According to investopedia, Neoliberalism draws from the principles of neoclassical economics and suggests that government should cut deficit spending, reform tax laws so the tax base can be broadened, limit on subsidies, limit protectionism by opening markets, encourage privatization and deregulation in order to allow private property. Neoliberalism is a system in which the economic factors that are controlled by the public sector move to the control of the private sector. To sum it up, neoliberal policies deregulate and expand the market economy.
Proponents of neoliberalism oppose the notion that neoliberalism increases the efficiency in a market based economy. On the contrary, neoliberal policies reduce and eliminate the effects of the government intervention and the public sector over all. This in turn leads to companies and people gaining advantages in the market. These advocates also argue that under neoliberal policies, companies will be able to increase their profits by actively increasing their production of goods and services. This will lead to better interactions between the consumers and the producers. This will also strengthen and increase the size and the efficiency of the market.
The above mentioned process can be considered the development phase of a neoliberal economy. During which the creativity and competitive power of companies will also be developed. One of the best examples of the fruits of neoliberal policies is development of the Free Trade Agreement of FTA. FTA abolished protectionist measures such as tariffs and encourages free and liberal trade amongst counties and companies of different countries. The United States has signed FTAs with over twenty countries.
Besides the FTA, neoliberal polices are considered to be the main reason of why globalization has spread to all continents and uplifted millions out of poverty. One can even compare the economies of European Union and United States. The EU economy is heavily regulated. The US economy on the other hand can be considered neoliberal to an extent because of its policies. And it’s because of those policies that the US economy has outperformed the EU economy almost always. Unfortunately, although millions might have been uplifted out of poverty, there are still major parts of the world that are heavily poverty stricken. “While globalisation has provided increased opportunities for the development prospects of some developing countries, the vast majority (mainly from Africa) have failed to take advantage of these opportunities, resulting in their increased marginalisation in the world economy” (Ismail, p. 119).
The proponent also argue that neoliberal has produced benefits for the global economic system and disregarded populations in terms of development and wealth, and is here to stay in the foreseeable future. They do admit that it has its flaws but argue that no better system exists that benefits everyone. “Unsurprisingly, an...