PRESENTED BY:
ATHIRA K
APOORVA SATHEESH RK
• Liberalism arose in Europe in the 1500s
• The philosophy of an open society in which
the state does not interfere with rights of
individuals
• Liberals believed this freedom would lead to
social progress
• "Neo-liberalism“ is a set of economic policies that
have become widespread during the last 25 years .
• “the economic policy related to the claim that the
flow of the market economy should be maintained
through the desire to intensify and expand the
market, by minimizing the intervention of
government and reinforcing the efficiency in the
market”.
• According to neoliberalism, government should take
care of very limited range of nation economy such as
security, restrictions for extreme monopolies.
Now, with the rapid globalization of the capitalist economy, we are
seeing neo-liberalism on a global scale
• THE RULE OF THE MARKET. Liberating private enterprise
from any bonds imposed by the government. Greater openness
to international trade and investment. Reduce wages by deunionizing workers and eliminating workers' rights that had
been won over many years of struggle. No more price controls.
All in all, total freedom of movement for capital, goods and
services.
• CUTTING PUBLIC EXPENDITURE for social services like
education and health care.
• REDUCING THE SAFETY-NET FOR THE POOR, and
even maintenance of roads, bridges, water supply
• DEREGULATION. Reduce government regulation of
everything that could diminish profits, including protecting
the environment and safety on the job.
• PRIVATIZATION. Sell state-owned enterprises, goods and
services to private investors. This includes banks, key
industries, railroads, toll highways, electricity, schools,
hospitals and even fresh water.
ADVANTAGES OF NEOLIBERALISM
• Neoliberalism amplifies the efficiency of market
economy.
On the ground that policies with
neoliberalism reduce the
influences from
governmental managements, companies, the group
of producers, can gain tremendous power in the
market.
• Enterprises will produce goods more actively to
increase their profits. As a result, interactions
between consumers
and producers will be
revitalized and size, efficiency of market will be
maximized.
• During above process of development, the
competitive power and creativity of companies will
be dramatically developed too.
PROBLEMS OF NEOLIBERALISM
• Opponents of neoliberalism strongly urge that
neoliberalism is the main cause of increasing gap
between rich and poor in modern society.
• In these days, only top 1% of world population is
taking 40% of finances in the world.
• Riches are becoming much richer based on their
original properties while poor people are ‘sinking
down’ and suffering great economic hardships in
their lives.
• Unemployment rate can be augmented because of
neoliberalism. In the world of neoliberalism, a
person with less ability will be unemployed and a
person with diverse and intense ability will get the
job. There is no care from government related to
unemployment
• globalization, which is the phenomenon deeply
associated with neo liberalization lead to
destruction of some folk cultures in each nation
and forced developing countries or poor countries
to follow developed countries mechanisms.
SOLUTIONS
• government should concern about welfare system
so that poor people gets enough financial support
to lead safe life.
• government should help jobless people by
offering living expenses and find the jobs for
them
• nation must manage how much the country
should be globalized. government has to supervise
the balance between folk cultures and new
cultures that came into because of globalization.
CASE 1 : Neoliberalism in Mexico
 The global economic crisis in the 70s hit Mexico hard.
 US recession that decreased demand for Mexican products, and
a lowering of oil prices.
 Mexico devalued the peso by 78 percent and declared
bankruptcy.
 De La Madrid (52nd President of Mexico from 1982 to 1988)
was put into the office of the Mexican presidency.
 Mexican government received a loan from the IMF.
 the neoliberal era in Mexico has created hell for the average
Mexican
 In 1982, the Mexican government owned about 1,100 firms. By
2000, this had been reduced to around 200.
 The privatization programs are estimated to have created 24
billionaires.
 Since NAFTA (North American Free Trade Agreement) went
into effect in January of 1994, the price of the tortilla has risen
738 percent.
Application of neoliberalism
The “Washington Consensus”: a package of reforms required for
developing countries access IMF and WB loans.
 Reduce government deficits
 Reduce government expenditure(esp. social spending)
 Tax reform
 Liberalize trade
 Privatize state owned industries
 Market determine the interest rates
1939-1945 –world war II: Many countries were
left devastated.
 This led to the restructuring of state forms and international relations
designed to prevent a return to the catastrophic conditions that
threatened the capitalist order.
 The thinking at the time: both capitalism and communism had failed in
their raw forms.
 The conclusion at the time :to construct the right blend of
state,peace,inclusion,well-being, and stability.
 Theory: this paved the way for the introduction of Neoliberal Policies:
supposedly a tool in preventing the re-emergence of inter-state
geopolitical rivalries that led to the war.
Case 2:
After the two world wars, the US emerged dominant in global economy.
 1950s: One third of world exports came from U.S.
 Theory: To ensure its dominance, the US restructured the world economy
through neo-liberal policies such as deregulation and liberalization.
 DEREGULATION: put simply , deregulation means limiting government control
over market forces.
 Liberalization : The trade liberalization program invariably consists of the
elimination of import quotas and the reduction and unification of tariffs.

Aim: To create new markets for its surplus products and excess capital.
Critical analysis…..
Neoliberalism is the idea that the “Market is the
Mother of all Things”
 The tenets of Neoliberalism are as follows:
 ”Market-based” solutions are the most stable and are inherently more sustainable
than “top down” publicly funded programmes that rely on the “arbitrary”
redistribution of wealth and resources.
 The Market is the ultimate arbiter of an individual’s worth and it allocates
resources to individuals and groups based on a “natural” and immutable process
that should not be questioned, perverted or impeded by Government.
 Because the Market is an impartial and efficient distributor of resources, wealth
and income inequality is actually a moral imperative and the people who accrue
more resources deserve their wealth, while the “losers” who have not been able to
thrive in the Market environment must simply accept their fate because there is
no sustainable alternative to the Market-based system.
 This means that wealthy, well-educated Elites consider themselves to have
achieved their status based solely on their own merit, and they are convinced that
anyone else could do what they have done, if they just had enough ambition,
drive, focus, etc. (i.e., “we can provide equal opportunity but not equal
outcomes”).
Restoration of power
The rich and powerful
of the world have formed
somewhat of an informal
alliance with one another
in order to protect their
mutual interests and
maintain their dominance.
Poverty, overproduction and local disintegration
 Harsh economic measure have resulted in the gradual disintegration of the
Welfare State.
 Because of the large accumulation of public debts in western countries, the
financial elite have been given the power to dictate government economic
and social policy.
Poverty, overproduction and local disintegration
This economic restricting has made the divide between different
social and ethnic groups even deeper. Moreover, it has increased
the potential capacity of the economic system and expended
levels of production without reducing poverty significantly.
RECOMMENDATION…
In order to disarm this world order, we must
democratize the economic system and its
management and the ownership structure. we
must redistribute income and wealth, restore
the rights of direct producer and rebuild the
welfare state
“The new world order is based on the ‘false
consensus’ of Washington and wall street, which
ordains the ‘free market system’ as the only
possible choice on the faded road to a ‘global
prosperity’.”
Liberal Democracy or Neoliberalism?
Liberal Democracy
 Political movement advocating a gradual and peaceful transition
from capitalism to socialism by democratic means
 Democratic welfare state that incorporates both capitalist and
socialist practices
FEATURES OF LIBERAL DEMOCRACY
 Mainly based in the manual working class,
 Improve their constituents’ lot by contesting elections, winning
office and using power to extend the state ownership and
regulation of capitalism
 Make the economy operate more efficiently and in the interests of
the majority
 Using the opportunities offered by political democracy to
influence economic activity
 They hoped to make society more equal.
 Regulated market capitalism
DRAWBACKS
 Social democracy does not offer an alternative to neoliberalism.
 Rejected the notion that the economy worked best when the free
market was left to its own devices.
 Government act as a ‘committee’ representing the interests of
big business.(Karl max)
 Structural dependence of governments on big business firms
 1970 economic crisis
 Separation of politics from economics(Alex Callinico)
 The early social democratic countries like Germany and Sweden
has changed to Neo-Liberalism
The Cases of Germany and Sweden
 Political parties in the social democratic tradition have
historically stood in opposition to neoliberalism. However, in
recent years they, too, have embraced neo-liberalism.
 Taking the examples of social democratic parties in Germany
and Sweden as illustrative of a broader trend, argues that social
democracy does not offer an alternative to neoliberalism
GERMANY
German Social Democratic Party (Sozialdemokratische Partei
Deutschlands (SPD)) argues that the key issue for social democrats
is ‘the role of the nation state, how we can guarantee that the state
is an actor and can control the market’.
 Origin in late 19 the centaury
 a party that debated ‘reform versus revolution’
 Strongly supporting and nurturing working class
SWEDEN
The Swedish Social Democratic Party (Socialdemokratiska
Arbetarpartiet –SAP) has allowed greater scope for market forces
but shares with its international siblings a belief in government
action to achieve equality and social justice
 Swedish social democracy was once considered to be the
pinnacle of social democratic achievement
 1932-1967 SAP Government has followed a policy called ‘cradle
to grave’ welfare capitalism
 1945 reforms which includes the enactment of reforms such as a
national health service, supplementary pensions, child benefits,
sickness insurance, and public housing programs which
considerably increased the standard of living
FACTORS AFFECTING SOCIAL
DEMOCRACY
 Globalisation
 Economic decline 1970
 European union pressure
GLOBALISATION
 Economic globalisation in particular causes greater capital mobility,
rising foreign investment and increased international trade
 The negative reactions of global financial markets can devastate
governments' policy programs
 Neo-liberal policies helped the raise of globalisation
 Globalisation promotes a beauty contest between nation as who ‘who
creates the best conditions for foreign investment for new
enterprises’. And it instils fear in governments ‘that in other
countries they [might] create perhaps better conditions
 Globalisation is an irresistible force that makes neo-liberal policies
inevitable,
The post war boom collapse of 1970
 The falling output and rising unemployment
 Economic Growth in Sweden, Germany, and the World, 1960s1990s
Other Neo-liberals
 ARGENTINA-1976
 AUSTRALIA-1980
 CHILE-1970
 CHINA-DETH OF MAO
 U.K(THACHER)
 U.S-1981(REGAN)
 BURMA
NEOLIBERALISM AROUND THE WORLD

A recent poll conducted by the BBC sheds some light as to which countries hold the
most neoliberal views and which the least.

Who are the most fervent supporters of capitalism in its current incarnation? This
will come as no surprise: Americans. A little more surprising is to find out that the
next in line are Pakistanis. The rest of the list is as follows:

3. Japan
4. Czech Republic
5. Philippines
6. Poland
7. Germany
8. Australia
9. Canada
10. China
11. Egypt
12. United Kingdom
13. India
Factors which promoted neo
liberalism
 The shift in economic conditions
 Reduced economic growth rates causes the increase in expense
of social programs
 high inflation, low economic growth and rising unemployment
 Social democrats now had to choose to be responsible managers
of capitalism or advocates of improvements in workers’ living
standards
Impact on Germany and Sweden
 Germen economy has been essentially stagnant for three straight
years
 The SPD(German social democratic party) believed that its
neo-liberal reforms were necessary to put Germany ‘back on the
road to growth’.
 Agenda 2010 was back
 The reforms aim to attract business investment and make
Germany successful as a strong business location
Impact on Sweden
 Growth fall
 Sweden was hit hard in the recession
 IMF report on necessity of reform of social security system was
adopted
 Sweden was so heavily dependent on economic growth to
maintain the European social model’.
 Welfare cannot be done without funding
Thank you