Neo-Liberal vs. Social Liberal Understanding of Freedom
Neoliberalism is a concept that is very common in today’s economic lingo. Harvey describes it as “a theory of economic practices that propose human well being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets and free trade” (2005, p.2). The basic concepts in this theory are the marketization and privatization of institutions with the aim of setting free the skills of entrepreneurs so that they can maximize their potential within the society. Neoliberalism and social liberalism have one thing in particular: they advocate for the removal of state interference. They relegate the state’s role to the provision of security and protection of property rights so that transactions within private citizens and institutions can progress unhindered.
Neoliberalist interactions are based more on contractual obligations than on trust. The emphasis of this concept is narrow because rather than focus on the general freedoms enjoyed by people, it focuses on entrepreneurial freedoms which mean that most beneficiaries of the system are those that possess entrepreneurial skills. The individual is empowered to leverage ‘its’ skills (Feher 2009). Individuals who are predisposed to failure due to a genetic or other condition become more miserable under this system. Additionally, those that are semi or unskilled will most likely be underemployed or altogether unemployed. This system is responsible for the divide seen between the rich and the poor within nation states where the minorities are the haves and the majorities are the have-nots. The situation is replicated on a global scale where there is a great distinction between poor and rich economies. The overall effect of neoliberalism, therefore, is inequality which is evident in many states today. The competition generated by this system forces people to be so fixated on improving their statuses that they destroy all their humanity and solidarity (Bourdieu 1998).
Social liberalism on the other hand is also a concept that believes that the state should be as far as possible to the central decision making mechanisms on how people live. The concept vehemently opposes militarism and emphasizes international free trade as an important factor in the promotion of world peace. The departure of social liberalism from other liberalism is that it is strongly rooted in the commitment of wealth and power redistribution through taxation and public service. Public service and redistributive taxation are ways in which wealth is fairly distributed to people within a certain economy whereas democracy is the way in which power is distributed (Gaus 2007). The core tenet of social liberalism is fairness which is considered as a form of legitimizing the state as well as a way of achieving meaningful freedom. Property rights within this system are viewed as instruments used by the state to craft policies that are geared towards greater political goals rather than goals as ends in themselves. There is a notion among several scholars that social liberalism is a contradiction of classical liberalism in that it does not wholly advocate for overall freedom. However, this notion is ill conceived as the tenets of redistribution and democracy are in themselves affirmations of political freedom just like classical liberalism. There is a popular saying that ‘power corrupts whereas absolute power corrupts absolutely’. In this regard, concentration of too much power in the centre is one way of undermining political freedom. The presence or absence of wealth is in itself a precursor to formation of oligarchies that either directly or indirectly buy up the political system in order to propagate their ideals. The wealthy can buy power directly while the poor use political actors like the media and the civil society. The envisaged end to a social liberal system is opposition to gross inequalities in wealth and advocacy for more active involvement in democratic decision-making.
Neoliberal policies are considered as right-wing as they are centered on the promotion of free markets that do not have any boundaries. These are characterized by privatization and deregulation. For the last three decades, the global economy has largely been fueled by neo-liberal ideals. This has created an ongoing dispute as to the extent of liberalism and newness in neo-liberalism. This concept was originally attributed to western economies and is interchanged with Thatcherism in Britain (Miller 2000). However, recent turbulence in the global markets have forced governments to reconsider their neoliberal ideals for better methods of safeguarding the powers wielded by the common people.
The disagreement between most social liberals rests on the practicality and desirability of some of the proposals that have been fronted for achieving a balanced state versus market equilibrium. On the one hand, liberals, regardless of kind, always view market mechanisms as fundamental tools of decentralizing decision making and stimulating innovations. The limitation of these market mechanisms is that they are more of means rather than ends in themselves. On the other hand, there are more concrete limitations to market mechanisms like creation of monopolies that exist regardless of barriers that may be enforced by other players like the state. Market failure eventually occurs due to a collusion of factors including but not limited to transactional costs, information asymmetry and the incapacity of human beings to comprehensively imagine or calculate beyond a certain point (Howarth 2007).
The discussion above does not mean that market mechanisms are a total failure. On the contrary, it seeks to show that the single most important tenet of neoliberalism in deregulation of markets does not guarantee the best results. Considering market mechanisms along other mechanisms like voluntary action or state regulation only seems to suggest that the best action would most likely be a combination of mechanisms (Howarth 2007). Overall liberalism is a concept that sees markets as being products of property rights that are closely related to the state since they eventually tumble if the state does not offer guarantees of protection of these rights. It is thus the conclusion of most liberals that rather than markets being results of fact, they are products of choices made at the behest of policies.
Social liberal thinking is driven by the conviction that individual freedoms are to be safeguarded and enhanced at every cost and at all times. This concept maintains that individuals should be empowered in turn empowering their communities and eventually creating a local democracy that is vibrant. The concept further discourages the placement of power in authoritative bureaucratic state mechanisms as much as in undemocratic markets (Howarth 2007). The conviction here is that all power must rest on ordinary people. Most specifically, social liberal capitalism has been posited as the most viable means of ensuring that people are empowered rather than impoverished. There should be meaningful social justice and the provision of equal opportunities to all people as a precursor to the achievement of greater fairness and freedom. As such, social liberalism takes the effects of the gross inequalities that have been evident in the last three decades under neoliberalism as a call to action to radically reform the machinations of the state and markets to ensure that they work for the realization of freedom by the poorest members in the society.
Whereas neoliberal ideals are greatly focused on the deregulation of markets and unfettered privatization as the best means of achieving individual freedoms, social liberal ideals go a step further and argue that the state and markets must work harmoniously; where neither trumps the other. In short, social liberal ideals are neither anti-state nor anti-market. They are simply premised on the fact that there must be human rights laws and strong civil liberties if the state is to be checked against eroding individual freedoms (Laws 2007). Additionally, there must be sound redistributive mechanisms as well as sufficient regulation to ensure that markets are not too volatile or that wealth inequalities are too extreme as presently witnessed. When all factors are considered, the neoliberal concepts and social liberal concepts are both about fostering freedoms that are enjoyed by people within set boundaries. The major point of departure is that the former values market deregulation with minimal to no state regulation whereas the latter advocates for a balance between involvement of the state and freedom of markets in a reciprocal manner that guarantees that both are geared towards greater fairness and freedom in the daily lives of the poorest citizens. Thus, social liberalism is far more inclusive and considerate than neoliberalism.
References
Bourdieu, P., 1998. Neo-liberalism, Utopia (Becoming a Reality) of Unlimited Exploitation in Acts of Resistance: Against the New Myths of Our Time. Cambridge: Polity Press
Feher, M., 2009. Self-appreciation; or, the Aspirations of Human Capital. Public Culture, 21(1), 21-41.
Gaus, G., 2007. On Justifying the Moral Rights of the Moderns in E. Paul, F. Miller and J. Paul, Liberalism: Old and New. Cambridge: Cambridge University Press
Harvey, D., 2005. A Brief History of Neoliberalism. Oxford: Oxford University Press
Howarth, D., 2007. Reinventing the State: Social Liberalism for the 21st Century. London: Politico’s Publishing
Laws, D., 2007. Size isn’t everything in J. Margo, Beyond Liberty: Is the future of liberalism progressive? London: IPPR,
Miller, D., 2000. The Rise of the PR Industry in Britain, 1979–98. European Journal of Communication, 15 (1)
