Neoliberalism

Neoliberalism is the most dominant ideological doctrine influencing global economic policy at today's sociohistorical moment. It is nevertheless a term rarely uttered by the mass media and thus is largely unknown, especially in the United States. The doctrine relies heavily on an interpretation of classical economic liberalism. Corporate advocates of neoliberalism base their arguments, in part, on a reading of Adam Smith's The Wealth of Nations that claims society and its citizens will flourish in a system structured by an unregulated market. Today's pro-capitalist economists such as Milton Friedman suggest that Smith felt the state should neither provide entitlements to its citizens nor set limitations on capital. Their arguments ignore Smith's warnings about the destructive tendencies of unbridled capitalism, and some critics hold that such reasoning is a gross mis-reading of Smith. They document that Smith believed the state must take an active role in favor of the “workmen.”

In any event, contrary to popular opinion, the free-market doctrine has never guided the policies and practices of neoliberal supporters. State intervention in favor of capital has been the driving force behind the perpetuation of international capitalism. International associations, described as a de facto world government, such as the World Bank, the International Monetary Fund, and the World Trade Organization have paved the way for a new imperial age.

Many scholars of political science, sociology, and economics hold that the birth of neoliberalism began in the 1970s. The doctrine became more pronounced during Ronald Reagan's (U.S. president, 1980–1988) and Margaret Thatcher's (prime minister of Great Britain, 1979–1990) regimes. To maintain their power base and quell labor and social movements, government officials and corporate leaders put forth the idea that people's lives as well the world economy could improve only if the state withdrew its role from everyday life. State intervention was also considered antithetical to individual freedom and human dignity. State intervention became essential, however, for corporations establishing the hegemony of global capitalism and neoliberal policies and practices. For example, the U.S. government and the CIA joined together to privatize life in Chile. After forcibly removing President Salvador Allende in 1973, corporate leaders dismantled social programs and nationalizations.

During the 1980s, large corporations found another argument for rolling back the social entitlements gained through many decades of labor struggle in trickle-down economics, which justified the dismantling of antitrust laws, an increase in military spending, and a reduction of social programs. Trickle-down economics promised more domestic jobs by reducing the taxes on the rich. Government leaders postulated that business leaders would spur economic growth by reinvesting their capital into national markets. Of course, this did not happen. The powerful ruling class sought to invest their capital in more economically advantageous locations. Various forms of high speed technologies facilitated corporate flight from North America. Corporations flooded so-called Third World countries with their ideologies and organizations because they avoided minimum-wage laws, taxes, and environmental regulations.

Over the past two decades, neoliberal policies have had a disastrous effect on the environment and on working people globally. The neoliberal paradigm has led to intensification in the inequalities of wealth, the pollution of the earth, and a demonization of impoverished peoples. For instance, the North American Free Trade Agreement (NAFTA) in 1994 has cost millions of U.S. workers their jobs, has increased the [Page 1023]poverty rate across Mexico, the United States, and Canada, and has resulted in deforestation all over North America. At the same time, the implementation of policies such as NAFTA and the Central American Free Trade Agreement (2005) has resulted in a growing concentration of wealth and power for global corporations, their shareholders, and the associated families of the people who run the conglomerates.

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