Editing Neoliberalism (section)

== Political policy aspects ==
Neoliberal policies center around [[economic liberalization]], including reductions to [[trade barriers]] and other policies meant to increase [[free trade]], [[deregulation]] of industry, [[privatization]] of state-owned enterprises, reductions in [[government spending]], and [[monetarism]].{{sfnp|Stedman Jones|2014|p={{page needed|date=May 2023}}}} Neoliberal theory contends that [[free market]]s encourage [[economic efficiency]], [[economic growth]], and [[technological innovation]]. [[State intervention]], even if aimed at encouraging these phenomena, is generally believed to worsen economic performance.{{sfnp|Kotz|2015|p=12}}

=== Economic and political freedom ===
{{Main|Economic freedom|Political freedom}}
{{quote box|Economic and political freedom are inextricably linked with each other. There cannot be any question of liberty and religious and intellectual tolerance where there is no economic freedom.{{sfnp|Burgin|2012|p=[https://books.google.com/books?id=BnZ1qKdXojoC&pg=PA117 117}}|author=—[[Ludwig von Mises]] |width=35% |align=right |quoted=1 |salign=right}}
Many neoliberal thinkers advance the view that economic and political freedom are inextricably linked. [[Milton Friedman]] argued in his book ''[[Capitalism and Freedom]]'' that [[economic freedom]], while itself an extremely important component of [[freedom|absolute freedom]], is also a necessary condition for [[political freedom]]. He claimed that [[centrally planned economy|centralized control of economic activities]] is always accompanied by [[political repression]]. In his view, the voluntary character of all transactions in an unregulated market economy and the wide diversity of choices that it permits pose fundamental threats to repressive political leaders by greatly diminishing their power to coerce people economically. Through the elimination of centralized control of economic activities, [[economic power]] is separated from political power and each can serve as a counterbalance to the other. Friedman feels that competitive capitalism is especially important to minority groups since impersonal market forces protect people from discrimination in their economic activities for reasons unrelated to their productivity.<ref name="Friedman-2002">{{cite book |first=Milton |last=Friedman |author-link=Milton Friedman |title=Capitalism and freedom |date=2002 |publisher=[[University of Chicago Press]] |isbn=0-226-26421-1 |pages=8–21}}</ref> In ''[[The Road to Serfdom]]'', [[Friedrich Hayek]] offered a similar argument: "Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends".<ref name="Chicago Press 1944 p.95"/>

=== Free trade ===
{{Main|Free trade}}
A central feature of neoliberalism is the support of free trade,<ref name="Worstall">{{Cite news |last=Worstall |first=Tim |date=March 1, 2012 |title=So What is this Neoliberal Globalisation Free Trade Thing About Anyway? |work=[[Forbes]] |url=https://www.forbes.com/sites/timworstall/2012/03/01/so-what-is-this-neoliberal-globalisation-free-trade-thing-about-anyway/#44a75cc43ec4}}</ref><ref>{{bulleted list|
|{{cite web |last1=Smith |first1=Nicola |title=Neoliberalism |url=https://www.britannica.com/topic/neoliberalism |website=Encyclopædia Britannica |date=18 May 2023}}
|{{cite book |last1=Gertz |first1=Geoffrey |last2=Kharas |first2=Homi |title=Beyond neoliberalism: Insights from emerging markets |date=April 2019 |publisher=The Brookings Institution |url=https://www.brookings.edu/wp-content/uploads/2019/05/beyond-neoliberalism-final-05.01.pdf |archive-url=https://web.archive.org/web/20190502040124/https://www.brookings.edu/wp-content/uploads/2019/05/beyond-neoliberalism-final-05.01.pdf |archive-date=May 2, 2019 |url-status=live}}
|{{cite web |last1=Dieter |first1=Plehwe |title=Neoliberalism |url=https://www.uni-bielefeld.de/cias/wiki/n_Neoliberalism.html |website=Center for InterAmerican Studies |publisher=Universität Bielefeld |date=2012}}
|{{cite news |last1=Cooper |first1=Ryan |title=The decline and fall of neoliberalism in the Democratic Party |url=https://theweek.com/articles/725419/decline-fall-neoliberalism-democratic-party |publisher=[[The Week]] |date=January 8, 2018 |quote=[Neoliberalism's] fundamental economic bedrock is...deregulation, tax and spending cuts, union busting, and free trade.}}
}}</ref> and policies that enable free trade, like the [[North American Free Trade Agreement]], are often associated with neoliberalism.<ref>{{Cite news |last=Rodrik |first=Dani |date=November 14, 2017 |title=The fatal flaw of neoliberalism: it's bad economics |work=[[The Guardian]] |url=https://www.theguardian.com/news/2017/nov/14/the-fatal-flaw-of-neoliberalism-its-bad-economics}}</ref> Neoliberals argue that free trade promotes [[economic growth]],<ref name="Political-Theology">{{Cite journal |last1=Moe-Lobeda |first1=Cynthia |last2=Spencer |first2=Daniel |date=2009 |title=Free Trade Agreements and the Neo-Liberal Economic Paradigm: Economic, Ecological, and Moral Consequences |journal=Political Theology |volume=10 |issue=4 |pages=685–716 |doi=10.1558/poth.v10i4.685 |s2cid=154933948 |quote=The premise undergirding FTAs is that trade liberalization within the neo-liberal global economy produces economic growth and development among all parties, and reduces poverty in poor nations.}}</ref> reduces [[poverty]],<ref name="Political-Theology"/><ref name="Worstall"/> produces gains of trade like lower prices as a result of [[comparative advantage]],<ref>{{Cite web |last=DeLong |first=Brad |date=May 26, 2017 |title=The Benefits of Free Trade: Time to Fly My Neoliberal Freak Flag High!: Hoisted from March 2016 |url=https://equitablegrowth.org/the-benefits-of-free-trade-time-to-fly-my-neoliberal-freak-flag-high-hoisted-from-march-2016/ |website=Washington Center for Equitable Growth}}</ref> maximizes [[consumer choice]],<ref>{{Cite news |last=Mishra |first=Pankaj |date=February 7, 2018 |title=The Rise of China and the Fall of the Fall of the 'Free Trade' Myth |work=[[The New York Times]] Magazine |url=https://www.nytimes.com/2018/02/07/magazine/the-rise-of-china-and-the-fall-of-the-free-trade-myth.html |archive-url=https://web.archive.org/web/20180207114034/https://www.nytimes.com/2018/02/07/magazine/the-rise-of-china-and-the-fall-of-the-free-trade-myth.html |archive-date=February 7, 2018 |url-access=subscription |url-status=live |quote=Free markets, the thinking went, not only generated wealth for all nations but also maximized consumer choice, reduced prices and optimized the use of scarce resources.}}</ref> and is essential to freedom,<ref>{{Cite web |last1=Friedman |first1=Milton |last2=Friedman |first2=Rose D. |date=October 30, 1997 |title=The Case for Free Trade |url=https://www.hoover.org/research/case-free-trade |website=[[The Hoover Institute]] |quote=Few measures that we could take would do more to promote the cause of freedom at home and abroad than complete free trade.}}</ref><ref>{{Cite web |last=North |first=Gary |date=July 9, 2012 |title=Free Trade: The Litmus Test of Economics |url=https://mises.org/library/free-trade-litmus-test-economics |website=[[Mises Institute]] |quote=Free trade means free choice.}}</ref> as they believe voluntary trade between two parties should not be prohibited by government.<ref>{{Cite news |date=March 14, 2018 |title=The Economist Explains: Why is free trade good? |newspaper=[[The Economist]] |url=https://www.economist.com/the-economist-explains/2018/03/14/why-is-free-trade-good}}</ref> Relatedly, neoliberals argue that [[protectionism]] is harmful to [[consumer]]s,<ref>{{Cite web |last1=Friedman |first1=Milton |author1-link=Milton Friedman |last2=Friedman |first2=Rose D. |date=October 30, 1997 |title=The Case for Free Trade |url=https://www.hoover.org/research/case-free-trade |website=[[The Hoover Institute]] |quote='Protection' really means exploiting the consumer.}}</ref> who will be forced to pay higher prices for goods;<ref>{{Cite news |last=Partington |first=Richard |date=August 13, 2018 |title=Is free trade always the answer? |work=[[The Guardian]] |url=https://www.theguardian.com/business/2018/aug/13/is-free-trade-always-the-answer |quote=Economists mostly agree higher tariffs are counterproductive. While they can protect jobs, they also tend to raise the price of goods for consumers and stifle innovation that could benefit the economy.}}</ref> incentivizes individuals to misuse resources;<ref name="Friedman-Trade">{{Cite book |last=Friedman |first=Milton |url=https://archive.org/details/friedman-milton-capitalism-and-freedom/page/n1/mode/2up |title=Capitalism and Freedom |publisher=The [[University of Chicago Press]] |year=1962 |isbn=0-226-26401-7 |location=Chicago |publication-date=1982 |pages=39 |quote=Tariffs and other restrictions on international trade...give individuals an incentive to misuse and misdirect resources, and distort the investment of new savings.}}</ref> distorts investment;<ref name="Friedman-Trade"/> stifles innovation;<ref>{{Cite news |last=Partington |first=Richard |date=August 13, 2018 |title=Is free trade always the answer? |work=[[The Guardian]] |url=https://www.theguardian.com/business/2018/aug/13/is-free-trade-always-the-answer |quote=Economists argue international competition stimulates greater innovation and productivity, while warning protectionism can hinder progress.}}</ref> and props up certain industries at the expense of consumers and other industries.<ref>{{Cite web |last=Lincicome |first=Scott |date=May 2, 2019 |title=The Case for Free Trade |url=https://www.cato.org/publications/commentary/case-free-trade |website=[[The Cato Institute]] |quote=Protectionism invisibly propped up certain industries and workers at most Americans' expense and generated the aforementioned economic and geopolitical problems.}}</ref>

=== Monetarism ===
{{Main |Monetarism}}
Monetarism is an economic theory commonly associated with neoliberalism.{{sfnp|Harvey|2005|p=}} Formulated by [[Milton Friedman]], it focuses on the macroeconomic aspects of the [[supply of money]], paying particular attention to the effects of [[central bank]]ing.<ref>{{cite web |last1=McCallum |first1=Bennett T. |title=Monetarism |url=https://www.econlib.org/library/Enc/Monetarism.html |website=The Library of Economics and Liberty |access-date=July 8, 2019}}</ref> It argues that excessive expansion of the money supply is inherently inflationary and that monetary authorities should focus primarily on maintaining [[price stability]], even at the cost of other macroeconomic factors like [[economic growth]].

Monetarism is often associated with the policies of the [[Federal Reserve System|U.S. Federal Reserve]] under the [[Chair of the Federal Reserve|chairmanship]] of economist [[Paul Volcker]],{{sfnp|Harvey|2005|p=}} which centered around high interest rates that are widely credited with ending the high levels of inflation seen in the United States during the 1970s and early 1980s<ref>{{cite news |last=Hutchinson |first=Martin |date=November 4, 2008 |title=To Treat the Fed as Volcker Did |work=[[The New York Times]] |url-access=subscription |url= https://www.nytimes.com/2008/11/05/business/05views.html}}</ref> as well as contributing to the [[Early 1980s recession in the United States|1980–1982 recession]].<ref>{{cite web |title=Paul Volcker |website=Encyclopædia Britannica |url=https://www.britannica.com/biography/Paul-Adolph-Volcker |access-date=July 8, 2019}}</ref> Monetarism had particular force in Chile, whose central bank raised interest rates to counter inflation that had spiraled to over 600%.<ref name="World Bank-2019"/> This helped to successfully reduce inflation to below 10%,<ref name="World Bank-2019"/> but also resulted in job losses.