Why neoliberalism does not work

Neoliberalism, also called free-market capitalism. Ever since communism has fallen in the 80s and 90s, there has been only capitalism. It has caused a lot of problems, but it has also done some good things for humanity. I don’t know whether I am against capitalism or neoliberalism (yet), since I don’t know much about the alternatives (but maybe I will in the future). But I do know that neoliberalism does not work, here’s why.

Neoliberalism

When someone’s political view is neoliberal, they want to decrease the governmental power and leave almost everything up to the free market. Milton Friedman is the person who has really spread the idea of neoliberalism around the globe. Friedman has even won a Nobel Prize in Economic Sciences. Neoliberalism came into common use in the 80s and 90s. Especially Margaret Thatcher and Ronald Reagan put neoliberalism into use in Britain and the United States. Things that were previously arranged by the state (public transportation, the mail, health care, etc) are transferred to the free market once neoliberals come into power. They think the state is inefficient and the market is efficient.

In The Netherlands neoliberalism has also led to the state selling public services to the market. Government Lubbers-Kok (CDA and PvdA) sold the public transportation in 2000 in the Netherlands. In 2006 health care was privatized by government Balkenende II (CDA, D66 and VDD). The energy sector was ‘liberalized’ in 2005 by government by the same government. It was also done for telecom services, daycare services and more.

Capitalism

I’d say neoliberalism is the more extreme form of capitalism. In the ideal neoliberal world the free market arranges everything and the state arranges nearly nothing. I do not believe in neoliberalism. Additionally, I think I also reject capitalism, because I don’t like money being the most important thing in everyone’s life. I think we can do better, but I have no idea how. So, for now, I guess I just live within a capitalistic system and have to make the best of what that is.

Does it work?

Some say that neoliberalism has worked very well in some markets. An example is the telecom market. Privatizing that market has led to competition and lower prices. The same goes in any other markets. For example food. Through competition we get cheap food. Or cosmetics, electrical devices, etc. The goal is always that a free market makes products cheaper. And that is true. So in that case, you can sometimes call neoliberalism and having a free-market a succes.

Values

However, I don’t think money is important. Having the cheapest products is nice and has lifted many people out of poverty, which is good. However, over the past decades it has destroyed our world and created inequalities. I think we should focus on other values. The most sustainable product, the safest product, the most beautiful product, etc. I think those are values we should be focussing on instead of the cheapest product.

Due to capitalism, the cheapest product is the default choice. The cheapest products are selling the most. Sustainable products for example don’t do that well. Only people who care about the environment, people who can afford sustainable products and people who have knowledge about global issues choose sustainable products. That’s wrong. And that’s why I have massive doubts for neoliberalism and capitalism. Maybe with additional legislation it can work, but I just don’t know.

Public services

So, if you think having the cheapest options is most important, neoliberalism can work for you in a lot of markets. Even if I’d agree to this (which I don’t), I would still argue that neoliberalism does not always work. And that’s in the case of services that I recognize to be basic human rights. I just think that there are some services that can never be privatized at all, or not entirely. These are:

1 Water

2 Food

3 Housing

4 Health Care

5 Clothing

6 Public transportation

7 Education

I would argue that in the capitalistic system we live in the today, water, health care, education and public transportation should always be in hands of the government entirely. Food, housing and clothing do not have to be entirely, but they surely can be. Even if they’re not in hands of the government entirely, the government should still ensure everybody to have sufficient food, housing and clothing. There are several options to assure this (an universal basic income maybe?).

Er zijn nog 17 miljoen wachtenden voor u

If you want to read more about which services might be suitable for neoliberalism and which are not, I can recommend a Dutch book to you. It’s called ‘Er zijn nog 17 miljoen wachtenden voor u‘ by Sander Heijne. In the book Heijne discussed what has gone wrong in the Netherlands when the government decided to privatize certain services. He discussed why this is the case. But as I said, this book does however argue that in some cases neoliberalism does work, because it’s efficient. I don’t agree to that as I mentioned before, but maybe you do. It’s still a very interesting book even if you don’t like capitalism or neoliberalism in general. I mean, it’s all we have these days. But if you do decide to read the book, please lend it from the library or someone else, as that is most sustainable.