Neoliberalism facts for kids

Pamphlet calling for a protest in 1983 following the economic crisis attributed to neoliberal experimentation

Neoliberalism is a term for different social and economic ideas. Originally the term was used by a group of liberals who helped shape social market economy in the mid 20th century. Today, this term is mostly used by people who are critical of the ideas of globalisation as well as trade unionists.

The ideas were developed by the economists Friedrich Hayek, Wilhelm Röpke, Walter Eucken, as well as other less prominent thinkers. They were first presented at a conference in 1938.

What do neoliberals want?

Neoliberals want a free market economy, with everything it stands for (private property of the means of production, the freedom for the market price to establish itself, the freedom of everyone to do what they want, etc.). They see however, that in some cases the freedom of the market fails or it does not yield the results wanted. In such cases, the state should intervene. The main focus of the state should therefore be measures to regulate the following:

• Monopolies and cartels.
• Social fairness
• Equal opportunities for everyone
• Internalising external effects
• Decreasing the effects of fluctuating business cycles.

Neoliberals are openly in compliance with the lobbying of groups, state interventions that aim to protect national interests, like import duties or subsidies. Neoliberalism is also against a centrally governed economy. What's more, it frowns upon the Laissez-faire of classical Liberalism.

Examples of neoliberal forms of Government

• Social market economy in Germany under Ludwig Erhard
• Chile under Augusto Pinochet
• United States under Ronald Reagan
• Great Britain under Margaret Thatcher
• New Zealand under David Lange

Images for kids

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  Friedrich Hayek

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  Ludwig Erhard

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  Builders in West Berlin, 1952

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  Chilean (orange) and average Latin American (blue) rates of growth of GDP (1971–2007)

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  Unemployment in Chile and South America (1980–1990)

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  GDP per capita in Chile and Latin America 1950–2010 (time under Pinochet highlighted)

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  Wealth inequality in the United States increased from 1989 to 2013.

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  United States incarceration rate per 100,000 population, 1925–2013

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  The European Union–Mercosur free trade agreement, which would form one of the world's largest free trade areas, has been denounced by environmental activists and indigenous rights campaigners.

See also

In Spanish: Neoliberalismo para niños