Economics

Question 1

Three key elements

Answer 1

• private property - central natural right
• individualistic - traders competing and cooperating will develop products to bring to market generating work and economic growth. Competition will drive innovation and improvement.
• benefit for all - as process will be driven down and opportunities for generating wealth created.

Question 2

Adam Smith - Laissez-faire capitalism

Answer 2

• In ‘The Wealth of Nations’ Smith argued that market forces would always make the economy as a whole and individual people within it better off.
• for the ‘invisible hand’ of the market to work, then all barriers had to be removed such as tariffs. The market would drive down prices and promote improvements in productivity and innovation.
• wealth made by individuals would ‘trickle down’ to the rest of society.

Question 3

Self-help

Answer 3

• Samuel smiles argued that people from all classes could remain self-reliant in industrial society.
• this would be a greater challenge for the industrial working classes but they could overcome this challenge.
• he believed self-help would bring great positives whilst stat-help would prevent people reaching their potential.

Question 4

Modern liberalism

Answer 4

• tackling socio-economic problems to enable people to succeed and be ‘free’.
• liberal social reform: state pension and help for poor children. E.g. free school meals.
• Keynesian economics : government should manage the economy to ensure ‘full employment’.
• Beverage Report: tackle the 5 giants what stopped people reaching their full potential: want (poverty), idleness (unemployment), ignorance (poor education), squalor (poor housing) and disease (poor health care) - basis of the welfare state.

Question 5

John Rawls a theory of justice

Answer 5

• saw redistribution of wealth as being a liberal principle as based on rational choice: people would not want the poor in society to be ‘unfairly treated’ and would want to see inequalities reduced (but not completely removed).
• economic success/ failure not always based on merit.
• as most people would want this it fits with ideas of government by consent.

Question 6

Neo-liberalism

Answer 6

• return to classical liberalism
• move away from welfare state to minimal state intervention in the economy.
• privatisation
• often associated with conservatives not liberals: Margaret Thatcher and Ronald Reagan.