclusion of the rest. Neoliberalism is meant to ensure that the haves continue to amass more wealth while the have-nots continue to struggle (Schiavone, 2016). Capitalism was common in the 30s up to 70s after which it began to decline. It is then that neoliberalism came in with the intention of ‘correcting the system’ which had been corrupted by capitalism. With neoliberalism, tough measures which were seen as punitive were put in place. Companies were forced into bankruptcy and individuals were too pressed by debts so that they would accept lower wages for the same jobs. Organized labor unions were also undermined so that they could no longer defend the rights of their members. As a result, workers did not have a choice but accept low wages. The aim of neoliberalism was to have as many people in the working class as possible accepting minimum wages yet being exploited. The ideology aimed at reducing the number of people within the capitalist class while increasing the wealth created by the majority working class who were being exploited. Features of Neoliberalism There are three main features that characterize neoliberalism. One was the sustained and continued attack with the aim of destroying labor unions so as to increase the level of exploitation among the working class. Neoliberalism was also characterized by reorganization of the industries through creation of methods that were considered leaner (Kiersey, 2018). This ...