Wealth in the Neoliberal Era
Published 27 Mar 2017
These readings convey that the creation of wealth in a neoliberal era occurred through the systematic creation of neoliberalization policies in several epicenters of power in the world- United States, United Kingdom, and China. These superpowers used international, such as the International Monetary Fund and World Bank, and national economic and educational organizations, to promote the neoliberalization paradigm in developing countries, including those who are struggling in South Africa and newly-founded democracies in Latin America and Asia. The new wealthy class came into being through a range of political and economic actors that advanced the “seductive” (5) ideals of individual freedom and dignity, so that they can justify the shift to neoliberal economics and politics.
These concepts of freedom and dignity are engaging and decisive, because they stress the autonomy of individuals, through the complete freedom of the market (5). This paper discusses the pros and cons of neoliberalization. It argues that there has been a pervading loss of freedom and ethics in a neoliberal world.
The positive sides of neoliberalization are the promotion of individual property rights and democratic principles. In Iraq, citizens acquired individual property rights after the war. Individual property rights are critical to the documentation of assets and determination of the economic potential of the citizenry. Chile and other new democracies also benefitted from using a neoliberal restructuring framework that emphasized the dignity of the individual. Human dignity and autonomy are encouraging values that ideally help people realize their civil rights and freedoms.
The downsides of neoliberal policies are: they have been forced on emerging nation-states, they lack a genuine ethical framework, and they resulted to “bad freedoms” (36). The U.S. imposed neo-liberal policies on Iraq in 2003 through the Coalition Provisional Authority, headed by Paul Bremer (6). Bremer advanced four orders that consisted of: “The full privatization of public enterprises, full ownership rights by foreign firms of Iraqi businesses, full repatriation of foreign profits…the elimination of nearly all trade barriers…”(6). On one hand, these neoliberal policies assert the rights of individuals to have property rights and for private firms to provide more efficient services and products. On the negative side, these policies also advance American profit interests, without consideration of diverse, local, and traditional values, practices, and beliefs (7).
Neoliberalization has no ethics; it has no human soul. It only cares for short-term contracts and transactions, without considering the human rights and dignity of individual citizens and non-citizens (i.e. refugees). Neo-liberal policies are Western value-laden, so when they are directly applied to other cultures, the results are often disastrous. The U.S. backed up the neo-liberal policies of Chile during the 1970s (8). All the recommendations for Iraq were applied already on Chile. Despite the promise of economic growth and social development, the success of the neo-liberal movement was short-term and a more Chilean form of neoliberalization was adopted in later years (9). Another sign that neoliberalization does not care for the plight of the common people is the rising wealth of the upper class and gap between the rich and the poor. In the U.S., the top 1 percent of the upper class controls a 15 percent of national wealth in the 1970s and 1980s, after neoliberalization took over the American economy (15). In Britain, the top 1 percent of income earners doubled their share of wealth from “6.5 percent to 13 percent since 1982″ (17). It is paradoxical that the income inequality worsened during the neoliberalization years, when the main philosophy of neoliberalization is to advance the interests of the “individual.” Apparently, neoliberalization only significantly protected and promoted the rights and interests of the upper class (16).
Neoliberalization created “bad freedoms” (36). Karl Polanyi in 1944 argued about the bad freedoms of neoliberalization. Bad freedoms are developed, because even in a liberal utopia, power struggles among classes take place (37). When this happens, it is inevitable that the ruling class will use the state and its economic and social influences to curb the freedom of other sectors, which are only demanding better working conditions and higher wages.
Freedom becomes one-way, as the ruling class becomes free to control labor, while workers are disenfranchised from their collective and union rights. Neoliberalization policies have been criticized for their soullessness. They destroy the “old,” such as the old ways of thinking and “habits of the heart” (3), without any smooth transition and contextual considerations. Neoliberalization policies have created the wealth of the new upper class and entrenched this wealth on their behalf. Thus, neoliberalization is made of false promises for autonomy and dignity. It only greatly promoted the interests of the ruling class, without decreasing the gap between the rich and the poor, and it is devoid of a comprehensive improvement of civil rights and freedoms, according to the culture and history of different people all over the world.