Neoliberalism Shaping Domestic Policy of Nations
Neoliberalism is a liberal ideology which favors laissez-faire, or free-market economics. This concept calls for minimal to no government intervention in an economy and is for the privatization of industries — being the pinnacle of capitalism. It is not only about privatization, but also consists of free trade and reduced government spending in the form of taxes and subsidies. Neoliberalism shapes domestic policy of nations around the world, as governments adjust their economic policies to boost their economy, by increasing employment through private ownership and because companies gain incentive due to no government intervention.
In an economy which seems faltering apart to the government, they may decide to let facilities be privatized for the sake of creating businesses, which enhance job availabilities in a nation, therefore combatting structural unemployment. Structural unemployment happens when workers lose jobs because their skills are obsolete or because their jobs are transferred to other countries. Therefore, privatization aids the government in “bringing back” these jobs as the workers may now work in these newly opened industries. This also lessens the burden on the government itself as many responsibilities are now handed over to the corporatists who run these industries. Historically, neoliberalism has manifested itself the most when an economy has been on a downhill, with the government failing to adequately provide their citizens with all necessary needs. This would shape a domestic policy as laws regulating businesses would be altered to favor employers more than or equal to the employees. Worker rights may be somewhat sidelined to bring focus to the establishment and creation of effective businesses to make privatization occur. New laws could emerge giving employers some rights, if not privileges, such as making it easier for them to own land and have freedom in hiring and firing employees as they deem fit.
This leads us into the next point of neoliberalism giving businesses an incentive to establish themselves, therefore the economic domestic policies would be altered to somewhat favor corporatists, so as to give rise to new jobs. We can take the case of India and analyze its economy ever since the Modi government came into power in 2014. Prime Minister Modi has stressed his idea of “Make in India” as part of his nation-building initiatives. As India’s labor laws are cited as a few reasons why foreign investors don’t prefer India, Modi attempted to bring reforms such as ease in laying off workers and giving a 60-day notice to employees who are about to be laid-off only if a business comprises of 300 or more employees, rather than 100 which is the current rule. The government has also gone far enough in attempting to decertify unions, which would limit the role of labor unions, therefore making it ideal for employers. As the name suggests, Make in India is to make products in India rather than import them from outside, which will create availability of goods and services as well as jobs in India. Although his reforms are yet to be put into effect, the fact remains that since Modi wants to bring jobs in India — even through foreign investors — so his own citizens do not leave the country in search for jobs, he has to look into neoliberal policies and give businesses a reason and desire to establish in India. And for this, he has to alter existing laws as well as create new ones, therefore shaping the domestic policy.
Neoliberalism sounds effective in theory but gives more power to the corporate wealthy. The top 1% gain more wealth and power through influence as they own some vital industries, for example healthcare, education and organic foods. As a business, they may seek to make profits than care about the well-being of the people, making products and services even more inaccessible as one would only be able to afford it if they had the money. Also, if employers gain more privileges and can fire at will, how much is unemployment being curbed if only the “chosen” ones are hired? The creation of businesses helps with the employing people and presenting new job opportunities, surely, yet not everyone can be hired as they may not demonstrate needed skills for that job which means there is no sense of security for the workers. Personal issues may also be obstructive as employers would be able to fire employees for reasons unrelated to business. This also contradicts with combating structural unemployment (which also occurs as employers’ skills have become obsolete), as if a worker’s skills are not needed or matching up, they simply wouldn’t be hired. Now, if we think about it, if a worker is not qualified or doesn’t have the skillset, they shouldn’t hold that job anyway. But the issue is that, the purpose of combating unemployment for which neoliberalism was birthed, is challenged. Although otherwise, this is just another method of handling a country’s economy and can yield some benefits which would have otherwise not been possible. It’s a thoughtful theory with an acceptable rationale but put into practice, may work differently.