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What is Neoliberalism and when was it born?
Neoliberalism is a political ideology based on the economy that emerged in the 1970s. Neoliberal thought aims to minimize the intervention of the state in the market while aiming to provide all kinds of opportunities to private capital with the theory of deregulation. With the collapse of the Keynesian economic model, it found application in the world in the 1970s. During those years, an inextricable economic situation was seen in many countries. Hayek and Friedman planted the seeds of neoliberalism in the world. As a result of the Great Depression in 1929, Keynesian economic policies came into play and the welfare state was formed. The welfare state became regulated in many areas of society, and in short, "re-distribution" mechanisms were in question. Behind the historical emergence of neoliberalism is the critique of the state's organization and existence in society. This criticism has two pillars: First, the system will hinder free life (a political emphasis); second, the system cannot ensure efficiency (an economic emphasis).
The starting point of the relationship between the state and society after the 1970s is the acceptance of the individual as a homo economicus. In other words, in neoliberalism, individuals are driven by economic incentives. On the way to neoliberalism, people have become economic subjects and not individuals with rights. With this ideology, the administration of states has completely changed. In the last thirty years; education, health, the environment and even the individual with a cost-benefit logic has entered our lives.
The basic philosophy of neo-liberal understanding can be summarized as:
Glorifying the market,
Prioritizing individual interest over public benefit,
Making the labor market flexible against capital power,
Reducing labor costs.
By minimizing the state, the following basic principles of neo-liberal policies (which are served through international economic, financial, and political institutions) come to the fore:
Privatization of public enterprises
Ending central government regulations in the economy
Liberalization of trade and industry
Taking 'monetary' measures against inflation at the expense of increasing inequality
Ensuring strict control over the organized (unionized) workforce
Reducing public spending, especially social spending and investment
Reduction of the state's field of activity and personnel
Removal of controls on global financial flows for the development of international markets
Reduction of taxes
So what has been the harm of neoliberal ideology?
With neoliberalism, the way for fast and easy movement of hot money between countries, which completely excludes people and labor and focuses only on economic efficiency, has opened. By imposing the privatization of public assets, regardless of the qualifications of individuals or institutions, foreign capital was allowed to own and control sectors such as energy, banking, telecommunications, security, transportation, and vital natural resources. By restricting the workers' right to unionize, unemployment rates increased to unprecedented levels with layoffs. Agricultural lands were destroyed and the import regime was adopted, resulting in countries facing food and nutrition problems with the risk of possible famine crises. With these policies, austerity and privatization programs were implemented to make capital markets illegal, free trade was opened by removing price controls, and the productive class was left at the mercy of capital by reducing the effects of governments on the economy. Many reasons such as the increasing welfare gap between social classes, income inequalities, increasing poverty and interest rates, erosion in job security, dissolution of the organization, and the increase in the level of unregistered employment have increased the discontent in social segments.
Instead of a political ideology based on freedom and the importance of freedom, a system that strongly supports free markets, advocates for the unequal distribution of wealth, property, and natural resources instead of developing the democratic process and welfare state, is one step closer to the end in every crisis.
With neo-liberal policies, nations' rights to determine their own destiny have been taken away. The system, whose only goal is economic efficiency, has actually collapsed a long time ago due to its anti-democratic, exploitative and social injustices by promoting globalization that impoverishes countries.
Finally, the world saw once again with the COVID-19 pandemic that there would be no economy without people. In 2020, neoliberalism could no longer hide the harm done to humanity. This time, it also revealed its misery with its collapse.
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