Neoliberalism and The Welfare State in Britain - Edited

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Effects of Neoliberalism in Britain.

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Effects of Neoliberalism in Britain

Neoliberalism is a political and economical idea that attempts to enhance human well-

being by advocating individual self-interests. It promotes the withdrawal of government

involvement in the economy, such as taxes quotas and some government services. It supports

the free movement of money, services, goods, and people. Classical liberalism was the

foundation of neoliberalism, Adam Smith advocated it. He proposed the removal of

government involvement in economic matters and supported ideas such as fewer government

taxes and free trade. Embedded liberalism involves the compromise of a lot of helpful but

partially differing objectives.

It started with the neoliberal turn and was used to revive trade after the post-war

period. Around 1776 Adam Smith, a British economist, published a wealth of nations that

advocated for liberalism. In the 1950s to 1960s, states applied high economic growth rates,

redistributive politics, control over capital mobility, and the Keynesian theory of fiscal

stimulus. The Keynes theory proposes that the government should spend and invest in

businesses, which will lead to businesses' growth. Towards the end of the 1960s, embedded

liberalism started to fall. Around the 1980s, there was a debt crisis. The governments have

extended Neo-liberal restructuring programs internationally through the United States effort

and G-7 states to subject their countries to form a discipline of capital markets. With its

decreasing profit rates, the capitalist crisis enhanced the business groups to bring back

economic liberalism, part of neoliberalism. Therefore, neo-liberalism came up as a project to

get around financial establishments. International Monetary Fund (IMF), World Trade

Organization (WTO), and World Bank (WB) aid in neoliberalism policies.

The IMF oversees the global monetary system, helps draw a systematic process for

foreign transactions, and credits member states who find temporary debt difficulties. The

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significant policies of neo-liberalization include austerity, globalization, deregulation, free

trade, and privatization. Austerity is the measure the government makes to take influence

public sector debt. The government achieves this by reducing its spending and increasing

taxes or implementing both. Types of austerities include lowering taxes and spending

simultaneously, raising taxes and lowering spending, and increasing taxes to finance

expenditures. In the long run, austerity leads to increased unemployment Globalization is the

enhanced interrelations and connection of people and countries. It is the free-flowing of

goods, services, information, and people between a country's borders.

Free trade and global cooperation drive economic globalization. There are three

types of globalization: political globalization, which involves national strategies that unite

states, encouraging a free flow of commerce. An example of organizations that uphold

political globalization policies includes the United Nations (UN). Economic globalization is

another type of globalization that involves coordination and integration of finances within

international states. An example of economic globalization is The World Bank. The third

type of globalization is cultural globalization where it targets technology and society

components that bring different cultures together.

Deregulation is the cutting back of governments and cooperates regulations in

industries. The prominent role is to remove competition barriers to enable specific businesses

to prosper and compete efficiently in the global market. Deregulation also implies that

enterprises should set their prices with markets' demand and supply without interference from

the government. The government cuts tariffs and subsidies on imports and exports in the free

trade is a trading approach. The theories that support accessible business include

mercantilism, whereby countries optimize their revenues by focusing more on exports than

imports, and comparative advantage, whereby countries focus more on producing goods at a

lower price than other states. Benefits of free trade include reducing government spending,

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improving technology transfer, stimulating economic growth, improving foreign

improvement, and helping consumption by lowering the prices of goods. The disadvantages

of free trade are that it encourages poor working conditions, loss of jobs, and decreased

revenues.

Privatization can mean moving industry and public service to a private zone from a

public sector. Privatizations include divestment, displacement, and delegation. Benefits of

privatization include increased competition among different firms preventing political

interference in the market, and improving the efficiency of private companies. Among the

disadvantages are that most private businesses focus on making a profit and less on social

objectives. It enhances an increase in prices because there is no contribution of government

subsidies, and initial resistance to change can impede the performance of the enterprise.

Impact of neoliberalism on the economic growth of Britain

Britain has shown a trade deficit in its economy. The decline of trade balance has resulted in

to decrease in balance payments of services and goods. The source of the debts in Britain is

the settlement of profits and dividends of international companies and monetary help to these

companies during economic crises. These settlements have exceeded the value of payments

from foreign debt. It has led to the privatization of the British economy. Privatization is a

major factor that threatens the State's external accounts, which is the major problem that

undermines the country's external accounts. Britain's decrease in economic growth results from
magnified debt, the increasing deficit within the transactions of products and services with the remainder of the

globe, inflation on top of target requiring a rise within the charge per unit to curb consumption and therefore the

problem of finance in infrastructure.

Industrial activity in Britain and neoliberalism

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Foreign investment in Britain has led to a large inflow of foreign capital in the

country. The massive volume of foreign direct investment is because of the increased influx of dollars in

the country. Therefore, excessive introductory profit rates have led to the British forex's overvaluation

against the US dollar. As a result, affecting British enterprise competitiveness in foreign trade and relation

to imports. The British economic system has lost competitiveness due to barriers caused by increased

public deficits, excessive interest rates, increased taxes, shortage of skilled labor, excessive labor

Costs, complicated and ineffective tax laws, high cost of Electricity, low-quality infrastructure, and high

prices of the pension system.

Impact of neoliberalism on decrease and increase in inflammation in Britain

Due to public deficits, excessive, accurate interest policies, inflated taxes, and overpriced

labor prices. Public investment is also scarce thanks to over-commitment of the British government
budget with ever-increasing public expenditure cost accounting and payment of interest and amortization of

domestic debt—the problem of Britain to financing in infrastructure results from the failure of public and

personal savings. The incompetence in management and scarce resources for investment in infrastructure are

the primary elements responsible for Britain's deplorable State of affairs in the transport and electrical

energy sector.

Impact of Neoliberalism in domestic debt, foreign debt and reduced public resources in

Britain

One of the significant severe consequences of the low economic process recorded in Britain since the

introduction of the neoliberal model is the increase within the public deficit. This undeniable fact makes it

impede the government's ability to develop all told levels of the core areas of the State like infrastructure, health,

education, security, and social insurance. It is necessary to note that the general public deficit in the UK results

from the conjunction of four factors. They include a rise in domestic debt related to the sale of state bonds to

manage inflation, the monetary prices associated with the conjugation of household debt, and too little public

revenues because of the low growth of the British economy level. Allocation of many resources for the payment

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of interest and amortization of debt can cause fewer resources on the market for State, federal, and local

government to take a position in finances and social infrastructure. Consistence payments of debts can

affect the growth of Britain; thus, the country will not have enough resources to boost its

development and control regional and social equalities that arise.

Britain's social and regional inequalities due to neoliberalism

Britain still presents significant regional inequalities as a result of its population and economy. Britain still

shows considerable regional inequalities because of its dense

B population and struggling economy. Lack of employment is high because of increased

public investment in Unemployment benefits. There is substandard public infrastructure such

as housing and below-par education in Britain.

In conclusion, keeping neoliberalism in Britain will intensify the privatization of

public resources in Britain. The outcome will be reduced economic growth, high inflation,

stagnant social achievements, and low productivity. Britain must replace neoliberal policies

with the national development model of standardizing the national economy, which will

make the State less susceptible to attack by speculative foreign capital, with a government

strictly controlling and overseeing the economy and aiding in the development of the nation.

References

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