Neo-liberalism refers primarily to ideas associated with economic liberalism. These include extensive economic liberalisation policies such as privatisation, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy. Neo-liberals make the argument that economic freedom, while itself an extremely important component of total freedom, is also a necessary condition for political freedom, and that centralised control of economic activities is always accompanied with political repression.
The term neo-liberal tends to refer to theories which have diverged from the more laissez faire doctrine of classical liberalism and which promote instead a market economy under the guidance and rules of a strong state. Most neo-liberal theory argues that a free market will promote efficiency, economic growth, income distribution, and technological progress. Any state intervention to encourage these phenomena will worsen economic performance.