liberals and econ Flashcards
united in support for capitalism and private property
econ freedom integral to overall individual liberty
-argue capitalism leads to more individual rights and freedoms -essential for societal prosperity.
-argue free trade, competition and the ability of people to pursue their econ interests in the capitalist system leads to efficient allocation of resources and innovation & progress benefitting society as a whole.
-even rawls & modern liberals who supported significant state intervention did so within a capitalist econ & allowed for sig scope for individual lib, self fufilment & therefore sig inequalities of outcome.
-libs support capitalism as it promotes private property which is seen as a natural right in society & crucial component of individual freedom.
-gives individuals a stake in society & makes it opposed to an excessive govt that may threaten private property & freedom
-locke - ‘life lib and property’ - he saw private property as a natural right essential to preservation of individual lib & econ independence.
disagree -classical libs believe in laissez faire capitalism whilst modern libs believe in keynesianism
-classical libs - laissez faire capitalism -free market w minimal state intervention - little regulation, low govt spending & tax.
-aligns w classical lib view of negative liberty, positing that freedom in econ pursuits is best achieved in an environment w few govt constraints/ interferences.
-classical libs believe individuals are free to engage in econ transactions as they see fit, allowing S & D to set prices naturally without external influence.
-Adam smith -father of modern econ argued the ‘invisible hand’ of the market leads to not only freedom but also the most beneficial, efficient outcome for society.
-believe laissez faire capitalism allows individuals & society as a whole to build wealth & that wealth will ‘trickle down’ to everyone & benefit all of society.
P2 - how do modern libs differ from classical libs
-they critique laissez faire capitalism and instead in the 20th century began to argue for a keynesian econ approach.
-stemmed from ideas of John Maynard Keynes as a response to limitations free market capitalism evident in econ downturns & consequent mass unemployment like the great depression in the 1930s.
-he argued that in econ downturns, cons spending decreases, leading to less business activity & higher unemployment. to counter this the govt should increase public spending, reduce taxes & lower IRs to stimulate demand & pull the econ out of a recession.
-approach contrasts w classical libs stance which argues for minimal govt interference & letting the market pull itself out of a recession.
disagree over whether capitalism creates meritocracy without state intervention or whether an enabling state is needed to promote true meritocracy
-classical libs - see laissez faire econ as meritocracy -see it as a system where success and advancement is based on merit, talent, effort and achievement.
this is cause they believe in negative freedom, which is freedom from, absence of interference from external force e.g the state. -min state protects ppl from undue coercion and control, ensures they’re free to choose their own paths in life.
Mill-minimal state-harm principle saying individuals should be free to act as they wish unless their actions harm others.
-so laissez faire capitalism ensures negative freedom which creates meritocracy.
Samuel smiles-concept of self help -power to improve ur own circumstances through hard work.
so govt should have a small role in econ affairs & instead focus on protecting property and individual rights.
how do modern liberals differ -P3 -enabling state is needed to promote true meritocracy.
-support +vs freedom-freedom to, they say
-ve freedoms which argue the mere absence of interference isn’t enough to promote freedom for all. -instead there has to be an enabling state to allow ppl to realise their potential. -esp. important for those from disadvantaged positions in society.
-enabling state shouldn’t try to control the econ but should try to play an active role in providing support when the market fails. e.g progressive tax, social welfare programmes and public services that level the playing field and promote freedom & individualism.
-UK this was established by the Beveridge report -foundations of welfare state-NHS, housing reforms.
Rawls-ensuring fair access to resources & opps allows individuals to realise true potential & contribute more effectively to econ.
-said progressive tax & redistributing wealth in a capitalist system was rational and not a ‘surrender to socialism’ as ppl would naturally want to see inequality reduced & the poor be given sufficient support.
-justifed through ‘veil of ignorance’ -a though experiment that asks individuals to design a society without any knowledge of their own position within it. -he said by doing this ppl would create a society that safeguards the least well off ensuring a fair distribution of resources and opps.
conc
-libs only united in views of econ to a limited extent.
-all support capitalism & private property.
-but sig disagreement abt approaches to capitalism - classical libs - laissez faire but modern strongly disagree.
-modern libs don’t think it leads to more freedom & instead support keynesianism & an enabling state to counteract flaws of free market.
-classical libs -strongly opposed to this greater state intervention seeing it as opposing freedom & meritocracy.
