Neo-liberalism
Also called: Neoliberalism · Topic: Equality and Social Justice · NCERT: Beyond NCERT
Meaning
Neo-liberalism is an ideology that became dominant in the 1980s. It favours free markets, deregulation (removing government controls on business), privatisation (selling state firms to private owners), careful control of government spending, and a smaller role for the state in the economy. It was a reaction against the welfare state and against heavy state planning. Critics say it widens inequality and weakens public services for the poor.
Example
Margaret Thatcher in Britain and Ronald Reagan in the USA followed neo-liberal policies. The Washington Consensus (1989) was a set of such policy prescriptions. India's 1991 economic reforms moved the country in this direction. They cut licences and controls and opened the economy to private and foreign firms.
Don't confuse with
- Modern liberalism: modern liberalism accepts a welfare state. Neo-liberalism wants to shrink the state's economic role.
- Minimal state: a minimal state is the old classical liberal ideal of a state limited to security and contracts. Neo-liberalism is a later policy programme, and many neo-liberal states still keep some welfare schemes.