Liberalism vs Neoliberalism
To understand the distinctions between liberalism and neoliberalism, it is necessary to first comprehend liberalism. The addition of the prefix “neo” merely signifies “new” to appeal to those dissatisfied with the outcomes of earlier socio-political ideologies. Liberalism is not a singular event, but rather a process initiated by a country’s policymakers. This article will discuss the differences between liberalism and neoliberalism.
Liberalism can be present in various fields, such as economics, politics, or religion. As an ideology, it is progressive and modern rather than traditional and regressive. Liberalism is employed as a means to attract those who are poor and marginalized, present them with a positive outlook, and prevent social conflicts. Although it may seem like a dream, liberalism has achieved significant advancements in different parts of the world across various aspects of life since its inception. For example, due to liberalism, women now enjoy greater freedom than ever before, as opposed to the past when they were forced to be fully covered and had little to no voice in society. Women now hold positions of power in many countries, a development that would have been unthinkable 50 years ago when societies were predominantly male-dominated. Liberalism is a process that strives for improvement in any field it is applied to, with the term “neo” merely reflecting adjustments made to accelerate the process.
The term “neo” simply denotes a new form of liberalism that differs from past iterations. While there are undoubtedly new and better ideas, this label is more about attracting a broader audience to the concept of liberalism. People tend to forget that when liberalism was first introduced, it appeared almost revolutionary, but its appeal eventually waned, necessitating the coining of the term “neoliberalism.”
Liberalism as a political concept gained prominence in 1776 when Scottish economist Adam Smith published his book “The Wealth of Nations.” This work advocated for minimal government regulation and intervention in order to foster entrepreneurship. Smith proposed the removal of tariffs, barriers, and controls, as well as the promotion of free trade as the optimal path for a country’s economic development. These ideas were considered revolutionary and were dubbed “liberal” because they sought to replace the restrictive measures of the past.
Neoliberalism is an economic concept that has gained popularity over the past 25 years. It champions free markets and essentially allows market forces to determine the direction of economic development. Neoliberalism eliminates government control and intervention to encourage entrepreneurship and proposes no price controls, complete freedom of movement for capital, goods, and services. It asserts that unregulated markets are the most effective way to increase economic growth, which will ultimately benefit everyone. Neoliberalism also promotes privatization and deregulation to facilitate international trade and commerce.
Key Takeaways
- Liberalism is a political ideology that values liberty and freedom and can refer to progression in various aspects of life, such as politics, religion, or economics.
- Economic liberalism involves policies that encourage entrepreneurship by reducing government control and interference.
- Neoliberalism, a term coined 25 years ago, primarily refers to new economic liberal policies introduced to accelerate globalization in the late 1980s and early 1990s.
