When and how the ideas of classical liberalism mutated into a modern, repressive market fundamentalism

Inflation and economic growth in the light of public spending, monetary aggregates and unemployment. Comparative analysis: 69 countries, 2000-12

Scientific Study 2013 4 Pages

Economics - Finance


Prof. dr Stanko Radmilovic

When and how the ideas of classical liberalism mutated into a modern, repressive the market fundamentalism

Inflation, economic growth, in the light of public spending, monetary aggregates and unemployment - Comparative factography with brief preliminary potentiation - 69 countries, 2000-12

We could say that the lower factography are specifically aimed to the performance analysis of the neoliberal doctrine of market fundamentalism: research the economic performance of those countries that the strictly applied, those who are forced to do so and those that implement various heterodox modality.

It will be useful, even necessary to present the to readers a few quotes / views from the emphasis on the what's in them have an impact on the determination to formulate preliminarnie reviews and makes suggestions more complete, deeper analysis.

Let us start with a quote that, I believe, best expresses the idea, the root from which sprang the doctrine of market fundamentalism in the applied sense. Quote dates from a later period of time when Hayek and others affirmed the concept and theory of economic liberalism embodied in the famous phrase Laissez faire et laissez passer..

Perhaps to the surprise of many, I have in mind a much less "overhyped" views of Milton Friedman. Why the Surprise? Well, because he is better known as the creator of monetarism, "Chicago School" monetarist counter-revolution against the "Keynesian revolution". In fact, strengthens the idea that Kenes views about money has implicaton Which are proinflation.

But here I think of a much broader and far-reaching issues that can be seen from the following quote (emphasis is mine):

"Different types of structural disorder and inelasticities may come into play and prevent the achievement of the long-term hypothetical position of equilibrium under conditions of full employment ; dynamic changes in technology, resources, and social and economic institutions can continually change the characteristics of the equilibrium position, however, there is any fundamental 'deficiency in price system' that caused unemployment to be a natural consequence of an efficient market mechanism. This (Keynes, ed. RS) setting has played a significant role in recruiting many economists to Keynesianism, particularly the large number of reformers, social critics and radicals were convinced that there is something fundamentally wrong in the capitalist 'system' ... "

Milton Friedman, Teorija novca i monetarna politika, prevod, Beograd, 1973, str. 161. i 162.

The same opinion on Friedman's impact on the market-fundamentalist views expressed and Nobel laureate Stiglitz. He says "that Friedman and his followers contributed to the causes of the current turmoil," The Chicago School bears the responsibility for intellectual grounding a notion that markets are capable to self-regulation", which we presented in a short article on this site Kraj dominacije monetarizma?

These are, no doubt, the premise on which the aforementioned market fundamentalism. It goes without saying that the above premises on to price mechanism - the market system without fundamental shortcomings had to be the best in most developed countries. And this would be the country in terms of inflation, economic growth and unemployment, they had to show the best performance. And if that is the case, then it would have to be clearly visible (from factography in the table below) that accrues to non-market disturbances coming from the fiscal and monetary areas.


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University of Novi Sad
Radmilovic classical liberalism mutated a modern repressive the market fundamentalism Inflation economic growth public spending monetary aggregates unemployment rate



Title: When and how the ideas of classical liberalism mutated into a modern, repressive market fundamentalism