NEOLIBERALISM: GOOD OR BAD?

Neoliberalism, an ideological apparatus characterised by David Harvey as a ‘creative destruction’, is an economic system and set of policies, principles and practices that are developed so as to ‘supposedly’ benefit a country’s people and its economy. This system has developed in the last 25 years or so (Garcia & Martinez). But how beneficial is neoliberalism to a country and its economy? I agree with Harvey in ‘Neoliberalism as a creative destruction’ (2006) as he successfully portrays the idea that neoliberalism is not an effective system and in fact results in increased economic inequality leaving the poor to become poorer and the rich to grow richer. According to Harvey (2006), neoliberalism holds a poor record of stimulating the economy yet still remains the dominant system used today in most countries across the globe. The majority of people in contemporary society are adamant that the system of neoliberalism is the only economic system that will work and therefore many, including those who do not directly benefit from neoliberalism themselves and who in fact loose out as a result, vote for this particular system. Harvey (2006) thoroughly portrays these ideas and a great amount of people in today’s society agree with his views on the subject, that is, that the poor are becoming poorer and the rich, richer.

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Figure 1: Protest against neoliberalism and division of class

Source: Popular revolt against neoliberalism [Image] (2011, October 31). Retrieved May 22, 2014 from http://vastminority.blogspot.com.au/2011_10_01_archive.html

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Figure 2: Protest against Neoliberalism

Source: [Image] (2014, April 11). Retrieved May 23, 2014, from http://plantothrive.net.au/2014/04/neoliberalism-energy-deficit/

David Harvey has a valid point when he discusses that neoliberalism is more about the redistribution off money and wealth to those of a higher socio-economic class, otherwise known as the elites, than it is about creating overall wealth and stimulating the economy to create a better society for ‘all’, regardless of economic status. It can therefore be noted that the system of neoliberalism causes a greater division of class and broadens the socio-economic gap. Neoliberalists aim to create money and wealth by what is referred to as the ‘trickle-down effect’. The Trickle down affect is a process where the elites, or the ‘ruling class’, gain greater income and wealth and thus they become richer than the rest of society. These elites then need those of a low-socio economic status to for example, work for them therefore generating income and wealth for these people as a result (Macdonald, 2009). But is this measure really beneficial to and in the best interest of society as a whole?

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Figure 3 : “The Trickle-down effect”

Source: [Image] (2012, February 20). Retrieved May 23, 2014, from http://okieblog.wordpress.com/2012/02/20/milton-friedman-on-neoliberalism-it-never-occurred-to-me-that/

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Figure 4: “The trickle-down effect”

SourceNeoliberalism’s trickle down effect [Image] (2013, August 11). Retrieved May 23, 2014, from http://blog.greenhearted.org/2013/08/making-invisible-backdrop-of.htm

The system of neoliberalism incorporates many measures with the primary aim to benefit ‘all’ of society. The system encompasses accumulation by dispossession which is made up of four main focus areas including; Privatization, deregulation, State Redistributions and the management and manipulation of crises. Accumulation by dispossession is explained by Harvey as a redistribution of wealth from the poor to the rich. Privatisation is where the ownership of once state owned services including gas, water, health care and so on is transferred to private companies. This method has resulted in people now having to pay higher prices including what used to be free goods and a loss of livelihood. Deregulation of the financial system is where the state no longer oversees the system “allowing it to act without balances and checks”. This results in higher prices for the public, debt incumbency, higher tax and a no public services. State redistribution involves the redistribution of income and wealth from the rich to the poor as a result of deregulation and limits in public spending. The management and manipulation of crises is state decisions and creation of economic crises that leave the poor with less and wealthy with more e.g. rise in interest rates.

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Figure 5: Rally against Privatisation of schools

Source: [Image] (2010, January 1).  Retrieved May 22, 2014, from http://www.blackagendareport.com/content/privatizing-education-neoliberal-project-re-imagine-america-them-not-us

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Figure 6: Protests against privatization of the health care system

Source: [Image] (2013, October 28). Retrieved May 22, 2014, from http://www.popularresistance.org/neoliberalism-government-in-the-service-of-corporations-not-people/

 

REFERENCES:

[Image] (2012, February 20). Retrieved May 23, 2014, from http://okieblog.wordpress.com/2012/02/20/milton-friedman-on-neoliberalism-it-never-occurred-to-me-that/

[Image] (2014, April 11). Retrieved May 23, 2014, from http://plantothrive.net.au/2014/04/neoliberalism-energy-deficit/

[Image] (2013, October 28). Retrieved May 22, 2014, from http://www.popularresistance.org/neoliberalism-government-in-the-service-of-corporations-not-people/ – Neoliberalism: Government In The Service Of Corporations, Not People

[Image] (2010, January 1).  Retrieved May 22, 2014, from http://www.blackagendareport.com/content/privatizing-education-neoliberal-project-re-imagine-america-them-not-us

Popular revolt against neoliberalism [Image] (2011, October 31). Retrieved May 22, 2014 from http://vastminority.blogspot.com.au/2011_10_01_archive.html

Neoliberalism’s trickle down effect [Image] (2013, August 11). Retrieved May 23, 2014, from http://blog.greenhearted.org/2013/08/making-invisible-backdrop-of.html

Garcia, A.,& Martinez, M. (n.d.). What is Neoliberalism? A Brief Definition for Activists. Corp Watch. Retrieved from http://www.corpwatch.org/article.php?id=376

Harvey, D. (2006). Neoliberalism as creative destruction. Annals of the American Academy of Political and Social Science. 610: 22-44.

Macdonald, T.H. (2009). Removing the Barriers to Global Health Equity. Oxford, New York: Radcliffe

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