An economic and political ideology at the centre of which are two propositions: that governments should not seek to intervene in the economy, because the market is an efficient and effective mechanism if left to its own devices; and that individuals should be responsible for themselves and run their own lives, though most variants of the ideology accept that there is a role for the state as a ‘safety-net’, providing a level of subsistence support when someone reaches the poverty line. Liberalism (in this sense, not in the sense of philosophical values of tolerance and acceptance) had its origins in the laissez-faire economics of early capitalism in the nineteenth century. It continued to be the dominant ideology until the establishment of the post-war welfare state. Thereafter, the welfare state took on the role of modifying the impact of market forces through the provision of a range of benefits and services ‘from the cradle to the grave’. In so doing, it was seen as a means of attempting to stabilize capitalism and regulate, at least to some extent, its impact on people’s lives (see democratic-welfare-capitalism).
Accordingly, the private commercial context of the market and the public service context of the state were seen as analytically distinct. This distinction between the operation of the market on the one hand, and the welfare state on the other rested on social democratic ideas that enjoyed a broad measure of support across the parliamentary political spectrum, often referred to as the ‘post-war consensus’. At the heart of the consensus was the idea that citizens had collective obligations for each other’s welfare through the agency of the state, as a corrective to life chances based purely on market-based outcomes. Such was the level of support for these social democratic ideas that they became a ‘common-sense’ way of thinking and some commentators referred to them as representing the ‘end of ideology’.
However, when the first Thatcher government came to power in 1979, influenced by New Right ideas emerging from think-tanks such as the Institute of Economic Affairs, there was a resurgence of interest in liberalism and how it could be revised and revamped in a different economic, social, and political context from that of the nineteenth century; hence neo-liberalism, whose core elements of market freedom and the sovereignty of the individual were entirely consistent with those of nineteenth-century liberalism. The Conservative (1979–97), New Labour (1997–2010), Conservative–Liberal Democrat Coalition (2010–15) and Conservative (2015–) governments have all espoused variants of neo-liberalism, and it has long replaced social democratic ideas as the parliamentary political consensus, usually presented as being non-political and simply the ‘truth’. In addition to extolling the virtues of the market and the private sector as dynamic, innovative, and responsive, neo-liberal ideas have been applied to public services, which have been enjoined to model themselves on the private sector. They have been brought as close to market conditions as possible through the use of privatization and quasi-markets. For example, in social work this involved many local authorities ‘floating off’ residential care for older people and there are quasi-markets in areas of provision as diverse as community care services for adults and fostering services for children. More generally, public sector organizations, including social work, have been under pressure to change and become like private sector organizations and this has resulted in managerialism being widely advocated and adopted.
Neo-liberalism has had an impact around the world first through its status as the orthodoxy of international economic bodies such as the International Monetary Fund and the World Bank, which have applied neo-liberal prescriptions to developing countries, and secondly, it has developed in tandem with globalization, under the impact of which economic power has been denationalized and diffused. In the global context, the more a national government is attached to neo-liberal ideas, or coerced by them, the more primacy will be given to placing the country advantageously in relation to global economic forces, creating the conditions for international competitiveness by lowering trade barriers, opening up its national economy to multi-national companies, and encouraging mobility of capital, investment, and production processes. The leanness and efficiency of the public sector is seen as an important element in national competitiveness and the changes in welfare regimes that result have an important bearing on how social work develops and the roles it plays. The financial crash of 2007–8 did not lead to a questioning of neo-liberalism in official policy but to its even more enthusiastic embrace as a solution to problems stemming from the crash and advocacy of austerity policies that have impacted on social work. See also business orientation; new public management.