Classical Liberalism And Neoliberalism

Neoliberalism is an updated version of the classical liberal economic idea that was predominant in the United States and the Great Britain prior to the Great Depression of the 1930s. “Interventionist” approach came into in the middle of 1930s to 1970s and replaced the classical liberalism; where to be viable, capitalism is believed to require a substantial state regulation. Corporate enterprises had assisted in creating wealthy class in society after the World War II, which enjoyed excessive political influence on their government in the United States and Europe. These wealthy elites supported neoliberalism as a base in order to counteract post-war policies that favored the working class and the welfare state.

Neoliberal idea identifies market forces and commercial activity as the significant way for production and supply of goods and services; by discouraging government intervention into economic, financial and social matters. The process of economic globalization is controlled by this ideology; removing borders and barriers between nations so that market forces can drive the global economy (Rajesh Makwana, 2006). During the era of Regan–Thatcher–Kohl (1980s); where they believed that expanding the

Accepting the neoliberal ideas, it likely means to reduce poverty and inequality in the poorest nations. One of the main criticisms for neoliberal policies is that they have been unable to help those living in extreme poverty that were most in need for monetary aid. Economic growth of 3.2% (1960-1980) in most developing states declined to a mere 0.7% in year 2000; which was during the period of neoliberalism in the global economy. However, China economic growth was increasing to over 8% in the year 2000 as China did not consider neoliberalism during that mean of