The term "neoliberalism" was originally coined in 1938 by the German scholar Alexander Rüstow at the Colloque Walter Lippmann. The colloquium defined the concept of neoliberalism as “the priority of the price mechanism, the free enterprise, the system of competition and a strong and impartial state.” To be "neoliberal" meant that – in the name of liberalism – a modern economic policy is required. Neoliberalism was not a monolithic theory. At the outset it drew on different academic approaches such as the Freiburg school, the Austrian School, the Chicago school of economics, and Lippmann's realism.
During the military rule under Augusto Pinochet (1973–90) in Chile, opposition scholars took up the expression again without a specific reference to any theoretical revision of liberalism. Rather, it described a set of political and economic reforms being implemented in Chile and imbued the term with pejorative connotations.
In the last two decades, according to the Boas and Gans-Morse study of 148 journal articles, neoliberalism is almost never defined but used in several senses to describe ideology, economic theory, development theory, or economic reform policy. It has largely become a term of condemnation employed by critics of liberalizing economic tendencies. And it now suggests a market fundamentalism closer to the laissez-faire principles of the "paleoliberals" than to the ideas of the original neoliberals who attended the colloquium. This leaves some controversy as to the precise meaning of the term and its usefulness as a descriptor in the social sciences, especially as the number of different kinds of market economies have proliferated in recent years.
According to Boas and Gans-Morse nowadays the most common use of the term neoliberalism refers to economic reform policies such as “eliminating price controls, deregulating capital markets and lowering trade barriers”, and reducing state influence on the economy especially by privatization and fiscal austerity. The term is used in several senses: as a development model it refers to the rejection of structuralist economics in favor of the Washington Consensus; as an ideology the term is used to denote a conception of freedom as an overarching social value associated with reducing state functions to those of a minimal state; and finally as an academic paradigm the term is closely related to neoclassical economic theory.
Some people believe that the term is used as a pejorative for policies that deregulate the private sector and increase its role in the economy.
Read more about this topic: Neoliberalism/Archive 1