Neoliberalism: The Origins and Socioeconomic Impacts

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This essay will discuss Mexico’s transition to neoliberalism. This economic change includes the economic climate that lead up to the shift to neoliberalism, a background of neoliberal policy, and the economic and social impacts that it had. By exploring the origins of neoliberalism in Mexico and the reasoning for its implementation, a more thorough view of political and socio-economic patterns can be had. Furthermore, the discussion of neoliberalism provides insight to the inequality and large income gaps existent among the population as well as the immense effects had on such industries as agriculture and the political implications displayed by said effects. Neoliberalism is an economic approach that promotes a laissez-faire model of trade (Edmonds-Poli & Shirk, 253). This economic model, widely supported by many Western economists, is based on three main principles: stabilization, structural adjustment, and trade liberalization. (Edmonds-Poli & Shirk, 254) Neoliberalism is a method to restructure the economy and the first step is to stabilize the fiscal supply. This happens through decreased government spending, leading to an overall decrease in employment, public services, and access to credit, while simultaneously increasing interest rates and the cost of imports (Edmonds-Poli & Shirk, 254). The next element of neoliberalism is structural adjustment which focuses on the shift from the public to the private sector. This shift is meant to minimize government involvement, which in turn stimulates competition in an open market economy to create a more efficient private sector (Edmonds-Poli & Shirk, 254). Finally, trade liberalization works to increase foreign investment and exports by lowering trade restrictions, such as tarif... ... middle of paper ... ...sm in democracies such as the United States, the Mexican economy seemed too vulnerable and easily controlled by foreign investors to operate in a globalized open market. Works Cited David Bacon, "Displaced People: NAFTA's Most Important Product," NACLA Report on the Americas vol. 41, no. 5 (Sept/Oct 2008): 23-27. Edmonds-Poli, Emily, and David A. Shirk. Contemporary Mexican Politics. Lanham, Maryland: Rowman&Littlefield Publishers, Inc., 2009. 100-108,252-258,276- 278,282-285. Print Elisabeth Malkin, "Nafta's Promise, Unfulfilled," New York Times, March 24, 2009. Elisabeth Malkin, "Did Nafta Actually Help Mexico?" New York Times, December 10, 2009. Hamilton, Nora. Mexico:Political, Social and Economic Evolution. New York: Oxford Press, 2011. 101-135. Print La Botz, Dan. Democracy in Mexico. Cambridge, MA: South End Press, 1995. 118-119. Print

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