Neoliberalism Theory

I chose to discuss the Neoliberalism theory of development. The Neoliberalism theory was developed in the 1980s and assumes that the free market is the most effective method to maintain and achieve economic growth and development. Supporters of Neoliberalism believe that government interference, particularly corruption, creates the long term negative consequences of development. They suggest that if the government would take a step back and allow businesses to make decisions freely, a healthy competition would exist among enterprises, ensuring the survival of the most successful and long-term development. Another aspect of the Neoliberalism theory is that public services should be less accessible thus incentivizing people to work and contribute to the economy. My understanding of the Neoliberalism theory is that they assume the more independence the government, the more people will have to “fend for themselves” and the stronger they will come because of it. 
An example of the impact of the development of Neoliberalism is the Chilean economy during president Augusto Pinochet’s time in office. Following, Allende’s presidency which in its later years brought massive protectionism, disordered land expropriations strikes, food shortages as well as massive inflation, Chile was in dire need of a reform. This was the perfect opportunity for a group of Chilean economists, known as the Chicago boys and led by Milton Friedman, to step in as the economic advisors for the new leader Pinochet. Under the military dictatorship of General Pinochet, Chile embraced free market approaches, including privatization, deregulation, and reduced government mediation in pensions, health and education.

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