We can define Neoliberalism , also known as new liberalism , as a set of great political and economic ideas all based on capitalism that defends, above all, the non-participation of the State in the economy, leaving out any government interference and promoting this private production that owns a single capital without ever having any kind of subsidy from the government . According to this doctrine, there should not be full freedom of trade ( free trade), since this principle guarantees the economic growth and social development of a country. It is seen by many as a negative action and is criticized for its policies such as the privatization of state-owned companies and the opening and poor regularization of markets.


What is neoliberalism?

The neo – liberalism or new liberalism is a set of major political and economic ideas that have their foundation and are based on capitalism mainly advocating non – participation by the State in the field of economy letting private enterprise has a unique capital without subsidies by the government.

  • History of neoliberalism
  • Characteristics of neoliberalism
  • goals
  • Principles of neoliberalism
  • Representatives of neoliberalism
  • Examples

History of neoliberalism

The word neoliberalism was first used by the German Alexander Rüstow in 1938. From that time began to give a definition of the concept of neoliberalism as an important part as a priority pricing system of the free enterprise , free enterprise and within of a State classified as strong and industrial. In the regime of the military Augusto Pinochet in Chile , the term was used to refer to a broad set of political and economic reforms under his government and the term pejorative was used.. During the last decades, the term has been used to elaborate criticism against the policies of liberalization of power within the private sector who want to increase their economy . Neoliberalism has and defends concepts typical of the old liberalism that occurred during the nineteenth century.


Characteristics of neoliberalism

  • State participation is minimal in terms of how to improve and participate in shaping the economy of a country.
  • The government participates very little in the labor market .
  • There is a policy of privatization of the companies that belong to the State.
  • There is free movement of international capital and the emphasis on globalization is very important to them.
  • It makes way for multinational industries to invest and important measures are taken against the economic protection provided by the state.
  • There is marked opposition to excess taxes and levies , production is increased to benefit the investor, and there is significant control over product prices. The supply and demand is very good to be able to regulate prices.
  • The economic base must be formed by private companies and are based on capitalism .


The neoliberalism is causing a rapid process to achieve wealth so based on deception and the concentration of wealth in the hands of entrepreneurs to achieve the goal of economic growth. They seek to quickly lower wage levels to achieve greater unemployment and then create many people without wages who are willing to work for very low wages. They try to destroy all kinds of workers’ unions, thus rendering them powerless before their employers. Privatizing everything that exists in the country is one of their main objectives as this is how they manage to dominate thetransnational corporations , public health and education. They promote ignorance by eliminating study plans and social and political commitments, stimulating at all times the superficiality and anti values of human society.

Principles of neoliberalism

  • The competition individually is an important factor for the proper functioning of the economy and economic success is the ethical standard critical of all activity.
  • The market is the only regulatory entity and the only one in charge of the economic process.
  • There is a decrease in the role that the State plays within the economy and worker protection . The only thing the state has to do is help with the free functioning of the market.
  • Regulations that do not allow the free action of economic agents are eliminated and monetary fluids are the only way the economy has to stimulate economic growth.

Representatives of neoliberalism

Walter Eucken , was the founder of neoliberalism, he was a Swiss economist born in London in 1891.  Röpke and Ludwing Erhard , were the main spokesmen of the doctrinal current, Röpke Wilhelm , German economist, considered socialism as the culmination of capitalist evils, and postulated the need to defend the mechanism and advantages of the international division of labor . Von Hayek , a British economist of Austrian origin, stood out for his participation in the discussion on the Theory of Economic Calculation.


Colombia and Peru are two countries that have been applying neoliberal economic policies and that currently present a large increase in unemployment rates , economic decline , low job creation, increased inflation and loss of purchasing power , situations that have influenced by the economic and social crisis in the two countries. The handover of companies to multinational companies for mining projects in the country the lack of good policies to combat poverty and inequality social causes that the Peruvian people are in crisis and discontent. On the other hand, in Colombia, all the indicators show that there will be an increase in unemployment , in the prices of food and medicines and that interest rates will increase notably, worsening as the years go by without a change.

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