Re: What does `neoliberal’ mean?… terminology primer


Jeff Moebus

The following is from the CorporateWatch WebSite Feature  "MNC  Masala:
India and Globalization"  

It offers a pretty clear, concise, and cogent definition of Machine.

Jeff Moebus
New Orleans, LA

What is "Neo-Liberalism"?  A brief definition for activists

  - by Elizabeth Martinez and Arnoldo Garcia

"Neo-liberalism" is a set of economic policies that have become
widespread during the last 25 years or so. Although the word is rarely
heard in the United States, you can clearly see the effects of
neo-liberalism here (Chiapas) as the rich grow richer and the poor grow

"Liberalism" can refer to political, economic, or even religious ideas.
In the U.S. political liberalism has been a strategy to prevent social
conflict. It is presented to poor and working people as progressive
compared to conservative or Rightwing. Economic liberalism is different.
Conservative politicians who say they hate "liberals" -- meaning the
political type -- have no real problem with economic liberalism,
including neoliberalism. 

"Neo" means we are talking about a new kind of liberalism. So what was
the old kind? The liberal school of economics became famous in Europe
when Adam Smith, an English economist, published a book in 1776 called
THE WEALTH OF NATIONS. He and others advocated the abolition of
government intervention in economic matters. No restrictions on
manufacturing, no barriers to commerce, no tariffs, he said; free trade
was the best way for a nation's economy to develop. Such ideas were
"liberal" in the sense of no controls. This application of individualism
encouraged "free" enterprise," "free" competition -- which came to mean,
free for the capitalists to make huge profits as they wished. 

Economic liberalism prevailed in the United States through the 1800s and
early 1900s. Then the Great Depression of the 1930s led an economist
named John Maynard Keynes to a theory that challenged liberalism as the
best policy for capitalists. He said, in essence, that full employment
is necessary for capitalism to grow and it can be achieved only if
governments and central banks intervene to increase employment. These
ideas had much influence on President Roosevelt's New Deal -- which did
improve life for many people. The belief that government should advance
the common good became widely accepted. 

But the capitalist crisis over the last 25 years, with its shrinking
profit rates, inspired the corporate elite to revive economic
liberalism. That's what makes it "neo" or new. Now, with the rapid
globalization of the capitalist economy, we are seeing neo-liberalism on
a global scale. 

A memorable definition of this process came from Subcomandante Marcos at
the Zapatista-sponsored Encuentro Intercontinental por la Humanidad y
contra el Neo-liberalismo (Inter-continental Encounter for Humanity and
Against Neo-liberalism) of August 1996 in Chiapas when he said: "what
the Right offers is to turn the world into one big mall where they can
buy Indians here, women there ...." and he might have added, children,
immigrants, workers or even a whole country like Mexico." 

The main points of neo-liberalism include:

1) THE RULE OF THE MARKET. Liberating "free" enterprise or private
enterprise from any bonds imposed by the government (the state) no
matter how much social damage this causes. Greater openness to
international trade and investment, as in NAFTA. Reduce wages by
de-unionizing workers and eliminating workers' rights that had been won
over many years of struggle. No more price controls. All in all, total
freedom of movement for capital, goods and services. To convince us this
is good for us, they say "an unregulated market is the best way to
increase economic growth, which will ultimately benefit everyone." It's
like Reagan's "supply-side" and "trickle-down" economics -- but somehow
the wealth didn't trickle down very much. 

health care. REDUCING THE SAFETY-NET FOR THE POOR, and even maintenance
of roads, bridges, water supply -- again in the name of reducing
government's role. Of course, they don't oppose government subsidies and
tax benefits for business. 

3) DEREGULATION. Reduce government regulation of everything that could
diminsh profits, including protecting the environmentand safety on the

4) PRIVATIZATION. Sell state-owned enterprises, goods and services to
private investors. This includes banks, key industries, railroads, toll
highways, electricity, schools, hospitals and even fresh water. Although
usually done in the name of greater efficiency, which is often needed,
privatization has mainly had the effect of concentrating wealth even
more in a few hands and making the public pay even more for its needs. 

replacing it with "individual responsibility." Pressuring the poorest
people in a society to find solutions to their lack of health care,
education and social security all by themselves -- then blaming them, if
they fail, as "lazy." 

Around the world, neo-liberalism has been imposed by powerful financial
institutions like the International Monetary Fund (IMF), the World Bank
and the Inter-American Development Bank. It is raging all over Latin
America. The first clear example of neo-liberalism at work came in Chile
(with thanks to University of Chicago economist Milton Friedman), after
the CIA-supported coup against the popularly elected Allende regime in
1973. Other countries followed, with some of the worst effects in Mexico
where wages declined 40 to 50% in the first year of NAFTA while the cost
of living rose by 80%. Over 20,000 small and medium businesses have
failed and more than 1,000 state-owned enterprises have been privatized
in Mexico. As one scholar said, "Neoliberalism means the
neo-colonization of Latin America." 

In the United States neo-liberalism is destroying welfare programs;
attacking the rights of labor (including all immigrant workers); and
cutbacking social programs. The Republican "Contract" on America is pure
neo-liberalism. Its supporters are working hard to deny protection to
children, youth, women, the planet itself -- and trying to trick us into
acceptance by saying this will "get government off my back." The
beneficiaries of neo-liberalism are a minority of the world's people.
For the vast majority it brings even more suffering than before:
suffering without the small, hard-won gains of the last 60 years,
suffering without end. 

Elizabeth Martinez is a longtime civil rights activist and author of
several books, including "500 Years of Chicano History in Photographs." 

Arnoldo Garcia is a member of the Oakland-based Comite Emiliano Zapata,
affiliated to the National Commission for Democracy in Mexico. 

Both writers attended the Intercontinental Encounter for Humanity and
against Neoliberalism, held July 27-August 3,1996, in La Realidad,