NEOLIBERALISM. Suddenly sticking out into the discourse warm in the middle of society. The trigger was the emergence of the name Boediono as a candidate for vice president Susilo Bambang Yudhoyono in the upcoming presidential election. According to the opponents of the former Governor of Bank Indonesia, Boediono an economist who adopts neoliberal economics, so he is very dangerous for the future of the Indonesian economy.
This paper does not intend or understand peel Boediono dianutnya economy. The purpose of this paper is to outline the understanding, the origin and development of neoliberalism in brief. I hope that, with proper understanding of neoliberalism, clash of ideas relating to the understanding of this economy can be avoided from the sophist. In contrast, economists who clearly believe in neoliberalism, did not flatly deny that he was not also a neoliberalis.
In accordance with namannya, neoliberalism is a new form of understanding of liberal market economy. As one variant of capitalism which consists of mercantilism, liberalism, Keynesianism, neoliberalism and neokeynesianisme, neoliberalism is an attempt to correct the weaknesses inherent in liberalism.
As known, in the understanding of liberal market economy, the market is believed to have the ability to look after himself. Because the market can take care of herself, then taking care of state intervention in the economy is not needed at all. But after the world economy falling into a large depression in the 1930s, confidence in the understanding of liberal market economy declined drastically. The market was not only unable to look after himself, but can be a source of catastrophe for humanity. Depression of the 1930s not only marked by the occurrence of bankruptcies and mass unemployment, but leads to the occurrence of World War II.
Realizing the weakness of the liberal market economy, in September 1932, a number of German economists led by Rustow and Eucken proposes to do repairs to understand the market economy, namely by strengthening the role of the state as regulator. In its development, Rostow and Eucken idea brought to Chicago and further developed by Ropke and Simon.
As packaged in ordoliberalisme economic policy package, the core of neo-liberal market economic policies are as follows: (1) The main objective is the development of neoliberal economic freedom of individuals to compete freely in the market-perfect, (2) private ownership of production factors is recognized and ( 3) the formation of market prices is not something natural, but rather the result of market control by the state through the issuance of the law (Giersch, 1961). But in the international monetary and financial conference organized by the United Nations (UN) in Bretton Woods, United States (U.S.) in 1944, which was organized to seek solutions to the vulnerability of the world economy, the concept offered by the neo-liberal economists are marginalized by the concept of state welfare was initiated by John Maynard Keynes.
As known, the concept of the welfare state or Keynesianism, the role of the state in the economy is not restricted only as regulators, but also expanded to include the authority to conduct fiscal and monetary intervention, particularly for the real sector, create jobs and ensure monetary stability. Related to the creation of employment, Keynes even explicitly says: "As long as there is unemployment, for as long as state interference in the economy remains justified."
But the superiority of Keynesianism does not last long. In the early 1970s, following the election of Reagan as U.S. president and Tatcher as British Prime Minister, neoliberalism is surprising to find the momentum to be applied widely. In America it is characterized by doing the health subsidy reduction on a large scale, while in England was marked by doing a mass privatization of SOEs.
Furthermore, associated with the developing countries, the application of neo-liberalism finds its momentum in the late 1980's. Following the monetary crisis widely in Latin American countries. The U.S. Treasury Department in cooperation with the International Monetary Fund (IMF), to formulate a package of neoliberal economic policies, known as the Washington Consensus policy package. The core Washington Consensus policy package that became the basic menu IMF structural adjustment programs are as follows: (1) the implementation of stringent budget policies, including policies on the elimination of subsidies, (2) liberalization of the financial sector, (3) trade liberalization, and (4) the implementation of privatization SOEs.
In Indonesia, the implementation of neoliberal economic agenda on a massive scale took place after Indonesia's economy hit by financial crisis in 1997/1998 ago. In detail it can be listened to in various government ditandatatangani memorandum of understanding with the IMF. After the end of direct involvement of the IMF in 2006, implementation of the agendas are then escorted by the World Bank, ADB and USAID.
Listening to the above description, a brief conclusion, as a new form of liberalism, neoliberalism remained basically very glorify the market mechanism. State intervention, while it is recognized necessary, should be limited as a safety regulator and the workings of the market mechanism. Because economics is taught in almost all economic faculties in Indonesia was built on the framework of capitalism, it is difficult indeed inevitable when 99.9 percent of Indonesian economists have a tendency to become adherent of neoliberalism. Wallahua'lambishawab.
This paper does not intend or understand peel Boediono dianutnya economy. The purpose of this paper is to outline the understanding, the origin and development of neoliberalism in brief. I hope that, with proper understanding of neoliberalism, clash of ideas relating to the understanding of this economy can be avoided from the sophist. In contrast, economists who clearly believe in neoliberalism, did not flatly deny that he was not also a neoliberalis.
In accordance with namannya, neoliberalism is a new form of understanding of liberal market economy. As one variant of capitalism which consists of mercantilism, liberalism, Keynesianism, neoliberalism and neokeynesianisme, neoliberalism is an attempt to correct the weaknesses inherent in liberalism.
As known, in the understanding of liberal market economy, the market is believed to have the ability to look after himself. Because the market can take care of herself, then taking care of state intervention in the economy is not needed at all. But after the world economy falling into a large depression in the 1930s, confidence in the understanding of liberal market economy declined drastically. The market was not only unable to look after himself, but can be a source of catastrophe for humanity. Depression of the 1930s not only marked by the occurrence of bankruptcies and mass unemployment, but leads to the occurrence of World War II.
Realizing the weakness of the liberal market economy, in September 1932, a number of German economists led by Rustow and Eucken proposes to do repairs to understand the market economy, namely by strengthening the role of the state as regulator. In its development, Rostow and Eucken idea brought to Chicago and further developed by Ropke and Simon.
As packaged in ordoliberalisme economic policy package, the core of neo-liberal market economic policies are as follows: (1) The main objective is the development of neoliberal economic freedom of individuals to compete freely in the market-perfect, (2) private ownership of production factors is recognized and ( 3) the formation of market prices is not something natural, but rather the result of market control by the state through the issuance of the law (Giersch, 1961). But in the international monetary and financial conference organized by the United Nations (UN) in Bretton Woods, United States (U.S.) in 1944, which was organized to seek solutions to the vulnerability of the world economy, the concept offered by the neo-liberal economists are marginalized by the concept of state welfare was initiated by John Maynard Keynes.
As known, the concept of the welfare state or Keynesianism, the role of the state in the economy is not restricted only as regulators, but also expanded to include the authority to conduct fiscal and monetary intervention, particularly for the real sector, create jobs and ensure monetary stability. Related to the creation of employment, Keynes even explicitly says: "As long as there is unemployment, for as long as state interference in the economy remains justified."
But the superiority of Keynesianism does not last long. In the early 1970s, following the election of Reagan as U.S. president and Tatcher as British Prime Minister, neoliberalism is surprising to find the momentum to be applied widely. In America it is characterized by doing the health subsidy reduction on a large scale, while in England was marked by doing a mass privatization of SOEs.
Furthermore, associated with the developing countries, the application of neo-liberalism finds its momentum in the late 1980's. Following the monetary crisis widely in Latin American countries. The U.S. Treasury Department in cooperation with the International Monetary Fund (IMF), to formulate a package of neoliberal economic policies, known as the Washington Consensus policy package. The core Washington Consensus policy package that became the basic menu IMF structural adjustment programs are as follows: (1) the implementation of stringent budget policies, including policies on the elimination of subsidies, (2) liberalization of the financial sector, (3) trade liberalization, and (4) the implementation of privatization SOEs.
In Indonesia, the implementation of neoliberal economic agenda on a massive scale took place after Indonesia's economy hit by financial crisis in 1997/1998 ago. In detail it can be listened to in various government ditandatatangani memorandum of understanding with the IMF. After the end of direct involvement of the IMF in 2006, implementation of the agendas are then escorted by the World Bank, ADB and USAID.
Listening to the above description, a brief conclusion, as a new form of liberalism, neoliberalism remained basically very glorify the market mechanism. State intervention, while it is recognized necessary, should be limited as a safety regulator and the workings of the market mechanism. Because economics is taught in almost all economic faculties in Indonesia was built on the framework of capitalism, it is difficult indeed inevitable when 99.9 percent of Indonesian economists have a tendency to become adherent of neoliberalism. Wallahua'lambishawab.
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