Neoliberal economics | Red Pepper

In the first of a Red Pepper series on ‘neoliberalism’, Gregk Foley traces the birth of an economic ideology

Neoliberal economic theory emerged after World War II, spearheaded by Austrian economists Ludwig von Mises and Friedrich Hayek, and later by America’s Milton Friedman.

The objective was to create a market that was truly free, global, and limitless – for capital, if not for human beings. The principles of individual liberty, rights to private property and a free market were radically reasserted, and it is this aspect that underscores the ‘neo’ [new] in neoliberalism.

Neoliberalism’s translation from theory to practice is associated with three figures. Firstly, in 1973, Chile’s democratically-elected leader Salvador Allende was overthrown by a CIA-backed coup and replaced with Augusto Pinochet, a military dictator who allowed a group of Friedman-educated economists known as the ‘Chicago Boys’ to turn Chile into a laboratory for neoliberal policy.

Later, Ronald Reagan and Margaret Thatcher translated neoliberalism’s hostility to the state into a rallying-cry against ‘big government’ interfering in people’s lives.

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