liberalism- the economy

Question 1

paragraph 1 LOA-

Answer 1

liberals are united in their support for capitalism and private property

Question 2

paragraph 1

Answer 2

Capitalism is strongly supported by liberals, reflecting the belief that economic freedom is integral to overall individual liberty.
Capitalism is not just an economic system but a manifestation of individual rights and freedoms. It is based on the principles of private property, free markets, and voluntary exchanges, which liberals argue are essential for personal autonomy and societal prosperity.
Liberals argue that when people are free to trade, compete and pursue their economic interests within the capitalist system, it leads to the efficient allocation of resources, innovation, and overall progress, benefiting society as a whole.
Even John Rawls and other modern liberals who supported significant state intervention did so within a capitalist economy and allowed for significant scope for individual liberty, self-fulfilment and therefore significant inequalities of outcome.
Liberals also support capitalism as it promotes private property. Property ownership is seen as a natural right in society and a crucial component of individual freedom, allowing people to reap the benefits of their work.
It also 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 oneʼs 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 Clauseʼ in the Fifth Amendment of the Bill of Rights stating that private property shall not be taken for public use without just compensation.

Question 3

Extra agreement paragraph

Answer 3

Classical and Modern Liberals also agree that women needed to be offered the same opportunities and treatment as men in order for there to be real economic progress and for society to harness its true economic potential.
Wollstonecraft, a classical liberal, argued that the treatment of women was against reason and that they should be treated as rational individuals and given the freedom and rights and education to develop their individual potential just as men were.
Not only would this enable women to be free and therefore fulfil the principles of liberalism, it would also benefit society and the economy as a whole, as their individual pursuit of progress would benefit the whole of society.
Classical liberals including Wollstonecraft and Mill supported formal equality in order to pursue this, including equal access to education in particular.
In the 20th century, modern liberals argued that laws and social attitudes undermined womenʼs rationality, autonomy and ability to succeed in the economy.
Betty Friedan argued that the societal attitude that the primary role of women was that of the wife and mother confined them to the domestic sphere, rather than being able to pursue their goals and careers. Social attitudes also resulted in women being paid significantly less than men and not being able to access the same top jobs.
She advocated for the enactment of laws to prohibit discrimination based on gender, and supported measures such as affirmative action to ensure that women had not only equal rights on paper but also genuine equality of opportunity to succeed.
Friedan was successful in campaigning for the passage of the Equal Pay Act 1963 which outlawed discrimination in terms of sex when paying wages.
She wrote in ‘The Feminine Mystiqueʼ “Who knows what women can be when they are finally free to become themselves?”

Question 4

Paragraph 2 LoA

Answer 4

Disagree = CL believe in laissez-fair capitalism vs. ML’s belief in Keynesian economics

Question 5

Paragraph 2 - laissez faire vs Keynesianism

Answer 5

A key disagreement within liberalism in relation to the economy is that classical liberals support laissez-faire capitalism with minimal state intervention, whilst modern liberals support Keynesianism in order to manage capitalism.
Classical liberals strongly support laissez-faire capitalism. This is a very free market type of capitalism where there is minimal government intervention (little regulation, low government spending, low taxation). This aligns with the classical liberal view of negative liberty, positing that freedom in economic pursuits is best achieved in an environment with few governmental constraints/interferences.
In a laissez-faire system, classical liberals believe that individuals are free to engage in economic transactions as they see fit, allowing supply, demand, and price-setting to occur naturally without external interference.
Adam Smith in particular, often referred to as the father of modern economics, argued that the ‘invisible handʼ of the market leads not only to freedom but also to the most efficient and beneficial outcomes for society.
They also believe that laissez faire capitalism allows individuals and society as a whole to build wealth and that the wealth created by different individuals will ‘trickle downʼ to everyone and benefit all of society.
Modern liberals donʼt believe in laissez-faire capitalism. In fact, their overall ideas can be seen as stemming in large part from a critique of laissez-faire capitalismʼs ability to truly promote freedom and individualism for all. Instead of laissez-faire capitalism, modern liberals began in the 20th century to argue for a keynesian economic approach.
Keynesianism, rooted in the ideas of economist John Maynard Keynes, emerged as a response to the limitations of free-market capitalism, particularly evident during economic downturns and consequent mass unemployment like the Great Depression.
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 interest rates to stimulate demand and pull the economy out of recession.
This approach contrasts sharply with the classical liberal stance, which advocates for minimal government interference and letting the market pull itself out of recession.