What’s the Difference Between Liberalism and “Neoliberalism”?

These two words are a constant source of confusion. Most people who criticise liberal ideas are usually doing so for neoliberal..

Ryan McMaken of Mises Institute explains:

As editor, I have published more than one article here that makes distinctions between the liberalism of the Austrian school and the so-called neoliberals. Philipp Bagus’s review essay, “Why Austrians Are Not Neoliberals” explains many of these distinctions in detail. In another article, Guido Hülsmann describes Ludwig von Mises’s own battle against an early group of neoliberals at the Mont Pelerin Society. In Mises’s eyes, these neoliberals were relatively liberal — compared to doctrinaire socialists — but were interventionists who favored central banking and the bureaucratic, regulatory state. Then as now, the central problem with the neoliberals revolved around their blithe attitude toward inherently anti-market central banks and government-created money. 

To those of us who keep up with the details of the marketplace in liberal ideas, these distinctions are readily apparent. 

To anti-liberal leftists looking in from the outside, however, Austrians, Chicagoans, and neo-classicals all probably look like pretty much the same thing. These “neoliberals” all say nice things about markets and free trade, so they all must agree with those neoliberals at the International Monetary Fund. Or so it is assumed. After all, don’t we hear from the IMF about the importance of free trade and balanced budgets and limiting government spending? The fact that the IMF supports central banking, bank bailouts, and corporatist deals for the politically-connected is lost on those who only see the IMF’s ostensible support for markets. The anti-liberals then lump together IMF President Christine Lagarde and Ludwig von Mises

In the UK, for example, it’s easy to find articles that equate neoliberalism with the alleged free-market policies of Ronald Reagan and Margaret Thatcher. In this article at The Guardian, for example, George Monbiot views Thatcherism and Reaganism as the vanguards of a supposed hard-core free-market hegemony we groan under today. 

Blame it on near wash out of history of economic thought from economics curriculum across the world. All schools and thoughts look similar…

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