Advantages And Disadvantages Of Neoliberalism And Globalization

Advantages of neoliberalism

Discuss about the Advantages and Disadvantages of Neoliberalism and Globalization.

Globalization is defined as integration of world’s economy with ones.  The expansion of market has created free movement of goods and services. The imposition of free market policies in the year 1980’s was the most talked about issue. The phenomenon of globalization is beyond integration of economy but perhaps seen as social economic interchange.  Neo liberal is the late name of the famous movement of globalization (Beck, 2015; Pieterse, 2015).

The term neo liberalization includes the following facts:

1. Liberation of free enterprise or private enterprise from any external force. Neoliberalism focus on creating a free market for the people in order to conduct trade conveniently. Free trade practice creates a better environment that helps in conducting trade.
2. Cutting down of the public expenditure for the purpose of social services. This has further reduced the rate associated with the public expenditure.
3. Deregulation
4. Privatization is the overall purpose of Neoliberalism. It purposes to create a free market for the economies to attain a desired growth. The purpose of neoliberalism is due to the new economic policies framework in 1980’s
5. Eliminating the concept of public or community goods in order to gain market growth

Neoliberalism is referred as an idea associated with Laiseez-faire economic liberalism. It includes extensive economic liberalization policies. These economic practices include extensive economic liberalization policy such as privatization, fiscal strictness, deregulation, free trade, and reductions in government spending. These economic practices thereby help   in increasing the role of the private sector in the economy. The market-based practices have stimulated that comprise of a shift in pattern (Ong, 2006). Since 1990, the economies were giving stress on increasing the rate of economic growth. Economic development is a wider concept that includes not only the economic growth but a lot of institutional changes. Growth is only possible with the help of development. Economic growth is only possible through improvement in the GDP. Hence it has become important to pay attention on various activities relevant to the economic growth and development (Saad-Filho and Johnston, 2005).

Since World War II there has been clear reduction in the trade barriers and the tariff quotas.  The relaxation in the Trade barriers has positively affected the GDP. It is only due to the development in the trade agreement like GATT, WTO who has a purpose to reduce the overall trade barriers. These treaties have affected the way of doing business. The trade has subsequently increased due to these treaties.  The GATT & WTO as seem are an outcome of the neoliberal movement. These treaties have however revoked the trade barriers that existed previously global trade has increased linearly due to these trade arrangements. The economic neoliberalism has supported FDI which is largely considered as a reason for international trade. The presence of FDI has increased drastically causing a positive change in the economy (Giroux, 2004).  

One of the general attribute of neoliberalism is the aspiration to strengthen and develop the market. This is achieved through increasing the number, incidence, repeatability, and formalization of dealings. Overall purpose of neoliberalism is to attain possible action of every individual in a market to be carried out in rivalry with other. It is essential from the point of view of the transactions that are carried   in an infinitely short time and repeated again.  An expansion in the market space is guided in a way it helps in managing a large market economy. They are looking for new area in the market to explore.  The focus over the property during the classic and market liberalism era is replaced by an emphasis on the contract (Jessop, 2002).  The process of Contract maximalisation is a typical neoliberal concept. The period of contract was reduced in the labor market due an increase in frequency of contract. Free trade agreement is a form of document that helps in abolition of tariffs or international limitation. One of the advantages of neo-liberalism is to abolish the restriction in the trade practice. Neoliberalism encourages free trade between the economies that allows integration of market. Globalization is known by the name of neo-liberalization.  It is due to Neoliberalism the countries worldwide are able to share the culture and economy (Giroux, 2015).

Criticism of neoliberalism

Another concept in the neoliberal market is related to automated trading and creation of virtual market. In the neoliberal sense the automated trading has led to intensification of transaction. This expansion in the activity means that the neoliberal societies are more open.  The modern neo liberals are more focused on creating link.  This attitude used by neoliberal is called as connectionists.  It is due to the expansion in the scope of contract the transaction cost plays an important role.  The cost of competition intensifies the transaction. The overall process of neo-liberalism has reached to a level that threatens the existing economy (Hall, Massey and Rustin, 2015). 

It is important to notice that the growth n the field of financial sector is due to neoliberal character apart from any inherent shift.  The entire sector is based on the transaction cost.  It is almost non-existent in a centrally planned economy.  This has already created a demand in the market in financial sector.  An increase in the sector and office employment is in direct contradiction which more or less creates a free market. The speed of trading has increased due to neoliberalism.  The overall market is moving at a fast speed. The automated functions have created an efficient market by increasing the trade volume (Davies, 2014).  

The small, medium a bigger enterprise are now pushed out of the market as they were performing below par.  The public sector was slimmed from its profitable part while handling over to the private sector.  The small size business was affected by the changes in the market.  Few argued that there has been a false correlation between economic growth and secured employment. It is believed that there will be badly paid jobs in the market. All the new form of private property is creating a predatory form of appropriation. The continuous destruction of welfare state has affected the individual in order to provide necessity and time. The economy is highly reliable on less reliable services than the privately own state (Peck, 2013).

The market fundamentalism is one of the disadvantages of neoliberalism. The free market ignores the importance of health and education. By adopting the free market in these two areas would create inequalities. This will further cause under provision of an institution that is important for the long term investment (Streeck, 2014).

It will further state that the neoliberal policies have further widened the inequalities. It is due to several factors like skilled workers. Those firms who have more power were able to increase producer surplus. The firms with the monpsony power were able to limit the wage growth.

Recommendations and Conclusion

The capital deregulation has not necessarily helped in the economic development this has accompanied in increasing the financial instability. This has caused a wider financial economic shock. A report on the Neoliberalism has increased the risk of adverse cycles. Economic growth is only possible through improvement in the GDP. Hence it has become important to pay attention on various activities relevant to the economic growth and development (Hirst, Thompson and Bromley, 2015).

Recommendations and Conclusion

There are three main problems that are associated with neoliberalism. There is a widening gap between poor and rich, increase in the unemployment rate and ill effects of globalization.  The government of economies should take proper measures to solve the issue by taking care of the market they need to create better employment opportunities for the local people. This will somehow help in managing the situation.

To conclude there has been an ample of support regarding the notion that influences the liberal economy theory.  The economic policies that were adopted from 1970 are the part of an attempt to gain economic gain. Globalization is considered as a different concept from neoliberalism.  The concept of neoliberalism is seen from the point of view of economic development. The essay however warns readers against the shift of economy towards a deregulated one. This will however decrease the concept of welfare state. The whole essay make a distinction as it was promised that the purpose of neoliberalism is to provide benefit to each individual but there were disparities. The disparities in the implementation can be seen later on by the small, developing countries. These countries were mostly inhabited by the small and medium sized business. The neoliberalism has a worldwide impact on the policy making.

References

Beck, U., 2015. What is globalization?. John Wiley & Sons.

Davies, W., 2014. The limits of neoliberalism: Authority, sovereignty and the logic of competition. Sage.

Giroux, H.A., 2004. The Terror of Neoliberalism: Authoritarianism and the Eclipse of Democracy. Paradigm Publishers

Giroux, H.A., 2015. Against the terror of neoliberalism: Politics beyond the age of greed. Routledge.

Hall, S., Massey, D. and Rustin, M., 2015. After Neoliberalism?. Lawrence & Wishart.

Hirst, P., Thompson, G. and Bromley, S., 2015. Globalization in question. John Wiley & Sons.

Jessop, B., 2002. Liberalism, neoliberalism, and urban governance: A state–theoretical perspective. Antipode, 34(3), pp.452-472.

Ong, A., 2006. Neoliberalism as exception: Mutations in citizenship and sovereignty. Duke University Press.

Peck, J., 2013. Explaining (with) neoliberalism. Territory, Politics, Governance, 1(2), pp.132-157.

Pieterse, J.N., 2015. Globalization and culture: Global mélange. Rowman & Littlefield.

Saad-Filho, A. and Johnston, D., 2005. Neoliberalism: A critical reader. University of Chicago Press.

Streeck, W., 2014. The politics of public debt: Neoliberalism, capitalist development and the restructuring of the state. German Economic Review, 15(1), pp.143-165.