Political and Cultural Consequences of Neoliberalism

Introduction

After the decline of the classical liberalism in Europe, a new form of liberalism was introduced- the neoliberalism.  The term neoliberalism gained its popularity in the late thirties. Its inception was highly misunderstood and many associated the term with market dynamics.  The term was also used to describe the rules and aspects of managing a state. The neoliberalism concept is a theory that spells out the political and economic management in countries.  The theory proposes that any form of advancement can be evidenced when human beings are offered freedom to operate in a free market.  Some of the said freedoms include having strong individual property ownership rights; the establishment of a free market that facilitates free trade. Neoliberalism is highly supported by states; hence it ends up establishing quality and integrity of money. Through neoliberalism, different cultures have been affected while providing a trend of eroding some of the existing cultures (Harvey 2005, p.7). The imperial plot that has encouraged political and cultural influence has been enhanced by neoliberalism. Many communist countries have liberalism as a theory against communism economies. This is based on the fact that communist states have a tendency of the state controlling everything. On the other hand, liberalism makes markets free from any state influence.This essay will offer a critical examination of some of the political and cultural consequences of neoliberalism.

The states’ role in the process of forming neoliberalism is worth critical examination. The state has to offer protection of the individual rights.  Essential security should be offered whereby markets are made safe for proper functioning.  The use of force if necessary is recommended so as to make sure that the markets function. The offering of land, water and prevention of the markets from being subjected to environmental hazards is the duty of the state. In the above mentioned areas, the state intervention is highly encouraged to take active part. The only thing that makes the markets free is the fact that minimum state intervention is encouraged.  Maximum interventions in the markets in the state discourage interested parties from carrying out their activities in that country.  Some of the countries have witnessed withdrawal of the state from offering social facilities to the market, and many states have adopted the liberal market system after the end of the Cold War. Emerging democracies such as New Zealand and Sweden have embraced the theory of neoliberalism (Harvey 2005, p.13).

The establishment of the operation of neoliberalism calls for a complete restructuring of the institutional frameworks. The said creative destruction has been cited to challenge the sovereignty of the state in some instances.  Restructuring also affects division of labour and other pertinent social relations. The ways of living of individuals in the said states are substantially affected.  The value attached to land and technological advancement is also changed.  The guiding principle in changing markets is to make sure that state involvement is reduced or completely done away with.  Building liberalism is challenging since it has the effect of introducing a new way in which the market is viewed. The neoliberal wave has proved strong to some economies, thus breaking them and introducing new economic strategies.  It is estimated that billions of people in both developing and developed countries have been affected by the wave. Some scholars have argued that neoliberalism is the most memorable economic event of the twentieth century.  The main proponents of the economic wave have observed that neoliberalism has introduced many consequences to the states. The triumph of new markets where governments had control has been witnessed, and freeing the market from the forces of government control has introduced political effects (Clarke 2004, p.18).

 The neoliberalism policies have brought about the regulation policies in states that have had the impact of changing the entire political landscape and the welfare of the state. The welfare and the politics of a given country change in the sense that politician’s choices change. So as to establish strong support, they focus on the dynamics of the market in a liberal way. A bargaining point is similarly introduced between the politicians and other groups that have the mandate of running the market.  The terms of market operation are subject to bargaining between the politicians and other groups. The institutional structuring has enhanced the widening of the political domain. Neoliberal economies have created a room for political incumbents such that they have a chance to expand their political control.  The political dealings of a country are affected in the sense that the politicians rule in consultations with the societal groups that control the markets. The political class is involved in the building coalitions which are designed to assist in the regulation of markets. 

The coordination of the societal groups and the politicians helps in arriving at the best policies in the market and the economy of the country. The societal groups get a chance to mobilize people to support the regulation process.  In so doing, the right institutions are created and market governance is facilitated. Therefore, government intervention is not entirely eliminated, but neoliberal reforms define the new policies that are to take place. The political class benefits from the said arrangements, but the benefits are realized in the short run only. The long term effect of the unregulated market is that the country’s power to decide what its citizens should consume is compromised (Harvey 2005, p.17).

Neoliberal reforms create incentives and opportunities for parties concerned to build stable institutions. The neoliberal policies render some of the institutions inapplicable, thus replacing them with new kinds of institutions. The new policies are very instrumental in shaping the country’s market towards globalization. The management of the markets rests on the dynamics of supply and demand. The monopoly of government is eliminated, therefore, making it easy for parties from outside of the country to invest. This ends up promoting globalization. It is imperative to note that the market created institutions promote efficient market regulation.  The political economy of a country that adopts neoliberalism is substantially affected. The cross national working of different reforms poses a major threat to the country’s existing institutions. Neoliberalism has explained the reason why countries apply certain policies at a given time. The support of neoliberal policies by politicians has largely caused many consequences to the country’s existing policies.  There are factors that make politicians support neoliberal reforms. The reasons for supporting neoliberal reforms explain why countries have experienced varied economic success. The reforms have had the effect of rendering the ancient regimes that regulate markets inapplicable. The political difference is highly witnessed in developing countries. Neoliberal reforms have changed the state’s focus on policy creation. Politicians have focused on coming up with policies that allow reconstruction of the markets. The policies by politicians are largely formulated through consulting the right parties, thus politicians have linked technical requirements to the neoliberal policies (Harvey 2005, p.16).

In preparation of state enterprises in improving the country’s public expenditure, the global market pressures are eliminated.  This provides sophisticated information that helps the exports and import markets. The global market competitiveness is boosted abroad. It is essential to note that the neoliberal reforms assist to trigger politically motivated institutions (Beck & Beck-Gernsheim 2002, p.8). The drive in the neoliberal reforms changes to the extent that politicians’ ambitions to control policy areas are enhanced. Industrial countries are said to embrace neoliberalism.  The implementation of neoliberal reforms has become a vehicle whereby democracy and other rules of governance have been furthered.  Criticism behind the political influence of globalization and neoliberalism has been witnessed.  

The effects of neoliberalism have generated incentives that have ensured incentives for political based policies. The highlighted factors have made it inevitable for politicians to implement the essential policies so as to stay and gain power. The political economies of deregulation have established a sustainable framework explaining the institutional structuring.  The regimes that take part in decision making are structured in the formal and informal rules so as to conform to the neoliberal working framework. Local governments and the state government hold the authority over the aspects that support the intergovernmental competition. The wave of democracy facilitates multiparty politics whereby strong incentives are created; hence fostering citizens’ representation (Leys 2001, p.30). 

The societal groups that participate in the free markets are relatively responsible in making sure that politicians implement the policies that are in place. The strategies that are designed to manage the country act as the motivating factor to guard the behaviour of politicians. The fact that is that neoliberalism has made politicians act in a responsible manner.  Neoliberalism policies have opened up markets for countries to invest.  The globalization trend has helped in promoting democracy in undemocratic regimes. Neoliberalism has come up with dominating politics. This has been evidenced whereby a given form of governance has been imposed on weaker states. Freeing the market is the main basis of neoliberalism.  The United States dominance in the political affairs of the world has been through neoliberalism. The argument of the United States’ political dominance has emphasized the fact that politics of imposing a certain rule have been advanced through neoliberalism (Leys 2001, p.29).

The hegemonic perception of the global economy is one of the main political consequences of neoliberalism. Opponents of neoliberalism have pointed out that origin of neoliberalism dates back to 1930s. The creation of the theory was by capitalist states so as to avoid future threats on the capitalism economies. International relations acted as the main transmitting agents of neoliberalism.  The concept has largely achieved the goal of making capitalism a dominating economy. On the other hand, democracy has been spread to many countries through the notion of encouraging free markets.  The proponents of neoliberalism have contended that its principles have encouraged the rule of law in dictatorial regimes. On the same note, interstate geopolitical rivalries have been highly minimized (Elliott & Atkinson 2009, p.243).

It is argued that a world has been created whereby dictatorial regimes based on communism have been challenged and other regimes created. Democratic institutions have been guaranteed ample peace, political, as well as economic stability. A world with institutions such as the United Nations and other financial institutions such as the World Bank has emerged. These institutions have helped in creating a stable environment for reliable international relations. The political limits that were used by the Soviet bloc have been broken and states have been formed, grounded on democratic principles.  A global acceptance of the duties and responsibilities of a state have been initiated. Globally, a state was recognized as far as it focused on the well being of its citizens. Deployment of state intervention in such a country would only be allowed to encourage the market to achieve its ends. 

A form of political economic organization that is free from strict state regulation has helped in assisting economies in achieving growth. The main challenge created by neoliberalism is based on the fact that developing countries have played a spectator role in international politics. The silence of developing countries has been triggered by financial institutions such as the World Bank and IMF. Many developing countries have often gone for financial aid from the mentioned institutions. The financial aid is always pegged on various conditions that must be met. Some of the main conditions have been coercing countries to free their markets. In other instances, the financial institutions have imposed a precondition to allow a type of governance. The IMF has increased breach on its morals; hence becoming a biased financial institution that promotes one-sided politics. Imposition of neoliberal principles in a country has largely acted to the detriment of the governed.  The liberalism policies have been said to be spread alongside neocolonialism because the developed countries have used that moment to exploit the developing countries. The neoliberalism theory has been used in developing countries under neoimperial plot. Politics of developed countries have been influenced by the developing countries through neoliberalism.  The opening of foreign markets has benefitted the multinationals, which are managed by the developed countries (Clarke & Newman 1997, p.11)

The political aspects of countries have been altered by neoliberalism. The social democracy ideology has been highly linked with neoliberalism.  Social democracy in this case has been coupled with other aspects. First, redistribution has been fostered whereby reduction of the inequities of capitalism has been promoted. Secondly, democratic economic governance has been put in place so as to reduce failures that are evident in the markets. This also helps in reducing excesses of products and other inefficiencies.  Thirdly, social protectionism has helped in making sure that citizens get satisfied in their education, health and welfare needs.  Largely, social democracy has been used by many politicians to seek support from their respective countries. The incentive of social justice leads to the mistaken belief that countries with free markets are better placed to advance economically than others. This notion has received widespread support from many countries. Markets have been made free from state intervention, but some of the policies created by stakeholders in the market have served the purpose of benefiting few developed countries. It should be noted that developing countries’ policies pertaining the regulation of markets have, in most instances, been reached through coercion and undue influence. The characteristics portrayed by different policies make it clear that neoliberalism is a tool for fostering political interests of the dominating countries.  Although neoliberalism has been said to promote transparency and devolution, its freedom is largely untamed; hence posing a great risk to any country adopting neoliberalism (Beck & Beck-Gernsheim 2002, p. 24).

Free markets have made many developing countries poor. Such countries have resorted to foreign aid. From a critical point of analysis, neoliberalism has made leaders to rely on borrowing to be able to develop their countries. Through the foreign aid, certain goods have been imposed on such countries. In some instances, the said goods have been sold without being levied tax, thus states have continued to lose out revenue through tax waived goods flooding markets. Institutions have been restructured so as to allow investment. Lack of proper institutions to control the flow of goods has continuously promoted capitalist political economies that are less concerned with the well-being of the citizens. Lastly, strong multinationals in developing countries have a role in the internal politics since they fund politicians who would consider their interests once in power. It follows that many of the said politicians are puppets of the multinationals of the developed countries (Foucault, Senellart & Collège de France 2010, p. 250).

There is growing concern that under neoliberalism, culture has been economized. Preservation of national or societal heritage has been looked at in the economic sphere. Values in specific states have been eroded. The national culture of preservation in different countries has lost its meaning.  State owned institutions that would promote better cultures have been individualized under neoliberalism. Institutions that were once controlled by the state are managed by capitalist multinationals.  The culture of capitalism has become highly predominant.  The strengthening of neoliberalism in 1980s opened a window in the emergence of the creative industries. The fact that people were used to goods from their country only changed drastically. Creative industry included creative arts.  The creative capital has received global support, making it have an effect on the culturally funded domain. There is a lot of borrowing of culture in neoliberalism.  It has been evidenced that global cultures mainly in the developed countries have been accepted in developing countries; for instance, the culture of individualization is encouraged. This means that the free markets will have capitalism forces dictating (James 2008, p.16).  This means that a culture will be important as long as it has acceptance by developing countries. Cultures of the developing countries disappear and they become irrelevant.  The political culture of dependence will also be evident. States will be manufacturing less and consuming a lot of products from other countries.  Interdependence will be promoted, while at the same time exchange of cultures will be inevitable (Macpherson & Cunningham 2011, p. 26).

The country’s institutions are weakened, leading to poor policies to regulate cultural degradation. The economic ties under the said states strengthen, while at the same time different cultures are affected.  The increased global integration leaves no room for cultural development, thus encouraging social changes that are undesired.  Ideally, the starting of the creative industries has mistakenly made many to treat culture like a commodity. Through liberalism, culture is viewed as a commodity that can be sold. Many countries have lost the institutional culture. With the freedom in the markets, it is becoming harder for some of the countries to control the negative impacts presented by neoliberalism on culture. In the global economy, the very cultures that should be preserved are lost. New cultures that are in-line with the commodities in the markets are promoted. Neoliberation makes institutions weak, while creating a lot of freedom to those taking part in market expansion and policy creation. Without the right regulation, cultures will be eroded while others will be traded like commodities. For the sake of protecting culture, the state should move swiftly and intervene to prevent further breaches (Bauman 2001, p. 32).

Conclusion

Freedom of markets is a notion supported by many developed countries. Under that notion, government intervention is reduced in the markets. The only intervention that is allowed is when the state is offering social facilities to support the functioning of the market. Markets have been left to operate through the forces of demand and supply.  This has greatly helped in supporting the economic advancement of the host countries through enjoying what they do not produce.  The dominance of markets by foreign goods has become a common trend. There are political and cultural consequences brought about by neoliberalism in countries. Developed countries’ institutions and formulation of policies have been interfered with. The fact that culture has been treated like a commodity has caused a lot of effects to countries. Worth noting is the fact that liberalism has provided negative as well as positive impacts. Elements of neoliberalism that entail democratic principles have helped in modelling institutions in the right direction. As such, an economy that is managed by the neoliberal theory is encouraged.

 

Reference List

Bauman, Z 2001, The individualized society, Polity Press, Cambridge.

Beck, U & Beck-Gernsheim, E 2002, Individualization: Institutionalized individualism and its social and political consequences, Sage, London.

Beck, U & Beck-Gernsheim, E 2002, Individualization: Institutionalized individualism and its social and political consequences, Sage, London.

Clarke, J & Newman, J 1997, The managerial state: Power, politics and ideology in the remaking of social welfare, Sage, London.

Clarke, J 2004, Changing welfare, changing states: New directions in social policy, Sage, London.

Elliott, L & Atkinson, D 2009, The gods that failed: How blind faith in markets has cost us our future, Nation Books, New York, NY.

Foucault, M, Senellart, M, & Collège de France 2010, The birth of biopolitics: Lectures at the Collège de France, 1978-1979, Picador, New York, NY.

Harvey, D 2005, A brief history of neoliberalism, Oxford University Press, Oxford.

James, O 2008, The selfish capitalist: Origins of affluenza, Vermilion, London.

Leys, C 2001, Market-driven politics: Neoliberal democracy and the public interest,  Verso, London.

Macpherson, CB & Cunningham, F 2011, The political theory of possessive individualism: Hobbes to Locke, Oxford University Press, Don Mills Ont.

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