Globalization broadly refers to the global integration of economies and global expansion of trade,capital and investment .
The main mantras of neo-liberalism are privatization, liberalization, deregulation withdrawal of welfare polices(social spending).
Neo-liberalism was introduced in Britain during Margaret Thatcher based on the philosophy of TINA(There is No Alternative) .She argued that the welfare state modal would fail since governments will ultimately run out of other peoples money.
Neo-liberal scholars such as Hayek, Robert Nozick and Milton Freeman concluded that the market was God and wanted a limited state. They believed in the hidden hand of market which would restore equilibrium without any state interventions.
During Regan’s presidency, US also incorporated these observation and favored the market to decide on all areas from wages to social security.
Gradually neo- liberalism has become a hegemonic idea and found its way into global intuitions and other nations.
The Benetton Woods Institutions ( IMF and WB ) have been at the forefront of globalization efforts. Globalization in the form of neo-liberalism reached Europe in the form of Shock Therapy and Third world countries as structural reforms.
Shock therapy refers to the deregulation and decontrol of prices, quotas and allowing the market forces to drive the economy. Further impetus was given to globalization by the disintegration of Soviet Union. It projected the failure of socialism as an alternative.
Structural Adjustment policies (SAP) were the conditional terms imposed by the IMF and World Bank on countries for subsidised loans and bail out packages during crisis. There SAP’s were in favor of reduction in fiscal deficit and favored privatisation . Increasingly Nation states have been co- pted into this modal of growth and development.
A study by World Bank scholars concluded the rise in per capita income has increased thrice more in the nations that have been integrated in comparison to the ones that have not.
The World Trade Organization symbolizes the zenith of globalisation. WTO has laid down the rules and regulations for global trade. Most of them are dictated by neo-liberal conception of economy. Nations have managed to develop alliances and India got a “peace clause” negotiated to protect its food security scheme.
Even nations have increasingly adopted this model of growth. The current government has explicitly stated “minimum government, maximum government” as its goal. The push for disinvestment of public sector undertaking and Labour reform have all been guided with this vision. The government has taken significant steps to improve India’s ranking in Ease of Doing Business index.
Yet, India has not abandoned its goal of welfare. Social security schemes and poverty alleviation program are also being implemented. Scholars such as Amartya Sen and Joseph Stilgitz have called for a course correction in globalization. Though they favor integration, they have called for globalization with a human face . Such an approach would provide for the safety net for unbearable sections. There has been a recognition of Post Washington Consensus and steps are being taken to achieve them. These developments intend to take globalisation beyond it's neo liberal agenda.
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