In (Hay 2004), the author gives the following definition of neoliberalism;
Economic neoliberalism, I suggest, can be defined in terms of the following traits:
- A confidence in the market as an efficient mechanism for the allocation of scarce resources.
- A belief in the desirability of a global regime of free trade and free capital mobility.
- A belief in the desirability, all things being equal, of a limited and non-interventionist role for the state and of the state as a facilitator and custodian rather than a substitute for market mechanisms.
- A rejection of Keynesian demand-management techniques in favour of monetarism, neo-monetarism and supply-side economics.
- A commitment to the removal of those welfare benefits which might be seen to act as disincentives to market participation (in short, a subordination of the principles of social justice to those of perceived economic imperatives).
- A defence of labour-market flexibility and the promotion and nurturing of cost competitiveness.
- A confidence in the use of private finance in public projects and, more generally, in the allocative efficiency of market and quasi-market mechanisms in the provision of public goods.
In other words, the neoliberal policy paradigm puts the focus on maintaining low taxes and low and stable inflation, a reduction of the welfare state , some fiscal conservativism, active and flexible labour market policies and the importance of the state as a facilitator of private markets that shouldn’t replace them.
- Colin Hay. . "The Normalizing Role of Rationalist Assumptions in the Institutional Embedding of Neoliberalism". Economy and Society 33 (4). Routledge:500–527. DOI.