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The History Of Neoliberalism And How It Shapes Today’s Social Media

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The History Of Neoliberalism And How It Shapes Today's Social Media
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Today we see social media as a tool for more accessible communication, information distribution, and entertainment. However, behind any innovation and creation of large industries, there are specific economic drivers and history of evolutionary ideas. One of the main elements of capitalism as a practice and theory is competition. The liberal approach refers to the equalization of capacities and brings in high levels of participation and competition, which is also the case of social media. If we follow the liberal approach, social media can be considered as a tool that provides equal opportunities and capacities for most of the population as it is easily accessible. So, in order to move forward in terms of accelerated competition, it is recommended to use additional support. For example, websites like StreamOZ will assist you in improving your and your business’s online performance.

The First Appearance

Neoliberalism, like its basis – capitalism, is known for its effect on the United States economy. However, this approach was widespread internationally. For the first time, neoliberalism had shown its signs in Chile. When the socialist leader, Salvador Allende, was overthrown and the new leader implemented right-wing economics like privatizing the public sector, opening the country for international trade, and collaborating with transnational companies. Sooner, this approach, which started as an ideological project, transformed the world’s economic structures and partly changed its primal objective, as it became more flexible to adjust contemporary demands.

The Primary Goal of Neo-Liberalism

For the first time, neoliberalism was created contrary to Keynesianism. When it became clear that modern global demands could not be satisfied with existing rules, the new ideology’s purpose was to fight inflation and fit itself to new justifications as time changed. When inflation declined, the fight against it renounced priority to the size of government budget spending. Which aimed to diminish public debt and gain and sustain control over inflation to serve the same purpose by creating a market–based society, which’s income and profits, would be dependent on income produced by the labor market.

How Did it Become the Dominant Economic Paradigm in the US?

Two main factors that made neoliberalism a dominant economic paradigm were globalization and industrialization. Globalization brought specialization in production and massive, global division of labor. Therefore, it created more significant markets, and as capital became more mobile, interdependence between international actors grew. Accordingly, the autarchic (self-sufficient) economic approach became obsolete and did not bring as much income as earlier. In the United States, the birth of ideology started with The Volcker Shock. Paul Walker was the chairman of the Federal Reserve Bank (FED) who tried to improve devastating economic conditions as inflation and devaluation occurred in the 70s. The bank tried to drag down the interest rate and reduce public living standards. The earliest stage of neoliberalism was painful for the American people because of growing social inequality and unemployment. That was caused by industrialization – the technological revolution, which brought human labor’s substitution with machinery, and accordingly, the growth of unemployment. When Volcker took the leading position, he found leverages to control the interest rate and diminish inflation by slowing down economic activity. First, the FED raised the interest rate (the price of credit) and made it complicated and expensive to borrow money. This action discouraged spending and encouraged saving. Correspondingly, this reduced consumer spending, and as rising interest rates made it difficult to borrow, companies diminished their investments. So, many of them went bankrupt because of the high percent charged; the high interest rate held back consumers from taking loans, which resulted in public protests as workers’ wages were decreasing, but the economy was recovering.

Who Benefits And Why?

The principle of reducing government regulation was one of the critical parts of neoliberalism; extensive deregulation of market and finance brought mobility of money and consequently instability of currencies. Thus, national businesses became concerned about their profits, which could diminish the devaluation of the local currency. National businesses were not concerned with regional marketing tips, they had better things to do. In the environment of rising monetary instability, currency trading became necessary, as traders, who were able to predict the prices of currencies, could earn enormous profits without taking any risks. Later, Western banks discovered that some developing countries were striving to borrow, while, in western countries, national businesses were discouraged from investing because of expensive loans and high-interest rates. Consequently, economies of the Global South were open for investments from developed countries. Thus, loans from the developing world became an instrument for the neoliberalizing developing South. In sum, neoliberalism has shown some practical ways to fight inflation and earn profits. However, unequally distributed income remains an issue, as lower-class workers receive drastically fewer benefits than owners of businesses or bankers.

The exact purpose of creating a market–based society, whose income and profits, would be dependent on income produced by the labor market.

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