What Is Neoliberalism?

The best way to understand Neoliberalism is an ideology that came about in response to the economic stagnation and high debt of the 1970s. As a result of this a group of economists, the chiefest amongst which were Milton Friedman and Friedrich Hayek, called for a return to classical liberalism, which helps explain the name, neoliberalism, neo meaning in this case, a revived form of something. But what’s classical Liberalism?

Where you can find me!

Classical Liberalism is generally associated with an ideology that became popular in the 19th century, that stressed individual freedom and democracy, that is the right of the people to choose their own government. However in the early 20th century across the world a different type of liberalism began to replace classical liberalism, known as social liberalism or modern liberalism. This kind of liberalism focused more on removing the things that were seen as obstacles to individual freedom, like poverty, wealth inequality, and social injustices, like racism and discrimination. Because of this many aspects of the early welfare state, like government provided healthcare, benefits to the unemployed and elderly, and regulations, or rules, on working conditions, were formulated by social liberals in the early 20th century. Social liberals in the 1930s like Beveridge and Keynes also called for full employment which is where everybody has a job and spending during recessions to curb unemployment,
when these ideas were eventually enacted after the second world war, this became known as the Post-war consensus.

Neoliberals like Hayek and Friedman on the other hand favoured a return to classical liberalism and with the successive elections of right wing governments in the 1980s, they helped lay waste to this social liberal consensus that they saw as being responsible for the economic stagnation and high debt of the 1970s. The neoliberal approach in its emphasis of the values of classical liberalism prides the economic rights of the individual above all else. Because of this, neoliberals believe that government policies such as taxation and regulation reduce the freedom of the individual to do what he or she wants with their own money. Neoliberals also believe that competition improves businesses, and they can only experience the full brunt of this when free of regulation and subsidies which is money that the government gives to businesses.

As a result, neoliberal governments in the USA and UK in the 1980s implemented what is called ‘laissez faire’ economics, coming from the french phrase ‘leave alone’ this means the government stays out of the economy as much as possible. This manifested itself as major deregulation, reduced taxes as well as more free trade and cutting subsidies to manufacturing industries. Also whereas John Maynard Keynes’ economic approach pushed for the government intervening in the economy to make sure everybody had a job and spending lots during recessions to ward off unemployment, neoliberals favoured governments staying out of the economy as much as possible and thus believed the best way to stabilise an economy was to control the money supply as opposed to spending more, this is called monetarism.

However because of Neoliberalism’s emphasis on the economic rights of the individual right to do as he or she pleases with their own money, it means that if they lose money, or lose their job, that’s their own fault. Because of this under a neoliberal system, inequality, or some have more than others is inevitable, even desirable. This approach costs a lot to pay for things like tax cuts, money which often comes from raiding public services that help the weakest in society. Also because of the stress neoliberalism places on individuals over the government, there is less of the emphasis on democracy that classical liberalism and social liberalism share, neoliberals tend to fear the mob rule effect of democracy, that people could vote in governments that could infringe on the economic rights of individuals, like socialist governments. Friedrich Hayek even went as far as to argue that neoliberalism could be brought about under a dictatorship. There is an extent to which this has in fact happened in many countries, what with crony capitalism and the housing crisis in 2008, the government supported the interests of banks and big businesses contrary to what people actually wanted them to do, they effectively subverted democracy

[wusangfu]

Bruh, this is criminal that your channel has so few views. I’m surprised that your vids haven’t been picked up by YouTube’s algorithm. Keep making great content!

[TheAgore]

The fallacy people get into is the idea that corporations are individuals. A corporation needs to be treated as a person for reasons of culpability and responsibility. Their freedoms are not and should not be as unlimited as an individuals.

[winstonz]

This is the best explanation I've seen online so far

[VeritableVagabond]

Thank you. I now understand what neoliberalism is. Props for the video, the writing, and the sources.

[heronimousbrapson]

The one thing that has always baffled me is the apparent fact that, particularly in the United States, among the greatest supporters of neo-liberalism are people who were its greatest victims.

[Thesm]

The idea that people should be allowed to spend their money as they wished, doesn't take into account the fact that real wages for ordinary people are constantly being reduced by preventing wage raises so as to keep up with inflation, it gets to the stage where the average person has almost no discretionary spending left because they are struggling to pay for the basics. The sad truth is that the rich are the great cause of poverty.
As the rich eat their fill, they speak to the poor of great things to come.

[tombrunila]

Otto von Bismarck is the father of the wellfare state". The policies he implemented in Germany in the early 1880's were what European states have been implementing in one form or another since WWII! These methods helped build a strong Western Europe during the Cold War.

[AcmePotatoPackingPocatello]

Unbelievable.
I was a a neo-liberal for 25 years. I feel sullied by the books I read that espoused the outright deception and propaganda the word neo-liberalism encompasses.

I stepped out of High School in 1971. Got a union job. Just like my friends.
I made more when I was 18 as a percentage than I did when I retired in 2016. More money, more healthcare and cost free healthcare then.. As all my friends did.
All this fell away when REAGANISM took hold. And the country as one embraced neo-liberalism.
Neo- liberalism is nothing less than CORPORATE DOMINATION, and we the worker are meaningless.
1971 I loved u.s.a.
By 2000 I was disgusted in u.s.a.
By 2016 I wanted out of this cesspool.

[mitcha]

so... get rid of regulation, taxes... but the government subsidies and
bailouts remain.

[RHYTHMMASTER]

thank you for this! I have a report this monday and this literally made more sense than other videos and books.

[NoShiiitSherlock]

Why so few interactions and views!? This channel is dope! Keep working hard and creating this kind of content and IT WILL PAY OFF!

[filipe]

How tf are the ones claiming for classical liberalism the ones labeled as “neoliberals” while ones claiming for a newly formed consensus get to keep the original “liberal” label?

[SethLigo]

The voiceover says neoliberalism relies on “Ideas that are over 100 years older” than the 1980s. I think they can be traced back to Adam Smith’s thought experiments published in 1776. That’s over twice as old — and following that approach, we’d be equally accurate to say “Ideas from as long ago as yesterday.”

[empyrean]

Great job! Keep up with the good work and the views will follow. Thorough yet concise information.

[ChichimonLeagues]

3:15 the literal translation is "Allow (them) to do"

[toryscot]

Brilliant and concise explanation. Well done!

[werkzeugmann]

Do business with kindness, fairness, and respect then neo-liberalism works great...to perfection, If these attitudes are sacrificed by companies for profits then you have government regulations....

[garbonomics]

The initial points make sense, but the middle and end completely distort the essence of classical liberalism. Referring to Hayek so out of context and suggesting he would support a dictatorship as long as it followed neoliberal principles is utterly absurd.

[taylorsuneson]

Great video thanks helped with my paper!

[andidawas]

It is not difficult to understand the low interest. This is very high level intellectual content. It does not lend itself to consumption by the masses. This is a great job.