Neoliberal Revolution, The

Neoliberalism is a term widely used to describe a set of economic policies and ideas that emphasize the importance of free markets, deregulation, privatization, and limited government intervention. Emerging in the mid-20th century, neoliberalism represented a distinct shift away from the welfare state and Keynesian economics, which had dominated Western economies in the post-World War II era. At its core, neoliberalism advocates for the belief that markets, if left to operate freely, will create wealth, drive economic growth, and improve human well-being. This chapter introduces the key tenets of neoliberal thought and traces its rise to prominence. The intellectual origins of neoliberalism can be traced back to economists and thinkers such as Friedrich Hayek, Milton Friedman, and Ludwig von Mises, who were critical of state intervention in the economy. They argued that government efforts to regulate markets, redistribute wealth, and promote social welfare were inefficient and counterproductive. Instead, they believed that economic freedom, unencumbered by regulation or state control, would lead to more prosperous societies. These ideas gained traction in the 1970s when the world was facing economic stagnation, inflation, and high unemployment, a period often referred to as the “stagflation” crisis. As a response to these challenges, neoliberalism became the intellectual and policy framework that justified sweeping changes in global economic practices. It was championed by leaders such as British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan, who implemented reforms based on neoliberal principles. These included reducing taxes, privatizing state-owned industries, cutting social welfare programs, and embracing global free trade. The goal was to increase individual freedom and market efficiency by minimizing the role of the state in economic affairs.