NEO-LIBERALISM OVERVIEW

  • First-wave neoliberalism primarily developed in the 1980s, exemplified by Reaganomics and Thatcherism.

  • Central tenets include the belief in self-regulating markets, individual entrepreneurship, and prioritizing low inflation over full employment.

REAGANOMICS

  • Ronald Reagan's economic policy focused on reducing taxes, cutting government spending, and increasing military expenditure.

  • Introduced 'supply-side economics'; emphasized tax cuts to spur investment and generate government revenue.

  • The 'Laffer Curve' was a key concept, suggesting lower tax rates could potentially lead to higher total revenue by incentivizing work.

  • Reagan resisted comprehensive cuts to popular social programs, leading to significant budget deficits despite tax cuts.

  • Institutionalized a form of economic governance which resisted increased regulation and prioritized market efficiency.

THATCHERISM

  • Margaret Thatcher's policies were rooted in monetarism; aimed at controlling inflation through strict monetary policies and reducing the size of government.

  • Advocated substantial privatization of state assets and industries, introducing competition in public services.

  • Established the Medium Term Financial Strategy (MTFS) to link money supply growth to deficit management.

COMPARATIVE ANALYSIS

  • Both leaders shared an aversion to 'big government' but differed in execution and policy specifics.

  • Reagan focused on tax decreases and military spending, while Thatcher targeted inflation and tight monetary control.

  • Both utilized market-oriented approaches to governance yet acknowledged the state’s role in enforcing neoliberal reforms.

FOREIGN POLICY

  • Both administrations engaged in prominent military interventions and maintained strong anti-communist stances.

  • The Falkland War (Thatcher) and Grenada invasion (Reagan) highlight neoconservative foreign policy impulses intertwined with neoliberalism.

CONCLUSION

  • The rise of neoliberalism in the 1980s marked a pivot away from Keynesianism, with lasting impacts not only on economic policies but on political ideologies, incorporating elements into broader consensus even amongst the Left.