1. Neo-liberalism prioritizes private property rights, free markets, and free trade and argues this maximizes human well-being. 2. Under neo-liberalism, the role of the state is limited to maintaining institutional frameworks that support private markets. The state provides services only where markets don't exist. 3. Critics argue neo-liberalism has increased inequality and poverty. It has constrained fiscal and monetary policies and reduced government services, disproportionately impacting the poor.

1. GOVERNMENT BUSINESS RELATIONS
GOVERNMENT BUSINESS RELATIONSNeo-liberalism is a theory of political economic
practices that propose that human well-being can best be advanced by liberating individual
entrepreneurial freedoms and skills within an institutional framework characterized by
strong private property rights, free markets, and free trade (Saad-Filho and Johnston 2005,
p. 85). The mandate of a country or state is to ensure that there is development and
management of institutional frameworks that enhances these practices in the economy. The
state has to guarantee, for example, the quality and integrity of money. The government
should also initiate legal frameworks, police departments, defence mechanisms, and
military structure with an aim of securing the rights of private property, and enhancing the
functioning of the markets. In the case where there are no markets—
for instance in social
security, health care, and education sector—
the state should create if they deem necessary
(Ong 2006, p.3). However, when the state is required to perform initiatives beyond this
limit, it should avoid the initiative. The government should ensure that it reduces the cost
outlay attributed to financing some of the public operations. In this essay, the focus is on the
global economic problems that have been caused by neo-liberalism in which the society is
currently experiencing.Neo-liberalism made the private sector to implement decisions that
would guide the market trends in the economy, which led to diverse problems in the sector.
As the economic factors shifted to private sector, the public had no mandate to regulate the
operations in the economy. Some of the basic commodities that were pre-supposed to be
public amenities were privatized. However, in the case of infrastructure, education, health
and social welfare, the budget allocation was reduced significantly. The poor continued with
their poverty level, while the rich benefited from huge budget allocations on their private
enterprises and business initiatives. The security of the society is crucial in enhancing
economic growth and development. The government need to foster on the need to increase
the budget allocation for these basic initiatives (Petras and Veltmeyer 2013,
p.242).Reducing the budget for the security and defence sector hampers economic stability
of the country. Investors are willing to invest in economies where they are assured of
security of their investment by the government in power. When the government is profit
oriented, as stipulated by the neo-liberalism theory, the focus will be on profit-making
initiatives, and budget allocation will only be undertaken on the most profitable operations.
In the case where an economy is ruled by market forces, there is always less incentives
directed to individual citizens. For instance, stock markets and powerful organizations have
been prioritized than an individual citizen when financial allocation is undertaken. In the

2. economy, such trend is depicted by the intensity of growth in the electronic sector, and, at
the same time, increase in poverty level. It means that the poor people are paying the prices
of neo-liberalism.However, the most discouraging aspect of neo-liberalism is the inequities
in the allocation of resources among the middle class and the poor. The society tends to
believe that the system is the only realistic economic system, and there cannot be other
alternatives to replace neo-liberalism (Bell Lara and Dello Buono 2007, p. 362). This has led
to fewer people in the society accumulating wealth, and majority of individuals are poor.
The politicians are considered to be the beneficiaries of this form of system. They provide
information to the general public on the significance of the neo-liberalism system little do
they know the severe economic implications associated with such a system. The leading
elite have failed to consider the need of conserving the environment, and maximizing on the
resources available in regions considered to be poor. Individualism has been the main trait
of neo-liberalism, and it has been prompted by the need to meet selfish needs in the society.
The inequality in the society is also manifested in the social environment.According to
Colclough (2008, p.78) the social security is not reliable and the society has ended paying
for the basic services that would be; otherwise, offered for free in the society. There has
been the loss of initiative in the economy which will bring about the change required. The
society has been corrupted and individuals are focused on their selfish interest. There is no
one left who could challenge the idea of schools being run as profit-making organizations.
The hospitals are mandated to offer services at prices that are outlined by the
pharmaceutical organization, and the medication should be accessible by the citizens. With
the disappearance of welfare state, the society is vulnerable to exploitation by private
institutions (Cameron and North 2003, p. 25). Neo-liberalism system ensured that public
agencies are no longer functioning, which gives them the mandate to undertake any
decision or action without public scrutiny.Furthermore, neo-liberalization has necessitated
monetary and fiscal constraints (Rowden 2009, p. 42). The economy depends on the
monetary polices in regulating market operations across the globe. The supply of money
should be maintained in the economy, as this will prove vital in mitigating inflationary
activities. One way is for the government to purchase the government bonds, in the case
where the money supply have reduced, increasing the amount of money in circulation. In
free markets or neoliberalization, the markets determine the amount of money that is in
circulation in the economy. The buying of government bonds also known as open market
operations, in Federal System, gives the central mandate to purchase these government
bonds or sells them in case of high money supply in the economy.Other monetary policies
that are constrained by neoliberalization include interest rates charged between banks.
Banks tend to determine the amount of money that is in circulation, and moderating the
demand of money in the economy requires the banks to either increase of decrease the
interest rates charged. In the case of neo-liberalization, the economy will be affected by
inflation as there is no clear procedure or initiative that mitigates the inflation level in the
economy.The economy should be balanced, and the government should play a part in
regulating the activities in the market; as this will mitigate the inflation that is evidenced
from the operations of neo-liberalization. When the lending rate is regulated and certain
interest rates are charged when giving out loans to the consumers, the banks will minimize

3. a situation where high money supply in the economy or high demand of money
characterizes the economy. Neo-liberalization does not give the government an opportunity
to balance the economy as it is restrained from moderating the interest level in the
economy (Leitner et al. 2007, p.319). A balanced economy enhances equity in the
operations across the economy and the resources can be distributed to the various classes
of people without discrimination. The gap between the poor and the rich is reduced when
development initiatives and operations are implemented within the system. Inflation has
been the main problem that the economy has faced; depicted by the recent 2007 economic
crisis that was felt across the globe. It is imperative for the government to consider the
implications of inflation on the citizen’ s access of basic amenities such as education and
health services.In addition, unemployment rate has increased due to limited access to job
opportunities by the poor population. Generally, the employment capabilities in the society
depend on the economic growth and development that is imminent in the economy. Neo-
liberalization is known for its inability to increase economic growth, and the success of the
operations in the economy. Where the government increases its operations and enhance
economic growth initiatives, unemployment rate would be significantly reduced. Focusing
on the public needs in the economy is crucial in necessitating increased economic growth.
In Sub-Saharan Africa and parts of Asia, people are languishing in poverty, and it is
attributed to the poor governance in the system that is in operation (Ferguson 2006, p. 25).
The poor should be given the opportunity to access education. When neo-liberalization
increases the cost of education, the poor cannot have access to proper education; hence
they cannot secure formal employment.The poverty trend in the economies that embraces
neo-liberalization is quite alarming, and the trend is expected to continue in the future, if
the government cannot reduce the cost of providing its services. Market interventions have
been deregulated prevented the accessibility of critical and vital services by the poor
individuals in the economy (Ferguson 2008, p. 22). Indeed, freeing up of trade increases the
extent of privatization, which has an effect on the provision of social amenities in the
economy. Privatizing some of the public amenities can not only increase the operability in
the economy, but it will jeopardize the functioning of other government initiatives.In
conclusion, three decades after the end of World War II, the economy has experienced
tremendous changes, which either increases or reduces the economic growth and
development. Neo-liberalism, being one of the initiatives in the economy, has brought about
numerous problems that can be mitigated if the system is ignored. As the economic factors
have shifted from the public sector to private individuals, most of the basic needs and
amenities are accessed at a cost. Other problems that are realized from neoliberalization
include constraints in fiscal and monetary policies, deregulation of the labour market, and
inequality in resource allocation.ReferencesBELL LARA, J., & DELLO BUONO, R. A., 2007.
Imperialism, neoliberalism and social struggles in Latin America. Leiden [u.a.]:
Brill.CAMERON, J. D., & NORTH, L. L., 2003. Rural progress, rural decay: neoliberal
adjustment policies and local initiatives. Bloomfield, Conn: Kumarian Press.COLCLOUGH, C.,
2008. States or markets?: neo-liberalism and the development policy debate. Oxford:
Clarendon Press.FERGUSON, I., 2008. Reclaiming social work challenging neo-liberalism and
promoting social justice. London, UK: Sage Publications.FERGUSON, J., 2006. Global

4. shadows: Africa in the neoliberal world order. Durham, N.C. [u.a.]: Duke University
Press.LEITNER, H., PECK, J., & SHEPPARD, E. S., 2007. Contesting neoliberalism: urban
frontiers. New York: Guilford Press.ONG, A., 2006. Neoliberalism as exception: mutations in
citizenship and sovereignty. Durham: Duke University Press.PETRAS, J. & VELTMEYER, H.,
2013. Beyond Neoliberalism: A world Win, London: Ashgate Publishing, Ltd.ROWDEN, R.,
2009. The deadly ideas of neoliberalism: how the IMF has undermined public health and the
fight against AIDS. London, Zed Books.SAAD-FILHO, A., & JOHNSTON, D., 2005.
Neoliberalism: a critical reader. London, Pluto Press.