Long-Term Costs of San Francisco

¶ … Neoliberal Social Theory

Neoliberalist Theory has been known and defined as a philosophy or thinking that promotes the continuous production and distribution of goods and services, and is adapted after the concept of Neoclassical economy that the economist Adam Smith had introduced in his book, "The Wealth of Nations." Through Adam Smith's famous economic and philosophical treatise, the idea that market economies can function and regulate itself without government intervention came into being. This is precisely one of the most important characteristics of neoliberalism: the market economy produces and distributes goods and services at an optimum and efficient rate without any intervention from the government.

Neoliberalist theory is characterized by a number of important aspects, which are the following: it promotes "a stable currency, free market capitalism, and free trade" (Wikipedia 2002). Further, neoliberalism advocates not only for deregulation, self-regulation, and free trade, but also to privatization of business enterprise (both private and public) as well as the development of globalization in the nation's economy. Free trade, privatization, and globalization all contribute to economic growth, making neoliberalism an ideal framework not only to developed and wealthy nations, but most especially to developing countries. More importantly, neoliberalism encourages the occurrence of change in the way of "changing perceptions of public and community good to individualism and individual responsibility" (Shah 2001). This is perhaps the essential change that occurs in neoliberalism, aside from the economic growth of market economies. Although neoliberalism is deemed a good concept to implement when it is applied in the economic schema of a nation, but neoliberalism also poses several problems that can result to society, since it changes the society from being a collectivist culture to an individualist one. Although individualism is a good quality in a culture, there are certain cases wherein individualism can be harmful, especially in economic and business competition, which neoliberalism harbors.

The shift from collectivist to individualist culture of the society is just one of the many criticisms that neoliberalism creates in the society. Two famous critiques of the neoliberalist theory are the anti-Capitalist or Social movement (through the Marxist or Critical Theory) and the Keynesian economists, advocates of John Maynard Keynes' approval of government intervention for an efficient economy.

Under the Marxist or Critical Theory, neoliberalism encourages the diversity between developed and underdeveloped and developing countries. This means that under neoliberalism, the rich become richer, and the poor become poorer. Because capitalism is encouraged in neoliberalism through free trade and establishment of various quasi-markets and businesses, there is a possibility that Karl Marx's theory that stratification between the poor and rich class will happen, thus, oppression will become present in the society. This is actually true; when you take into account the comparison between developed vs. underdeveloped and developing countries. Since developed countries have a greater advantage over developing countries regarding economic success and prosperity, the developing nations will then become dependent on the rich nations for funding and help in establishing their economy into a neoliberalist kind. Another example concerns the implementation of free trade between developed and developing countries. It was said that developed nations are "protectionists," wherein developed nations "want the developing countries to completely remove barriers to free trade which would cause an imbalance in favor of the industrialized countries" (Shah 2001). Aside from inequality in free trade agreements between nations, the establishment of 'open societies' for all nations will also result to a scenario similar to the free trade case. If small nations will allow the big nations to enter their economic market, there is a possibility that the bigger nations will aim to dominate the smaller nation's economy, which is again an unfair outcome, since it defeats the purpose of making the nation grow economically. Instead, neoliberalism in this scenario is projected as an 'unhealthy' practice of competition between two open societies.

Inequality in economic growth and allocation of goods and services does not only happen internationally, that is, between rich and poor nations, but also domestically, wherein people within the society vie for the biggest percentage of the economic market of the nation. Again, stratification between rich and poor groups/individuals happens when people are encouraged to participate actively in a neoliberalist economy. These are only few of the inequalities and stratification problems that nations and individuals/groups within a society may experience under an economy that follows a neoliberalist approach/framework.

Under the second opposition, the Keynesian argument, neoliberalism is said to be detrimental to the welfare of the people (individuals), environment, and society in general. Keynesian economists argue that economies that operate without government intervention is a "poor instrument prone to frequent failures, and intervention is necessary to stabilize and save economies from the rampages of the market" (Wikipedia 2002). This argument means that an uncontrollable market economy is vulnerable to the sudden fluctuating changes in the worldwide economy. If every economy of nations will become an 'open society,' the negative effect of a failing market will affect all these nations collectively, especially if there are no intervening policies that will at least alleviate the negative effect of failing markets to other nations.

Corporations and other business enterprise also profit and benefit from an economy without government intervention. Because corporations and businesses do not follow any government policies, there is very little accountability and responsibility on their part when a violation or problem comes up against them by the society. This results to abusive manipulation of the society and a nation's economy by rich corporations and business companies. Neoliberalism also encourages the "pursuit for self-interest" by way of gaining financial resources and material wealth, which is a good result if competition is fair and efficient, but is unhealthy is the competition was conducted in an unfair manner, and this often happens between big and small corporations and entrepreneurs, wherein the bigger enterprise gain the upper hand and dominate over the small businesses. Also, material prosperity and wealth becomes the ultimate 'measure' of progress, disregarding the social conditions of people and the society within a nation. Thus, because of neoliberalism, human conditions and consideration for the welfare of the society only becomes second priority, sometimes, it is not even considered a priority at all, as long as the business performs satisfactorily. All of these problems happen if a political body or the government does not impose regulations and policies that will prohibit or regulate the degree in which big corporations and companies will not abuse and dominate over the market at the expense of the smaller businesses.