Although neoliberalism is a great advocator of a free market economy without trade restrictions and limitations in government intervention, neoliberalism also had some very harsh critics. It also brought about harsh consequences (effects) from some of the policies and theories it put forth. Ironically, neoliberalism’s biggest weakness stems from its biggest component: a free market economy, or a laissez-faire economy. Within a free market economy, there is a push for globalization based on individualism (self-interest) rather than a push for community. Carl Menger, founding intellect of the Austrian school of economics and influence of Ludwig von Mises, was one of the biggest advocators of self-interest in the free market during the 19th
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While Menger believed that economics and ethics should be kept separate, Schmoller believed that the relation between economics and ethics would force distributive justice. Simply put, Schmoller understood that a moral approach (based on the community and not the individual) to the economy would bring about a fair distribution of wealth. However, Menger’s theory of globalization through self-interest is more appealing in a free market economy. The theory of self-interest helps us understand why economists like Menger are opponents of unequal wealth distribution. Inequality, according to supporters of globalization through self-interest, is simply a necessary side-effect in exchange for a growing economy. So the question remains, what is globalization and how does globalization encourage unequal wealth distribution? Globalization is the expansion of economies into international markets where there is a free movement of services, capital, goods, and labor. Globalization is a call of action for countries to come together and trade freely. Although the call for globalization in a free market economy has some great advantages, it also contributes to a gap …show more content…
To make matters worse, the progress we have made in the world of technology today have only garnered more inequality. Globalization, with the addition of technology, is very much like a double-edged sword. As globalization is “a catalyst of technology that facilitates the diffusion of ideas and methods around the world through…openness to trade” (Papageorgiou 272), it is also a cause for unequal wealth distribution. Unequal wealth distribution may seem like a small price to pay for a thriving economy, however, unequal wealth distribution can actually cause a ripple effect that Carl Menger himself would not have been able to predict. Because of the push towards globalization through self-interest, some developed countries have seen tremendous benefits as other developing countries have seen little to none as they lack the technology to compete in the same sector as developed countries. Increased inequality reflects not only a lack of economic opportunity in a particular sector or country but also reflects limited growth potential and limited production capacity. Without the necessary resources and opportunities to benefit from the market, countries can suffer
While Menger believed that economics and ethics should be kept separate, Schmoller believed that the relation between economics and ethics would force distributive justice. Simply put, Schmoller understood that a moral approach (based on the community and not the individual) to the economy would bring about a fair distribution of wealth. However, Menger’s theory of globalization through self-interest is more appealing in a free market economy. The theory of self-interest helps us understand why economists like Menger are opponents of unequal wealth distribution. Inequality, according to supporters of globalization through self-interest, is simply a necessary side-effect in exchange for a growing economy. So the question remains, what is globalization and how does globalization encourage unequal wealth distribution? Globalization is the expansion of economies into international markets where there is a free movement of services, capital, goods, and labor. Globalization is a call of action for countries to come together and trade freely. Although the call for globalization in a free market economy has some great advantages, it also contributes to a gap …show more content…
To make matters worse, the progress we have made in the world of technology today have only garnered more inequality. Globalization, with the addition of technology, is very much like a double-edged sword. As globalization is “a catalyst of technology that facilitates the diffusion of ideas and methods around the world through…openness to trade” (Papageorgiou 272), it is also a cause for unequal wealth distribution. Unequal wealth distribution may seem like a small price to pay for a thriving economy, however, unequal wealth distribution can actually cause a ripple effect that Carl Menger himself would not have been able to predict. Because of the push towards globalization through self-interest, some developed countries have seen tremendous benefits as other developing countries have seen little to none as they lack the technology to compete in the same sector as developed countries. Increased inequality reflects not only a lack of economic opportunity in a particular sector or country but also reflects limited growth potential and limited production capacity. Without the necessary resources and opportunities to benefit from the market, countries can suffer