Neoliberalism and Good Governance

• What is neoliberalism
⁃ Freedom
⁃ From government, enterprise
⁃ Access to rewards of labour and incentivises property
gain
⁃ Allows competition to thrive in a stable manner
⁃ How is stability reached??
⁃ Takes advantage of the competitive nature of society (rivalry
amongst individuals, or self-interests)
• Importance of inequality
⁃ Creates incentives
⁃ Individualism
⁃ Competition (Darwinism)
⁃ Inefficiency introduced by constraining the market system
• Milton Freedman
⁃ Monetary theory
⁃ “No such thing as free lunch”
⁃ One of the first thinkers of neoliberalism
• Private vs Public sectors
⁃ Public sector is missing incentives which makes it an
inefficient system
• Diffusion of neoliberalism
⁃ Higher-education economics departments
⁃ Institutions (Adan Smith Institute, IEA (UK), etc.)
• Neoliberalism, governance + the state
⁃ Reduction in state size
⁃ Focus on changing the type of government as opposed to the
volume
⁃ p much quality vs quantity
⁃ Transformation of government, society and citizen towards a
society of entrepreneurs
⁃ People sorting their own shit out
⁃ e.g. Poverty + other social problems is not a societal
problem, it is an individual problem from the
neoliberal perspective
⁃ Handouts are a violation of property rights
⁃ Taking reward from those who work to those who don’t
⁃ Rewarding failure incentivises failure (positive
feedback loop)
⁃ “The state should focus on national defence, administration
of justice and the promotion of markets” – Adam Smith
• Underpinning theories
⁃ Unemployment
⁃ Labour market
⁃ Supply + demand theory
⁃ A decrease in marginal return
⁃ d^2 / dx^2 ≤ 0
⁃ Why the demand curve has a negative slope
⁃ Equilibrium in supply and demand maximises
social benefit
⁃ Involuntary vs voluntary unemployment
⁃ Involuntary := I legit can’t find a job
⁃ Voluntary := I am worth >E in wages, but the
market is only offering E amount.
⁃ Assumptions
⁃ Work is unpleasant
⁃ Why people get paid, as an incentive
⁃ People work to produce things to exchange for
what they want to consume
⁃ Consumption produces utility
⁃ i.e. The purchase of goods and services
⁃ Keynes
⁃ “Bruh bun that noise”
⁃ Fiscal policies (demand-side)
⁃ Macro-economics “founder”
⁃ Criticised neoliberalism perspective of
unemployment
⁃ Wage/price spiral
⁃ Stagnation
⁃ Free markets tend towards unemployment
⁃ Monetarism
⁃ A direct correlation between the rate of inflation and
the volume of money in circulation
⁃ Volume of money controlled by central bank
(printing)
⁃ Quantitative easing/Helicopter money
⁃ Limiting government spending also limits inflation
⁃ But... infrastructural investments reduce
costs?? R&D increases efficiencies?
⁃
⁃ Rational expectations
⁃ Aggregation
⁃ Assumption of rational individuals (i.e. can recognise
their current and desired states)
⁃ Ability to maximise utility given limited individual
resources (monetary + capital)
⁃ Government
⁃ Imitation of private sector mechanics into public sector
• “Nanny state”
⁃ Looks after people at the expense of the destruction of the
production of growth
• Main themes
⁃ Financialisation of Capital Accumulation
⁃ Control of sources of capital
⁃ Command of resource allocation
⁃ Capture of value produced
⁃ Financialisation of the Global Economy
⁃ Transnationalisation of individual circuits of capital
accumulation (‘globalisation’)
⁃ Recomposition of ‘national’ systems of provision
⁃ Recycling of US current account deficits
⁃ Capital inflows and debt bubble in US and UK
⁃ Financialisation of the State
⁃ Ideology
⁃ Politics
⁃ Economics
⁃ Financialisation of Ideology
⁃ Competitiveness
⁃ Democracy
⁃ Limitations
⁃ Role of finance, political legitimacy, inflation
⁃ Financialisation of Social Reproduction
⁃ Diffusion of neoliberal capitalism
⁃ Technological innovations
⁃ Contractionary monetary and fiscal policy, retreat of
‘welfare state’
⁃ Working class integration into financial circuits

Central Themes
Incentives
Free market
Individualism
Competition