6.1d Other Important Liberal Ideas Flashcards
The Economy: Laissez-faire capitalism
Laissez-faire capitalism is the belief that competition between people, seeking their own profit, benefits all in society.
Liberals believe in a capitalist economy that has private ownership and is controlled by market forces.
A free market is one that is left to its own devices and does not have interference from the government.
Classical liberals argue that this is the most efficient way to distribute resources in the economy.
The Economy: Supply and Demand
Prices are set by the forces of supply and demand and become stable so that producers and consumers can receive and pay a fair price for their goods and services.
In the ‘Wealth of Nations’ (1776) Adam Smith argued that the ‘invisible hand’ regulates the market, meaning that there is always an efficient supply, demand, price and distribution of resources.
Classical liberals argue that a free market promotes freedom and individual responsibility - an individual is able to choose how they engage with the market.
The Economy: Keynesianism
Keynesianism is based on the ideas of the economist John Maynard Keynes and is an idea supported by modern and social liberals, rather than classical liberals.
Keynesianism is an economic theory which rejects some ideas of laissez-faire economics.
Keynesianism rejects the laissez-faire idea that the government should have no involvement in the economy, and that it can correct itself.
Instead, the government should intervene to stimulate the economy by manipulating demand.
The Economy: Keynesianism
Supporters of Keynesianism believed that the government should help the economy achieve price stability and full employment.
This government intervention in the economy helps support some liberal ideas - such as equality of opportunity (by creating full employment), and the idea of the ‘enabling state’.
Meritocracy
Meritocracy is the idea that individuals should be able to succeed in society on the basis of their ability rather than any other factor.
Individuals should succeed based on merit rather than where they were born, how much money their parents had, and other circumstances of their birth.
Individuals should have equal opportunities to succeed, so that those with the most ability are able to.
Social mobility is important, as anyone should be able to achieve great things.
Mechanistic theory
Mechanistic theory is the idea that the state is a man-made creation that individuals create to serve their interests.
Liberals believe that the state is created by individuals to protect freedom.
As a result, interactions between individuals can help determine how the state functions.
The mechanistic theory opposes the organic theory of the state.
The organic theory of the state is favoured by conservatives, who believe that the state evolves over time.
Mechanistic theory example
The social contract is an example of the mechanistic theory - individuals come together to vote for a government to make laws to uphold individual freedom.
The individuals and the government have rights and duties towards each other.
If the individuals don’t like the actions of the government they can vote it out of power - and therefore change how the state functions.
Social contract theory
The social contract is the idea that the state/society is set up with agreement from the people to respect its laws which serve to protect them.
The idea was popularised during the Enlightenment period and refers to a contract between the people and the government, based on the people’s consent (permission) to be ruled, given via their votes.
Famous theorists who wrote about the social contract include Jean Jacques Rousseau and John Locke.
Examples of social contract I
‘On the Social Contract’ by Rousseau (1762): ‘Man is born free, and everywhere he is in chains’.
At the time, people were considered subjects with no rights, rather than citizens with rights such as voting.
Rousseau wanted to find out if a social contract could be achieved, in which citizens had the same rights as one another, had freedoms and in return accepted government and security.
This is the foundation of modern liberal democracy and influenced the French Revolution (1789) and the American War of Independence (1776).
Examples of social contract II
Any election in which people vote (such as general elections, local, European etc) strengthens the idea of the social contract as people are voting for representatives to govern them.
The 2016 EU Referendum represents a social contract for Britain to leave the EU by March 2019.
The struggle between Brexiteers, Remainers, parliament and the government represents the difficulties of implementing a social contract in which 16m people voted Remain, and 17.5m voted Leave.
