Liberalism versus neoliberalism with Hayek pages Final version Dec. 2017

Political Philosophy Overview

  • Discussion of Liberalism vs Neoliberalism

Classical Liberalism

  • Core Principles:

    • Liberty is primary.

    • Individual over collective; limited government.

    • Supreme Rule of Law governing state laws.

  • Societal Structure:

    • Preference for civil society (family, church) over government interference.

    • Spontaneous order arises from voluntary discussions, not detailed government management.

    • Tolerance: Interference only occurs if harm is inflicted on others (Mill's Harm Principle).

    • Peace: Individuals pursue personal business with minimal interest in others' conflicts.

Adam Smith

  • Background:

    • 18th-century Enlightenment thinker; foundational figure in classical free market theory.

    • Wrote The Wealth of Nations, a precursor to modern economics.

  • Key Concepts:

    • Division of labor; rational self-interest and competition foster economic prosperity.

Neoliberalism

  • Definition:

    • A political/economic philosophy reacting against revisionist liberalism.

    • Not a return to classical liberalism; integrated with globalism and capitalism.

  • Characteristics:

    • Promotes individual self-interest; opposes government market interventions (e.g., tariffs, quotas).

    • Advocates for free movement of goods, services, people, and finance.

  • Origins:

    • Developed by economists like Milton Friedman (Chicago) and Friedrich Von Hayek (Austria).

    • Became prominent with Reagan (US) and Thatcher (UK) political regimes around 1980.

Friedrich von Hayek

  • Economic Theory:

    • Economics, not duty or justice, determines society.

    • Self-interest drives human engagement that influences demand, supply, price.

  • Government Role:

    • Governments should ensure free markets without intervening; any intervention distorts markets.

    • Paradox of needing state intervention to maintain market openness.

Critique of Hayek's Theory

  • Questions the valuation of human virtues beyond economic exchange (love, duty, dignity).

  • Considers implications of a cold economic-driven world on humanity.

  • Challenges the value-free nature of economics; suggests sentimental values are disregarded.

Alternative Views on Neoliberalism

  • Chomsky's Perspective:

    • Critiques neoliberalism; proposes workers control their own destinies.

    • Distrust of political institutions; views suggest a modified anarchist stance.

  • Impact on Society:

    • Neoliberalism redefines society, prioritizing market principles over social welfare.

    • Enforces competition as a prevailing principle, transforming personal and societal engagement.