Conservatism; economic models Flashcards
Free-market capitalism
Minimises government intervention.
Rational economic actors acting in their own self-interest deal with the creation and pricing of goods and services the most efficiently.
Government regulations, trade barriers and labour laws are generally thought to distort the market.
Why might conservatives like Free-market Capitalism?
It supports private property and therefore established social order and values.
It exists, therefore, it has a purpose. It has developed organically in the UK since 1979, so it is fit for purpose as it has stood the tests of time.
It works in conjunctions with Cons ideas about human nature.
It supposedly maximised individual freedom.
Why might conservatives dislike Free-market Capitalism?
It can provide the means to challenge order, stability and continuity due to inequality and exploitation; it promotes risk and innovation that can lead to change and social upheaval.
Can sharpen the gap between rich and poor, deepening economic inequalities.
Conservatives have a negative view of human nature, which could be applied to ‘the market’ — why should it self-regulate?
moderated Capitalism
Interventions made by the government to restrict or restrain international trade, often with the intent of protecting national producers and consumers from foreign competition.
May protect workers’ rights.
Why might conservatives like Moderated Capitalism?
The government’s ability to intervene provides greater stability than Free-Market Capitalism. This protects from big boom & busts.
It lines up with the emphasis Cons place on national identity.
It protects national producers from the threat of globalised competition.
Reinforces the importance of private property and established social order.
Why might conservatives not like Moderated Capitalism?
Some Cons believe any intervention in the free market will damage it — to be effective, it must be unregulated.
International trade also needs to be unrestricted. This way, every nation can develop its own competitive advantage, and if every nation does this, the whole world will get richer; the price of goods will fall; the quality of goods will rise.
Keynesian Capitalism
Planned capitalism, aiming to create full employment.
There is an emphasis on employing people in public services, nationalization of certain key industries, and increased government spending.
Why might conservative like Keynesian Capitalism?
Protects business from the brunt of free-market economics, which promotes social harmony.
In controlling certain parts, the government doesn’t have to interfere so much in others; it can tackle the root of the problem, rather than the symptoms.
It promotes ‘corporatism’, where all elements of society cooperate in government i.e. business leaders, trade unions etc.
It integrates more groups into the decision-making process.
Why might conservatives not like Keynesian Capitalism?
The free market is badly distorted by government intervention.
It interferes with traditions.
It leads to inefficient public services with monopolies, which is a drain on the taxpayer and treasury.
Unions gain too much power.
