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Advantages And Disadvantages Of Neoliberalism

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“Neoliberalism is in the first instance a theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade”. (Harvey 2005) The idea of neoliberalism has evolved through different stages in the past and it has created many problematic outcomes as a result.
Those stages mainly include classical liberalism (Adam Smith), embedded liberalism (Keynes), neoliberalism (Friedman, Chicago Boys) and the post-neoliberalism era(Harvey):

The first stage involves the idea of classical liberalism which came from Adam Smith who is very well-known in modern economics. He believed that “the welfare of the society is realized when the individual is free to pursue his or her own interests”.(Adam Smith). This means that self-regulating market is the best option for the society as the state has the least interference in this kind of market. It also means that politics and economics should always be separated as government should not interfere in economic transaction in order to let the market work at it’s best.

Through this, individuals and private firms are able to express their economic preferences as limited role of government creates an open environment. Natural division of labor is also developed through which each state can produce goods for which it has a comparative advantage. This is

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