What is neoliberalism?

Neoliberalism is the economic model that currently rules the capitalist world. It emerged in the 1980s with Reagan and continued to be promoted through the Clinton, Bush I and Bush II administrations. Put crudely, its slogan would be, "markets good, state bad."

Neoliberals argue that when markets are 'free' from meddling by the state it's good for business, which is good for the economy and good for the people. So neoliberal policies aim to 'liberate' markets by removing controls on trade, corporate investment and international finance. At the same time neoliberals want to roll back the state, resulting in weaker environmental or worker safety regulations, privatization of schools and water services, and cutbacks in social welfare programs.

Neoliberals have been waging a war on the public good -- our public institutions, our environment, our social solidarity, and our sense that we should take care of one another. More and more, markets rule our lives and everything is valued in terms of price and profit.

Major players

The U.S. is at the forefront in the push for neoliberalism. Major players also include other industrialized nations and international institutions such as the IMF (International Monetary Fund), the World Bank and the WTO (World Trade Organization). Global corporations who are interested in shaping policies and institutions to maximize their profits heavily influence these governments and institutions.

Winners and losers

Neoliberalism is marked by growing inequality, as wealth, labor and resources from the majority of the world's peoples are transferred to global corporations and the super-rich. On a global level, the 2003 Human Development Report found that 54 countries experienced a fall in income over the last ten years. At the same time, between 1983 and 1999, the profits of the Top 200 corporations grew by 362.4%. In 2003, total sales of Wal-Mart, BP (formerly British Petroleum), and ExxonMobil were greater than the combined economies of the world's poorest 118 countries, with total population of over 800 million people. There is a dangerous trend of concentration of corporate power in many key industries: media, healthcare, energy, agribusiness, retailers, and so on.

"Free" trade agreements have led to loss of livelihoods for small producers who can't compete with transnational corporations or agribusiness. Throughout the world, states engage in a 'race to the bottom' as they compete for foreign investment by promising low wages, low taxes, no unions, weak regulations, and subsidies.

The constant attack on the state has led to: lower taxes which have mostly benefited the rich; cutbacks in social programs; privatization of schools, social services, and water; and weaker environmental and consumer protection.