Graffitti on the Great Wall of China

Graffitti on the Great Wall of China

Thursday, August 19, 2010

WTF is Neoliberalism?

Do you want to know why the Wall Street crashed? Because of neoliberalism. Do you want to know why there are so many illegal immigrants in the US? Because of neoliberalism. Do you want to know why you can’t find a job? Because of neoliberalism. I could go on, (and I will, this is one of my longer posts) but you get the picture.

Neoliberalism is the theory that an economy and state have the ability to function the most effectively when there are no market barriers in place. There are five main points in the theory of neoliberalism. The first is establishing a market that is completely free of regulation. The second is the eradication of public spending for social services. The third is the deregulation of any government intervention that imposes upon the gain of profit. The fourth is the privatization of all government run services. The fifth is eliminating the idea of the “public good”.

In the eighties, a new economic theory emerged called neoliberalism (sometimes called neoconservatism or reaganomics or teabagger craziness). Anyway, this new policy basically said lets make the only role that the government has on the economy is make sure that no one tries to regulate any kind of trade. Some examples of trade regulation are tariffs for imported goods, making it so companies can’t outsource, or having a country charge taxes to a corperation that wants to operate in their nation.

In neoliberal theory, the whole idea of government changes from an institution that makes laws and provides services to its country to one that is only in place to make sure that there aren’t any trade regulations. For example, if there were a country or group of people who were working against a neoliberal state’s free trade, the state would use violence or the threat of violence to force them to allow free trade.

There are definite problems when this idea is put into practice. For example, in a completely “free” society, a company would not have to follow labor standards or environmental standards. The theory is that if the workers were being treated badly, they would have the freedom to not work there. If the workers quit because they were being treated badly, the business would fail and the problem would be fixed. In that scenario, the “freedoms” of the company wouldn’t be infringed upon and the free market would continue to flourish unrestricted.

This theory, of course, does not work in practice. From a realistic point of view, one realizes that workers need payment, even if conditions are bad and that a high percentage of businesses will do anything to increase profits. Even though there is obvious proof that the end result of this practice is harmful, many classic neoliberals maintain that it is still better the state does not intervene. They believe that the “cure is worse than the disease.” (Check out David Harvey’s A Brief History of Neoliberalism, “

The classical neoliberal theory, as discussed earlier, is that if people have complete and total freedom, then the market will become a self-regulating entity and everyone working within it will have an equal chance of social mobility. Like the example stated earlier about the ways neoliberals believe labor standards will regulate themselves, the idea of a free market ensuring equality fails just as miserably. The ideal economic climate that neoliberals envision is one wherein a person would have the freedom to use their monetary capital in a way that will afford him or her the best life possible. In practice however, neoliberalism only works to create an economy where the elite have the freedom to increase their capital to amounts previously unseen and the poor are forced to live at a lower and lower standard.

So, to answer the questions I posed in paragraph one in a bit more detail… Because neoliberals took almost all of the regulations out of the banking industry, people on wall street were allowed to do whatever they wanted and what they wanted to do was to get a huge personal profit and they didn’t really care who’s pension they were ruining in the meantime.

Because neoliberals went into Latin American countries and ruined their economies by forcing deregulation of trade, now no one there is able to get a job. Basically US industries went in, took everything they could and left. Now the people there are forced between starving to death and seeing their children doomed to lead a life of poverty or illegally immigrating to the US were they can at least be able to send some money home. In short, the reason that the US has jobs for immigrants and their own countries don’t is because the US stole all their capital.

Because neoliberals forced free trade down everyone’s throats, companies are now allowed to go anywhere in the globe to look for the cheapest workers. Before neoliberalism, if say Nike wanted to make all their shoes in China, the labor would be a ton cheaper but Nike wouldn’t make such a huge profit because they would be forced to pay China taxes to operate there and they would be forced to pay tariffs (money to the government that could be reinvested in the United States) to import cheaply made goods. But since we decided to throw away any kind of trade regulation, companies can go make shoes in China and then sell them in the US for 500 times what it cost to produce. And since its so much cheaper to find labor overseas, American lost all its jobs.

So whenever you hear someone complaining about big government or trade regulation or the “socialist” agenda, just remember that the neoliberal agenda is what got the US to the state it is in today. I don’t know about you, but I am totally willing to try something different than this.

Sidenote, if you want to know more about neoliberalism, email me or leave a comment because I have a totally amazing list of articles and books about this topic!


  1. Do you think that neoliberalism will persist? Do you think the power of the elites overthrow any suggestions of change? you can email me back at if you have any info on this topic that you would like to share :)

  2. Where is ex-governor of PR Luis Fortuño?
    Click on the following link to find out where:
    Luis Fortuño is in Washington DC working for the law firm Steptoe and Johnson. Look what Steptoe has to say about Luis Fortuño:
    Luis Fortuño, aside from having done an excellent job as governor, installed in Puerto Rico the Private – Public Partnership law that permitted us to make 2 very significant investments – the Puerto Rico highway system and the Puerto Rico international airport.
    Luis Fortuño, as part of his function in this firm, is the advisor for Puerto Rico affairs. This firm represents many companies that want to buy the rest of Puerto Rico’s public companies, so that they could be in private hands. As soon as this is done, the cost for these services will go up. When Puerto Ricans can’t pay for them, they will be forced to abandon Puerto Rico. The moment Puerto Ricans become a minority in Puerto Rico, only then would Puerto Rico become the 51st state of the Union.
    Noam Chomsky said it in his book PROFIT OVER PEOPLE (page 21) that, “democracy conflicts with the demand for a political and economic climate conducive to private investment.” United States neoliberalism permits its corporations to make as much money as possible, without any regards to the consequences to its citizens or the rest of the world.
    This is why we must continue to march permanently and peacefully for Puerto Rico decolonization. Instead of the US government complying with the United Nations’ 34 resolutions asking it to immediately decolonize Puerto Rico, it has been working tirelessly to kick us out of Puerto Rico.
    Recently, the author of the book WAR AGAINST ALL PUERTO RICANS, Nelson A. Denis, said that we need to realize that this is another Vieques. Protest now, because those who want to kick us out of our own homeland don’t believe in JUSTICE FOR ALL!


Further thoughts on the subject? Let me know what you think.