The predominant
economic/social
theory of the day. It supposes first and foremost that unregulated, unfettered 'free'
markets provide
society with what it needs and is the ideal social construction, and as a corollary that any
public spending or effort is antithetical to this, a drain on resources. It thus strives for
privatization of everything or almost everything. The term neo-liberal is a bit confusing because the word 'liberalism' can be associated with just the opposite, but in this context it means unregulated
business. The name was given to the economic theory to contrast it with the
Keynesian economic theory that was dominant at the time it was developed.
Neo-liberal thinking has come to pervade our lives, so much so that its tenets have become instinctual for many people. Neo-liberalism has come to be the national, if not international religion - a 'religion of the market' - that has all of the characteristics and devotion of any religion that has come before.
Neo-liberalism is a very hard term and set of beliefs to elucidate because there are so many misconceptions tied up with it. The basics are: 1) it was developed by heartless ivory tower number crunchers (Milton Friedman et al.) who were followers of Ayn Rand and B.F. Skinner (whose work "Beyond Freedom and Dignity" should be a clue as to what motivated these people), 2) it was disseminated, promulgated and popularized with the help of misreadings and incomplete readings of Adam Smith, 3) It had its first stirrings of triumph under Nixon and took over with the Reagan revolution and the Bush/Clinton years, replacing the Keynesian economic theory and its emphasis on an active public sector and oversight as the dominant model of Capitalism, and 4) it somehow managed to make itself synonymous with Capitalism, even freedom itself, and later, after the fall of state Communism, proclaimed its own triumph.
I should mention that 'neo-liberalism' is the neutral term for it. Advocates evoke terminology such as 'free markets,' while those acquainted with its true nature prefer "Market Fascism." In any case, neo-liberalism is the philosophical basis for, the specific policies that brought and continue to bring about, and a convenient short hand for the near absolute rule by corporations and certain economic interests in general that we have especially come to know in the past 30 years.
Neo-liberal policies and thinking do wonders for abstract markers such as GDP. However, those who live in the real world know it has the opposite effect on quality of life that it does on GDP. When markets are presumed to be the paramount facet of society and thus business is allowed to just algorithmically march on guided by the 'invisible hand' of market forces, when government and popular oversight is negated and derided, when the power of corporate agglomerations aggregate, the following are inevitable effects:
1) The environment is despoiled at an unprecedented and unacceptable rate. Wild places are ruined and natural resources are consumed without regard to any needs or wants other than profit, such as the human need to have preserved parts of nature or the global need for sustainable resources and biodiversity.
2) People work longer with less job security and fewer benefits.
3) The downward pressure on wages and health and environmental standards is
absolutely IMMENSE and inescapable as nations, regions, and even localities must compete with one another for the 'investment' that they are not allowed to make or retain themselves.
4) There is no support to elevate most disadvantaged segments. Social programs of all sorts and safety nets must be eliminated in accordance with the downward pressure on standards necessary to secure investment.
5) Small, community based firms, the businesses that give many people a real connection to their labor, are unable to compete with the Wal-Marts of the world and are superfluous and disappear.
6) The third world becomes a sweat shop labor pool. In answer to the argument that jobs are being provided to otherwise jobless countries, the fact is that policies of the WTO, IMF and World Bank, dictated by transnationals and governments beholden to them, and agreed to by the often corrupt, elitist and unrepresentative governments of these nations specifically dictate programs and policies that make subsistence agriculture and other traditional means of support impossible thereby depopulating the countryside and creating a pool of desperate labor in urban centers.
7) Farms and fields become parking lots and shopping malls. This is true metaphorically as well as literally.
8) The vast spectrum of human culture and creativity is subsumed in the name of corporate culture. Activities without any economic value are superfluous and recede. Everything is a commodity.
9) Our public resources, for example the airwaves themselves, are used for private gain and private ends, in effect being turned on us.
10) Public space itself disappears. There is no place for community life as everything is privatized. The food court at the mall is not conducive to meaningful debate, spontaneous meetings, or public forums the way a town square is.
11) Freedom becomes equated with the freedom to consume. People actually have less autonomy in their lives and less individual and community time and initiative as they become further commoditized and engage in a hyperactive marketplace struggle to stay competitive and afloat. At the same time, cultural options and outlets narrow as economically superfluous activities recede, thereby reducing individuality and expression.
12) Power of every form - political, cultural, economic - is consolidated by transnational corporations and their puppet institutions, which are undemocratic, unrepresentative, unaccountable, and by nature not necessarily responsive to human needs
And
13) Public goods - the things that really make life worth while - like a good well rounded education, nice parks to play and exercise in, public works that provide us with increased levels of social safety and health, the ability to walk outside and talk to a neighbor, are wholly sacrificed in the name of private goods - SUVs, McMansions, home theater systems, etc…