Neoliberalism is a policy model that encompasses both politics and economics and seeks to transfer the control of economic factors from the public sector to the private sector. Many neoliberalism policies enhance the workings of free market capitalism and attempt to place limits on government spending, government regulation, and public ownership.
Neoliberalism is often associated with the leadership of Margaret Thatcher–the prime minister of the U.K. from 1979 to 1990 and leader of the Conservative Party from 1975 to 1990–and Ronald Reagan, the 40th president of the U.S. (from 1981 to 1989). More recently, neoliberalism has been associated with policies of austerity and attempts to cut government spending on social programs.
Neoliberalism is related to laissez-faire economics, a school of thought that prescribes a minimal amount of government interference into the economic issues of individuals and society. Laissez-faire economics proposes that continued economic growth will lead to technological innovation, expansion of the free market, and limited state interference.
Neoliberalism is sometimes confused with libertarianism. However, neoliberals typically advocate for more government intervention into the economy and society than libertarianism. For example, while neoliberals usually favor progressive taxation, libertarians often eschew this stance in favor of schemes like a flat tax rate for all taxpayers.
In addition, neoliberals often do not oppose measures such as bailouts of major industries, which are anathema to libertarians.