The ideology of Neoliberalism, which emerged in the 1970s, is often characterized as a contemporary manifestation of “market fundamentalism.” This designation is derived from the central tenet of Neoliberalism, which prioritizes free markets as the primary mechanism for organizing economic activity and holds a firm conviction in the superiority of market-based solutions compared to government intervention. This perspective calls for a reduction in government regulation and intervention in the economy and a corresponding shift towards market-based solutions, including eliminating hurdles in trade, privatizing state-owned enterprises, and reducing welfare programs (Bockman 14). It is believed that the market is the most efficient means of allocating resources and that economic growth is best achieved through the unrestrained operation of market forces.
Several factors facilitated the development of neoliberalism at the global level. The prevalence of stagflation, characterized by sluggish economic growth and elevated inflation rate, resulted in a shift from Keynesian ideology towards the ideas of Hayek and Friedman (Balaam & Dillman 36). Margaret Thatcher and Ronald Reagan popularized neoliberalism in the 1980s by implementing its policies and a decade later the fall of communism in Eastern Europe opened new frontiers for the ideology (Balaam & Dillman 37-38). Reduced government intervention and privatization of various sectors during the 1990s also contributed to the widespread popularity of neoliberalism across the world.
Protests against market globalization, which was implemented by Bill Clinton, as demonstrated by the Battle of Seattle and the Arab Spring, can be regarded as a response by authoritarian regimes to the global implementation of neoliberal ideologies. This phenomenon aligns with the observations of Karl Polanyi – the efforts to establish an independent and free market would result in the emergence of countermovements seeking to resist such developments (Bockman 15). The advancement of neoliberalism has resulted in both negative and positive outcomes. It has further deregulated financial markets and reduced state intervention. Nevertheless, it has led to heightened levels of inequality and economical destabilization.
Neoliberalism is considered a new form of market fundamentalism because it sees market as a primary driver of economic decision-making and that interference of government in the economy should be controlled. The superiority of market forces over government intervention aligns with traditional market fundamentalism, which views market as the best mechanism for allocating resources and solving economic problems. However, neoliberalism also incorporates additional elements, such as globalization and the reduction of state power, making it a distinct and influential ideology.
References
Balaam, D. N., & Dillman B. L. (2018). Introduction to international political economy. Routledge.
Bockman, J. (2013). Neoliberalism. Contexts, 12(3), 14-15. Web.