Neoliberal approach to economy development has been heavily critiqued throughout academic literature, with there being various assertions as to what the benefits of this approach are. This essay will critically analyses neoliberalism approach to economy development. The benefits of using the approach, examples of countries that have used neoliberal approach, scholars’ critiques (such as, David Harvey 2005 and Jajati Pattnaik and etc) of the approach and the relevance of the approach to Jamaica will be discuss in this essay.
The original meaning of neoliberalism has been transformed since the 1970’s. As a result of economic crisis there was a second emergent of neoliberalism which was characterised by economic rationalism and privatisation (Philip Mirowski and Dieter Plehwe 2009). Jacques Cros in his dissertation in 1950 gave scholar articulation to, and a defence to his thesis , he argued that neoliberalism is a political ideology which resulted from a few efforts at revive traditional economic liberalism,(Kozlowska Anna and Janko Mursak ,2009,248). David Harvey (2005), argued that, the restructuring of state form and the of international relation after World War II was to prevent the condition that had threaten the capitalist order of the 1930s (5). “Neoliberalism is a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade”. Harvey (2005), further argued that cardinal features of the neoliberal approach include free trade, privatisation, price deregulation, a reduced size of government and flexible labour markets (5). There are many arguments for and against using neoliberal approach to develop a country. I strongly believe that neoliberal approach is not the best approach to a country’s development.
Under neoliberalism the state’s role has moved from direct ownership of state assets, production activities and social services towards attracting and subsidising export-oriented investors. Ownership and roles are transferred/sold to the private market (Robert Potter, David Barker, Thomas Klak and Denis Conway 2004, 356). This view has also been argued by Wendy Brown, (2006), who argued that a part of what makes neoliberalism “neo” is free markets, free trade, and entrepreneurial rationality which are achieved through law and through social and economic policy, (694).
Examples of Neoliberalism in Practice
Chile had shifted towards neoliberalism during the dictatorship of General Pinochet in 1976, Menem administration. Pinochet’s military government had implemented economic liberalisation, including currency stabilisation, removed tariff protections for local industry, banned trade unions, facilitated foreign direct investment and freer trade and privatised critical functions such as social security, health, education, natural resources and many state-owned enterprises (Peter Read, 2018).
Both Reagan (US) and Thatcher (UK) administration during the 1980s implemented policies that have features of the neoliberal approach these included, changes to tax policies, privatisation of state-owned industries (the British railway network in UK), radical reduction of income taxes, reduced government regulation and deregulation of market. Moreover, after the collapse of the Soviet Union countries such as Sweden and New Zealand had responded voluntarily and in some cases by pressure applied some version of neoliberal theory by adjusting some policies and practices (Harvey 2005, 1-2). On the same hand, Nigel Hawkins (2015), stated that, election of the Conservative Party into government in 1979 in the UK, under the leadership of Margaret Thatcher, had many changes, such as implementation of policy of privatization, whereby state-owned companies were sold off to the private sector, monopolies were manifest, and system of price regulation was established. The monopoly businesses, whilst investment rose, so did retail prices, (2 and 20).
In June 1996, post-apartheid government