Page(s) 299-300

Question

10.4. Explain the key organizing principles of the global economy.
Neoliberalism has emerged as a guiding economic philosophy since the 1970s and has been promoted by large, worldwide institutions since the 1980s. Identify the actions that a neoliberal worldview supports.
Supported by Neoliberal Worldview
privatization of public services and assets
Press Space to open
increase in taxes and tariffs
Press Space to open
decrease in government spending
Press Space to open
establishment of more trade regulations
Press Space to open
Not Supported by Neoliberal Worldview

Answer 1

**Supported by Neoliberal Worldview**:

- **Privatization of public services and assets**: Neoliberalism promotes the shifting of services and assets from public to private control and operation. This is based on the belief that private enterprises are more efficient and effective at delivering services due to competition and profit incentives.

- **Decrease in government spending**: A key principle of neoliberalism is the reduction of government intervention in the economy. This includes cutting public expenditure, particularly in areas such as welfare, healthcare, and education, to limit government's role and encourage private sector solutions.

**Not Supported by Neoliberal Worldview**:

- **Increase in taxes and tariffs**: Neoliberalism advocates for lower taxes and the reduction or elimination of tariffs to foster free trade. The philosophy holds that lower taxes encourage investment and economic growth by allowing individuals and businesses to retain more of their income and profits.

- **Establishment of more trade regulations**: Neoliberalism favors deregulation and the removal of barriers to trade. It supports free trade agreements and the minimization of trade restrictions to create a global market where goods and services can move freely. The belief is that this leads to increased efficiency, innovation, and economic growth through competitive pressures.

The neoliberal worldview emphasizes market solutions over government interventions, a belief in the power of free markets to allocate resources efficiently, and the pursuit of policies that foster economic liberalization globally.