Neoliberalism From Neoclassical Economics Essay

1330 words - 5 pages

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...

Find Another Essay On Neoliberalism from Neoclassical Economics

Labor Unions Must Fight Globalization or Become Extinct

1617 words - 6 pages and according to authors Fletcher and Gapasin (2008), “Neoliberalism [is] not simply an approach to domestic economics. [Instead it is] the philosophical underpinning for the reorganization of global capitalism, [a process] referred to as “globalization.” Its five main characteristics are privatization, deregulation, casualization of the work force (use of casual workers to avoid committing to full-time contracts), deunionization, and free trade

Policy Making Essay

1750 words - 7 pages neoliberalism are two concepts which have deeply entrenched roots in the recent labour force. The two concepts are however competing against each other yet from the paper it is apparent that seeking a balance between the two is the real solution to the diminishing labour opportunities and security facing Canada and the globe at large. Integrating the two should thus form the basis of future attempts to generate and develop stable economies by


1940 words - 8 pages Canada has gone through and continues to go through a dramatic and systematic change with regards to its political, societal and economical aspirations. This change is not just domestic but also global in its scope, brought on by the advent of a paradigm shift from Keynesianism to that of neoliberalism. Although I believe that this transition has been largely beneficial to the world, there are others, namely unions, some feminists and religious

Monetary Policy

2224 words - 9 pages actually they assure rent to idle financial capital. Mainstream economics flawed ideas applied to the real world produces a systematic expansion of, at least, public deficits, public debts, primary surpluses and money supply, thus leading the economy to chaos in a way paved by crises like the present one. The construction of the monetarist doctrine starts in the neoclassical doctrine, both at micro and macroeconomic levels. The neoclassical

Research question: What do you understand by the term neo-liberalism? Discuss the author’s critique of the neoliberal analysis of the role of the state. What does he present as an alternative...

1409 words - 6 pages TOPIC2: IDEAS SHAPING THE GLOBAL ECONOMYResearch question:What do you understand by the term neo-liberalism? Discuss the author's critique of the neoliberal analysis of the role of the state. What does he present as an alternative "institutional political economy"?Neo-liberalism is a set of economic policies that have become widespread during the last 25 years approximately. The term stems from the original "liberal" economics of Adam Smith

Managerial Economics

2361 words - 9 pages Management are responsible for making decisions within firms and these decisions often involve risk and uncertainty. Models have been developed, all of which are based upon the objective of firms, to help identify the decision which must be made in order to achieve the desired outcome (Moschandreas, 2000). The neoclassical model states the firm’s main objective is profit maximisation. However, economists believe it is unrealistic to assume


1673 words - 7 pages In order to understand how economics really work in today’s age we must think about how those economic ideas, revolutionary theories of many economists, that helped to shape the economic structure as we know it now, through many individuals and school of economic though that has existed through the ages. These schools are “the mercantilists, the physiocrats, the classical economists, Marxian economics, the neoclassical economists and the

Briefing Paper on endogenous growth theory in connection of forth-coming meeting with CBI and a Treasury team.

1296 words - 5 pages Briefing Paper on endogenous growth theory in connection of forth-coming meeting with CBI and a Treasury team.Prepared for: Mrs Smith (The Boss)Date:31 Oct 2003Prepared by: Ann SmithEndogenous growth theory is an extension from one basic neoclassical growth model, which was first formalised by Robert Solow in 1950's. There are a number of basic assumptions underlying the neoclassical growth model.The first one is that the productive capacity of

Features of Neoliberal Globalization

2602 words - 10 pages Martinez and Arnoldo Garcia. According to them neoliberalism includes:The rule of the market -- freedom for capital, goods and services, where the market is self-regulating allowing the "trickle down" notion of wealth distribution. It also includes the de-unionizing of labor forces and removals of any impediments to capital mobility, such as regulations. The freedom is from the state, or government.Reducing public expenditure for social services

John Maynard Keynes

531 words - 2 pages John Maynard Keynes"John Maynard Keynes is doubtlessly the most important figure in the entire history of economics", that is a powerful statement that I can't really make a good decision, however based on the books and information that he has provided I would suggest that he is a major player in the evolution of twentieth- century economics. He developed theories that were regarded as probably the most influential social science treatise of the

The Zapatista Revolt Against NeoLiberalism

4198 words - 17 pages dependent on the key players in the global capitalist economies. It is in this context that the Zapatista rebellion takes place. The indigenous people are faced with problems from all sides. The polarization of Mexican society between the rich “yuppie” cities and the ever-growing poor people [xxv] , the corrupt Mexican government and its military and the ravages of foreign interests through neoliberalism. For 500 years the indigenous people have been

Similar Essays

Stigin’ It To The Man Essay

984 words - 4 pages schools of thought, however neoclassicism incorporates the additional ideas of utility, or perceived value, and marginalism, or the extra use gained from each incremental increase. As neoclassical economics is essentially determined by the utility on a consumer scale, it has come to be known as the study of microeconomics. (Neoclassical Economics) Additionally incorporated into neoclassical economics is the theory of rational expectations. This is

Neoliberalism: A Social, Political And Economical Concept That Is Based, Among Others, On Classic Liberalism And The Neoclassical Theory And Its Purpose Is Minimizing The Influences Of The State On...

3904 words - 16 pages Neoliberalism January 2010 Introduction By neoliberalism we understand a social, political and economical concept that is based, among others, on classic liberalism and the neoclassical theory and its purpose is minimizing the influences of the state on economic events. Unlike the laissez-faire of classic liberalism the intervention of the state for guaranteeing functional markets is considered necessary. The

The Keynesian And Neoliberal View Of Unemployment

2588 words - 10 pages defeat of the Trudeau administration in 1984 (Course-reader 53: Lewis 2003). The adoption of Keynesianism by most western countries was a response to the deep interwar economic crisis (Course-reader 23: McBride and Shields 23). Keynesianism emerged as a result of the failure of the then neoclassical economy as seen from the great depression of 1929. This neoclassical-Keynesian paradigm shift entailed increased government spending (intervention) and

Global Economics Essay

879 words - 4 pages counterrevolution, the solow neoclassical growth model)Lecture notes on Krugman-Vernonian Product Cycle and Mahalanobis modelModule 5: Pareto Optimality: Efficiency and EquityPhotocopies circulated with the chapter heading 'Exchange'Module 6: Understanding GlobalisationPhotocopies of Chapter 2 'Globalization of Markets and Internationalization of Firms'2 photocopies covering all the trade theories, pages 222-233, 266-270,301-306 from 'International Economics