Versions of neoliberalism
The ascendance of neoliberalism in the global political economy from the 1970s was articulated directly as a challenge to the principles of Keynesian economic management, which in Europe had constituted the prevalent mode of development over the post-war period. Given the absence of comparable welfare state structures in Latin America, neoliberalism was articulated there in opposition to inward-looking development strategies and indeed as a response to the perceived exhaustion of the post-war ISI model. The neoliberal analysis of both Keynesianism and ISI, however, was much the same: it viewed the expansion of state intervention in the economy, in each case oriented to the goals of full employment and economic growth, as the root cause of problems with inflation and political management which, again in both cases, centred on the militancy of trade unions. In the Latin American context, it was argued that the corporatist legacy of the ‘hyper-politicised’ state both heightened political dislocations and complicated effective economic management. For these reasons, foundational neoliberal thinkers such as Milton Friedman saw limited government as essential for the preservation of public order and the protection of private contracts, as well as for the promotion of competitive markets and viable economic development (Friedman 1962). The substance of the new neoliberal thinking thus rested centrally on the prioritisation of capital as money over capital as production (Gamble 2001:131), with the range of associated strategies enabling a disengagement of the state and capital from their roles in the European Keynesian welfare state model and the Latin American inward-looking industrialisation model.