The Causes and consequences of neoliberalism Have been determined by certain political, social and economic crises that, according to different regions of the world, have evolved differently.
Neoliberalism is an ideology that promotes a change in the configuration of the capitalist economy, where the state does not participate, leading to the privatization of public services. The followers of neoliberalism believe that this system contributes to the economic and social development of a country.
The antecedent in the history of neoliberalism are the liberal conceptions that had the classics of the political economy of the English bourgeoisie. Its first appearance was before World War II and continued with much more presence in the decade of the 60 and also later in the 80 and 90.
Neo-liberal strategies began in Latin America in the late 1970s as a result of the great economic imbalances they had. Other pioneering countries in neoliberalism are the United States, Germany and England.
As the poor become poorer and the richer the rich, the more favored they acquire an increasing control over money. This increase in inequality undermines the level and sustainability of growth.
Milton Friedman
With global trade expanding, foreign investment has made it a way to transfer technology and Developing economies .
One of its main exhibitors is Milton Friedman , Who argued that the state does not have to be an active player in the national economy, but that the control of the economy is private capital.
Those who run privatized and semi-privatized services in the UK increase their wealth because they invest little and charge a lot.
In Mexico, Carlos Slim gained control of virtually all fixed and mobile telephony services and soon became the richest man in the world.
5 Causes of neoliberalism
1- The economic crisis
With the devaluation of the currency exports are reduced and makes the country's position more competitive.
The neoliberals indicate that all the variables of the economic system must be deregulated, that is to say, dissociated from the control of the state. They also point to a deregulation and liberalization of banks.
To try to solve the economic problems in the decade of the 70 and 80, almost all the States of the capitalist world They had to follow some of these measures.
Although those that were really forced were the underdeveloped countries. These countries saw poverty and social inequality rise after years of implementing these measures.
2- The political crisis
When governments lose their ethical authority, they simply divert people's attention to issues that may interest them. In this way citizens are carried away by feelings rather than arguments.
3- Bankruptcy of stock exchange
The fall of prices of the stock market of New York in 1929, well-known like"The crack of the 29", was the greater crisis until then known.
It caused the ruin of many investors, big businessmen and small shareholders, as well as the closure of companies and also of banks.
This caused many citizens to remain unemployed, and the problem spread to almost every country in the world.
The consequences were a great economic crisis that led to the principles of neoliberalism.
4- Disappearance of the welfare state
The welfare state disappears when social protection is reduced, labor precariousness appears and privatization of public services such as electric utilities, railway and air companies, education, roads, health, etc.
5- The class struggle
Neoliberalization was considered as a project of recovery of the bourgeois class. The neoliberal policy directly attacks the unions and bets and supports the private tradesmen classes with industrial and financial interests.
This causes service workers to have precarious contracts and lower pay.
5 Consequences of neoliberalism
1- Modification of workers' rights
The process of economic liberalization entails greater wage flexibility, lowering minimum wages, reducing public employment and creating a reduction in employment protection. Restrictive labor laws are created that facilitate the dismissal of workers.
It is left vulnerable to the worker since the entrepreneur can decide more freely on its continuity in the company.
Workers are constantly being monitored and evaluated resulting in unbearable situations. Preference is given to cheap labor.
2- Elimination of public health
What is intended with the privatization of the health system is a better management of taxpayers' taxes, with more than considerable savings in public coffers in order to offer a better service to citizens.
In 1983 Thatcher Privatization began in the English health system, first with the logistics services of hospitals such as laundry, cleaning and cooking. The hospitals were then completely privatized.
3- Weakening of the poorest countries
One of the measures taken to weaken the poorest countries is to reduce the financing of the state to everything that is not related to the reproduction of capital and especially everything destined for social purposes.
The cuts in social spending, commodity price liberalization, the social benefits of large fortunes, among other measures, only condemn the poorest countries to stay indefinitely, in an economic marginalization having to depend on other countries.
4- Increasing taxes
Taxes on consumption are increased, while it is reduced in the higher incomes.
5- Opening the borders for goods
It wants to win in competition by eliminating restrictions on trade. This fact causes wages to go down.
References
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