In a widening sphere of vastly different societies economic growth has
come to be guided by the same set of neoliberal policies. Neoliberalism
is a broad structure of political beliefs founded on right wing, yet not
conservative, ideas about political democracy, individual freedom and
the creative potential of unfettered entrepreneurship. The economic
analysis at the theoretical core of this belief system derives from a certain
reading of the founding texts of classical and neoclassical liberal
economics. These represent market processes as optimally efcient means
of allocating resources to the most productive uses. The main restriction
on the tendency for free capitalist economies to grow is thought to be
market failure resulting from perverse governmental intervention. In
neoliberal thought, governments may play a productive role in providing
public goods, such as infrastructure. Fiscal policy may help stabilize
overly-exuberant economies. But most governments in welfare state soci- eties and developing countries alike are said by neoliberals to have gone
too far in interfering with the free play of markets. Neoliberal econo- mists like Milton Friedman began to be taken seriously during the series
of economic crises in the 1970s. Neoliberal-type economic policies were
imposed by the IMF and the US Treasury on a left-leaning Labour
Government in Britain in the middle 1970s. Neoliberalism was eagerly
adopted by the Reagan and Thatcher governments in the early 1980s. The World Bank began to shift towards neoliberal positions with the
Berg report on development in sub-Saharan Africa. A series of World
Bank reports published in the 1980s showed increasing adherence to
neoliberal positions. By the late 1980s, a system of policy recommenda-
tions, dubbed the ‘Washington consensus’, dominated what had previ- ously been a liberal or social democratic development discourse. The
consensus showed a renewed faith in classical economics, while advo- cating ‘prudent macroeconomic policies, outward orientation, and free
In a widening sphere of vastly different societies economic growth hascome to be guided by the same set of neoliberal policies. Neoliberalismis a broad structure of political beliefs founded on right wing, yet notconservative, ideas about political democracy, individual freedom andthe creative potential of unfettered entrepreneurship. The economicanalysis at the theoretical core of this belief system derives from a certainreading of the founding texts of classical and neoclassical liberaleconomics. These represent market processes as optimally efcient meansof allocating resources to the most productive uses. The main restrictionon the tendency for free capitalist economies to grow is thought to bemarket failure resulting from perverse governmental intervention. Inneoliberal thought, governments may play a productive role in providingpublic goods, such as infrastructure. Fiscal policy may help stabilizeoverly-exuberant economies. But most governments in welfare state soci- eties and developing countries alike are said by neoliberals to have gonetoo far in interfering with the free play of markets. Neoliberal econo- mists like Milton Friedman began to be taken seriously during the seriesof economic crises in the 1970s. Neoliberal-type economic policies wereimposed by the IMF and the US Treasury on a left-leaning LabourGovernment in Britain in the middle 1970s. Neoliberalism was eagerlyadopted by the Reagan and Thatcher governments in the early 1980s. The World Bank began to shift towards neoliberal positions with theBerg report on development in sub-Saharan Africa. A series of WorldBank reports published in the 1980s showed increasing adherence toneoliberal positions. By the late 1980s, a system of policy recommenda-tions, dubbed the ‘Washington consensus’, dominated what had previ- ously been a liberal or social democratic development discourse. Theconsensus showed a renewed faith in classical economics, while advo- cating ‘prudent macroeconomic policies, outward orientation, and free
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