The Persistence of Neoliberalism

Despite much criticism, neoliberalism is still the dominant politico-economic theory amongst policy-makers as shown by its influence on a variety of domestic and international policies.

Citation

Stephen McBride, “Neoliberalism in Question?” in Stephen McBride, Rianne Mahon and Gerard W.Boychuk eds. After '08: Social Policy and the Global Financial Crisis Vancouver: UBC Press

What is this research about?

Neoliberalism is a modern politico-economic theory that emphasizes elements such as the free market, privatization, deregulation, flexibility of labour markets, and minimum government economic interference aside from preserving property rights and institutions. Intellectuals, some states, and some international organizations have criticized this approach for its role in causing recurrent crises, such as the 2007-2008 economic crisis. The purpose of this research is to argue that despite the criticisms there has been little deviation from neoliberalism and to explore reasons for its durability.

What did the researchers do?

The author reviewed existing literature on the expectations of paradigm shifts due to crises, the criticisms concerning neoliberalism, and the empirical evidence on the persistence of this type of economic policy. He then offered explanations to address neoliberalism's durability.

What did the researchers find?

The researcher found that:

  • Neoliberalism has led to the rise of corporate power and a change in the labour market. Policies aimed at full employment and job security have been replaced with ones that aim at flexibility in the form of unstable employment, job loss and rising inequality.
  • Although some intellectuals, states, and international organizations have criticized neoliberalism, they have not developed a coherent, unified alternative that can replace neoliberalism.

 
Neoliberalism's persistence can be explained by:

  • Neoliberalism's altering of the traditional labour market such that workers and unions have less power. This was accomplished through changes such as allowing unemployment rate to increase and increasing the flexibility of the labour market.
  • Neoliberalism's strong influence on the political and economic structures at both the state and international levels.  For example, important global institutions, such as the G20, European Union and Central Bank, still use the neo-liberal paradigm as a guide to action. This has led to outcomes such as decreased government regulation of the market, the creation of international treaties that include neoliberal content, and increased power of private capital.

How can you use this research?

This research is useful for policymakers, political scientists, economists, and other researchers to gain a better understanding of the reasons behind the dominance of neoliberalism and the outcomes of this paradigm, including ongoing budgetary constraints and government cutbacks.

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