Why do people say that neoliberalism has made capital flight easier?

It’s simple really. Neoliberal agendas have created the following circumstances in developing countries (as an openly expressed matter of neoliberal policy):

1. Increasing capital movement within a global environment, and thus increasing opportunities for capital flight (out of a developing country).

2. Privatization of public resources and economic liberalization in general - frequently transferring ownership to foreign corporations, as well as reducing controls and oversight of industry, thus enabling additional avenues of capital flight.

3. Excessive concentrations of wealth - especially in a few very large corporations or opportunistic individuals, which in turn makes it fairly easy for large chunks of capital to exit a given country.

4. Economic instability - ultimately, the greater the economic liberalization, the greater the tendency for extreme boom-and-bust cycles; during a localized bust, all the capital that has been accumulated by the wealthiest elite is going to look for safer, more lucrative opportunities…usually outside of the country.

As an example, if you look at how the IMF and World Bank have manipulated developing countries, the structural adjustment policies (which are all-too-often transparently neoliberal in nature) engineer the perfect environment for capital flight. It’s a travesty.

The neoliberal promise has always been: let free markets make you rich! Well, those unfettered markets actually only benefit the folks who started out with the largest chunks of capital - or who quickly obtain it, often illicitly - at the expense of everyone and everything else.

My 2 cents.

(From Quora question: https://www.quora.com/Why-do-people-say-that-neoliberalism-has-made-capital-flight-easier/answer/T-Collins-Logan)


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