Trailing back to the early 90’s, when India barely held any foreign exchange in it’s pockets, lasting only a fortnight, it’s then Finance Minister, presented a budgeted in the Indian Parliament, giving a makeover to the country and it’s global presence.
Gracias to the political turmoil, mind-boggling oil prices and fiscal profligacy that called for a reform sooner shielding the nation from national humiliation.
In that frantic summer, Mr. Singh brought in major amendments in law, such as devaluation of the rupee, abolishment of quotas and licenses, breaking trade barriers, opening few industries to foreign capital, to name a few.Further, opening India’s market to Global interaction and welcoming the ever-lasting and well received economic theory “Laissez Faire”.
Living up to the literal meaning “Let-Do” the government stepped down of major involvement in the economy, privatizing majority of the country’s market.
Having said so much of India’s major turning point, never did I mention about NEO-LIBERALISIM, anywhere above.
Most often Neo-liberalism is grasped as a disciple of laissez-faire principles, born with an ambition of ensuring free markets and an “unfettered” economy. Quinn Slobodian, Associate Professor of History at Wellesley College and Author of the established book: “Globalists: The End of Empire and the Birth of Neo-liberalism”, however details Neo-liberalism as a theory of separating the economic world from the political world, protecting the Global economy and not freeing it.
Brief History:
Used extensively by numerous scholars, critics and analysts worldwide, Neoliberalism refers to ideas propagating economic liberalization, extending rights and abilities of the private sector over the public sector, disallowing government control over the economy.
Referred to in the classic sense of growing privatization, defining the world as a global market in the early life, the popularity of the term decreased steadily in the 1960s, rising back in the 80s. During this time it’s meaning shifted to the more radical laissez faire ideology.
Liberalism Vs Neoliberalism:
Sounding like they belong to similar theories, both terms are surprisingly distinct. Rooted in the 19th century, both from the classical liberalism family, promote laissez faire economics and freedom of the people against an overpowering government.
A thin line that differentiates the two is the sphere of the economic factors and theories over which they conceptualize or concentrate. Taking it further, liberalism is greatly oriented towards political philosophy holding liberty to high standards. It focuses greatly on all social, economic and political aspects of the society, for instance: government’s role, toleration, freedom to act etc.
Whereas, on the other hand neoliberalism focuses on the current markets, their growth and needs. It promotes deregulation, freeing up markets and being less possessive. It is based highly on economics.
Never the less, every theory has it’s own set of critics and Neoliberalism is no exception. Though well received amongst the scholars, economists and the corporate masterminds, it has received a lot of criticism from the political spectrum.
Critics claim, sole focus on economic factors may lead to ignorance of other factors, hindering the overall growth of the country and the Global market. Critics also claim that neoliberalism has greatly influenced the corporations such that their policies stand against the betterment of the society and the democracy.
Adding to the above, critics visualize Globalization as a negative concept as replacing government owned corporations are believed to reduce efficiency. Further, they believe that neoliberalism yearning great productivity may not be sustainable due to World’s geographical design and it’s limitations.
However, as the former Argentina President,Nestor Kirchner rightly said, “We must create a kind of Globalization that works for everyone, and not just for a few”, it is necessary that the theories defined by Neoliberalists be aligned with theories of Globalization and Liberalism, meeting the needs of the World.
Author
Hridaya
Hridaya is a senior audit analyst at KVA LLP. A bibliophile, she has gained immense experience from her work centered around international taxation, risk advisory services and legal compliances. In her free time, she enjoys reading and writing about industry trends and economic reforms.
