Neoliberalism is a political, economic and philosophical movement that emerged in the 1930s. The main theses of the theory were: economic freedom of business entities, government support for entrepreneurial initiative and free market competition.
The difference between neoliberalism and classical liberalism
Neoliberalism is an economic theory that proclaims the freedom of personal initiative of business entities and guarantees that all needs are met with a minimum of cost. The main conditions of the market system, this theory recognized the existence of private property, freedom of entrepreneurship and free competition. This trend was represented by several schools, including the London Hayek School, the Friedman School of Chicago and the Euken School of Freisburg.
Unlike classical liberalism, this trend does not deny the regulation of the economy by the state, but its sphere of regulation should only be the guarantee of a free market and unrestricted competition, which should ensure social justice and economic growth. Neoliberalism is similar in its principles to globalization in the economic sphere.
The main idea of neoliberalism is to support protectionism. The political rationale for governments is to advocate for the diffusion of advanced technology while maintaining control over entrepreneurship, which ultimately leads to increased corruption and interventionist legislation. Several principles of neoliberalism underlie the functioning of the World Bank, the World Trade Organization and the International Monetary Fund.
Basic principles of neoliberalism
In 1938, at a conference in Paris, representatives of this movement voiced the basic principles of the theory. In accordance with these principles, the market was the most effective form of management, freedom and independence of economic participants was fundamental to the efficiency and growth of the economy, competition had to find support from the state, and freedom of personal initiative within the economic framework had to be guaranteed by law.
However, some well-known publicists, such as Mario Vargas Llosa, tend to believe that there is no independent movement of "neoliberalism", and this is just a coined term that exists only to devalue the theory of liberalism. Critics consider this policy to be detrimental in matters of social justice, especially since the policy of neoliberalism has failed in Argentina, the countries of Eastern Europe, Asia and North Africa.