Essay on The Devastating Effects of Neoliberal Policies

1384 Words 6 Pages
Introduction
Neoliberalism, also called free market economy, is a set of economic policies that became widespread in the last 25 years. The concept neoliberalism, have been imposed by financial institutions that fall under the Bretton Woods such as the International Monetary Fund (IMF), World Trade Organization (WTO) and World Bank (Martinez & Garcia, 1996). One of the famous economists published a book called “The Wealth of Nations” in which he said in it that free trade is the best way to develop nations economies (Martinez & Garcia, 1996). He and other economists also encouraged the removal of government intervention in economic matters, no restrictions on manufacturing, removing borders and barriers between nations, and no taxes
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Moreover, the government economists used the annual economic growth to measure the progress in the developing countries. While we know the economic growth has benefits, the evidences show that those benefits did not trickle the 986 million people living in extreme poverty who represent 18% of the world population (Makwana, 2006). Therefore, both of the benefits of economic growth and the poverty levels have proved to be impossible because of the insufficient statistical measurement applied (Makwana, 2006). The economic growth is perfect for the corporations because it helped them in increasing their profits, productions, economic activities and political influence (Makwana, 2006). However, this has caused the inequality to grow more across the globe and the inability of the poor people to afford the high market prices.
Free Trade
Neoliberalism applies political forces to the advantage of the powerful and wealth at the expense of other nations. The North American Free Trade Agreement (NAFTA) is an example of free market that gives legal rights to the corporations at the expense of the national sovereignty (Makwana, 2006). Its application caused people to lose their job, compromise labor right, privatized services, increased inequalities and caused environmental issues (Makwana, 2006). For instance, 5 percent of the European citizens in Europe work in agriculture; they produce 1.6

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