Neoliberalism is a set of economic policies that have become widespread during the last 25 years or so. It is described in theory as a mechanism that allows global trading and that would see all nations prospering and developing fairly and equitably.

Neoliberalism is the liberation of free enterprise from any binding restrictions that the state has imposed. Neoliberalism allows greater openness to international trade and investment. Neoliberalism is practically total freedom of movement for capital, goods, and services in an unregulated market. It reduces government regulation of everything that could diminish profits and reduces the social safety net for the poor in order to cut down the role of government in daily life. It is about freer movement of goods, resources and enterprises in a bid to always find cheaper resources, to maximize profits and efficiency. The goal of neoliberalism is to allow the free market to naturally balance itself through the pressures of market demands. This is a key concept to successful market-based economies.
Neoliberalism gets rid of several things before it can provide a free market. It deregulates, privatizes, de-unionizes, gets rid of tariffs, goes from ideas of public goods to individualism, and reduces the public expenditures fro social services by the government in order to have less governmental participation. The underlying assumption then is that the free markets are a good thing. They may well be, but unfortunately, reality seems different from theory. Neoliberal reforms, all in all, have not produced self-sustained growth, a more equitable income distribution, or a fair society. Latin American neoliberalism has also cost the loss of confidence in democracy.

Neoliberalism was doomed to fail in several Latin American countries because of the inequality that it began with. The more powerful countries have been pushing for various policies imply that the globalization process is a repeat of mercantilist processes seen throughout Latin American history. Products are being exported from the poorer countries however, with labor being paid less than their fair wages in the poorer nations; wealth is still accumulated by the richer nations. So while it might appear that free trade is taking place, the wealth that is accumulated by the richer and suggests that old mercantilism processes are being played over again. Globalization and neoliberalism are increasing the financial risks of developing countries. Free trade was really only helping those who owned and could trade. Land owners and elites encouraged free trade, of course, and convinced the poor that it was the right answer. Democracy was unable to flourish in a hierarchical society where only a small percent of the population was in control. As a result the rich became richer and the poor, poorer.

Success is hard to evaluate in these neoliberal cases. We have no idea of knowing where they would be had they not adopted neoliberalism. It is too hard to model whether or not countries, in fact, are better off since there is no way to counter fact. There were problems of inequality throughout Latin America before neoliberalism was instituted, so there is no real way to peg neoliberalism as the real reason for failure. Argentina had a faulty institutional structure before neoliberalism was even implemented into the system.

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