Globalization

by Colin Stief
Updated August 15, 2018

If you look at the tag on your shirt, chances are you would see that it was
made in a country other than the one in which you sit right now. What's
more, before it reached your wardrobe, this shirt could have very well
been made with Chinese cotton sewed by Thai hands, shipped across the
Pacific on a French freighter crewed by Spaniards to a Los Angeles
harbor. This international exchange is just one example of globalization,
a process that has everything to do with geography.

Globalization and Its Characteristics

Globalization is the process of increased interconnectedness among
countries most notably in the areas of economics, politics, and culture.
McDonald's in Japan, French films being played in Minneapolis, and the
United Nations are all representations of globalization.

Improved Technology in Transportation and

Telecommunications
What makes globalization possible is the ever-increasing capacity for and
efficiency of how people and things move and communicate. In years
past, people across the globe did not have the ability to communicate
and could not interact without difficulty. Nowadays, a phone, instant
message, fax, or video conference call can easily be used to connect
people throughout the world. Additionally, anyone with the funds can
book a plane flight and show up halfway across the world in a matter of
hours. In short, the "friction of distance" is lessened, and the world
begins to metaphorically shrink.

Movement of People and Capital

A general increase in awareness, opportunity, and transportation
technology has allowed for people to move about the world in search of a
new home, a new job, or to flee a place of danger. Most migration takes
place within or between developing countries, possibly because of lower
standards of living and lower wages push individuals to places with a
greater chance for economic success.

Additionally, capital (money) is being moved globally with the ease of

electronic transference and a rise in perceived investment opportunities.
Developing countries are a popular place for investors to place their
capital because of the enormous room for growth.

Diffusion of Knowledge
The word 'diffusion' simply means to spread out, and that is exactly what
any new found knowledge does. When a new invention or way of doing
something pops up, it does not stay secret for long. A good example of
this is the appearance of automotive farming machines in Southeast Asia,
an area long home to manual agricultural labor.

Non-Governmental Organizations (NGOs) and

Multinational Corporations
As global awareness of certain issues has risen, so too has the number of
organizations that aim to deal with them. So-called non-governmental
organizations bring together people unaffiliated with the government
and can be nationally or globally focused. Many international NGOs deal
with issues that do not pay attention to borders (such as global climate
change, energy use, or child labor regulations). Examples of NGOs
include Amnesty International or Doctors Without Borders.

As countries are connected to the rest of the world (through increased

communication and transportation) they immediately form what a
business would call a market. What this means is that a particular
population represents more people to buy a particular product or
service. As more and more markets are opening up, business people
from around the globe are coming together to form multinational
corporations in order to access these new markets. Another reason that
businesses are going global is that some jobs can be done by foreign
workers at a much cheaper cost than domestic workers. This is referred
to as outsourcing.

At its core globalization is an easing of borders, making them less

important as countries become dependent on each other to thrive. Some
scholars claim that governments are becoming less influential in the face
of an increasingly economic world. Others contest this, insisting that
governments are becoming more important because of the need for
regulation and order in such a complex world system.

Is Globalization a Good Thing?

There is a heated debate about the true effects of globalization and if it
really is such a good thing. Good or bad, though, there isn't much
argument as to whether or not it is happening. Let's look at the positives
and negatives of globalization, and you can decide for yourself whether
or not it is the best thing for our world.

Positive Aspects of Globalization

 As more money is poured into developing countries,
there is a greater chance for the people in those
countries to economically succeed and increase their
standard of living.

 Global competition encourages creativity and

innovation and keeps prices for commodities/services
in check.

 Developing countries are able to reap the benefits of

current technology without undergoing many of the
 growing pains associated with the development of
these technologies.

 Governments are able to better work together

towards common goals now that there is an
advantage in cooperation, an improved ability to
interact and coordinate, and a global awareness of
issues.

 There is a greater access to foreign culture in the

form of movies, music, food, clothing, and more. In
short, the world has more choices.

Negative Aspects of Globalization

 Outsourcing, while it provides jobs to a population in
one country, takes away those jobs from another
country, leaving many without opportunities.

 Although different cultures from around the world are

able to interact, they begin to meld, and the contours
and individuality of each begin to fade.

 There may be a greater chance of disease spreading

worldwide, as well as invasive species that could
prove devastating in non-native ecosystems.

 There is little international regulation, an unfortunate

fact that could have dire consequences for the safety
of people and the environment.

 Large Western-driven organizations such as the

International Monetary Fund and the World Bank
make it easy for a developing country to obtain a loan.
However, a Western focus is often applied to a non-
Western situation, resulting in failed progress.
 Criticisms of Globalization:
 Of the many criticisms of globalization, the prominent critique relates to
the fact that globalization erodes national sovereignty and takes away the
power of governments. By allowing international corporations and
multinational businesses to set the economic (and often, the political
agenda), critics argue that the nation state becomes irrelevant. The point to
be noted is that if global corporations can set the agenda, there is nothing
inherently wrong about that. Just that capitalism runs on the profit motive
to the exclusion of everything else and hence, businesses simply cannot be
allowed to set the terms of the political and economic discourse because
the nation state is answerable to all citizens and not just to the wealthy and
privileged. It needs to be mentioned that nation states exist for welfare of
the citizens and not for making profits alone. By usurping the powers of the
nation state, the corporations reduce everything to money and profits and
this has a corrosive effect on the welfare of the citizens.

 One World Market

 Ever since the 1990s, it has become fashionable for corporations to

demand global rules of doing business that are uniform across the world. In
other words, international businesses want the same set of rules and
procedures in all countries i.e. the right to repatriate profits, the right to
exploit natural resources, uniform taxes, and tax structures, the removal of
barriers on entry and exit, among other things. This means that the notion
of a global marketplace that is consistent across nations and one that is
friendly to the corporations is the aim of this endeavor. This is definitely a
plan to take away the power of the governments to set the rules and
though there are many experts who point to the enabling features of
globalization especially where lifting billions of people out of poverty is
concerned, critics are aghast that the poor and underprivileged who are
already suffering would be hit by a double whammy.

 National Sovereignty vs. Supranational Corporations

 Given the fact that some multinationals have more revenues than some
countries entire economic output, the power of these companies is indeed
 deep and wide. Hence, the temptation to override national governments
and instead, set supranational rules to be followed results in the ceding of
sovereignty by the governments. As has been discussed in the previous
sections, this results in the notion of profits before people and does away
with the basic humanitarian impulse that is behind the modern concept of
democratic states.

 The supranational economic order does not have allegiance to nations or

nationalities but to super elite whose interests span across countries and
whose loyalties lie to the economic principles that are devoid of humane
and social objectives.

 Concluding Thoughts

 Finally, global corporations have grown in power in recent decades and this
trend while contributing to global growth has also produced sharp
inequalities and led to exacerbation of ethnic and social tensions between
the haves and the have-nots. Hence, there needs to be a moderation in the
way global corporations are allowed to usurp the power of national
governments and the way in which national sovereignty is ceded to the
international businesses. ty and takes aw Criticisms of Globalization:
Threats to National Sovereignty

 It is not only about Profits

 Of the many criticisms of globalization, the prominent critique relates to

the fact that globalization erodes national sovereignty and takes away the
power of governments. By allowing international corporations and
multinational businesses to set the economic (and often, the political
agenda), critics argue that the nation state becomes irrelevant. The point to
be noted is that if global corporations can set the agenda, there is nothing
inherently wrong about that. Just that capitalism runs on the profit motive
to the exclusion of everything else and hence, businesses simply cannot be
allowed to set the terms of the political and economic discourse because
the nation state is answerable to all citizens and not just to the wealthy and
 privileged. It needs to be mentioned that nation states exist for welfare of
the citizens and not for making profits alone. By usurping the powers of the
nation state, the corporations reduce everything to money and profits and
this has a corrosive effect on the welfare of the citizens.
 Neoliberalism

 Neoliberalism refers primarily to the 20th-century resurgence of 19th-century ideas associated

with laissez-faire economic liberalism. Those ideas include economic liberalization policies such
as privatization, austerity, deregulation, free trade and reductions in government spending in
order to increase the role of the private sector in the economy and society These market-based
ideas and the policies they inspired constitute a paradigm shift away from the post-war
Keynesian consensus which lasted from 1945 to 1980.

 English-speakers have used the term "neoliberalism" since the start of the 20th century with
different meanings, but it became more prevalent in its current meaning in the 1970s and
1980s, used by scholars in a wide variety of social sciences as well as by critics. Modern
advocates of free market policies avoid the term "neoliberal" and some scholars have described
the term as meaning different things to different people as neoliberalism "mutated" into
geopolitically distinct hybrids as it travelled around the world. As such, neoliberalism shares
many attributes with other concepts that have contested meanings, including democracy.

 The definition and usage of the term have changed over time. As an economic philosophy,
neoliberalism emerged among European liberal scholars in the 1930s as they attempted to trace
a so-called "third" or "middle" way between the conflicting philosophies of classical liberalism
and socialist planning. The impetus for this development arose from a desire to avoid repeating
the economic failures of the early 1930s, which neoliberals mostly blamed on the economic
policy of classical liberalism. In the decades that followed, the use of the term "neoliberal"
tended to refer to theories which diverged from the more laissez-faire doctrine of classical
liberalism and which promoted instead a market economy under the guidance and rules of a
strong state, a model which came to be known as the social market economy.

 In the 1960s, usage of the term "neoliberal" heavily declined. When the term re-appeared in the
1980s in connection with Augusto Pinochet's economic reforms in Chile, the usage of the term
had shifted. It had not only become a term with negative connotations employed principally by
critics of market reform, but it also had shifted in meaning from a moderate form of liberalism
to a more radical and laissez-faire capitalist set of ideas. Scholars now tended to associate it
with the theories of Mont Pelerin Society economists Friedrich Hayek, Milton Friedman and
James M. Buchanan, along with politicians and policy-makers such as Margaret Thatcher, Ronald
Reagan and Alan Greenspan. Once the new meaning of neoliberalism became established as a
common usage among Spanish-speaking scholars, it diffused into the English-language study of
political economy. By 1994, with the passage of NAFTA and with the Zapatistas' reaction to this
 development in Chiapas, the term entered global circulation. Scholarship on the phenomenon of
neoliberalism has been growing over the last couple of decades.[16] The impact of the global
2008–2009 crisis has also given rise to new scholarship that criticizes neoliberalism and seeks
policy alternatives.

 An early use of the term in English was in 1898 by the French economist Charles Gide to
describe the economic beliefs of the Italian economist Maffeo Pantaleoni, with the term "néo-
libéralisme" previously existing in French, and the term was later used by others including the
classical liberal economist Milton Friedman in a 1951 essay. In 1938 at the Colloque Walter
Lippmann, the term "neoliberalism" was proposed, among other terms, and ultimately chosen
to be used to describe a certain set of economic beliefs. The colloquium defined the concept of
neoliberalism as involving "the priority of the price mechanism, free enterprise, the system of
competition, and a strong and impartial state". To be "neoliberal" meant advocating a modern
economic policy with state intervention.: Neoliberal state interventionism brought a clash with
the opposing laissez-faire camp of classical liberals, like Ludwig von Mises. Most scholars in the
1950s and 1960s understood neoliberalism as referring to the social market economy and its
principal economic theorists such as Eucken, Röpke, Rüstow and Müller-Armack. Although
Hayek had intellectual ties to the German neoliberals, his name was only occasionally
mentioned in conjunction with neoliberalism during this period due to his more pro-free market
stance.

 During the military rule under Augusto Pinochet (1973–1990) in Chile, opposition scholars took
up the expression to describe the economic reforms implemented there and its proponents (the
"Chicago Boys"). Once this new meaning was established among Spanish-speaking scholars, it
diffused into the English-language study of political economy. According to one study of 148
scholarly articles, neoliberalism is almost never defined but used in several senses to describe
ideology, economic theory, development theory, or economic reform policy. It has largely
become a term of condemnation employed by critics and suggests a market fundamentalism
closer to the laissez-faire principles of the paleoliberals[who?] than to the ideas of those who
originally attended the colloquium. This leaves some controversy as to the precise meaning of
the term and its usefulness as a descriptor in the social sciences, especially as the number of
different kinds of market economies have proliferated in recent years.

 Another center-left movement from modern American liberalism that used the term
"neoliberalism" to describe its ideology formed in the United States in the 1970s. According to
David Brooks, prominent neoliberal politicians included Al Gore and Bill Clinton of the
Democratic Party of the United States. The neoliberals coalesced around two magazines, The
New Republic and the Washington Monthly. The "godfather" of this version of neoliberalism
was the journalist Charles Peters, who in 1983 published "A Neoliberal's Manifesto".

 Shermer argued that the term gained popularity largely among left-leaning academics in the
1970s "to describe and decry a late twentieth-century effort by policy makers, think-tank
experts, and industrialists to condemn social-democratic reforms and unapologetically
 implement free-market policies".[35] Neoliberal theory argues that a free market will allow
efficiency, economic growth, income distribution, and technological progress to occur. Any state
intervention to encourage these phenomena will worsen economic performance.

 At a base level we can say that when we make reference to 'neoliberalism', we are generally
referring to the new political, economic and social arrangements within society that emphasize
market relations, re-tasking the role of the state, and individual responsibility. Most scholars
tend to agree that neoliberalism is broadly defined as the extension of competitive markets into
all areas of life, including the economy, politics and society.

 The Handbook of Neoliberalism

 According to some scholars, neoliberalism is commonly used as a catchphrase and pejorative

term, outpacing similar terms such as monetarism, neoconservatism, the Washington
Consensus and "market reform" in much scholarly writing, The term has been criticized,
particularly by those who often advocate for policies characterized as neoliberal. Historian
Daniel Stedman Jones says the term "is too often used as a catch-all shorthand for the horrors
associated with globalization and recurring financial crises". The Handbook of Neoliberalism
posits that the term has "become a means of identifying a seemingly ubiquitous set of market-
oriented policies as being largely responsible for a wide range of social, political, ecological and
economic problems". Yet the handbook argues to view the term as merely a pejorative or
"radical political slogan" is to "reduce its capacity as an analytic frame. If neoliberalism is to
serve as a way of understanding the transformation of society over the last few decades then
the concept is in need of unpacking". Currently, neoliberalism is most commonly used to refer to
market-oriented reform policies such as "eliminating price controls, deregulating capital
markets, lowering trade barriers" and reducing state influence on the economy, especially
through privatization and austerity. Other scholars note that neoliberalism is associated with the
economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan
in the United States.

 There are several distinct usages of the term that can be identified:

 As a development model, it refers to the rejection of structuralist economics in favor of the

Washington Consensus.

 As an ideology, it denotes a conception of freedom as an overarching social value associated

with reducing state functions to those of a minimal state.

 Sociologists Fred L. Block and Margaret R. Somers claim there is a dispute over what to call the
influence of free market ideas which have been used to justify the retrenchment of New Deal
programs and policies over the last thirty years: neoliberalism, laissez-faire or "free market
ideology". Others such as Susan Braedley and Med Luxton assert that neoliberalism is a political
philosophy which seeks to "liberate" the processes of capital accumulation. In contrast, Frances
Fox Piven sees neoliberalism as essentially hyper-capitalism. However, Robert W. McChesney,
 while defining it as "capitalism with the gloves off", goes on to assert that the term is largely
unknown by the general public, particularly in the United States. Lester Spence uses the term to
critique trends in Black politics, defining neoliberalism as "the general idea that society works
best when the people and the institutions within it work or are shaped to work according to
market principles". According to Philip Mirowski, neoliberalism views the market as the greatest
information processor superior to any human being. It is hence considered as the arbiter of
truth. Neoliberalism is distinct from liberalism insofar as it does not advocate laissez-faire
economic policy but instead is highly constructivist and advocates a strong state to bring about
market-like reforms in every aspect of society.

 The worldwide Great Depression of the 1930s brought about high unemployment and
widespread poverty and was widely regarded as a failure of economic liberalism. To renew
liberalism, a group of 25 intellectuals organised the Walter Lippmann Colloquium at Paris in
August 1938. It brought together Louis Rougier, Walter Lippmann, Friedrich von Hayek, Ludwig
von Mises, Wilhelm Röpke and Alexander Rüstow among others. Most agreed that the
liberalism of laissez-faire had failed and that a new liberalism needed to take its place with a
major role for the state. Mises and Hayek refused to condemn laissez-faire, but all participants
were united in their call for a new project they dubbed "neoliberalism". They agreed to develop
the Colloquium into a permanent think tank called Centre International d’Études pour la
Rénovation du Libéralisme based in Paris.

 Deep disagreements in the group separated "true (third way) neoliberals" around Rüstow and
Lippmann on the one hand and old school liberals around Mises and Hayek on the other. The
first group wanted a strong state to supervise, while the second insisted that the only legitimate
role for the state was to abolish barriers to market entry. Rüstow wrote that Hayek and Mises
were relics of the liberalism that caused the Great Depression. Mises denounced the other
faction, complaining that ordoliberalism really meant "ordo-interventionism".

 Mont Pelerin Society[edit]

 Neoliberalism began accelerating in importance with the establishment of the Mont Pelerin
Society in 1947, whose founding members included Friedrich Hayek, Milton Friedman, Karl
Popper, George Stigler and Ludwig von Mises. The Colloque Walter Lippmann was largely
forgotten.[49] The new society brought together the widely scattered free market thinkers and
political figures.

 Hayek and others believed that classical liberalism had failed because of crippling conceptual
flaws and that the only way to diagnose and rectify them was to withdraw into an intensive
discussion group of similarly minded intellectuals.

 With central planning in the ascendancy worldwide and few avenues to influence policymakers,
the society served to bring together isolated advocates of liberalism as a "rallying point" – as
Milton Friedman phrased it. Meeting annually, it would soon be a "kind of international 'who's
who' of the classical liberal and neo-liberal intellectuals." While the first conference in 1947 was
 almost half American, the Europeans dominated by 1951. Europe would remain the epicenter of
the community with Europeans dominating the leadership.

 Post-World War II neo-liberal currents[edit]

 Argentina[edit]

 Further information: José Alfredo Martínez de Hoz and Domingo Cavallo

 In the 1960s, Latin American intellectuals began to notice the ideas of ordoliberalism; these
intellectuals often used the Spanish term "neoliberalismo" to refer to this school of thought.
They were particularly impressed by the social market economy and the Wirtschaftswunder
("economic miracle") in Germany and speculated about the possibility of accomplishing similar
policies in their own countries. Neoliberalism in 1960s meant essentially a philosophy that was
more moderate than classical liberalism and favored using state policy to temper social
inequality and counter a tendency toward monopoly.[5]

 In 1976, the military dictatorship's economic plan led by Martínez de Hoz was the first attempt
at a neoliberalist plan in Argentina. They implemented a fiscal austerity plan, whose goal was to
reduce money printing and thus inflation. In order to achieve this, salaries were frozen, but they
were unable to reduce inflation, which led to a drop in the real salary of the working class.
Aiming for a free market, they also decided to open the country's borders, so that foreign goods
could freely enter the country. Argentina's industry, which had been on the rise for the last 20
years since Frondizi's economic plan, rapidly declined, because it wasn't able to compete with
foreign goods. Finally, the deregulation of the financial sector, gave a short-term growth, but
then rapidly fell apart when capital fled to the United States in the Reagan years.[ citation
needed] Following the measures, there was an increase in poverty from 9% in 1975 to 40% at
the end of 1982.

 From 1989 to 2001, another neoliberalist plan was attempted by Domingo Cavallo. This time,
the privatization of public services was the main objective of the government; although financial
deregulation and open borders to foreign goods were also re-implemented. While some
privatizations were welcomed, the majority of them were criticized for not being in the people's
best interests. Along with an increased labour market flexibility, the final result of this plan was
an unemployment rate of 25% and 60% of people living under the poverty line, alongside 33
people killed by the police in protests that ended up with the president, Fernando de la Rúa,
resigning two years before his term as president was completed.[citation needed]

 Australia[edit]

 In Australia, neoliberal economic policies (known at the time as "economic rationalism"[52] or

"economic fundamentalism") were embraced by governments of both the Labor Party and the
Liberal Party since the 1980s. The governments of Bob Hawke and Paul Keating from 1983 to
1996 pursued economic liberalisation and a program of micro-economic reform. These
 governments privatized government corporations, deregulated factor markets, floated the
Australian dollar and reduced trade protection.

 Keating, as federal treasurer, implemented a compulsory superannuation guarantee system in

1992 to increase national savings and reduce future government liability for old age pensions.
The financing of universities was deregulated, requiring students to contribute to university fees
through a repayable loan system known as the Higher Education Contribution Scheme (HECS)
and encouraging universities to increase income by admitting full-fee-paying students, including
foreign students. The admitting of domestic full fee paying students to public universities was
stopped in 2009 by the Rudd Labor government.

 Immigration to the mainland capitals by conflict-migrants had seen capital flows follow soon
after, such as from war torn Lebanon and Vietnam. Latter economic-migrants from mainland
China also, up to recent restrictions, had invested significantly in the property markets.

 In 1955, a select group of Chilean students (later known as the Chicago Boys) were invited to the
University of Chicago to pursue postgraduate studies in economics. They worked directly under
Friedman and his disciple, Arnold Harberger, while also being exposed to Hayek. When they
returned to Chile in the 1960s, they began a concerted effort to spread the philosophy and
policy recommendations of the Chicago and Austrian schools, setting up think tanks and
publishing in ideologically sympathetic media. Under the military dictatorship headed by
Pinochet and severe social repression, the Chicago boys implemented radical economic reform.
The latter half of the 1970s witnessed rapid and extensive privatization, deregulation and
reductions in trade barriers. In 1978, policies that would reduce the role of the state and infuse
competition and individualism into areas such as labor relations, pensions, health and education
were introduced. These policies resulted in widening inequality as they negatively impacted the
wages, benefits and working conditions of Chile's working class.[51][59] According to Chilean
economist Alejandro Foxley, by the end of Pinochet's reign around 44% of Chilean families were
living below the poverty line. According to Klien, by the late 1980s the economy had stabilized
and was growing, but around 45% of the population had fallen into poverty while the wealthiest
10% saw their incomes rise by 83%.

 In 1990, the military dictatorship ended. Hayek argued that increased economic freedom had
put pressure on the dictatorship over time and increased political freedom. Years earlier, he
argued that "economic control is not merely control of a sector of human life which can be
separated from the rest; it is the control of the means for all our ends". The Chilean scholars
Martínez and Díaz rejected this argument, pointing to the long tradition of democracy in Chile.
The return of democracy required the defeat of the Pinochet regime, though it had been
fundamental in saving capitalism. The essential contribution came from profound mass
rebellions and finally, old party elites using old institutional mechanisms to bring back
democracy.

 European Union[edit]
 The European Union (EU) is sometimes considered as a neoliberal organization as it facilitates
free trade and freedom of movement. It erodes national protectionism and it limits national
subsidies.[64] Others underline that the EU is not completely neoliberal as it leaves the
possibility to develop welfare state policies.

 Neoliberal ideas were first implemented in West Germany. The economists around Ludwig
Erhard drew on the theories they had developed in the 1930s and 1940s and contributed to
West Germany’s reconstruction after the Second World War. Erhard was a member of the Mont
Pelerin Society and in constant contact with other neoliberals. He pointed out that he is
commonly classified as neoliberal and that he accepted this classification.

 The ordoliberal Freiburg School was more pragmatic. The German neoliberals accepted the
classical liberal notion that competition drives economic prosperity, but they argued that a
laissez-faire state policy stifles competition as the strong devour the weak since monopolies and
cartels could pose a threat to freedom of competition. They supported the creation of a well-
developed legal system and capable regulatory apparatus. While still opposed to full-scale
Keynesian employment policies or an extensive welfare state, German neoliberal theory was
marked by the willingness to place humanistic and social values on par with economic efficiency.
Alfred Müller-Armack coined the phrase "social market economy" to emphasize the egalitarian
and humanistic bent of the idea.[5] According to Boas and Gans-Morse, Walter Eucken stated
that "social security and social justice are the greatest concerns of our time".

 Erhard emphasized that the market was inherently social and did not need to be made so.[48]
He hoped that growing prosperity would enable the population to manage much of their social
security by self-reliance and end the necessity for a widespread welfare state. By the name of
Volkskapitalismus, there were some efforts to foster private savings. However, although average
contributions to the public old age insurance were quite small, it remained by far the most
important old age income source for a majority of the German population, therefore despite
liberal rhetoric the 1950s witnessed what has been called a "reluctant expansion of the welfare
state". To end widespread poverty among the elderly the pension reform of 1957 brought a
significant extension of the German welfare state which already had been established under
Otto von Bismarck.[69] Rüstow, who had coined the label "neoliberalism", criticized that
development tendency and pressed for a more limited welfare program.

 Hayek did not like the expression "social market economy", but stated in 1976 that some of his
friends in Germany had succeeded in implementing the sort of social order for which he was
pleading while using that phrase. However, in Hayek's view the social market economy's aiming
for both a market economy and social justice was a muddle of inconsistent aims.[70] Despite his
controversies with the German neoliberals at the Mont Pelerin Society, Ludwig von Mises stated
that Erhard and Müller-Armack accomplished a great act of liberalism to restore the German
economy and called this "a lesson for the US".[71] However, according to different research
Mises believed that the ordoliberals were hardly better than socialists. As an answer to Hans
Hellwig's complaints about the interventionist excesses of the Erhard ministry and the
 ordoliberals, Mises wrote: "I have no illusions about the true character of the politics and
politicians of the social market economy". According to Mises, Erhard's teacher Franz
Oppenheimer "taught more or less the New Frontier line of" President Kennedy's "Harvard
consultants (Schlesinger, Galbraith, etc.)".

 In Germany, neoliberalism at first was synonymous with both ordo-liberalism and social market
economy. But over time the original term neoliberalism gradually disappeared since social
market economy was a much more positive term and fit better into the Wirtschaftswunder
(economic miracle) mentality of the 1950s and 1960s.

 Middle East[edit]

 The Middle East experienced an onset of neoliberal policies from the late 1960s onwards. Egypt
is frequently linked to the standardization of neoliberal policies, particularly with regard to the
'open-door' policies of President Anwar Sadat throughout the 1970s, and Hosni Mubarak's
successive economic reforms from 1981 to 2011. These measures, known as al-Infitah, were
later diffused across the region. In Tunisia, neoliberal economic policies are associated with Ben
Ali's dictatorship, where the linkages between authoritarianism and neoliberalism become clear.
Responses to globalization and economic reforms in the Gulf have also been approached via a
neoliberal analytical framework.[79]

 China[edit]

 Following the death of Mao Zedong, Deng Xiaoping led the country through far ranging market
centered reforms, with the slogan of Xiǎokāng, that combined neoliberalism with centralized
authoritarianism. These focused on agriculture, industry, education and science/defense.

 During her tenure as Prime Minister, Margaret Thatcher oversaw a number of neoliberal
reforms including: tax reduction, reforming exchange rates, deregulation and privatisation.
These reforms were continued and supported by her successor John Major and although
opposed by the Labour Party at the time, they were largely left unaltered when the latter
returned to government in 1997. Instead, the Labour government under Tony Blair finished off a
variety of uncompleted privatisation and deregulation measures.

 The Adam Smith Institute, a United Kingdom-based free market think tank and lobbying group
formed in 1977 and a major driver of the aforementioned neoliberal reforms,[83] officially
changed its libertarian label to neoliberal in October 2016.[84]

 United States[edit]

 David Harvey traces the rise of neoliberalism in the United States to Lewis Powell's 1971
confidential memorandum to the Chamber of Commerce.: A call to arms to the business
community to counter criticism of the free enterprise system, it was a significant factor in the
rise of conservative organizations and think-tanks which advocated for neoliberal policies, such
as the Business Roundtable, The Heritage Foundation, the Cato Institute, Citizens for a Sound
 Economy, Accuracy in Academia and the Manhattan Institute for Policy Research. For Powell,
universities were becoming an ideological battleground, and he recommended the
establishment of an intellectual infrastructure to serve as a counterweight to the increasingly
popular ideas of Ralph Nader and other opponents of big business. On the left, neoliberal ideas
were developed and widely popularized by John Kenneth Galbraith while the Chicago School
ideas were advanced and repackaged into a progressive, leftist perspective in Lester Thurow's
influential 1980 book "The Zero-Sum Society".

 Early roots of neoliberalism were laid in the 1970s during the Carter administration, with
deregulation of the trucking, banking and airline industries. This trend continued into the 1980s
under the Reagan administration, which included tax cuts, increased defense spending, financial
deregulation and trade deficit expansion. Likewise, concepts of supply-side economics,
discussed by the Democrats in the 1970s, culminated in the 1980 Joint Economic Committee
report "Plugging in the Supply Side". This was picked up and advanced by the Reagan
administration, with Congress following Reagan's basic proposal and cutting federal income
taxes across the board by 25% in 1981.

 During the 1990s, the Clinton administration also embraced neoliberalism[82] by supporting the
passage of the North American Free Trade Agreement (NAFTA), continuing the deregulation of
the financial sector through passage of the Commodity Futures Modernization Act and the
repeal of the Glass–Steagall Act and implementing cuts to the welfare state through passage of
the Personal Responsibility and Work Opportunity Act. The neoliberalism of the Clinton
administration differs from that of Reagan as the Clinton administration purged neoliberalism of
neoconservative positions on militarism, family values, opposition to multiculturalism and
neglect of ecological issues. [disputed – discuss] Writing in New York, journalist Jonathan Chait
disputed accusations that the Democratic Party had been hijacked by neoliberals, saying that its
policies have largely stayed the same since the New Deal. Instead, Chait suggested this came
from arguments that presented a false dichotomy between free market economics and
socialism, ignoring mixed economies. Historian Walter Scheidel says that both parties shifted to
promote free market capitalism in the 1970s, with the Democratic Party being "instrumental in
implementing financial deregulation in the 1990s".

 In New Zealand, neoliberal economic policies were implemented under the Fourth Labour
Government lead by Prime Minister David Lange. These neoliberal policies are commonly
referred to as Rogernomics, a portmanteau of “Roger” and “economics”, after Lange appointed
Roger Douglas minister of finance in 1984.[98]

 Lange’s government had inherited a severe balance of payments crisis as a result of the deficits
from the previously implemented two-year freeze on wages and prices by preceding Prime
Minister Robert Muldoon who had also stubbornly maintained an unsustainable exchange rate.
[99] The inherited economic conditions lead Lange to remark “We ended up being run very
similarly to a Polish shipyard.”[100] On 14 September 1984 Lange’s government held an
 Economic Summit to discuss the underlying problems in the New Zealand economy, which lead
to advocacy of radical economic reform previously proposed by the Treasury Department.

 A reform program consisting of deregulation and the removal of tariffs and subsidies was put in
place which consequently affected New Zealand’s agricultural community, who were hit hard by
the loss of subsidies to farmers. A superannuation surcharge was introduced, despite having
promised not to reduce superannuation, resulting in Labour losing support from the elderly. The
finance markets were also deregulated, removing restrictions on interests rates, lending and
foreign exchange and in March 1985, the New Zealand dollar was floated.[103] Subsequently, a
number of government departments were converted into state-owned enterprises which lead
to great job loss: Electricity Corporation 3,000; Coal Corporation 4,000; Forestry Corporation
5,000; New Zealand Post 8,000.

 New Zealand became a part of a global economy. The focus in the economy shifted from the
productive sector to finance as a result of zero restrictions on overseas money coming into the
country. Finance capital outstripped industrial capital and subsequently, the manufacturing
industry suffered approximately 76,000 job losses.

 The Austrian School is a school of economic thought which bases its study of economic
phenomena on the interpretation and analysis of the purposeful actions of individuals. It derives
its name from its origin in late-19th and early-20th century Vienna with the work of Carl
Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser and others. In 21st century usage by
such economists as Mark Skousen, reference to the Austrian school often denotes a reference to
the free-market economics of Friedrich Hayek who began his teaching in Vienna.

 Among the contributions of the Austrian School to economic theory are the subjective theory of
value, marginalism in price theory and the formulation of the economic calculation problem.
Many theories developed by "first wave" Austrian economists have been absorbed into most
mainstream schools of economics. These include Carl Menger's theories on marginal utility,
Friedrich von Wieser's theories on opportunity cost and Eugen von Böhm-Bawerk's theories on
time preference as well as Menger and Böhm-Bawerk's criticisms of Marxian economics. The
Austrian School follows an approach, termed methodological individualism, a version of which
was codified by Ludwig von Mises and termed "praxeology" in his book published in English as
Human Action in 1949.

 The former Federal Reserve Chairman Alan Greenspan, speaking of the originators of the School,
said in 2000 that "the Austrian School have reached far into the future from when most of them
practiced and have had a profound and, in my judgment, probably an irreversible effect on how
most mainstream economists think in this country". In 1987, Nobel laureate James M. Buchanan
told an interviewer: "I have no objections to being called an Austrian. Hayek and Mises might
consider me an Austrian but, surely some of the others would not". Republican Congressman
Ron Paul stated that he adheres to Austrian School economics and has authored six books which
refer to the subject. Paul's former economic adviser, investment dealer Peter Schiff, also calls
 himself an adherent of the Austrian School. Jim Rogers, investor and financial commentator,
also considers himself of the Austrian School of economics. Chinese economist Zhang Weiying,
who is known in China for his advocacy of free market reforms, supports some Austrian theories
such as the Austrian theory of the business cycle.

 The Chicago school of economics describes a neoclassical school of thought within the academic
community of economists, with a strong focus around the faculty of University of Chicago.
Chicago macroeconomic theory rejected Keynesianism in favor of monetarism until the mid-
1970s, when it turned to new classical macroeconomics heavily based on the concept of rational
expectations. The school is strongly associated with economists such as Milton Friedman,
George Stigler, Ronald Coase and Gary Becker. In the 21 century, economists such as Mark
Skousen refer to Friedrich Hayek as a key economist who influenced this school in the 20th
century having started his career in Vienna and the Austrian school of economics.

 The school emphasizes non-intervention from government and generally rejects regulation in
markets as inefficient with the exception of central bank regulation of the money supply (i.e.
monetarism). Although the school's association with neoliberalism is sometimes resisted by its
proponents, its emphasis on reduced government intervention in the economy and a laissez-
faire ideology have brought about an affiliation between the Chicago school and neoliberal
economics.

 Political policy aspects[edit]

 Political freedom[edit]

 In The Road to Serfdom, Hayek has argued: "Economic control is not merely control of a sector
of human life which can be separated from the rest; it is the control of the means for all our
ends".

 Later in his book Capitalism and Freedom (1962), Friedman developed the argument that
economic freedom, while itself an extremely important component of total freedom, is also a
necessary condition for political freedom. He commented that centralized control of economic
activities was always accompanied with political repression.

 In his view, the voluntary character of all transactions in an unregulated market economy and
wide diversity that it permits are fundamental threats to repressive political leaders and greatly
diminish power to coerce. Through elimination of centralized control of economic activities,
economic power is separated from political power and the one can serve as counterbalance to
the other. Friedman feels that competitive capitalism is especially important to minority groups
since impersonal market forces protect people from discrimination in their economic activities
for reasons unrelated to their productivity.

 Amplifying Friedman's argument, it has often been pointed out that increasing economic
freedoms tend to raise expectations on political freedoms, eventually leading to democracy.
 Other scholars see the existence of non-democratic yet market-liberal regimes and the
undermining of democratic control by market processes as strong evidence that such a general,
ahistorical nexus cannot be upheld.[125] Contemporary discussion on the relationship between
neoliberalism and democracy shifted to a more historical perspective, studying extent and
circumstances of how much the two are mutually dependent, contradictory or incompatible.

 Stanley Fish argues that neoliberalization of academic life may promote a narrower and in his
opinion more accurate definition of academic freedom "as the freedom to do the academic job,
not the freedom to expand it to the point where its goals are infinite". What Fish urges is "not
an inability to take political stands, but a refraining from doing so in the name of academic
responsibility".

 Criticism[edit]

 Neoliberalism has received criticism both from the political left as well as the right, in addition to
myriad activists and academics.

 Much of the literature in support of neoliberalism relies on the idea that neoliberal market logic
improves a very narrow monetized conception of performance, which is not necessarily the best
approach. This focus on economic efficiency can compromise other, perhaps more important
factors. Anthropologist Mark Fleming argues that when the performance of a transit system is
assessed purely in terms of economic efficiency, social goods such as strong workers' rights are
considered impediments to maximum performance, which given the monetization of time
means timely premium rapid networks. Using the case study of the San Francisco Muni, Fleming
shows that neoliberal worldview has resulted in vicious attacks on the drivers' union, for
example through the setting of impossible schedules so that drivers are necessarily late and
through brutal public smear campaigns. This ultimately resulted in the passing of Proposition G,
which severely undermined the powers of the Muni drivers' union. Workers' rights are by no
means the only victims of the neoliberal focus on economic efficiency as it is important to
recognize that this vision and metric of performance judgment de-emphasizes literally every
public good that is not conventionally monetized. For example, the geographers Birch and
Siemiatycki contend that the growth of marketization ideology has shifted discourse such that it
focuses on monetary rather than social objectives, making it harder to justify public goods
driven by equity, environmental concerns and social justice.

 Class project[edit]

 David Harvey described neoliberalism as a class project, designed to impose class on society
through liberalism. Economists Gérard Duménil and Dominique Lévy posit that "the restoration
and increase of the power, income, and wealth of the upper classes" are the primary objectives
of the neoliberal agenda Economist David M. Kotz contends that neoliberalism "is based on the
thorough domination of labor by capital".: The emergence of the "precariat", a new class facing
acute socio-economic insecurity and alienation, has been attributed to the globalization of
neoliberalism.
 Sociologist Thomas Volscho argues that the imposition of neoliberalism in the United States
arose from a conscious political mobilization by capitalist elites in the 1970s who faced two
crises: the legitimacy of capitalism and a falling rate of profitability in industry. Various
neoliberal ideologies (such as monetarism and supply-side economics) had been long advanced
by elites, translated into policies by the Reagan administration and ultimately resulted in less
governmental regulation and a shift from a tax-financed state to a debt-financed one. While the
profitability of industry and the rate of economic growth never recovered to the heyday of the
1960s, the political and economic power of Wall Street and finance capital vastly increased due
to the debt-financing of the state.

 The invisible hand of the market and the iron fist of the state combine and complement each
other to make the lower classes accept dissocialized wage labor and the social instability it
brings in its wake. After a long eclipse, the prison thus returns to the frontline of institutions
entrusted with maintaining the social order.

 —Loïc Wacquant

 Several scholars have linked the rise of neoliberalism to unprecedented levels of mass
incarceration of the poor in the United States. Sociologist Loïc Wacquant argues that neoliberal
policy for dealing with social instability among economically marginalized populations following
the implementation of other neoliberal policies, which have allowed for the retrenchment of the
social welfare state and the rise of punitive workfare and have increased gentrification of urban
areas, privatization of public functions, the shrinking of collective protections for the working
class via economic deregulation and the rise of underpaid, precarious wage labor, is the
criminalization of poverty and mass incarceration. By contrast, it is extremely lenient in dealing
with those in the upper echelons of society, in particular when it comes to economic crimes of
the privileged classes and corporations such as fraud, embezzlement, insider trading, credit and
insurance fraud, money laundering and violation of commerce and labor codes. According to
Wacquant, neoliberalism does not shrink government, but instead sets up a "centaur state" with
little governmental oversight for those at the top and strict control of those at the bottom.

 In expanding upon Wacquant's thesis, sociologist and political economist John L. Campbell of
Dartmouth College suggests that through privatization, the prison system exemplifies the
centaur state:

 On the one hand, it punishes the lower class, which populates the prisons; on the other hand, it
profits the upper class, which owns the prisons, and it employs the middle class, which runs
them.

 In addition, he says the prison system benefits corporations through outsourcing as the inmates
are "slowly becoming a source of low-wage labor for some US corporations". Both through
privatization and outsourcing, Campbell argue, the penal state reflects neoliberalism. Campbell
also argues that while neoliberalism in the United States established a penal state for the poor,
it also put into place a debtor state for the middle class and that "both have had perverse effects
 on their respective targets: increasing rates of incarceration among the lower class and
increasing rates of indebtedness—and recently home foreclosure—among the middle class"-

 David McNally, Professor of Political Science at York University, argues that while expenditures
on social welfare programs have been cut, expenditures on prison construction have increased
significantly during the neoliberal era, with California having "the largest prison-building
program in the history of the world". The scholar Bernard Harcourt contends the neoliberal
concept that the state is inept when it comes to economic regulation, but efficient in policing
and punishing "has facilitated the slide to mass incarceration. Both Wacquant and Harcourt
refer to this phenomenon as "Neoliberal Penality".

 Global health[edit]

 The effect of neoliberalism on global health, particularly the aspect of international aid, involves
key players such as non-governmental organizations (NGOs), the International Monetary Fund
(IMF) and the World Bank. According to James Pfeiffer, neoliberal emphasis has been placed on
free markets and privatization which has been tied to the "new policy agenda" in which NGOs
are seen as being able to provide better social welfare than governments. International NGOs
have been promoted to fill holes in public services created by the World Bank and IMF through
their promotion of Structural Adjustment Programs (SAPs) which reduce government health
spending and which Pfeiffer criticized as unsustainable. The reduced health spending and the
gain of the public health sector by NGOs causes the local health system to become fragmented,
undermines local control of health programs and contributes to local social inequality between
NGO workers and local individuals.

 In 2016, researchers for the IMF released a paper entitled "Neoliberalism: Oversold?", which
stated:

 There is much to cheer in the neoliberal agenda. The expansion of global trade has rescued
millions from abject poverty. Foreign direct investment has often been a way to transfer
technology and know-how to developing economies. Privatization of state-owned enterprises
has in many instances led to more efficient provision of services and lowered the fiscal burden
on governments.

 However, it was also critical of some neoliberal policies, such as freedom of capital and fiscal
consolidation for "increasing inequality, in turn jeopardizing durable expansion". The authors
also note that some neoliberal policies are to blame for financial crises around the world
growing bigger and more damaging. The report contends the implementation of neoliberal
policies by economic and political elites has led to "three disquieting conclusions":

 The benefits in terms of increased growth seem fairly difficult to establish when looking at a
broad group of countries.
 The costs in terms of increased inequality are prominent. Such costs epitomize the trade-off
between the growth and equity effects of some aspects of the neoliberal agenda.

 Increased inequality in turn hurts the level and sustainability of growth. Even if growth is the
sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay
attention to the distributional effects.

 Writing in The Guardian, Stephen Metcalf posits that the IMF paper helps "put to rest the idea
that the word is nothing more than a political slur, or a term without any analytic power".

 The IMF has itself been criticized for its neoliberal policies. Rajesh Makwana writes that "the
World Bank and IMF, are major exponents of the neoliberal agenda". Sheldon Richman, editor
of the libertarian journal The Freeman, also sees the IMF imposing "corporatist-flavored
'neoliberalism' on the troubled countries of the world". The policies of spending cuts coupled
with tax increases give "real market reform a bad name and set back the cause of genuine
liberalism". Paternalistic supranational bureaucrats foster "long-term dependency, perpetual
indebtedness, moral hazard, and politicization, while discrediting market reform and forestalling
revolutionary liberal change".

 Rowden wrote that the IMF’s monetarist approach towards prioritising price stability (low
inflation) and fiscal restraint (low budget deficits) was unnecessarily restrictive and has
prevented developing countries from scaling up long-term investment in public health
infrastructure, resulting in chronically underfunded public health systems, demoralising working
conditions that have fueled a "brain drain" of medical personnel and the undermining of public
health and the fight against HIV/AIDS in developing countries.

 The implementation of neoliberal policies and the acceptance of neoliberal economic theories in
the 1970s are seen by some academics as the root of financialization, with the financial crisis of
2007–2008 as one of the ultimate results.

 Infrastructure[edit]

 Nicolas Firzli has argued that the rise of neoliberalism eroded the post-war consensus and
Eisenhower-era Republican centrism that had resulted in the massive allocation of public capital
to large-scale infrastructure projects throughout the 1950s, 1960s and 1970s in both Western
Europe and North America: "In the pre-Reagan era, infrastructure was an apolitical, positively
connoted, technocratic term shared by mainstream economists and policy makers […] including
President Eisenhower, a praetorian Republican leader who had championed investment in the
Interstate Highway System, America’s national road grid […] But Reagan, Thatcher, Delors and
their many admirers amongst Clintonian, ‘New Labour’ and EU Social-Democrat decision makers
in Brussels sought to dismantle the generous state subsidies for social infrastructure and public
transportation across the United States, Britain and the European Union".
 Following Brexit, the 2016 United States presidential election and the progressive emergence of
a new kind of "self-seeking capitalism" ("Trumponomics") moving away to some extent from the
neoliberal orthodoxies of the past, we may witness a "massive increase in infrastructure
investment" in the United States, Britain and other advanced economies:

 With the victory of Donald J. Trump on November 8, 2016, the 'neoliberal-neoconservative'

policy consensus that had crystalized in 1979–1980 (Deng Xiaoping's visit to the United States,
election of Reagan and Thatcher) finally came to an end [...] The deliberate neglect of America's
creaking infrastructure assets (notably public transportation and water sanitation) from the
early 1980s on eventually fueled a widespread popular discontent that came back to haunt both
Hillary Clinton and the Republican establishment. Donald Trump was quick to seize on the issue
to make a broader slap against the laissez-faire complacency of the federal government.

 Mark Arthur has written that the influence of neoliberalism has given rise to an "anti-
corporatist" movement in opposition to it. This "anti-corporatist" movement is articulated
around the need to re-claim the power that corporations and global institutions have stripped
governments of. He says that Adam Smith's "rules for mindful markets" served as a basis for the
anti-corporate movement, "following government's failure to restrain corporations from hurting
or disturbing the happiness of the neighbor [Smith]".

 Environmental impact[edit]

This section needs expansion. You can help by adding to it. (July 2017)

 Nicolas Firzli has argued that the neoliberal era was essentially defined by "the economic ideas
of Milton Friedman, who wrote that 'if anything is certain to destroy our free society, to
undermine its very foundation, it would be a widespread acceptance by management of social
responsibilities in some sense other than to make as much money as possible. This is a
fundamentally subversive doctrine'". Firzli insists that prudent, fiduciary-driven long-term
investors cannot ignore the environmental, social and corporate governance consequences of
actions taken by the CEOs of the companies whose shares they hold as "the long-dominant
Friedman stance is becoming culturally unacceptable and financially costly in the boardrooms of
pension funds and industrial firms in Europe and North America".

 The replacement of a government-owned monopoly with private companies, each supposedly

trying to provide the consumer with better value service than all of its private competitors,
removes the efficiency that can be gained from the economy of scale.

 Even if it could be shown that neoliberal capitalism increases productivity, it erodes the
conditions in which production occurs long term, i.e. resources/nature, requiring expansion into
new areas. It is therefore not sustainable within the world's limited geographical space.

 Social and ecological damages: heterodox economists argue that neoliberalism is a system that
socializes costs and privatizes profits. It is thus a system of unpaid costs and avoidance of
 responsibility. The main solutions are seen in social controls of the economy to prevent
damages, namely the precautionary principle and the reversal of the burden of proof. This
markedly differs from neoclassical and neoliberal solutions that propose taxes, bargaining, or
judicial process.

 Exploitation: critics consider neoliberal economics to promote exploitation and social injustice.

 Negative economic consequences: critics argue that neoliberal policies produce economic
inequality.

 Mass incarceration of the poor: some critics claim that neoliberal policies result in an expanding
carceral state and the criminalization of poverty.

 Increase in corporate power: some organizations and economists believe neoliberalism, unlike
liberalism, changes economic and government policies to increase the power of corporations
and a shift to benefit the upper classes.

 Anti-democratic: some scholars contend that neoliberalism undermines the basic elements of
democracy.

 Urban citizens are increasingly deprived of the power to shape the basic conditions of daily life,
which are instead being shaped exclusively by companies involved in competitive economy.

 Trade-led, unregulated economic activity and lax state regulation of pollution lead to
environmental impacts or degradation.

 Deregulation of the labor market produces flexibilization and casualization of labor, greater
informal employment and a considerable increase in industrial accidents and occupational
diseases.

 Mass extinction: according to David Harvey, "the era of neoliberalization also happens to be the
era of the fastest mass extinction of species in the Earth's recent history".

 Instead of citizens, it produces consumers. Instead of communities, it produces shopping malls.

The net result is an atomized society of disengaged individuals who feel demoralized and socially
powerless.

 —Robert W. McChesney

 American scholar and cultural critic Henry Giroux alleges neoliberalism holds that market forces
should organize every facet of society, including economic and social life; and promotes a social
Darwinist ethic which elevates self-interest over social needs.

 According to the economists Howell and Diallo, neoliberal policies have contributed to a United
States economy in which 30% of workers earn low wages (less than two-thirds the median wage
 for full-time workers) and 35% of the labor force is underemployed as only 40% of the working-
age population in the country is adequately employed.

 The Center for Economic Policy Research's (CEPR) Dean Baker (2006) argued that the driving
force behind rising inequality in the United States has been a series of deliberate, neoliberal
policy choices including anti-inflationary bias, anti-unionism and profiteering in the health
industry.[188] However, countries have applied neoliberal policies at varying levels of intensity
—for example, the OECD has calculated that only 6% of Swedish workers are beset with wages it
considers low and that Swedish wages are overall lower.[189] Others argue that Sweden's
adoption of neoliberal reforms, in particular the privatization of public services and reduced
state benefits, has resulted in income inequality growing faster in Sweden than any other OECD
nation.

 The rise of anti-austerity parties in Europe and SYRIZA's victory in the Greek legislative elections
of January 2015 have some proclaiming "the end of neoliberalism".

 Kristen R. Ghodsee, ethnographer and Professor of Russian and East European Studies at the
University of Pennsylvania, asserts that the triumphalist attitudes of Western powers at the end
of the Cold War and the fixation with linking all leftist political ideals with the excesses of
Stalinism, permitted neoliberal, free market capitalism to fill the void, which undermined
democratic institutions and reforms, leaving a trail of economic misery, unemployment and
rising inequality throughout the former Eastern Bloc and much of the West in the following
decades that has fueled the resurgence of extremist nationalisms in both the former and the
latter. In addition, her research shows that widespread discontent with neoliberal capitalism has
also led to a "red nostalgia" (Nostalgia for the Soviet Union, Ostalgie, Yugo-nostalgia) in much of
the former Communist bloc, noting that "the political freedoms that came with democracy were
packaged with the worst type of unregulated, free market capitalism, which completely
destabilized the rhythms of everyday life and brought crime, corruption and chaos where there
had once been a comfortable predictability."

 Ruth J Blakeley, Professor of Politics and International Relations at the University of Sheffield,
accuses the United States and its allies of fomenting state terrorism and mass killings during the
Cold War as a means to buttress and promote the expansion of capitalism and neoliberalism in
the developing world. As an example of this, Blakeley says the case of Indonesia demonstrates
that the U.S. and Great Britain put the interests of capitalist elites over the human rights of
hundreds of thousands of Indonesians by supporting the Indonesian Army as it waged a
campaign of mass killings which resulted in the wholesale annihilation of the Communist Party
of Indonesia and its civilian supporters. Historian Bradley R. Simpson posits that this campaign of
mass killings was "an essential building block of the neoliberal policies that the West would
attempt to impose on Indonesia after Sukarno's ouster."
 In Latin America, the "pink tide" that swept leftist governments into power at the turn of the
millennium can be seen as a reaction against neoliberal hegemony and the notion that "there is
no alternative" (TINA) to the Washington Consensus.

 Notable critics of neoliberalism in theory or practice include economists Joseph Stiglitz,[198]

Amartya Sen, Michael Hudson, Robert Pollin, Julie Matthaei and Richard D. Wolff; linguist Noam
Chomsky; geographer and anthropologist David Harvey; Slovenian continental philosopher
Slavoj Žižek, political activist and public intellectual Cornel West; Marxist feminist Gail Dines;
author, activist and filmmaker Naomi Klein; journalist and environmental activist George
Monbiot; Belgian psychologist Paul Verhaeghe; journalist and activist Chris Hedges; and the
alter-globalization movement in general, including groups such as ATTAC. Critics of
neoliberalism argue that not only is neoliberalism's critique of socialism (as unfreedom) wrong,
but neoliberalism cannot deliver the liberty that is supposed to be one of its strong points.

 In protest against neoliberal globalization, South Korean farmer and former president of the
Korean Advanced Farmers Federation Lee Kyung-hae committed suicide by stabbing himself in
the heart during a meeting of the WTO in Cancun, Mexico in 2003. He was protesting against the
decision of the South Korean government to reduce subsidies to farmers.

The International Businesses and the Ongoing Economic

Crisis

 The previous articles in this module discussed the various

facets and aspects of the international businesses and the
norms and rules with which they have to operate in the
global economy. This article looks at the ongoing economic
crisis and its impact on the operations of the international
businesses. Market experts and investors gauge the health
of global trade and the growth of international businesses by
a measure known as Baltic Shipping Index. This measure is a
basket number of the size of global trade as measured in the
shipping activity.

 In the aftermath of the global economic crisis, this measure

took a dip and is currently in the lower end of the scale. This
is an indication that international businesses are having it
tough in the global economy. Apart from this measure, there
is the other index, which is known as the Purchasing
Managers’ Index or PMI. This measures the inventory
 position and the number of new orders that have been
placed for goods and services.

 Both these measures indicate that international trade is

down and the manufacturing, retail, and services activity is
on the lower end. Hence, it can be said that international
businesses are having a hard time in the global economy.
Added to this is the prognostication of some commentators
who have likened the ongoing global economic crisis as
having a dealt a death blow to globalization and have
proclaimed the “The Collapse of Globalism”. Taken together,
these indicators are sobering for any investor and hence,
international businesses have to consider all options and
look carefully before they leap.

 However, we argue in this module, that globalization is far

from over and that the future of international business would
depend on the BRICS (Brazil, Russia, India, China, and South
Africa) and the next “Breakout Nations” that would form the
tier two of the emerging markets. Further, the fact that
globalization has integrated the world to such an extent that
the ongoing global economic crisis is just a blip on
international businesses and that the phenomenon would go
on after this lapse has to be considered as well.

 What this means are those international businesses had to

innovate to grow and expand further to succeed. They would
be well advised to look for opportunities in the next rung of
the emerging markets like Vietnam, African countries, and
Latin American countries. Of course, the fact that the
ongoing economic crisis has dented the confidence of
international businesses cannot be denied. The moot point
here is that instead of unfettered globalization, a trend
wherein international expansion is done after doing due
diligence would be the driving force for the future. Apart
from this, the future would also belong to those international
 businesses that can thrive in the chaotic global economy
that is the present state.

 Finally, the ongoing global economic crisis has laid bare the
stresses, strains of systemic risk, and has exposed the fragile
nature of the global economy. Hence, the future of
international businesses would be in the realm of guarded
growth and better business practices as opposed to
unrestrained expansion and dubious business practices.