NEOLIBERALISM THEORY

Neoliberalism
- is an economic and political theory that emerged in the mid-20th century, gaining
prominence in the late 20th and early 21st centuries. It advocates for limited government
intervention in the economy, emphasizing the importance of free markets, deregulation, and
individual liberties.

Historical Context
A. Emergence (1940s-1950s)
• Neoliberalism originated as a reaction to the perceived failures of Keynesian economics
during the Great Depression. Prominent thinkers like Friedrich Hayek and Milton Friedman
played pivotal roles in its development.
B. Global Spread (1970s-1980s)
Neoliberal policies gained traction in various parts of the world, notably with the
administrations of Margaret Thatcher in the UK and Ronald Reagan in the US. International
organizations like the International Monetary Fund (IMF) and the World Bank also
embraced neoliberal principles.

Core Principle of Neoliberalism

1.Free Trade
-Neoliberals argue for the superiority of free markets in allocating resources efficiently. They
believe that voluntary exchange between individuals and businesses leads to optimal outcomes.
2.Limited government intervention:
- Neoliberals advocate for a minimal role of government in the economy. They contend that
excessive regulation stifles innovation and economic growth.
3.Privatization:
Neoliberalism encourages the privatization of state-owned enterprises and services. This is seen
as a means to increase efficiency and competitiveness
4.Globaliztion:
-Neoliberals support the liberalization of international trade and the removal of barriers to global
commerce. They believe that free trade leads to increased prosperity for all involved parties
5.Monetary Policy:
-Neoliberals often advocate for independent central banks with a focus on controlling inflation
through monetary policy.

Critiques of Neoliberalism

A. Income Inequality and Social Disparities Critics argue that neoliberal policies can exacerbate
income inequality and lead to social disparities.
B Market Failures and Financial Crises
-Detractors point to instances of market failures and financial crises as evidence of the limitations
of neoliberalism.
C. Lack of Environmental Considerations
-Some argue that neoliberalism may not adequately address environmental concerns, as profit-
maximization may not align with sustainable practices
 INDUSTRIALIZATION

What is Industrialization?
- Industrialization is the process of transforming the economy of a nation or region from a focus on
agriculture to a reliance on manufacturing. Mechanized methods of mass production are an
essential component of this transition.
Industrial Revolution
-In the western world, Industrialization is most commonly associated with Industrial Revolution in
Europe that began in the late 18th century and the subsequent burst of industrialization in the
U.S. through the 19th century.
-The Industrial Revolution was the period that began in 1760 in Britain and expanded to other parts
of Western Europe and to North America, including the United States, ending in the 1880s.
Examples of Industrialization and Invention:
*In Textile Industry
-Spinning Jenny of James Hargreaves (1764)
-Flying Shuttle of John Kay (1934)
-Cotton Gin of Eli Whitney

*Transportation
-Macadam of John McAdam ( 1792)
-Steam Boat of Robert Fulton ( 1807)
- Steam Locomotive of George Stephenson (1825)

Effects of Industrialization
*Transportation, communication, and finance expanded
*Economic and business owner prosperity
*Consumers' demand for goods and services grew
* Increased the specialization of the workforce

Impact of Industrialization

How Does Industrialization Impact Society?

Industrialization leads to job creation and migration of people from rural areas with farms or
villages to urban centers where production occurs.