Neoliberalism Definition

Neoliberalism is a modern form of liberalism. While liberalism primarily wants a community with a free economic market, free competition between businesses and the right to private property, with the neoliberalism, the definition of the optimum society goes one step further and highlights the so-called ‘minimal state’.

What is liberalism meaning?

What is neoliberalism?

Neoliberalism is briefly; allowing the free market forces to have the influence on the economy and thus ensuring that the state has minimum control on the economy which results in ‘minimal state‘. Neoliberal ideas began to take shape among economists, community scientists and politicians during the 1980s as a result of increasing globalization and increased cross-border economic cooperation.

Despite the fact that economic policies has previously been determined by governments, today’s global economy has so much influence on national policies that its effects are taken into account in economic planning. It is difficult to control national economic processes because they are influenced by economic decisions and crises around the world. In addition, modern communication technologies and means of production (eg computers and robots) help transform national societies into one large geographical space for the production, distribution and sales of products.

Against this background, the neoliberalists believe that the economic challenges and globalization can only be overcome using a free market that regulates itself. Neoliberalists therefore want a strong and unregulated market in a capitalist  society, striving to increase growth and prosperity by letting the market forces control the economy. It is about creating greater market efficiency, not least in the public sector, and increased competition between workers and businesses.

Competitive State

In connection with the development of the neoliberal concepts, various researchers and politicians have put forward the idea of ​​the competitive state.

The competitive states perceive the citizens should develop their skills with the guidance of the state. The education system is therefore a tool for developing skills of employees. The state’s primary task is to regulate citizens’ behaviors in the market, especially the labor market, and make sure that they can commit themselves to increasing global economic competition.

Since the 1980s, the European governments have introduced a number of reforms in the public sector (including education and health).

Competitive states combine equal access to education and health with personal responsibility for self-seeking education. Competitive states affect citizens through different motivational factors (tax exemptions or government grants), as well as pushing citizens through or sanctions (withdrawal of grants and reduction of benefits).

However, most scientists and politicians agree that in practice competition states are just a modern version of the welfare state.