Impact of Neo-liberalization on International Business †Free Samples

Question: Discus about the Impact of Neo-liberalization on International Business. Answer: Introduction Neoliberalism is an important theory of political economy which proposes that that the well-being of an individual can be achieved by maximizing entrepreneurial freedom within the institutional framework. This framework is characterized by individual liberty, free trade, property rights, unfettered markets. Neoliberalisation has been flourishing around the world similar to the wave of discursive adjustment and institutional reform. Neoliberalism is an important exemplar of global development. The advocates of neoliberalism have opined that the ease of capital flow is an important indicator of development for the poorer countries. They ignored the issue of labor mobility in such countries. The investors in the global market have focused on the new areas of profit making opportunities which was produced by the neoliberalism in the emerging market during the mid-1990s. Moreover, neoliberalism often defines competition as important characteristics of human relations. It defines the citiz ens as the consumers whose choices are exercised through the process of buying and selling, a systematic process which punishes inefficiency and rewards merit. The market also delivers such benefits which cannot be achieved through proper planning. The declining price of the food stuffs, growth in the public and private debt and increase in the unemployment affected the economy of Australia. The neoliberal ideology which has shown an increasing trend in Australian agriculture has emphasized on the rural and the individual community self-help. This paper will highlight the impact on neo-liberalism on the international business activity (Joseph, 2013). Key ideas of Neo-liberalism Neoliberalism is an authoritative policy framework in contemporary globalization. The approach of liberalism has served the interests of the dominant classes and the countries in the world. The neo-liberal laissez faire capitalist argue that the political and economic freedom either in the form of capitalism or democracy helps to produce higher level of wealth in the economy. There are certain economic reforms in the market conducted on the basis of efficiency and growth such as labor and financial reform and privatization. It is also seen that the idea of economic theory is dominant and guided by neoliberalism which encourages the growth of private enterprises and the operation of the free market forces (Finnegan, 2016). The instability in the economy around the world is due to government intervention and regulation of the economy. Government should try to defend and create the market and all other activities must be in the hands of the private company. The neoliberal policies depend on the general theory of equilibrium. The sellers and the buyers in a market try to produce unique products at an affordable price which helps to balance the demand and supply of the goods and services that are used in the production. Moreover, the neoliberal policies must try to integrate the national economy into the global economy to allow the free flow of varied goods and services. The neoliberal policies also lay faith on the unregulated market (Wilson, 2015). The neoliberal economic policy has also increased the risk associated with economic growth and increased inequality. Many neo-liberal policies have increased inequality in the economy instead of generating growth. Trade liberalization has lifted many individuals out of poverty in most of the developed countries of the world. Moreover, privatization has also increased the efficiency in various platforms. Certain benefits can be seen in various developed countries in terms of rising growth and thus it is not seen if it includes a wide range of countries. The cost which is measured in terms of rising inequality is justifiable. The expansion of trade across the world has helped many people to come out of poverty. Foreign direct investment has helped to transfer the technology to the developing countries in the world. The privatization of the state owned enterprises has also led to the efficient allocation of the services and lowered the burden on the government (Akkermans, 2017). Neo-liberalism in the education policy is one of the major characteristics of a capitalistic society. This has led to the introduction of education through training and has helped in changing the fund regime. The various policies of globalization and the reforms in higher education suggest new political, cultural and economic dimensions. Neoliberalism as an ideology, philosophy and guide has a good reputation in removing the evils of globalization. The proponents of neo-liberal laissez faire argues that a greater degree of political and economic freedom in varied forms of democracy and capitalism in the developed countries of the world always produces high amount of material wealth in the economy. The World Bank and the IMF were not in business when there were promotions of neo-liberal policies. But after 1980s both these organizations became famous in promoting market liberalizing reforms in the economy (Lipman, 2013). Literature Review According to Dean (2014), the concept of neo-liberalism is thought collective and it focuses on the organization. Neo-liberalism is a political philosophy, local assemblage or rationality and it will become an uneven process of regulatory or governmental development in the future. Connell Dados (2014) predicted that neoliberalism is an idea which is circulated through the network of intellectuals or by an economic system which gives rise to profitability in capitalism. The role of the state, the expansion of trade, agriculture and transformation of the rural society are the major issues of neoliberalism. Constantine, Reissla Stockhammer(2016) opined that neoliberal economic policies played an important role in times of global financial crisis and the debt crisis of Europe. They identified certain key features such of neo-liberalism such as financialisation, globalization and the increasing inequality among the people. According to Flew (2014), neoliberalism is defined in terms of political ideology and it is associated with economic globalization and financial capitalism. It is such a theory which involves political economic practices and suggests that the well-being of an individual can be generated by giving institutional freedom and skills within the framework of an institution. These are characterized by free trade, free market and strong property rights. Baker (2015) opined that neoliberalism is a political ideology and it is a way through which the economic and the land policy can be preserved with regard to agricultural production in the world economy. The most vital tenant of neoliberalism is the belief that opens a competitive and unregulated market which is derived from all types of state interference and thus it represents an optimal mechanism for the development of the economy. According to Glenna, Shortall Brandl (2015), neoliberalism is a term which is used mostly in academic research and it difficult to define the term. It is often considered as a mythical construct which is of varied origin. They also opined that it is a global phenomenon and there is no evidence that it will not be considered as homogenous. According to Babb Kentikelenis (2017), IMF requires certain measures such as reduction of fiscal policy or money supply for emergency loans. Both the World Bank and the IMF were famous because they used conditionality for promoting trade and liberalizing the market policies. They also suggested that in such a circumstance the IMF must co-operate with the World Bank for regional development and assistance from the government. The role of IMF in the financial crisis needs greater security in such aspect. In such a case, the World Bank targeted its lending program which will benefit the poor. According to Streeck (2013), public debt in the capitalist and democratic economy is accompanied by a slow economic growth, rise in the tax resistance, slow political participation and a steep rise in the unemployment. The consolidated efforts are under the pressure of the financial market and this has led to the decline in the investment expenditure and privatization of some of the state owned functions. Payne (2014) highlighted that the G20 Summit created a global crisis in the economy and it is very critical to assess its impact on the member countries. According to Farnsworth Irving (2017), one of the biggest challenge of neo-liberalism is the emerging crisis which was brought into question. They stated that the idea that the economics would be competitive and stronger and the corporations will be more entrepreneurial and profitable if the government allows to do so. Bond et al., (2015) stated that the global crisis affected the economy of the country. The economies export various types of processed products, basic raw materials and a lso suffer from the shortage of various kinds of natural resources. They cannot rely on the shock absorbers which are unfavorable in an international context. They are emaciated by the political conditions which were imposed due to neoliberalism and thus it eliminated the other countermeasures which were implemented by global polarization earlier. Further, they also opined that neoliberal globalization may be referred to as the major cause of this backdrop. It has helped to strengthen the food security system, strengthen the agro-business and destroy the peasantry system. According to Hopewell (2015), people in the civil society engage themselves in the field of multilateral trade governance. The initial strategies adopted by them include criticism of the neo-liberal agenda which was not recognized as the valid form. This has resulted to a wide discrimination and ignorance. The knowledge and position of these people related to the principle of neo-liberalism has deprived the civil s ociety and the right of the people to speak and raise their voice. Critical evaluation of neoliberalism Neoliberalism can be stated as complex phenomena which seeks state intervention and this is important for the optimal mechanism which is vital for the economic development of the country. It can be said as the ongoing specific process that evolves through collisions in different forms and in varied landscapes. Neoliberal globalization is a way which can be captured by reorganizing the production process and the consumption of varied products of the economy with the emergence of a universal network. This will also provide the political and theoretical tools that has facilitated and tried to reduce the intervention of the state run economy along with the regulation of production processes. The neo-liberal policy which was present on the higher education system in Australia also suggest that the policy reforms must be changes and a wider perspective of economic and political imperative must be implemented. It is seen that both the IMF and the World Bank are facing pressure from various countries in the world and the emerging government (Wilson, 2015). In such a case both the organizations must end the dispute and come into an agreement. Moreover, the global investors have engaged themselves in the profit making opportunities and thus have placed themselves in the emerging market economy. It is vital in some aspect to find the connection between the worldwide development and the global elite through the process of neoliberalism. The free trade standard which was implemented by the WTO allowed export specialization in many economies of the world and helped to convert the net purchases of the essential daily products. In many societies, the technical experts have made a parallel shift in their effort to gain legitimacy, symbolic capital and remove exclusion from this field. The neo-liberal trade paradigm and market liberalization are the important means to pursue environmental, developmental and other important objectives. Recent current examples of neo-liberalism affecting international business In USA, the socialists are creating an alliance across the dogmatic scale against neoliberalism. It is useful to analyze and think about neoliberalism in the era of Trump. It is seen that Trump has encountered the neoliberal consensus. Neoliberalisms supports the movement of the goods and the people freely across the political borders. Trump has also announced that the consideration of human rights is inconsequential according to the foreign policies of the state (Saving neoliberalism in the age of Trump, 2017). Moreover, in Germany the crisis of conservatism collided with the catastrophe of neoliberalisation at the time of 2008 financial crisis. The German government accepted the budget deficit to boost up the economy and offset the fall in the demand. The government thus, increased its spending (Between Capital and Volk, 2017). Conclusion It can be said that neo-liberalism and globalization are inter-related and this has affected international business to a large extent. The free movement of capital goods is one of the important aspect of open market which was advocated and supported by the neo-liberals. The emergence of the industrialized power in the globalized world has led to the emergence of neoliberal ideas. Moreover, neoliberalism also encourages individual freedom as the fundamental criteria. The notion of free trade among the various nations has made the policies related to exchange, production and consumption easier. There is no restrictions such as tariffs and trade barriers. It also supports privatization of the resources under individual responsibility. The government programs has decreased and thus it has provided a safety net to the individuals leading to increase in the policies and agreements of the people. Neoliberalism also helps to define the policies which were adopted by the WTO and the IMF. It s upports the multilateral pressure of the political parties through various international organizations. It can also be said that neoliberalism is associated with the welfare reform and the promotion of free trade in US. It justifies that the idea of free state, free market and the unrestricted movement and flow of capital helps to produce political, economic and social goods. In some of the western state, it is seen that neo-liberal ideas must not be encouraged or there should be privatization. Thus, it can be concluded that neo-liberalism encourages the political and economic interdependence and this will lead to progress and removal of barriers between the countries. References Akkermans, D. H. (2017). Net profit flow per country from 1980 to 2009: The long-term effects of foreign direct investment.PLoS One,12(6), e0179244. Babb, S. L., Kentikelenis, A. E. (2017). International financial institutions as agents of neoliberalism.The SAGE handbook of neoliberalism. Thousand Oaks: SAGE Publications. Baker, C. (2015, November). 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