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... Neoliberalism is an economic philosophy that has its origins in Germany, France and the United Kingdom. After World War II, the doctrine migrated to the University of Chicago, where neoliberal economists, chief among them Friedrich von Hayek and Milton Friedman, established what became known as the Chicago School. This bastion of free-market fundamentalism proved massively influential in advancing neoliberal ideology around the world, most notably in Chile following the U.S.-backed overthrow of Salvador Allende’s socialist government in 1973.  

Neoliberal ideology is rooted in the belief that the capitalist economy should be buttressed and protected from collapse by state assistance. But the state should otherwise allow market forces to move freely, unimpeded by government regulation.

In A Brief History of Neoliberalism, Marxist scholar David Harvey points out that the 1970s global financial crises “appeared to point towards the emergence of a socialist alternative,” and neoliberalism surged in popularity among capitalists who were unwilling to lose the “social compromise between capital and labor that had grounded capital accumulation so successfully in the post-war period.”

In the United States, neoliberalism’s raison d’être—especially as it began migrating out of academia and into political-policy-making in the 1970s and 1980s—was to dismantle trade unionism and New Deal social democratic programs, and to deregulate business at every opportunity.

Throughout history, neoliberalism has proven to be anti-socialist at its core.

The area where socialism and neoliberalism intersect is their insistence that the economy requires some degree of state intervention and planning, as opposed to classical liberalism, which puts full faith in the belief that the “invisible hand” of the market should guide and sustain capitalist economies without state assistance.

But the similarities stop there, because the next difference is fundamental: Neoliberals believe that, wherever possible, the state should support private enterprise taking on vital functions in society. Socialists, on the other hand, believe in eliminating these private enterprises wherever possible and replacing them with democratically-run public institutions.

Just so we’re clear, neoliberalism means capitalism—a specific form of capitalism, where the business-friendly state encourages the commodification of sphere after sphere of both public and private life. ...
Read full article at In These Times