Politics in Minutes (2016)

Neoliberalism

By the mid-20th century, liberalism had evolved from its classical roots of minimal government power over the rights of the individual and minimal intervention in economic affairs, to the social liberalism of a market economy guided and regulated by the state protecting the welfare as well as the rights of its citizens. But a number of economists, notably Friedrich Hayek and Milton Friedman, advocated a much more laissez-faire attitude to economic policy, termed ‘neoliberalism’.

These ideas were aggressively enforced by the dictator Augusto Pinochet in Chile during the 1970s, but gained respectability when this economic liberalization was adopted in the USA and Britain by Ronald Reagan and Margaret Thatcher. In essence, it was a reversal of the trend towards social liberalism, and instead a strengthening of the free markets, through a programme of reduction in government spending, especially social spending, lowering of taxation, deregulation of business and banking, and extensive privatization.