Neoliberalism and Organization

Principals

Neoliberalism recovered and reformulated the basic principles of liberalism to preserve competition and redefine the role of the state so as to be able to create and guarantee the structural conditions for free competition in a global scene. Over the course of the 19th century, liberalism sustained its project under three main principles:

• 1.
  Free market. Liberalism sustained the natural functioning of the economy based in the free market in which individuals are able to decide and act rationally to try to satisfy their personal interests. Actors were conceived as autonomous individuals who, according to their preferences and values, can choose the most convenient for themselves. Thus, the market provides, through the system of prices, the information required by economic agents to maximize their utility in the market game of free exchange. Cooperation is based in the belief that competition will be in the interest of all participants, because the coordination of such economic activities will lead to general equilibrium. It is thus a natural process in which the preferences and resources of all individuals are identified and transmitted, producing a spontaneous social order, as seen in Friedman's 1962 work and Hayek's contributions from 1990.
• 2.
  Individual freedom. The second main principle of liberalism is individual freedom as the basic source of social order. It argues that it is the actions of free individuals that create and shape society, so there is no abstract set of moral norms that allows the individual to constitute himself or herself as an individual. Again, individual freedom is conceived as a natural condition that orients economic agents to act always in their own benefit. This is the natural state of the economy represented by the principle of the invisible hand of competition.
• 3.
  Limited state. Finally, liberalism postulates that the state must not prescribe individual actions and decisions in any way. The state's only duty is to preserve freedom, restricting its role to protect the harmony of the factors of production and to remove any obstacles to private property's ability to act in its own interest. Thus, liberalism demands the constitution of a limited state, as its functions must be restricted to the protection of the rights of people that foster the individual's autonomy to decide and act. Consequently, the main function of this “police” state is to protect and ensure that every participant respects the rules of the game of competition.

In summary, the only social relationships that liberalism considers are market relationships, which have been progressively disseminated until they have converted all human activity into commercial activity; that is, into activities that find their substantive social purposes supplanted and being reduced to objects of exchange with the only purpose being the obtaining of profit.

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