capitalism and private property Flashcards
capitalism is strongly supported by liberals reflecting the belief that economic freedom is integral to overall indvidual liberty , capitalism is not just an economic system but a manifestation of indvidual rights ands freedoms , it is based on the principles of
private property , free market and voluntary exchanges which liberals argue are essential for personal autonomy and societal prosperity
liberals argue that when people are free to trade , complete and pursue their economic intrests within the capitalist system it leads to the
efficient allocation of resources , innovations and overall progress benefiting society as a whole
furthermore it promotes a metrioctacy and therefore
equality of opportunity in society
capitalism crucially also promotes private property , property ownership is seen as a natural right in society and a
crucial component of indvidual freedom allowing people to reap the benefits of their work
further it gives individuals a stake in society and makes society inherently opposed to
arbitrary and excessive government that may threaten private property and freedom
Locke saw private property as a natural right and an extension of ones labour that was essential to the
preservation of individual liberty and economic independence
This belief influenced the founding fathers of the US constitution with the ‘ takings clause ‘ in the fifth ammendment of the bill of rights stating that
private property shall not be taken for public use without just compensation
classical liberals strongly support laissez faire capitalism , this is a very free market type of capitalism where there is minimal gov intervention , this aligns with the
classical liberal view of negative liberty , positing that freedom in economic pursuits is best achieved in an environment with few gov constraints
in a laissez faire system , classical liberals believe that indviduals are free to engage in economic transactions as they see fit , allowing
supply , demand and price setting to occur naturally without external influence
Adam Smith in particular , often referred to as the father of modern economics argued that the
’ invisible hand ‘ of the market leads not only to freedom but also to the most efficient and beneficial outcomes for society
classical liberals believe that this laissez Faure capitalism will allow indvdiuals and society as a whole to build wealth and that
the wealth created by diffrent indviduals will ‘ trickle down ‘ to everyone and benefit all of society
importantly classical liberals also saw the laissez faire economy as a meritocracy beleiving it to be a system where
success and advancement are based on indvdiual talent , effort and achievement
the government should therefore play little role in economic affairs and should instead focus on maintain law and order and protecting property and indvdiuals rights so that people can act in the economy with confidence , whilst providing some
public goods that couldn’t be provided by the marker such as national defence , justice and some public infrastructure
modern liberals don’t believe in laissez fair capitalism in fact their overall ideas can be seen as stemming in large part from a critique of laissez faire capitalisms ability to truly promote freedom and individualism for all , instead of laissez faire capitalism modern liberals began to argue for
a Keynesian economic approach and an enabling state in economic affairs within the capitalist system
Keynesianism rooted in the ideas of John Maynard Keynes emerged as a response to the limitations of free market capitalism , paticualry evident during economic downturns and consequent mass unemployment like the Great Depression , Keynesianism argues that
active government intervention is necessary to stabilise economies , especially in times of recession
Keynes argued that during economic downturns consumer spending decreases leading to reduced business activity and higher unemployment , to counteract this the government should
increase public spending , reduce taxes and lower intrest rates to stimulate demand and pull the economy out of recession
this approach sharply contrasts with the classical liberal stance which advocates for minimal government interference and letting
the market pull itself out of recession
alongside a Keynesian approach to tackle the booms and busts of capitalism . modern liberals argue for an enabling state in economic affairs to promote
freedom and individualism for all in particular those who are disadvantaged due to inequalities produced by the free market
the state should play and active role in providing support where the market fails , this involves implementing policies such as
progressive taxation , social welfare programs and public services that aim to level the playing field and promote freedom and indvdiudualism for all members of society
these beliefs were key in influencing policy in the UK in the 20th century , the beverage report 1942 , identified five major social issues and proposed
comprehensive reforms to address them
Rawls in particular argued that ensuring fair access to resources and opportunities allows indvdiuals to fully realise their
potential and contribute more effectively to the economy
Rawls justified the redistribution of wealth through progressive taxation by arguing that it was rational to do so as people would naturally want to see
inequality reached and the poor being given sufficient support , the economy isn’t a complete metriocracyunder capitalism
the enabling state also steps in to promote a fair marker by regulating industries to prevent monopolies and protect consumers …
workers and the environment
modern liberals in particular Rawls also saw private property as a vital component of personal autonomy and a precondition for
individual liberty aligning with the traditional liberal view
However Rawls also believed that the unfettered accumulation of property could lead to
social and economic inequalities that undermine the fair value of political liberties and equal opportunity
Therefore while Rawls supported the right to private property he also advocated for a system of redistributive taxation and social welfare policies to ensure that the
inequalities arising from natural distributions of talents and social circumstances do not lead to unjust advantages for a few
