"Neoliberalism" refers to two different, but related, threads of political discourse. One is an ideology of domestic governance, and the other is a theory of international relations.
In its use in United States domestic politics, the term seems to have been created by Michael Kinsley of the traditionally liberal magazine, The New Republic. In its original meaning, neoliberalism is the idea that, while traditional liberalism had many flaws, the government could still work to help ordinary people. Neoliberalism also attempted to do away with the narrow interest politics that were seen to damage the Democratic Party, by instead creating a vision of how to run the country that was internally consistent and could vie with the libertarian model that many in the Republican Party espoused.
The most important value in neoliberal planning was empiricism. Outcomes needed to be measurable, and measured, to make sure that ideology was not blinding the policy makers. This emphasis on results over other factors led to the creation of the term "technocratic" to describe this approach.
Under the Bill Clinton administration, many neoliberals were given a chance to put their ideas into practice. What this meant was a focus on education, balanced budgets, and assistance to non-profits, alongside a restructuring of those government bureaucracies that did work. Moreover, many economists were brought in for their technical expertise. There were many successes, and overall real incomes grew at a faster rate than any time in recent history, at all levels.
However, there are some criticisms of neoliberalism. One of the most common, even espoused by some prominent neoliberals like Robert Rubin, was that it was too concerned with raising incomes and less with overall income equality. Many traditional liberals worry that the increasing gap between the lower class and the mega-rich is undermining democracy as we know it.
The other major criticism of domestic neoliberals is their support for free trade. Many people on all sides of the political spectrum (in every country) worry about the effects of free trade on everything from wages to sovereignty, but so far empirical evidence for its deleterious effects is still scant.
Prominent domestic neoliberals in the United States include Paul Krugman, Michael Kinsley, and Bill Clinton
International Relations Neoliberalism
In the academic field of international relations, neoliberalism refers to a school most closely associated with Harvard and Princeton. The neoliberal school of IR arose in the 1970s as a response to the hegemony of the "realism" school
In IR, "liberalism" refers to the orientation of Woodrow Wilson and other people who hoped to reshape the world, through the use of war and international organizations. The goal of the early liberals was democratization and an end to war. Neoliberals took these same goals, but rejected the unscientific applications that had come before. Instead, neoliberals decided to apply rigourous mathematical and scientific techniques.
Most neoliberal analyses relied heavily on rational choice and game theoretic models, borrowed extensively from economics. (The main thing tying both domestic neoliberalism and international neoliberalism is the heavy reliance on economics.) Neoliberals today believe that tying states together in institutions, it can decrease the signal noise that prevents communication between them. Moreover, it can increase the costs associated with provocation and aggression.
The best formulation of neoliberal hopes can be found in the "democratic peace" theory. According to this, no two mature democracies have ever fought a war against each other. Therefore, promoting liberal democracy around the world will have the side-effect of decreasing war. Moreover, since a vibrant middle class has long been recognized as a necessary condition for liberal democracy, neoliberals have focused on helping nations choose policies that would promote the creation of middle classes and democracy.
Criticism of neoliberalism often comes from both the right and the left. Realists often claim that because neoliberals ignore power, they are fooling themselves as to what really causes war and struggle. This is despite the fact that neoliberal claims and predictions have come true at least as often as those made by realists. From the left, constructivists claim that neoliberals are ignoring the structure behind the norms they espouse. Moreover, they point to China as an example of a country that can follow the economic advice of the neoliberals without democratizing.
Prominent neoliberals in IR include Bill Clinton and Thomas Friedman.
- In fact, Friedman's Lexus and the Olive Tree is a good summation of neoliberal thought, if a bit overly simplistic.
"Former Chilean dictator Augusto Pinochet is an example of the kind of monster who would kill for the free market."
More like Circlejerk wiki.
"Much of this deregulation ends up benefiting the parasitic elites and bureaucracy, rather than the poor. (A classic example of this is the kleptocracy of India.)"
This is a red herring argument. Kleptocracy has always existed in India, almost since the country's independence in 1947. In fact, the source of kleptocracy in India is its socialist labor market system where public sector employees have a high degree of job security. They can expect to hold on to their jobs whether they are good at it or not, thus encouraging graft and inefficiency.
Neo-liberal reforms were enacted in India in 1991 and since that time the country's economy has grown and millions of people have been lifted out of poverty. There is no evidence that neo-liberalism as such has contributed to kleptocracy in India.