An early use of the term in English was in 1898 by the French economist Charles Gide to describe the economic beliefs of the Italian economist Maffeo Pantaleoni, with the term "néo-libéralisme" previously existing in French, and the term was later used by others including the classical liberal economist Milton Friedman in a 1951 essay. In 1938 at the Colloque Walter Lippmann, the term "neoliberalism" was proposed, among other terms, and ultimately chosen to be used to describe a certain set of economic beliefs.:12–13 The colloquium defined the concept of neoliberalism as involving "the priority of the price mechanism, free enterprise, the system of competition, and a strong and impartial state".:13–14 To be "neoliberal" meant advocating a modern economic policy with state intervention.:48 Neoliberal state interventionism brought a clash with the opposing laissez-faire camp of classical liberals, like Ludwig von Mises. Most scholars in the 1950s and 1960s understood neoliberalism as referring to the social market economy and its principal economic theorists such as Eucken, Röpke, Rüstow and Müller-Armack. Although Hayek had intellectual ties to the German neoliberals, his name was only occasionally mentioned in conjunction with neoliberalism during this period due to his more pro-free market stance.
During the military rule under Augusto Pinochet (1973–1990) in Chile, opposition scholars took up the expression to describe the economic reforms implemented there and its proponents (the "Chicago Boys"). Once this new meaning was established among Spanish-speaking scholars, it diffused into the English-language study of political economy. According to one study of 148 scholarly 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 and suggests a market fundamentalism closer to the laissez-faire principles of the paleoliberals than to the ideas of those who originally 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.
Another center-left movement from modern American liberalism that used the term "neoliberalism" to describe its ideology formed in the United States in the 1970s. According to David Brooks, prominent neoliberal politicians included Al Gore and Bill Clinton of the Democratic Party of the United States. The neoliberals coalesced around two magazines, The New Republic and the Washington Monthly. The "godfather" of this version of neoliberalism was the journalist Charles Peters, who in 1983 published "A Neoliberal's Manifesto".
Elizabeth Shermer argued that the term gained popularity largely among left-leaning academics in the 1970s "to describe and decry a late twentieth-century effort by policy makers, think-tank experts, and industrialists to condemn social-democratic reforms and unapologetically implement free-market policies". Neoliberal theory argues that a free market will allow efficiency, economic growth, income distribution, and technological progress to occur. Any state intervention to encourage these phenomena will worsen economic performance.
At a base level we can say that when we make reference to 'neoliberalism', we are generally referring to the new political, economic and social arrangements within society that emphasize market relations, re-tasking the role of the state, and individual responsibility. Most scholars tend to agree that neoliberalism is broadly defined as the extension of competitive markets into all areas of life, including the economy, politics and society.
The Handbook of Neoliberalism
According to some scholars, neoliberalism is commonly used as a catchphrase and pejorative term, outpacing similar terms such as monetarism, neoconservatism, the Washington Consensus and "market reform" in much scholarly writing, The term has been criticized, particularly by those who often advocate for policies characterized as neoliberal.:74 Historian Daniel Stedman Jones says the term "is too often used as a catch-all shorthand for the horrors associated with globalization and recurring financial crises".:2 The Handbook of Neoliberalism posits that the term has "become a means of identifying a seemingly ubiquitous set of market-oriented policies as being largely responsible for a wide range of social, political, ecological and economic problems". Yet the handbook argues to view the term as merely a pejorative or "radical political slogan" is to "reduce its capacity as an analytic frame. If neoliberalism is to serve as a way of understanding the transformation of society over the last few decades then the concept is in need of unpacking". Currently, neoliberalism is most commonly used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing state influence on the economy, especially through privatization and austerity. Other scholars note that neoliberalism is associated with the economic policies introduced by Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States.
There are several distinct usages of the term that can be identified:
Sociologists Fred L. Block and Margaret R. Somers claim there is a dispute over what to call the influence of free market ideas which have been used to justify the retrenchment of New Deal programs and policies over the last thirty years: neoliberalism, laissez-faire or "free market ideology". Others such as Susan Braedley and Med Luxton assert that neoliberalism is a political philosophy which seeks to "liberate" the processes of capital accumulation. In contrast, Frances Fox Piven sees neoliberalism as essentially hyper-capitalism. However, Robert W. McChesney, while defining it as "capitalism with the gloves off", goes on to assert that the term is largely unknown by the general public, particularly in the United States.:7–8 Lester Spence uses the term to critique trends in Black politics, defining neoliberalism as "the general idea that society works best when the people and the institutions within it work or are shaped to work according to market principles". According to Philip Mirowski, neoliberalism views the market as the greatest information processor superior to any human being. It is hence considered as the arbiter of truth. Neoliberalism is distinct from liberalism insofar as it does not advocate laissez-faire economic policy but instead is highly constructivist and advocates a strong state to bring about market-like reforms in every aspect of society.