In the context of economics, “neoliberalism” refers to an approach that is intertwined with modern-day capitalism. In essence, it aims to facilitate trade among countries. The ideology and its corresponding policy approaches seek to relieve the state of its human rights obligations and social spending so as to defer instead to the market as the principal agent of development. This is done by allowing capital, goods and raw materials to move more freely and for investors always to obtain cheaper resources and inputs, thus maximizing efficiency and profits. The neo-liberal approach to economics and commerce seeks a reduction of barriers, tariffs and restrictions on the movement of capital and goods; decreased government deregulation, including environmental safeguards, safety precautions, etc.; and privatization, namely the sale of publicly owned (public-sector) projects, goods and services, such as banks, railroads, electricity, medical facilities, security, schools and water, to private investors, who then determine pricing, distribution and conditions of access.
The governments of most highly industrialized and capitalized countries, as well as most major international financial institutions (i.e., the International Monetary Fund, the World Bank, the Inter-American Development Bank, and the European Bank for Reconstruction and Development) promote and apply this economic philosophy through their cross-border conduct.
As a function of current economic globalization, these external actors and compliant local decision makers have implemented neoliberal policies in many poor and developing countries through structural adjustment and their successor programs, which have dismantled planned economies, in order to allow for foreign capital and goods to enter lesser-developed countries, in order to access cheaper services and resources without restriction. This process has had a largely negative effect on the economic sovereignty of countries of the Third World and created unfair competition that has diminished livelihoods of local producers.
More information can be found at:
Elizabeth Martinez and Arnoldo Garcia, “What is Neoliberalism? A Brief Definition for Activists,” CorpWatch, http://www.corpwatch.org/article.php?id=376;
Anup Shah, “A Primer on Neoliberalism,” Global Issues (22 August 2010), http://www.globalissues.org/article/39/a-primer-on-neoliberalism#Neoliberalismis;