Originating in the 1960s and gaining prominence in the 1980s, neoliberalism is a political philosophy that is rooted in classical liberalism but focuses on free markets and economic growth. Some foundational concepts that are supported by neoliberals, who are also called economic liberals, include deregulation, privatization and limiting the government’s role in social funding. This economic philosophy is based on the idea that economic growth is supported by allowing businesses to function freely, or relatively freely. Neoliberalism, therefore, is more like libertarianism on economic issues than liberalism is, for example.
Deregulation
Neoliberals are in favor of deregulation, arguing that it allows the market to open to others with little interference and control from the government. By loosening government investments and control, the market becomes open to a wider range of buyers, making stock prices rise and creating a more competitive economic environment. The competitive market, they argue, fosters economic growth. Deregulation also contributes to a competitive market and can help make room for small business and other investors to emerge.
Although deregulation is favored by most neoliberals, complete deregulation typically is not. If corrupt business practices go unaddressed by the free market or regulation, economic growth might be hindered. More commonly, neoliberals support minimal regulation for the purpose of safety and environmental concerns or to protect consumers.
Privatization
Privatization is another key policy concern in neoliberalism, which takes the position that government funds, such those slated for government-sponsored retirement programs or education, should be given to private individuals or corporate businesses to manage. In other words, national retirement programs for all citizens should be handled by commercial retirement plans, and education should be managed by private educational companies. Privatization might even affect natural resources such as water or natural gas. The idea behind privatization is that putting these services on the free market will self-regulate those industries to an optimal state.
Spectrum of Beliefs
Like most political philosophies, there is a spectrum of beliefs within neoliberalism. Some neoliberals believe in a limited amount of privatization. More extreme views within neoliberalism call for eliminated government-funded social programs such as payments to the poor and public healthcare assistance.
Pros and Cons
Proponents of neoliberalism say that it might be advantageous to economies by creating a more competitive economic climate and allowing for new, cutting-edge business practices to emerge. Opponents, such as classical liberals, typically don’t trust that businesses that are free from governmental intervention are capable of regulating themselves in a way that benefits society as a whole. Moreover, opponents argue that the neoliberal philosophy might be detrimental to disadvantaged and underrepresented groups in society.