Neoliberalism

Neoliberalism: origins, theory, definition
Since the 1990's activists use the word 'neoliberalism' for global market-liberalism ('capitalism') and for free-trade policies. In this sense, it is widely used in South America. 'Neoliberalism' is often used interchangeably with 'globalisation'. But free markets and global free trade are not new, and this use of the word ignores developments in theadvanced economies. The analysis here compares neoliberalism with its historical predecessors. Neoliberalism is not just economics: it is a social and moral philosophy, in some aspects qualitatively different from liberalism. Last changes 02 December 2005.
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Neoliberalism inadequately defined?The definition of neoliberalism presented here is more abstract than usual - but it also suggests that neoliberalism has been underestimated. A widely quoted example of those 'usual definitions' is What is "Neo-Liberalism"? by Elizabeth Martinez and Arnoldo García:
Neo-liberalism is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarelyheard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer....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....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.
This sense of the word 'neoliberalism' is widely used in Latin America. However, neoliberalism is more a phenomenon of the rich western market democracies, than of poor regions. That is why I emphasise the historical development of liberalism, in those western market democracies. The IMF and the WorldBank are not the right places to look, to see the essence of neoliberalism. And the WTO ideology - free trade and 'competitive advantage' - is 200 years old. There is nothing 'neo' in their liberalism.
Seattle and Genoa?
The image of 'neoliberalism' has been heavily influenced by the protests against it: people think of the violent protests at Seattle and Genoa, and the associated socialmovements. If you only thought about that, then neoliberalism would be an ideology of the riot police, and that's not accurate.
It's true that the Genoa G8 summit was intended as a show of force. The organisers knew that violent demonstrations were probable in an Italian city, but chose to confront them. Democratically elected leaders "should not run from demonstrators", said Tony Blair. (However, whenit was Britain's turn to organise the G8 summit, the hypocrite choose the isolated Gleneagles hotel in Scotland). 20 000 police and soldiers were deployed at the Genoa G8 summit - NATO used 42 500 troops to occupy Kosovo. This show of force was out of all proportion to the political strength of anti-market forces, but it emphasised the legitimacy of the market-democratic states.
It is possiblefor 'the state' to suppress 'the market', but also to promote it. In fact, the free market emerged in Europe under the protection of the state, and the market needs the state, more than the other way around. The market needs internal regulation, in order to function: the state, in the form of the legal system, ensures contracts are enforced. In the form of the police, it prevents theft and fraud. Itestablishes uniform systems of weights and measures, and a uniform currency. Without these things there would be no free market, no market forces, and no resulting market society. Bill Gates disputes the US Government's authority over his business - but if there was no government at all, the poor would soon steal his wealth. The attack on the World Trade Center provided some images of this...