For those that may not see any difference between classical liberalism that started with Adam Smith and neo-liberalism that has its roots in the Reagan-Thatcher conservative revolution (although the theoretical origins predate Reagan-Thatcher, and can be traced to Chile in 1973 when the CIA overthrew Salvador Allende and brought the 'Chicago School' (Milton Friedman - U of C) to implement economic policy).
Neo-liberal advocates insist that anything in the public sector entails inefficient, corrupt, uncompetitive, and unhealthy for society's welfare, therefore, any public enterprises that can be handed over to the private sector must, and any services, including military and intelligence, that can be contracted out must. The ultimate goal of all of this according to apologists of neo-liberalism is economic growth and greater prosperity for all, the panacea promised to all but delivered to very few who are the large owners of capital.
In 2005, economists from the WTO and the Institute for International Economics advocating neo-liberalism argued that more than half a billion people would be raised from the depths of poverty. They argued that poverty in the world would end within the first decades of this century, if only barriers to trade and capital transfers were removed. In 2011, poverty is higher not only in underdeveloped nations, but in the advanced ones as a result of the global recession of 2008-2011, with the US alone having more than 17% living below poverty standards, and EU about the same number and expected to rise both in US and Europe.
During the African Union summit in Ethiopia in February 2008, a number of African leaders linked the fallacies of neo-liberalism to the political violence in East Africa, something that would be repeated in 2011 across North Africa during the Arab Spring uprisings, and across Europe with the indignant mass protest movements, and in major US cities with the anti-Wall Street protests.
But let us argue that the grass roots movements from Africa and Europe to the US represent a small minority of disgruntled people, and that there is no myth or fallacy in the neo-liberal panacea. How do we then explain that in the last three decades there has been downward socioeconomic mobilization in the US and super-concentration of capital in the hands of the top 10% of the population, if neo-liberalism held the promise of eradicating poverty by increasing wealth and presumably allowing for its sharing across all social sectors?
How has American society benefited from neo-liberalism's privatization when 45 million have no health coverage and unofficial unemployment is at 15%, and underemployment is at around 18%? It is in fact a myth that there has been greater economic growth and prosperity for all, not just for the US but for any country operating under neo-liberal policies. How do we explain that in the advanced capitalist countries the most vulnerable population is not the unskilled workers, but college graduates facing the prospect of never working in their field and never enjoying the 'middle class dream' of material comforts that their parents enjoyed?
a) subsidies, b) tax breaks, c) bailouts, d) barriers on foreign goods that are competitively priced,
e) intervention against monetary policies of countries enjoying competitive advantages,
f) labor and environmental laws and regulations, and a host of other areas from research and development paid for by taxpayers to infrastructural development?
Deregulation under neo-liberalism also means de-unionization of the labor market, canceling workers' rights achieved since the 19th century, and imposing wages that are as close to subsistence as possible. The rationale is that the US, EU, Japan, etc. must become competitive because China is rapidly out-competing the advanced countries. How do developed countries become competitive? They bring wage levels down so that they can maintain high profits and keep market share.When they speak of 'competitive', they mean lowering wages and benefits and securing tax breaks and subsidies.
6. HOMOGENIZED POLITICAL PARTIES: Neo-liberalism as a phase of contemporary capitalism projects the impression that political parties from center-left to right-wing represent options to the voters, when in fact their only policy option is to tinker within the larger framework of neo-liberalism; that is to say, cutting less from social security while raising consumption taxes. The idea that conservative parties have much policy difference with their centrist or Socialist counterparts is a myth that people now realize.
For example, Spain, Greece, and Portugal were all under Socialist political party rule when all of them decided to adopt neo-liberal policies more than a decade ago, long before they adopted the current IMF-EU neo-liberal-based austerity programs. It was of immense symbolic significance that the former head of the IMF was a French Socialist, Dominique Straus-Khan, who despite his full embrace of neo-liberal policies insisted that he was a Socialist. That Socialist parties have been so thoroughly absorbed by the neo-liberal tide is essential for they appeal to the centrist and leftist segment of voters that must be deradicalized into conformity.
European Socialists speak and write like a college-educated person would expect Socialists to speak and write, but they practice neo-liberalism with their votes when in government. Neo-liberalism has triumphed over most mainstream political parties, a development that has accounted for the grass roots movement owing to the realization of most people that political parties try to appease voters, but all of them practice similar policies intended to further big capital. The frustration of the indignant masses, whether in Madrid or New York, is the same and it is with the hypocrisy that democracy exists, when in reality neo-liberalism has co-opted the ruling parties.
In society, the individual is defined in a utilitarian manner as a worker who must subordinate to the rules of the evolving marketplace and as a consumer who has the right to demand quality products and services. Under neo-liberalism, civic values and human rights as part of the collective community are only acceptable if they are not obstacles to the progress of the marketplace. Whereas the traditional Enlightenment exalted the cultivation of creativity as an expression of the person's intrinsic value, neo-liberalism reduces creativity and individual talent into a commodity, thus the value system fostered and rewarded has a cash value. Not just the educational system, but the entire institutional structure is shaped to cater to the neo-liberal value system that has reduced human beings into commodities serving the ultimate goal of marketplace hegemony.