Definition. Neoliberal Capitalism
In addition to an economic policy, neoliberalism is also a political project.
Important components of neoliberalism are the consideration of the market as a pre eminent process of decision making. Markets are privileged and regulations or rules on trade and commerce are opposed. Advocates of neoliberalism promote cutting public expenditures such as schooling and health care and social services. The promote deregulation of markets such as eliminating the Glass- Steagall’s limits on banking and deregulation of any practice that produces profits for some.
In many places they promote privatization of state owned enterprises through private investment, including energy companies, utilities, and similar companies.
1. The Rule of the Market which liberates “free” enterprise from any bonds (regulations) imposed by the government no matter how much social damage this causes.
2. Cutting Public Expenditures for social services such as education and health care.
3. Deregulation of any policies, practices or laws that could diminish profits, including environmental protection and worker safety.
4. Privatization of state owned enterprises, goods, and services through sales to private investors
5. Eliminating the Concept of “The Public Good” or “Community” and replacing it with “individual responsibility.” (Martinez & Garcia, 2000)
6. Assaults on labor unions.
Based upon Gorlewski & Gorlewski, 2012
*The adoption of neo liberal policies by main stream Democrats helps to explain the anger of a portion of the White working class and their abandonment of the Democratic Party.
Recent history of neoliberal capitalism.
How neoliberal capitalism worked.
· Prior to the 1970’s
A. Following the Great Depression, American workers enjoyed a social contract with a strong central government guided by Keynesian economic policy and an expanding industrial base with a global reach. By the 1950s, manufacturing was almost 30% of GDP. Industrial communities were stable and vibrant.
· B. The private sector—with government support—oversaw the development of our industrial base, making the decisions on what sectors to develop and retain, the products to produce, the use of technologies, and the terms of engaging the labor market.
· C. The labor movement and the government provided a more equitable distribution of wealth as well as good working conditions. The underlying assumption of that era was that the drive for profit and the private accumulation of wealth would be a tide that would lift enough boats to sustain political and economic stability as well as ensure global dominance.
1947- 1979
Neoliberal capitalism 2.
1980 – Present
· A. With the emergence of new information technologies, opportunities to generate high rates of profit in the short term dramatically expanded. Capital maximized profits by globalizing production.
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· B. Powerful sections of the financial community along with owners and managers of the manufacturing sector unilaterally violated the social contract. They abandoned their home communities and their stewardship of the productive sector that had been the bedrock of our society. This resulted in the closing of thousands of companies and the loss of millions of good manufacturing jobs.
C. The neoliberal strategy included blaming labor and demanding concessions in wages, benefits, and working conditions. Government complicity in the destruction of our industrial base was framed by President Reagan as “government [needs] to get out of the way of the private sector.”
D. Extreme growing inequality as shown in graphs and the videos.
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