Advantages and disadvantages of NEOLIBERALISM

neoliberalism is a political and economic theory, belonging to the family of capitalism, which is characterized by advocating minimal state involvement.

Advantages and Disadvantages of Neoliberalism

More about neoliberalism

During the interwar period ,between World War I and World War II, a number of liberal theories emerged that differed from classical liberalism.

In 1938 the economist Alexander Rüstow coined the term neoliberalism to differentiate these theories from classical liberalism.

Neoliberalism advocates the privatization of much, or all, of public services, market regulation through the law of supply and demand and competition in the labor market.

Milton Friedman and Friedrich von Hayek are the most important theorists of economic neoliberalism. Ronald Reagan or Margaret Thatcher stand out in political neoliberalism.

In the following article we are going to present a series of advantages and disadvantages of neoliberalism.

Advantages of neoliberalism:

  • Free market. Promotes freedom of trade, benefiting both sellers and buyers. Elimination of economic frontiers.
  • Competition. The seller must adapt to a buyer with a wide variety of options to choose from. This competition fosters an improvement in the product or service offered.
  • Goodbye to taxes. Neoliberalism advocates a society in which taxes are minimal or non-existent. Since it advocates the privatization of all public services.

Disadvantages of neo-liberalism:

  • Inequality. The total privatization of some sectors such as education can foster social inequality and cultural gap.
  • Monopoly. Privatization of public sectors in a drastic way can lead to the formation of monopolies, benefiting a few.
  • Environmental problems. In many cases the environment is not respected due to the search for profit. Neoliberalism does not take into account the environmental impact that certain businesses can produce. It puts economic profit ahead of the environment.