Economic Liberalism: the Good, the Bad, and the Ugly

The 1980s and 1990s ushered in a wave of neoliberal reforms across Latin America. However, over time, there was great variation in the implementation and success of such economic and social programs regionally, according to a 2004 Huber and Solt article, Successes and Failures of Neoliberalism.

I was interested in exploring the findings of Huber and Solt prior to reading this article, and I was not disappointed in what they delivered. Both a critique of neoliberalist policies and an examination of certain approaches to development, Successes and Failures of Neoliberalism is a collective criticism of the vast attempts at growth following the short-lived success and subsequent failure of ISI in Latin America.

One of the concepts that Huber and Solt addressed that particularly resonated with me was the unfortunate positive relationship between liberal reforms and poverty. Those ascribing to the economic thought of Washington and much the the mainstream global North may have arrived at the conclusion that national economic liberalization leads to general prosperity. However, those countries with higher GRIs than the median were shown to have considerably higher rates of poverty than those with lower GRIs (Huber and Solt 157). In addition, according to Huber and Solt, “there is no doubt, then, that higher levels of neoliberalism and more aggressive tactics of liberalization are associated with rising inequality,” (156), bursting the bubble of belief surrounding the practical application of trickle-down economics.

Though liberal economic policies led to consistent national growth, the societal divisions and class-warfare they promoted have shown to be more detrimental in terms of greater stability. I appreciate the empirical nature of Huber and Solt’s findings, as well as their presentation of their argument as the natural conclusion to a question we’ve been pondering since the US took a liberal turn of its own.