You flip through threads on ATS and channels on TV and you are probably going to see someone saying how Socialism has led to massive debt. From
Canada health care problems
Greek financial crisis
. People are calling it the fault of Socialism that has led to a
dependence on the government and laziness. I am here to say, you just don’t know.
I am not going to say you have to be a Socialist or support a Welfare state, because you don’t have to, be a Libertarian or Anarchist if you want,
the point is to just show WHY we are having these problems.
Let’s start just after the second world war. The Golden Age
was a period lasting
from 1945 to 1973, varying by country, that was dominated by The Bretton Woods System
. But the use of Keynesian economics and the Bretton Woods System ended
during the oil crisis of 1973.
When the oil crisis occurred the policies that ushered in the golden age ended and we entered a transition period across the world. In the USA we
suffered serious economic stagnation which marked the Ford, Carter and early Reagan years. But the USA emerged from that system with a new global
model in hand, supported by an alliance of Reagan, Thatcher and others. Their impact on economics has lasted since then and has changed the policies
of both the left and the right.
Williamson's list included ten points:
• Fiscal policy Governments should not run large deficits that have to be paid back by future citizens, and such deficits can only have a short term
effect on the level of employment in the economy. Constant deficits will lead to higher inflation and lower productivity, and should be avoided.
Deficits should only be used for occasional stabilization purposes.
• Redirection of public spending from subsidies (especially what neoliberals call "indiscriminate subsidies") and other spending neoliberals deem
wasteful toward broad-based provision of key pro-growth, pro-poor services like primary education, primary health care and infrastructure investment
• Tax reform– broadening the tax base and adopting moderate marginal tax rates to encourage innovation and efficiency;
• Interest rates that are market determined and positive (but moderate) in real terms;
• Floating exchange rates;
• Trade liberalization – liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any
trade protection to be provided by law and relatively uniform tariffs; thus encouraging competition and long term growth
• Liberalization of the "capital account" of the balance of payments, that is, allowing people the opportunity to invest funds overseas and
allowing foreign funds to be invested in the home country
• Privatization of state enterprises; Promoting market provision of goods and services which the government can not provide as effectively or
efficiently, such as telecommunications, where having many service providers promotes choice and competition.
• Deregulation – abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental
and consumer protection grounds, and prudent oversight of financial institutions;
• Legal security for property rights; and,
• Financialization of capital.
Neoliberalism became key to the economics of most western countries. Here are some examples from the Neoliberalism page.
: In Australia, neoliberal economic policies have been embraced by governments of both the Labor Party and the Liberal Party since the
1980s. The governments of Bob Hawke and Paul Keating from 1983 to 1996 pursued economic liberalisation and a program of micro-economic reform. These
governments privatized government corporations , deregulated factor markets, floated the Australian dollar, and reduced trade protection.
: In Canada, these policies identified with neoliberalism (reducing taxes and welfare spending, minimizing of government and reform of
public healthcare and education, among others) are often associated with Brian Mulroney, Mike Harris, Ralph Klein, Gordon Campbell and Stephen
: The policies included cutting agricultural subsidies and trade barriers, privatising public assets and the control of inflation
through measures rooted in monetarism, and were regarded in some quarters of Douglas's New Zealand Labour Party as a betrayal of traditional Labour
ideals. The Labour Party subsequently retreated from pure Rogernomics, which became a core doctrine of ACT. The Labour Party leader planned to create
a 15% flat tax in New Zealand, and to privatise schools, roads and hospitals, which was moderated by the Labour cabinet at the time, although the
resultant reforms were still generally considered radical in a global context. After Douglas left the Labour party, he went on to co-found ACT in
1993, which regards itself as the new liberal party of New Zealand.
: Iceland began implementing neoliberal economic policies beginning in the late 1980s. As measured by the Economic Freedom of the World,
it had the 53rd "freest economy" in 1975 and it was one of the poorest countries in Europe. In 2004, it had the 9th freest economy and it was one of
the richest. However, by 2009, the country was bankrupt, a consequence that a number of observers have attributed directly to Iceland's adoption
of neoliberal economic policies.
: In 2001 Peter Mandelson, a Member of Parliament belonging to the British Labour Party and closely associated with Tony Blair,
famously declared that "we are all Thatcherites now."
 In reference to contemporary British political culture it could be said that
a "post-Thatcherite consensus" exists with regard to economic policy. In the 1980s the now defunct Social Democratic Party adhered to a "tough and
tender" approach in which Thatcherite reforms were coupled with extra welfare provision. Neil Kinnock, leader of the Labour Party from 1983–1992,
initiated Labour's rightward shift across the political spectrum by concurring largely with the economic policies of the Thatcher governments. The
New Labour governments of Tony Blair have been described as "neo-Thatcherite" by some since many of their economic policies mimic those of
Most of the major British political parties today accept the trade union legislation,[neutrality is disputed] privatisations and
general[clarification needed] free-market approach that Thatcher's governments installed. By 2009 no major political party in Britain was
committed to reversing the Thatcher governments' reforms of the economy.[
: During Reagan's tenure, GDP grew at an annual rate of 3.4% per year. Unemployment dropped and inflation significantly
decreased. Average real wages were stagnant, however, as inequality began to grow for the first time since the 1920s. Some, like William Niskanen,
would point out two facts in response, the first being that average compensation for workers (that is wages+fringe benefits) went up through the 80s,
and that every quintile of society performed better during the 80s. The policies were derided by some as "Trickle-down economics," due to the
significant cuts in the upper tax brackets. There was a massive increase in Cold War related defense spending that caused large budget deficits,
the U.S. trade deficit expansion, and contributed to the Savings and Loan crisis, In order to cover new federal budget deficits, the United
States borrowed heavily both domestically and abroad, raising the national debt from $700 billion to $3 trillion, and the United States moved from
being the world's largest international creditor to the world's largest debtor nation.
There is opposition and support to Neoliberalism. You can read the support on the page, I will post the opposition though.
Opponents of neoliberalism argue the following points:
Globalization and liberalization subvert nations' ability for self-determination; neoliberal countries are in turn subject to a "virtual
parliament" of currency speculators whose attacks or threats of attack are used to limit policy options.
Exploitation: critics consider capitalist economics to be exploitative.
Environmental costs: critics argue that neoliberalism leads to more transportation, and unregulated markets lead to more industrial
Negative economic consequences: Critics argue that neo-liberal policies produce inequality and deterioration in living standards without the
improvements in efficiency which are predicted.
Increase in corporate power: some anti-corporate organizations believe neoliberalism, unlike liberalism, changes economic and government policies to
increase the power of corporations and large business, and a shift to benefit the upper classes over the lower classes.
There are terrains of struggles for neoliberalism locally and socially. Urban citizens are increasingly deprived of the power to shape the basic
conditions of daily life.
Trade Led, unregulated economic growth and state regulation of pollution and other environmental impacts economic growth
It is claimed by that deregulation of the labor market produces flexibilization and casualization of labor, greater informal employment, and a
considerable increase in industrial accidents and occupational diseases.
[edit on 5/31/10 by Misoir]