Is Neo-Liberalism Responsible for Most of the Global Problems We Are Experiencing Today - Coursework Example

Is neo-liberalism responsible for most of the global problems we are experiencing today? Neo-liberalism is about making trade between countries easier. It is about the free movement of goods, resources and enterprises in a bid to always find cheaper resources so as to maximize profits and efficiency. To accomplish this, neo-liberalism needs the removal of various controls seen as barriers to a free trade. These include tariffs, regulations, laws, legislation and regulatory measures and restrictions on capital flows and investment. It is simply the rule of the market, freedom for goods and services, capital, where the market itself is regulating allowing wealth distribution. It also includes the dehumanizing of labor forces and removal of any barriers to capital mobility, such as regulations. It was therefore thought as a mechanism for world trade and investment supposedly for every nation to prosper and develop fairly and equitably. This freedom is from the government or state. The government does this through various actions such as reducing public expenditures on social services, including health and education, privatizing public enterprises, changing the public and community’s attitudes to individualism and individual responsibility as well as deregulation allowing market forces to act as self-regulating mechanism. The current neo-liberalism system, open enterprises and market established economies came about 200 years ago, as one of the major brains of development for the industrial transformations. (Harvey, 2007. p 79). Among the system’s founders was Adams Smith, a British economist, who some considered the founder of the present open market capitalism. In his book,” The wealth of Nations”, Adams suggested that for maximum efficiency to be achieved, all forms of government interference in the economic issues should be removed and that there should be no limitations or duties on manufacturing and trade within a nation for it to develop. For it to be effective, social practices had to be changed. Free markets were not certain, naturally occurring processes. They had to be forced upon people.Mid-nineteenth marked the start of extensive tests in social engineering. Its main agendas was make the economic life free from both political as well as social controls by coming up with a new institution, the free markets. This later on brought down the socially established markets that were there long time ago. The open or free market established a new kind of economy where all prices of goods and labor changed without taking any attention to its impacts on the society. Long ago economic life was tied up by the urge to preserve the social cohesion. It was carried out in social markets, which were put in society and subjected to many forms of regulations and much controls. The objectives were aimed doing away with social markets, and replacing them by markets that were not regulated and were operating freely of social needs (Kochler, 1986. p. 124). The euphoria in economic life brought by the development of the free market has been referred to as the Great Transformation. A detailed look into this process of transformation is revealed by Michael Perelman, a Professor of Economics at California State University. In his book The Invention of Capitalism , Perelman explains how peasants did not willingly abandon their self-sufficient lifestyle to go work in factories instead they had to be forced with the active support of thinkers and economists of the time, including the famous originators of classical political economy, such as Adam Smith, David Ricardo, James Steuart and others (Saad-Filho, 2009 p.89). Contradicting themselves, as if it were, they campaigned against the government customs and policies that robbed the poor their way of living of self-provision, pushing them into wage-based labor. Keeping the rural poor away from their lands was made possible due to the ideological braveness of individuals like Adam Smith, and as a result of what they termed the revision of history they brought out an impression of an idealistic heritage of political economy; something that was worth celebrating. A common assumption from most economists who believed strongly in neoliberalism was that it was good thing. It was however seen from political perspective by many around the worlds as a continuation of old policies almost taking the form of theology. The issue of power and its effects on how it manipulated trade was nonetheless less discussed. Today, neoliberal is seeing positive as well as negative results. Under free enterprises, for example, have emerged many innovative products. Growth and development for some people have been extensive. It is however sad that for a majority of people globally, there has been increasing poverty level and the innovative changes and advancements have not been designed to satisfy the immediate needs of many people all over world. Global inequalities have grown by a big margin and sharp indicators include about 3 billion people or half of humanity living under 2 dollars per day. The world’s wealthiest nation too consumes about 86% of the world’s natural resources (Kochler, 1986. p. 124). The free trade that was formed on the basis of free enterprise for the capitalist up to the great depression of the 1930s was actually the main economic theory followed in the United States of America and Britain. Unfortunately this trade was accompanied by politics that made more of mercantilism and for those countries to succeed and still be competitive in the world arena, they had to have a strong base of subjugation, colonialism and imperialism of other nations so that they have an access to the resources required to produce large amounts of wealth. As American and European economies therefore expanded, they needed to move on with the expansion in order to maintain the high living standards that some elites were achieving in the past. This involved taking control, and expanding colonial territories so as to gain further access to the raw materials and other resources, as well as acquiring and exploiting cheap labor. Those who were against it were in most cases met with inhuman repression or military interference. Economists therefore ruled it out as they thought that it was hardly the free trade many had suggested. They thus saw it as an addition of mercantilist policies. Neo-liberalism had therefore started to show signs of increasing apostasy between the rich and poor. Bryan Gould, an economist argued that the democratic process had been used and manipulated allowing concentration of power that was against the idea of free markets as well as real capitalism (Lee & McBride 2007, p.147). He went own to argue that democracy and free markets were not compatible. Majority of wars throughout history had their origin in economics, trade and resources acquisition at their core. The interest to access cheap resources to create a large amount of wealth allowed the imperial empires to apply military action, imperialism and colonization in the name of taking care of their national interests. Their wealth was therefore based on their powers and treaties they formed with other great powers to control their trade interests. This led to nations coming up with trade policies to appropriate the wealth of others.Occassionally one powerful nation would overpower another through misappropriation of its wealth through the use of trade wars. Weaker and less developed countries would then suffer loses in these exchanges. It was the military power of the most developed countries that allowed them to dictate and take control of trades thus maintaining unequal relationships. Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of their nations had to go along with them, and the doors closed against him had to be brought down. Authorization obtained by financiers must be protected by the state ministers, even if the sovereignty of uncooperative nations be offended in the process. Colonies were to be acquired and planted, so that no fruitful part of the world would be undermined or left unused. The definite answer to this was to increase American and European control overseas, in particular those areas that were relatively untouched through capitalist expansion in Asia, Africa and the Pacific. Colonialism had now become, in fact, an identified answer to the need to increase markets, opportunities for investments and ensure the raw material supply (MacEwan, 1999. p. 116). Cecil Rhodes, a renowned figure during England’s colonization of Africa, acknowledged the usefulness of overseas expansion for preserving peace at home. World War I then began as imperial powers fought to acquire control over the rest of the world. Then came World War II which provided another battlefield over themselves. The imperial nations realized that the fight was not the way and became more cooperative in the end. The cooperation was however not for the interest of the world but their own. World War II left the empires weak; the colonized nations began to break free. In some places, where nations had the powers to develop more democratic processes in place and perhaps even provide an example to their neighbors to follow, it undermined multinational corporations and their imperial or former imperial states for example, by reducing access to affordable resources. Due to this, their control, influence and power were also undermined. Often then, military actions were sanctioned (Saad-Filho, 2009). To the populations at home, the fear of communism was unopposed, even if it was not the case, so as to acquire support. The final effect was that everybody fell into line, as if it were, allowing the kind of globalization that fitted the big businesses and high classes mainly of the past imperial powers. Hence, it is not shocking that majority of the World War II rivals, USA, Japan and Germany as well as other European nations are currently so prosperous, while the past colonial nations are still raged by poverty; the economic prosperity of those rich nations have been at the expense of most people all over the world.Therefore, to ensure this successive inequality goes on, advantage globalization and power was supported with military prowess and still is. Hence, even with what seemed as the end of colonialism and imperialism at the end of World War II, and Adam Smith’s ideas of free trade promotions, the policies of mercantilist still went on. Adam Smith exposed the past system as mercantilist and not just. He then recommended the free market capitalism as the best alternative. Yet, a reading of Adam Smith’s Wealth of Nations would confess that the current situation is no different from the free market capitalism he had recommended, and instead could still be seen as monopoly capitalism, or mercantilism that he had exposed. Conclusion Social as well as labor trends have strongly been influenced by economic transformations, which have not only failed to turn economic prosperities to the advantage of the most vulnerable, but also, and worse yet, the demands of the economy have undermined the living standards of many. With regard to the effects of the economy on politics, there is no doubt that neo-liberal policies have heightened socio-economic inequalities, and thus become an important barrier in the way of progress toward democracy. They have therefore set limits on greater political participation, and have destroyed the foundations which could enhance citizens' political education and sophistication. In other words, this is one of the reasons that explain people's lack of affection in politics. But the problem of democracy in societies lies not only in people's lack of interest in politics, but also in the fact that their daily struggle to survive has become a barbaric, violent and desperate one, in which the end justifies the means, whatever they may be. In this context, recognition of the duties and rights of others, as well as the assumption of one's own responsibilities toward others and toward society as a whole. This implies that acceptance, recognition and respect for the law develop issues which concern nobody in particular and which, worse yet, when put into practice are seen by many as something nonsensical. Indeed, the main requirements to one's definition as a citizen are ignored and breached by many in the society; and this, to some great extent, is motivated by the urge for survival imposed and demanded by economic trends, which are increasingly controlled by neo-liberal logics. In other ways, the negative impact of neo-liberalism on the creation of democracy has been only one of the aspects characterizing the historical process (Saad-Filho, 2009). If this contradiction we described between neo-liberalism and democracy has revealed the not-always healthy relationship between politics and economics, the second problem brings out not only the tension between the economy and society, but also the weakness of the means of mediation and conflict-resolution between opposing poles. In other words, we have observed the limits of politics in terms of institutionally channeling social demands and dissatisfaction, which are the impacts of the socio-economic inequalities aggravated by the economic policies of neo-liberal. Thus, over recent years, neo-liberalism has mostly weakened politics by undermining basic conditions for taking part and having a negative consequence on developing a citizen body. Its tendency to raise poverty and constrain mechanisms created in the past to alleviate the effects of structural adjustment policies has aroused social demands and protests to which the political system has not been able to respond to and which have overwhelmed it. Thus, the presence of non-governability has raised come out, popular mistrust in institutions has grown and trusts in politics and politicians have diminished noticeably. References Kochler, H. (1986). Democracy in international relations. International Progress Organization. (4). Pp 121-125 Harvey (2007). A Brief History of Neoliberalism.Oxford University Press (4). Pp 78-80 Lee, S. and McBride, D. (2007). Neo-liberalism, state power and global governance. Springer (2). Pp 144-149 MacEwan, A. (1999). Neo-liberalism or democracy? Economic Strategy, Markets and Alternatives for the 21st Century. Zed Books (3). Pp 114-117 Saad-Filho, A. (2009). Economic Transitions to Neoliberalism in Middle-Income Countries: Policy Dilemmas, Crises, Mass Resistance. Taylor and Francis (4). Pp 88-90 : Read More