Conceptual and Theoretical Foundation of Neoliberalism

Neoliberalism as an ideology patronizes consumerism and free market to ensure capital accumulation and concentration. It also imposes its political agenda through global economic interdependence, trade and financial markets. It criticizes state intervention model and provides explanations for its failure. As a mode of governance it is based on competitiveness, self-interest and decentralization. It also advocates individual empowerment and devolution of central state power to smaller localized units. Neoliberalism calls for the employment of governmental technologies that are derived from business and commerce. It could also be expressed in a formula “D-L-P”: deregulation, liberalization and privatization. Neoliberalism argues that natural order moves towards equilibrium because market forces delegitimize public policies that interfere with natural laws. Neoliberalism suggests that the establishment of political institutions that interfere with natural order creates disorder in the society. Precisely, neoliberalism argues that state interference in market mechanisms is the cause of poor economic performance thus the capitalist class advocates a movement for the overthrow of Keynesianism and replaces it with neoliberalism. Indeed, moral entrepreneurism involves the ability of the capitalist class or business community to construct the crisis of accumulation and profitability to become a social problem that could be addressed by adopting neoliberal policies to generate economic prosperity. Neoliberalism is against the establishment of institutions that could interfere with the market forces. This phenomenon creates crisis of state power and becomes responsible for the crisis of accumulation and profitability among the capitalist class because the state relinguishes its power to market fundamentalism. This problem motivated classical Marxists and contemporary sociologists to encourage the capitalist class to organize themselves politically to response to the prevailing economic crisis. The class redefines political structures that are conducive to capitalist accumulation and guides by social structure of accumulation theory. Thus, the capitalist class unifies and mobilizes and redefines the political and legal frameworks to offset the destructive market forces. Therefore, state officials formulate public policies and establish state structures to institutionalize market equilibrium. In this circumstance, the destructive market forces were overcome through increased protection and limited free trade thus new order. Due to the role of class fractions in the production process, they have developed specific political and economic interests that could be different to those of other class fractions. These conflicting economic interests could generate opposing political interests and influence public policy formulation. This leads to the emergence of spontaneous order and change needed to overcome the crisis created by the forces of globalization. Therefore, commercial policy that is formulated by the state to address crisis of accumulation in an economy or in a part of a composition of capital has the tendency to bring new social order capable of institutionalizing changes in the prevailing economic quagmire.