Government Business
Neo-liberalism is responsible for most of the global economic problems we are experiencing today. Discuss.
The US subprime mortgage crisis triggered a global economic crisis, which brings serious challenges around the world. As for the cause of the crisis, except for imperfect financial regulation, the real estate bubble and the overcapacity of global economy, the neo-liberalism is undoubtedly to blame. Nowadays, neo-liberalism refers to the economic term of legislative market reforms such as deregulation, privatization, free trade, and reducing government control of the economy (Taylor and Jordan, 2009, pp. 149). This essay is going to analyse whether no-liberalism is responsible for most of the global economic problems we are experiencing today. It is expected that this essay could contribute to the comprehension of the influence of neo-liberalism.
Firstly, with regard to the relationships between free market and government intervention, neo-liberalism emphasizes the spontaneous regulation of market mechanism. It articulates that only market can achieve high efficiency as a resource configuration tool. Besides, the economic intervention of government not only can not promote economic stability and growth, but also will limit the self-perfection and self-regulation of the market. Neo liberalism advocated market should be deregulated, and more open to international trade and international investment, with the free movement of capital, currency, and services (Friedman, 2002, p. 8–21). Hence, it is indicated that if neo-liberalism caused financial crisis, the spontaneous regulation of market mechanism is supposed to be the main reason while government intervention was eased.
Put this theory into practice, let us analyse the US sub-prime crisis. Since the 1980s, the neo-liberalism promotes the market oriented operation of exchange rate and interest rate, in response to changes in the risk from market price. The prevalence of neo-liberalism is one of the
The US subprime mortgage crisis triggered a global economic crisis, which brings serious challenges around the world. As for the cause of the crisis, except for imperfect financial regulation, the real estate bubble and the overcapacity of global economy, the neo-liberalism is undoubtedly to blame. Nowadays, neo-liberalism refers to the economic term of legislative market reforms such as deregulation, privatization, free trade, and reducing government control of the economy (Taylor and Jordan, 2009, pp. 149). This essay is going to analyse whether no-liberalism is responsible for most of the global economic problems we are experiencing today. It is expected that this essay could contribute to the comprehension of the influence of neo-liberalism.
Firstly, with regard to the relationships between free market and government intervention, neo-liberalism emphasizes the spontaneous regulation of market mechanism. It articulates that only market can achieve high efficiency as a resource configuration tool. Besides, the economic intervention of government not only can not promote economic stability and growth, but also will limit the self-perfection and self-regulation of the market. Neo liberalism advocated market should be deregulated, and more open to international trade and international investment, with the free movement of capital, currency, and services (Friedman, 2002, p. 8–21). Hence, it is indicated that if neo-liberalism caused financial crisis, the spontaneous regulation of market mechanism is supposed to be the main reason while government intervention was eased.
Put this theory into practice, let us analyse the US sub-prime crisis. Since the 1980s, the neo-liberalism promotes the market oriented operation of exchange rate and interest rate, in response to changes in the risk from market price. The prevalence of neo-liberalism is one of the