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Neoliberalism can be defined as the revival of predominant ideas of 19th centuries in the modern economics. The economic liberation of mid 1900s were the driving force behind the paradigm shift in the economy from Keynesian consensus towards financialization. These ideas based on neoliberal theories and conception have been incorporated into application, like the privatization of a number of stale services, domestic or international deregulation of business to attain free mobility of capital and lastly the fiscal austerity.
Social democracy is the transition from unsustainable growth to the establishment of justice, security and sustainability. The very first ideology that deserves recognition in the realm of social democracy is the Third way and Neue Mitte approach that garnered electoral success in the past. The global social movements with resource redistribution at heart deserve the second place in the discussion for being a remarkable approach backed by the ideas of social democracy. Lastly the ideas that facilitate collaborative reorganizing the production system of the society towards the ultimate goal of sustainability can be the third idea that has roots embedded deep within the concept of social democracy.
The debacle of contradictory ideas of Maynard Keyne and Friedrich Hayek originated years ago, but the flames of the fire is still very much lit. Undoubtedly both were remarkable thinkers, but both had different takes on the economy. According to Keyne, macroeconomic system is vulnerable to demands oriented declines and micro-adjustments are incapable of tackling the downfall and restoring the prosperity of the economy. On the other hand, the ideas of Hayek is much more optimistic, he believed the economy to be capable of self-correction incorporating competitive defenses to restore market prosperity.
An Australian policy based on neoliberal approach is the mandatory superannuation guaranty system established in 1992, in order to encourage national savings. The Australian policy based on the ides of social democracy can be the labourist protectionist policy in place from early 20th century that centralizes societal equal redistribution and justice among all socioeconomic classes.
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