Reshaping worlds: The effects of Neoliberalism on the domestic policy of nations

Neoliberalism is a growing form of Economic and Political governance which encourages the production of a free market, but also encourages the dissolution of protectionist measures for individual nations, and allows independent corporations to obtain unchecked power. Neoliberalism, when practiced with the inclusion of checks and balances, can be profitable for nations, and can lead to greater overall improvement of national governance. However, as it is practiced today, without checks and balances, neoliberalism is a toxic force which allows for the advancement of corporate or higher socioeconomic benefactors to exploit resources and labor of third world nations, and minority groups within developed nations.

An immensely informative example of this can be seen in the effects that neoliberalist practices have shaped the political and economic structures of the nation of India. In recent years, though India has been hailed for being “at the top of the world’s economies” (Snehal Shingavi, 2016) in terms of GDP increases, it has been found that these signs of growth may be misleading of the real economic and political state of the nation. Due to the fact that Indian’s growth figures “are now based on market-price calculations rather than on production figures, which most analysts agree are widely inflated” (Snehal Shingavi, 2016), this means that the actual state of India’s affairs are a far cry from stable. The actual production rates of India “have ground to a halt: railway freight, one of the best indices of how much is being produced and traded in the country, declined 9 percent this year” (Snehal Shingavi, 2016). This has resulted in a contradiction between global and national perception of India’s economic state, as said by Shingavi, “This crisis renewed calls for economic reforms, especially labor laws, which are seen as overly restrictive for businesses. Finally, the public banks, which control some 70 percent of the country’s investments, are known to sit on a glut of bad loans. The combination of these factors produces an unsustainable situation” (Snehal Shingavi, 2016). India is currently in a crisis, caused by the number of issues and their severity, and the shifting of focus of economic critics from neoliberalism as a whole to singular aspects of neoliberalism which stand out greater than others. It has been found that “ While these critics have been quite right to focus on the egregious actions of the Indian state against tribal populations (who live on large mineral reserves), the creation of Special Economic Zones, and the privatization of state-owned industries, they have largely ignored the way that the majority of the economy still depends on the exploitation of labor” (Snehal Shingavi, 2016), which outlines as to how far neoliberalist policies have infiltrated into shaping the political and economic spheres of India. These neoliberalist policies, as cited in Shingavi’s article, have been instigated due to a long history of infiltration from two fronts: outside, by international corporate forces, and inside, by pro-neoliberal policy makers. This has led to deep rooted neoliberalism within the framework of Indian governance, one that has been found to be without substantial checks and balances to counteract the corruption of economic and political practices. Without extensive revision of the influence that neoliberalist policies have on the framework of Indian governance, the crisis will continue, and no amount of counteractive austerity measures will be able to quell the rising storm of revolt against these oppressive policies.

Another noteworthy example of the effects of neoliberalism can be seen in the current crisis that has befallen Greece. This crisis is the latest of a series of financial crises which has plagued Greece over the past decade, causing an outburst of riots in response to heightened austerity measures. Concerning developments in the new austerity policies led to “a crucial meeting of eurozone finance ministers following the late-night approval in Athens of laws overhauling the country’s tax and pension system” (Helena Smith, 2016). Conditions of the €5.4 bn cuts implemented include: “ The overhaul of the pension system — along with unpopular tax measures and an increase in VAT — form the central plank of a €5.4 bn package of budget cuts and reforms that Tsipras has agreed to enact in exchange for rescue funds from a third, €86 bn bailout the country signed up to last summer” (Helena Smith, 2016). These cuts and reforms have been stated as being “seen as the toughest reforms the thrice bailed-out nation has been forced to enact since its debt crisis began” (Helena Smith, 2016), and has received negative reactions from the general population of Greece. A young waiter by the name of Vassilis Papadopoulos stated that “ Every day they destroy our country a little more. OK, I accept we have to change but, like this, that’s not fair. How can anyone survive on a national monthly pension of €384? How can a state function when over 25% of its population is unemployed?” (Helena Smith, 2016). Bringing up the effects that this legislation has wrought on the common population of Greece, it goes without saying that the government has caused a greater conflict to arise because of the way in which these measures have fractured the trust between the government and the people. The restrictions placed on Greece’s population are proving counterproductive at best, and the call for massive relief is growing. The general administration of Greece, and some of the other eurozone members have “ insisted debt relief was now the only way of plucking Greece out of its seemingly endless economic death spiral” (Helena Smith, 2016). In fact, the vice chancellor of Germany, Sigmar Gabriel stated that “ The eurogroup meeting on Monday must find a way to break the vicious circle,” he wrote. “Everyone knows that this debt relief will have to come at some point. It makes no sense to shirk from that time and time again” (Helena Smith, 2016). However, despite the prospects of hope on the horizon for mass debt relief, at the moment Grecian policy makers are determined to maintain their power, and settle their debts without another bailout. Is it possible that this entire situation could have been altered before it began? Or is this kind of fallout just the inevitable cost of neoliberal-democratic system?

In the end it can be clearly seen that something is amiss in the way that neoliberal policies have reshaped the political and economic sectors of individual nations. This is regardless of their placement in the global north or their placement in the global south, whether they are in the bottom billion or the top billion. Neoliberalist practices have become a staple of the general global policy towards the development of economic fields, and the establishment of political sectors, and by being misused they are causing more harm than good. It is up to the world to reevaluate the way in which we operate, and it is necessary that we reestablish the necessary governance that would prevent the ideals of neoliberalism from further destabilizing the world as we know it.

Shingavi, S. (n.d.). Austerity, neoliberalism, and the Indian working class. International Socialist Review. Received from http://isreview.org/issue/103/austerity-neoliberalism-and-indian-working-class-0

Smith, H (2016, May 9). Greek MPs approve toughest austerity measures yet amid rioting. The Guardian. Retrieved from https://www.theguardian.com/world/2016/may/08/rioters-take-to-the-streets-ahead-of-greek-austerity-vote