How the neo-liberals ideas has influenced the world order Essay

How the neo-liberals ideas has influenced the world order - Essay Example Since the advent of the end of the Cold War, it is experienced that the ideas of the neo-liberalists has widely taken place. Hence, the contemporary states economy have imbibed the culture of free trade, free economy entry and exist of labour and the opening of their state economy to the international market for active competition. This scenario of the international order, with the aid of modern improvement in the world technological base, has resulted in the expansion and the consolidation of globalization. The stand of socialism has given way to capitalist society, where the rule of price is a cogent force that determines the market situation. Hence, governments through the policy of privatization and commercialization , deregulation of their states economies have given up several state corporations to the private individuals and private bodies; thus, bringing to the fore front the phasing out of the socialist and communist doctrines. The enshrinement of the neo lib al doctrines in the world order would not have gain its immense success if international organizations such as UN, World Bank, IMF, WTO , have not backed up and imbibe the culture and ideas of free trade and the globalization of the world economy. This write- up tends to discuss the ways in which Neo- liberalism has influenced the world order. IDEAS OF THE NEO- LIBRALS The neo-liberals based their ideas on the neo- classical economists’ doctrines, which is an extension of the classical economists’ ideology. The neoclassical economists contend that slow or negative growth results from poor resource allocation from non market prices and excessive Third World state intervention. Hence, the argument that promote competitive free market, privatization of public enterprises, supporting export and free international trade, liberalizing trade and exchange rates, allowing exchange rates to attain a market- clearing rate, removing barriers to foreign investment, rewarding domestic savings, reducing government spending and monetary expansion, and removing regulations and price distortions in financial, re source and commodity markets, would spur increased efficiency and economy growth was upheld. (Dibie, 2000:18) according to Albo (1996), "Neo-liberals have fostered the movement to freer trade and deregulation of labour markets, arguing that overcoming the constraint of limited markets is the means to increase growth, remedy trade imbalances, and lower unemployment. The state needs to be forced to comply with the 'laws' of the market". It is seen that the socialist and communist's ideas of government control of the means of production is greatly opposed in all its' ramifications by the neo liberalists, Hence a capitalist structure that support free trade and free movement of labour is supported. The neo-liberals ideas are summed up in what is widely known as 'globalization'. "Globalization can be briefly defined as the intensification of economic, political, social, and cultural relations across borders" (Holm & Sorensen, 1995:4). A key characteristic of the globalization is that the actors involved are not only states but non- state actors, particularly multinational or trans- national corporations. It is now the case that more than half of the top economies in the world are corporations not states, and international investment is increasingly private" (OHCHR, 2005). Many international trade theorists, such as Gottfried Haberler, Jacob Viner, Alex Cairncross and Peter Baur, have expanded and reinforced the classical and neoclassical views. These scholars share the neoclassical belief that trade can promote the growths that are favourable to the other sectors. (Dibie, 2000:15). To Haberler (1968), the emphasized international trade has several indirect and dynamic benefits, apart from static gains to the trading countries. One of the benefits is the introduction of new technologies in less developed countries.