Neoliberalism

Abstract

AbstractNeoliberalism first arose in the 1940s but came to prominence in the 1970s. It has a number of important strands, Austrian and monetarist, laissez‐faire and social market. The ordoliberalism of the 1940s sought to give priority to market rather than bureaucratic means of ordering the economy within a framework of law. Economic liberals after 1945 set up the Mont Pelerin society to campaign for the rule of law, a minimal state, and individual liberty. For a time these ideas had little practical impact, but that changed in the 1970s following the crises which overwhelmed the postwar liberal order of national Keynesianism. Key neoliberal ideas on inflation, public spending, and trade unions, became the dominant common sense. Neoliberals favor reducing the role of government in the economy as much as possible, giving primacy to markets and the free play of competition. They advocate deregulation, privatization, marketization, and lower taxes. The state retains a major role because a free economy requires a strong state to establish and maintain the institutional arrangements for it. Neoliberals are often hostile to democracy, because of the primacy they give to safeguarding the market order. Challenged by the 2008 financial crisis, neoliberalism has so far proved resilient.