Neoliberalism is a late-20th-century economic philosophy, dominant in Europe after the 1970s, that favors free markets, privatization, and deregulation over state-led economic management. In AP Euro it appears in Topic 9.13 as a driver of globalization and the rollback of the postwar welfare state.
Neoliberalism is the idea that markets, not governments, should run the economy. It calls for privatizing state-owned industries, deregulating business, cutting taxes and welfare spending, and letting competition and individual entrepreneurship drive growth. The "neo" matters. It's a revival of older laissez-faire liberal economics, repackaged for the late 20th century.
In AP Euro, neoliberalism shows up as the big turn of the 1970s and 1980s. The economic crises of the 1970s (oil shocks, stagflation, slow growth) made the postwar model of state-managed, welfare-heavy economies look broken. Leaders like Margaret Thatcher in Britain responded by selling off nationalized industries, weakening unions, and shrinking the state's role in the economy. After 1989, post-communist Eastern Europe went through its own crash course in neoliberalism, privatizing entire command economies. These policies fed directly into the accelerating globalization covered in Topic 9.13.
Neoliberalism lives in Unit 9 (Cold War and Contemporary Europe), specifically Topic 9.13 on globalization, supporting learning objective 9.13.A on the causes and consequences of increasing European globalization from 1914 to the present. It's the economic engine behind that story. Free-market policies, paired with new communication and transportation technologies (KC-4.4.I.D), multiplied connections across borders and integrated Europe into global markets. It also gives you the backlash side of the topic, since Green parties challenged consumerism and cautioned against globalization by the late 20th century (KC-4.4.III.A). For essays, neoliberalism is your go-to evidence for change over time in European governments' role in the economy, which is exactly what the 2017 LEQ asked about.
Keep studying AP Euro Unit 9
Globalization (Unit 9)
Neoliberalism is the policy side of globalization. Deregulated markets and privatized industries opened Europe to global trade and investment, while new technologies like the internet and cell phones supplied the connections. Topic 9.13 expects you to see both working together.
Margaret Thatcher (Unit 9)
Thatcher is the face of European neoliberalism. Her government privatized British industries, cut welfare spending, and curbed union power in the 1980s. If an essay asks for a specific example of neoliberal policy, she's your safest pick.
Eastern Europe after 1989 (Unit 9)
When communism collapsed, former Soviet-bloc states rapidly privatized their command economies. That transition, often called "shock therapy," is neoliberalism applied at maximum speed, and it makes a great comparison point with Western Europe's slower shift.
19th-century laissez-faire liberalism (Unit 6)
Neoliberalism deliberately revived the free-market ideas of classical liberals like Adam Smith. Spotting that echo lets you build continuity arguments across periods, since Europe swung from laissez-faire to state intervention and partway back again.
Neoliberalism is most useful as essay evidence. The 2017 LEQ asked you to describe and explain a significant similarity and difference in European governments' role in the economy across periods, and neoliberalism is the textbook answer for the late-20th-century shift away from state intervention. Use it to argue change (from postwar welfare states to Thatcher-era privatization and deregulation) or continuity (a return to older laissez-faire principles). In multiple choice, expect it in stems about 1970s economic crises, Thatcher's Britain, post-1989 Eastern European transitions, or globalization debates. The move that earns points is connecting the policy (privatization, deregulation) to its cause (the perceived failure of state-led economies in the 1970s) and its consequence (accelerated globalization and a Green-party backlash).
Both favor free markets and limited government, but they belong to different centuries and answer different problems. Classical liberalism (Units 5-6) was the original 19th-century package of laissez-faire economics plus political rights like constitutions and suffrage. Neoliberalism (Unit 9) is narrowly economic. It emerged in the 1970s-80s as a reaction against the postwar welfare state, not against monarchy or mercantilism. On the exam, period matters. If the question is about the 1800s, say liberalism. If it's about Thatcher or globalization, say neoliberalism.
Neoliberalism promotes free markets, privatization, and deregulation as the path to growth, and it became dominant in Europe after the economic crises of the 1970s.
It emerged as a reaction against the postwar welfare state and state-led economies, which seemed broken after the oil shocks and stagflation of the 1970s.
Margaret Thatcher's Britain is the classic AP Euro example, with privatized industries, weakened unions, and reduced government spending in the 1980s.
After 1989, post-communist Eastern Europe applied neoliberal policies rapidly by privatizing former command economies.
Neoliberalism fueled globalization in Topic 9.13, and Green parties pushed back by challenging consumerism and cautioning against global markets (KC-4.4.III.A).
For essays on governments' role in the economy, neoliberalism is your evidence for the late-20th-century swing back toward free markets, echoing 19th-century laissez-faire ideas.
Neoliberalism is the late-20th-century economic philosophy favoring free markets, privatization, and deregulation over government management of the economy. It appears in Unit 9, Topic 9.13, as a major force behind European globalization after the 1970s.
No. Classical liberalism is a 19th-century ideology combining free-market economics with political rights like constitutions and suffrage. Neoliberalism is a 1970s-80s revival of just the economic half, aimed at dismantling the postwar welfare state, not old-regime monarchies.
The 1970s brought oil shocks, stagflation, and slowing growth, which made state-led economies and expensive welfare states look like failures. Leaders like Margaret Thatcher responded with privatization, deregulation, and spending cuts.
No. Neoliberal governments cut and privatized parts of the welfare state, but most European countries kept core programs like national health systems. The shift was a rollback of state economic intervention, not its elimination, which makes it good continuity-and-change evidence.
Neoliberal policies like deregulation and free trade opened European economies to global markets, while new communication technologies multiplied cross-border connections (KC-4.4.I.D). Together they drive the globalization story in Topic 9.13, along with the Green-party backlash against it.
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