What is neo-liberalism? Like fascism, it's kind of hard to define exactly, and like fascism we can all name a couple of characteristics of the ideology. I wonder if that is because they both were extremist reactions to a failed capitalist free market system..
source: YouTube
In short, neo-liberalism was an extreme response to the failures in classical liberalism and the real-world consequences of these failures. Liberalism, the ideology that focuses on personal liberty and free markets, as put forward by Adam Smith among others, led to a brief period of economical bliss in the "roaring twenties" followed by a huge crash in 1929, ushering us into the "Great Depression". The response to this crash and depression was an increase in direct political action, exemplified by Franklin Roosevelt's "New Deal" and the introduction of Keynesian economics. Early neo-liberals formulated ideas about how to remedy the faults that led to the crash, and also saw great danger in the response; they feared that the huge increase of government interference in the markets was an early sign of collectivization which they believed to the enemy of the personal liberty that all but defined their ideology.
It's important to realize that free markets and competition as envisioned by Adam Smith served, in his mind, the greater good. He was of the opinion that if every free individual rationally worked for their own self-interest, there would appear a self-regulated equilibrium in which each citizen would get theirs; classical liberalism held that same belief and therefore contained a core of reciprocity in which trading was done for mutual benefit. It's that last part that has always failed, and was eventually abandoned completely by the neo-liberals. After years of this failed capitalist experiment it was proven beyond a shadow of a doubt that Smith's "invisible hand" simply doesn't exist. Seeing this core defect, and horrified by the response of government interference, the liberals had to find new ways to sell their ideology, and neo-liberalism is what they came up with.
The first thing they did, was to do away with the notion that markets are a natural phenomenon capable of balancing itself. Instead they conceded that markets are a human-made structure. The state, in their minds, should take an active role in the creation and maintenance of markets, not in the maintenance of society. Ronald Reagan in America and Margaret Thatcher in Great Britain are famous for their slogans supporting this belief; Reagan said "Government is not the solution to our problem, government is the problem," and Thatcher said "There is no such thing as society." They each in their own words made clear that the government isn't there to help you. The markets will help you, and therefore it's the government's task to safeguard not your well-being, but the well-being of the markets. So, when modern liberals claim they want a "smaller" government, they only mean a government that does less for you, when in reality governments have only grown because they take the task of serving the markets very seriously...
In so far neo-liberal governments do serve us, it's always from an individualistic perspective, not from the perspective of wanting to better society as a whole; that part of maximizing personal liberty they've kept from the classical liberal ideology. And in order to sell their neo-liberal monstrosity they've hugely increased the focus on personal freedom in their rhetoric, always aimed at your individual right to help yourself. See how that works? Instead of actually helping, government tasks itself to take away as much obstacles as possible in order for you to freely compete in the marketplace. And they freely admit that here will be losers in that eternal competition; that's another marked difference between classical liberalism and neo-liberalism. Gone is the idea of an equilibrium or trades that are mutually beneficial. Taking care of number one, that's all that counts in the neo-liberal ideology, which is why we now have families in which each member has to have their own job; gone are the days that one parent is the provider, now mom and pop have to work, and if the kids want an education, they'll have to work as well...
The natural outcome of this failed response to a failed ideology is the anti-democratic oligarchy we see today; yes, the neo-liberals see "democracy" as one of the main threats to their preferred world-order and they've made sure that democracy is all but gone. But I don't want you to be fooled into thinking that what we have now is anything other than peak-capitalism, or late stage capitalism. All that I've said is a natural progression starting with Adam Smith's vision of free rational agents who pursue their own personal profits. And I've made this point in many, many posts of mine; a return to the capitalism and free markets in classical liberalism is nothing more than a reset of the ideology that led us to where we are today. Even Smith realized that capitalism can not work without government there to protect the personal property rights on which this ideology is based. It's only natural then, that in the end those with the largest amount of accumulated wealth will enjoy the most amount of the government's support. The moral of all this is that government needs to be the representative of society as a whole, and that the only way to accomplish this is to have a functional, honest democracy that's based on the one-person-one-vote rule instead of the one-dollar-one-vote rule we've let the liberals and neo-liberals device.
That's all I have to say on this, so please watch this video. It goes into much more detail on the history, definition and effects on society of neo-liberalism. I found it interesting and enlightening, and I hope you'll agree. And I hope you now have a better understanding of why the Democrats just voted down the raise of the minimum wage to 15 dollar per hour...
Neoliberalism Explained: Its Theory, Practice, and Consequences
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