Liberalization is a term in political economy that refers to the reduction of barriers to trade like price controls, tariffs, taxes, and quotas. It does not mean “liberal” in the sense of left-wing or left-center political positions. The inverse of liberalization is a protected economy, wherein prices are not controlled by the “invisible hand” of the free market but rather set by a government or market authority. Liberalization is core policy prescription of neoliberal economics. In a mixed economy, which exists in most of the world, some markets are liberalized while others are protected. 

For instance, in the United States, core commodities like grains and dairy are protected with import quotas and subsidies so that the country can ensure a cheap and stable supply of food. However, many other goods and services in the US are traded in liberalized free markets that do not benefit from price controls or protections. A tenet of neoliberalism as articulated by Milton Friedman is that all markets should be liberalized so that “distortions and bad patterns” (50) in the economy can be cleared away.