Key Ideas Of Modern Liberalism - The Economy Flashcards
What economic liberalism did modern liberals prefer
-Keynesian capitalism
What was Keynesianism
-based on work of economic John Keynes
-form of capitalism that involves the state directing + managing market forces to ensure steady growth, full employment + thus greater individual liberty
How was this different to the classical liberal view of capitalism
-classical liberals favoured laissez-faire capitalism
What was laissez-faire capitalism
-an economy where private enterprise + marker forces exist with minimal interference from the state
-market forces could operate + flourish naturally with Smith addicting for the end of tariffs, duties + other forms of economic protectionism
What did modern liberals argue was wrong with laissez-faire capitalism
-it led to mass unemployment, resulting loss of freedom for millions of individuals + the grave prospect of facial + communism
-Keynes argued self-fulfilment + liberty were seriously endangered by joblessness + resulting poverty
How did Keynes as a modern liberal believe was the best way to protect capitalism
-best way protect capitalism was through state ‘management’ of capitalism ensuring economic stability + a workforce ‘enabled’ to be ‘free’ by full employment
How did modern liberals like Rawls view Keynesianism
-as crucial - expansion of state spending that Rawls + others prescribed to overcome the ‘five giants’ needed to be financed by taxation
What were the ‘five giants’
-came from the Beveridge report of 1942 providing the bedrock for Br post-war ‘welfare state’ predicting individuals post-war period would face five giants threatening their freedom
-poverty, unemployment, poor education, poor housing + poor health care but could be overcome by a welfare state enabling individuals ‘from cradle to grave’
How would they get this tax
-Rawls beloved sufficient tax yield could only be assured by the steady economic growth promised by Keynesianism in contrast to ‘boom + dust’ cycles associated with laissez-faire capitalism
-but shown by UK economy 1970s Rawls naive to assume Keynesianism would prevent return of recession
