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Difference Between Liberalism and Neoliberalism

Liberalism vs Neoliberalism

To know the differences between liberalism and neoliberalism, we got to understand liberalism first. The addition of the prefix neo just means new to appease those who are not satisfied with the results of earlier socio-political ideology. Liberalism is not an event but a process that is set in motion by policy makers of a country. There are differences in the terms liberalism and Neoliberalism that will be discussed in this article.

Liberalism can be in any field, economic, political or even religious. Liberalism as an ideology, is progressive and modern rather than traditional and regressive. Liberalism is adopted as a measure to lure those who are poor and backward, to present them a rosy picture, and to prevent social conflicts. It is not that it is merely a dream but liberalism has in reality achieved much since its inception in different parts of the world in all spheres of life. It is because of liberalism that we see so much of freedom for women who, at one point of time, were forced to live fully covered from head to toe in clothes and had no voice literally. Who would have thought women to be at the helm of affairs in many countries of the world only 50 years ago when it was a male dominated society? Liberalism, as described earlier is a process that works for the betterment in whichever field it is adopted, and the word neo merely reflect changes that are incorporated to speed up the process.

Neo just implies a new kind of liberalism which is different from liberalism in the past. Though, there are certainly new and better ideas, this is more of a label to attract more people within the fold of liberalism. What people conveniently forget is that, when liberalism was presented it too appeared to be almost revolutionary but soon its charm faded so much that the term neo liberalism had to be coined.

Liberalism as a political idea became famous in 1776 when A Scottish economist, Adam Smith published his book “The wealth of nations”. It was a book that proposed minimum regulations from the government and very few interventions from the government to help promote entrepreneurship. He proposed no tariffs, no barriers, no controls, and free trade as the best way for a country to develop economically. These ideas were revolutionary, and were accordingly termed liberal as they sought to replace draconian measures of the past.

Neo liberalism is an economic concept that has been popular for the last 25 years. It proposes free markets and virtually rule of markets to dictate development of economies. It abolishes government control and interventions to encourage entrepreneurship. It also proposes no price controls, total freedom of movement for capital, goods and services. Neoliberalism is of the view that unregulated markets are the best way to proceed to increase economic growth as it will benefit everyone ultimately. It encourages privatization and deregulation to give wings to international trade and commerce.

In brief:

Difference Between Liberalism and Neoliberalism

• Liberalism is a political ideology that believes in liberty and freedom.

• Liberalism in economic field refers to policies that meant to encourage entrepreneurship by removing government control and interference.

• Neo liberalism is a term that was coined 25 years ago to refer to a process that was set in motion to expedite economic liberalization in the world to increase international trade and commerce.

• Liberalism can refer to progression and freedom in any sphere of life such as politics, religion or economics.

• Neo liberalism mainly refers to new policies of liberal economy that were introduced to speed up process of globalization in late eighties and early nineties.


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  • Alex Red

    This article is badly informed, very subjective, and poorly written. The author’s notions of what the two theories mean seems to confuse ‘liberal’ with ‘liberalism’, the suggestion that theorists are developing theories to lure or con the less fortunate (e.g. “this is more of a label to attract more people within the fold of liberalism) and “Liberalism is adopted as a measure to lure those who are poor and backward, to present them a rosy picture, and to prevent social conflicts”) is unsupported and subjective, and the absence of important theoretical contributors (particularly Kant, who is central to Liberalism) suggests little research or effort. This is a good example of a piece of work that has been too quickly produced, has undergone little or no editing, and adds no value to anything.

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