The result is the emergence of a new social order, based upon the free market and private interests, as opposed to State intervention. (Dumenil and Levy, 2000).During the decades after the IInd World War, Keynesian economic principles characterized development. The developed nations such as the USA, Canada, Europe and Japan demonstrated high rates of economic growth, technological development, purchasing power parity, employment and the development of a welfare system (Dumenil and Levy, 2000). But the changing world scenario has also changed the face of development. Neo-liberal policies have pushed the world towards globalization, privatization and large-scale elimination of all trade barriers. Markets have integrated and the philosophy of capitalism is spreading across the globe, even reaching out to once die-hard Communist Eastern-bloc states. The direct impact of such changes on development has been the gradual elimination of the welfare state.The neo-liberal counterrevolution is a phenomenon whereby the developed countries of the West have capitalized on the fall of Communism and the expanding role of the media to promote privatization, entrepreneurship and the propagation of the free market across the globe. (Herman, 2006) This has produced a gradual dismantling of the welfare state and a move towards laissez-faire, capitalistic world economy.This trend towards neoliberalism has had a significant impact on development. The most significant of these is the spread of the capitalistic philosophy across the globe. As opposed to capitalism, which promotes free enterprise and a free market, communism relies heavily on State intervention and has been on the decline. Another major outcome of the neo-liberal counter-revolution is the change in Government policy, so support entrepreneurial activity, while gradually reducing its own role in its social contract with its citizens.
The Neoliberal Counterrevolution and its Impact on the Development