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Neoliberalism refers to the reduction of government’s influence on the economy by abolishing price controls, easing capital markets regulation, and eliminating trade barriers. It also includes privatization of state-owned utility companies and reduction of policies that seek to increase government revenue collection through taxes. The reliance on free trade in solving problems that require public policy has contributed to the geographical uncertainties. One of the major problems as a result is social inequality.

The Chilean government adopted neoliberalism in the 1970s after the failure of socialist policies that led to a recession. This served as the experimentation of the policies where other countries could benchmark from. Its adoption was a success as it led to the reduction of inflation rates from 600 percent to 10 percent (Peck, pg. 5). The downside of this was the increase in inequality due to the reduction of wages. It was reported that by 1990, 44 percent of the Chilean population was poor. Neoliberalism was introduced in the United States and the United Kingdom in the 1970s by President Ronald Reagan and Prime Minister Margaret Thatcher respectively. They sought to change the regional economic policies to neoliberalism that eliminated government influence on the economy. The move by the British and American governments influenced the adoption of neoliberal policies in other countries. International financial institutions like the World Bank and the IMF also influenced the adoption of neoliberal policies in developing countries by making it a requirement for loan processing. This led to widespread adoption in different regions around the world including the Middle East region, the Latin America region, the Asian-pacific region, and the Republic of China.

In the United States, the reduction of income taxes, financial deregulation, and free trade agreements characterized the adoption of neoliberal policies. In the United Kingdom, neoliberalism was characterized by the reduction of income taxes, deregulation of capital markets, and privatization of utility companies. The adoption of the neoliberal policies in Mexico as a result of the International monetary fund loan requirement. During the debt crisis of 1983, Mexico was forced to adopt free trade policies to qualify for IMF loans. This resulted in the privatization of state-owned industries, easing of trade barriers, and devaluation of the currency. In Japan, the neoliberal policies transformed the agricultural sector by opening up to trade negotiations and reducing the price of farm products. The Australian government adopted neoliberal policies by deregulation of financial markets, privatization of state-owned corporations, and opening up to trade negotiations. In the Middle East, Egypt took the lead in the adoption of neoliberal policies. Neoliberalism is inherent in the European Union, which advocates for free trade and lifting of movement restrictions across member countries.

How Neoliberalism has contributed to socio-economic uncertainty

Inherently, neoliberal policies are believed to have the ability to control and autocorrect markets. Reducing government influence means that the markets are left to self-control. While this could achieve the desired outcome of economic freedom, it could lead to neglect of other aspects of the economy (Fraser, pg. 5). For instance, in all the countries that adopted the neoliberal policies, there was an improvement in economic performance and increased inequality. This is because of the decreased wages of workers as a result of deregulation. Critics argue that Neoliberalism neglects the social impacts of its adoption such as labor rights in the pursuit of its economic gains like gross domestic product growth. This results in the argument that the pursuit of economic growth could compromise social justice and lead to exploitation. Economic inequality is one of the major negative effects of neoliberal policies on social justice. Many countries that have succeeded in the adoption of neoliberalism has resulted in more than 30 percent of American workers earning low wages. 35 percent of the workers have been underemployed while 40 percent of the population are adequately employed (Wilson, pg. 2). The adoption of neoliberal policies in many countries has resulted in the formation of a social group of citizens that exists without certainty and has been alienated by the community. This affects their mental well-being. This is as a result of the reduction of workers union powers and empowerment of the employers through the neoliberal policies.

In Chile, the adoption of neoliberal policies led to an economic turn-around. Which the economic gains were evident, the social inequality gap widened. Approximately 44 percent of the Chilean population was poor with only 10 percent wealthy among the population (Slobodian, pg. 12). The income of the wealthy citizens depicted an 85 percent increase. In Argentina, the adoption of neoliberal policies resulted in the neglect of the social welfare of workers. This led to protests by workers demanding social justice. As a result, the president resigned before the completion of his term due to social unrest. After the adoption of the neoliberal policies by the Swedish government, it recorded the fastest growth in income inequality. Lack of regulation of the labor market by the Venezuelan government led to an increase in informal employment and an increase in occupational accidents. Although there are gains in the adoption of neoliberalism, social inequality seems to be the trade-off. In the long run, social inequality affects the sustainability of the economic growth achieved by the adoption of neoliberal policies. Neoliberalism is perceived as a punishment to the lower class citizens and rewarding to the elite class. This is because a reduction in income taxes translates to economic inequality as the wealthy stand to benefit.

How the policies have created geographic rivalries or tension?

Neoliberalism has been associated with imperialism. This is the extension of power and political control of developed countries over countries outside their jurisdiction. This is achieved by the use of military forces. The United States and the UK have been accused of promoting state terrorism and annihilation in a bid to promote the adoption of neoliberal policies by the developing countries (Brown, pg. 10). For instance, the UK and the US governments ignored the human rights of the civilians who supported communist policies in Indonesia by supporting the mass killings by the Indonesian army. This was achieved by presenting the military interventions as the only solution for the attainment of perpetual peace. Similar interventions have been employed by the US in several countries leading to the violation of human rights. In Iraq, the use of military intervention by the US government is a classic case of imperialism and the furtherance of its global control. The formation of international institutions is also viewed as a way to extend the power and political control over developing countries. Neoliberal policies allow this by allowing these institutions such as the IMF and the World Bank to obtain resources from developing countries in the form of financial aids and loans. In a bid to save the developing countries from the financial crisis, these countries are coerced into adopting the neoliberal policies by these global institutions. The establishment of these institutions is seen as a plan to increase the political and economic dominance of the developed countries such as the UK and the US over the developing countries. The case of the US intervention to influence the outcome of Chilean elections is an example of political dominance and coercion to adopt neoliberal policies. This led to a military coup against the elected government in which the US government supported. In his words, the US secretary of state at the time stated that they could not watch the Chilean government go communist hence the intervention. This is despite a democratic election that led to the formation of the overthrown government.

Accumulation by dispossession

This is a concept that defines how neoliberalism leads to the concentration of power and wealth to just a few people. It is achieved by the privatization of public entities and the manipulation of state crisis (Cahill, pg. 15). Privatization is the practice of converting public assets that are owned by the state into private assets. This includes natural resources. The selling of public land to private investors is a perfect example of accumulation by dispossession. For instance, Margaret Thatcher’s initiative of privatization of the housing scheme in the United Kingdom was perceived as favorable to the lower class population. This is because it provided an opportunity for property acquisition at lower costs and the acquisition of assets. The allocation of the houses was politically influenced and this led to the lower class missing out on the prime property which was acquired by the elite class. Moreover, these homeowners borrowed money through mortgages to buy these houses they paid interest to bank owners who belong to the wealthy class of citizens. In the end, it was a case of the transfer of money from the poor to the rich, increasing the inequality gap.

The adoption of the neoliberal policies led to the development of differences regionally. For instance, in Europe, the adoption of these policies took place at different levels and timings. This led to regional differences that brought about the splitting of the European continent into Western and Eastern Europe. Western European countries delayed the adoption of the policies and maintained control over the social protection of their citizens. This ensured control over social inequality by retaining higher wages. A research was conducted on the effects of neoliberalism on social life and the creation of symbolic boundaries in Europe. The variables used included the change in animosity towards the poor and the Muslim community against the rate of neoliberal policy adoption. The results indicated that the eastern European countries showed that increased adoption led to decreased poverty levels and increased animosity towards Muslim immigrants. In conclusion, there are evident boundaries between the poor and the rich in countries that were slower in the adoption of neoliberal policies for example Portugal and the UK. On the other hand, there were blurred boundaries between the poor and the rich in countries that adopted neoliberal policies such as France. When gauging using the animosity towards Muslims variable, countries that adopted neoliberalism showed sharper boundaries as was the case in Spain. In general, the adoption of neoliberal policies led to the creation of symbolic boundaries leading to regional differences.

References

Brown, W. (2019). In the ruins of neoliberalism: the rise of anti-democratic politics in the West. Columbia University Press.

Cahill, D., Cooper, M., Konings, M., & Primrose, D. (Eds.). (2018). The SAGE handbook of neoliberalism. Sage.

Fraser, N. (2017). The end of progressive neoliberalism. Dissent, 2(1), 2017.

Peck, J., Brenner, N., & Theodore, N. (2018). Existing neoliberalism. The Sage handbook of neoliberalism, 3-15.

Slobodian, Q. (2020). Globalists: The end of empire and the birth of neoliberalism. Harvard University Press.

Wilson, J. (2017). Neoliberalism. Routledge.