Running Head: Economic Liberalism
Ideology as a subject is the science or study of ideas, but defined in a deeper view as the way people think about the world and their thought of how to live in the world. Ideology can also mean the way a group, class, community or a nation think or believe. There are two types of ideologies, the first being political ideology that is the set of ideas of how a country should be run. The second one is the epistemological ideology, which refers to the ideas of belief, the earth and how people should make decisions. In this essay, I will discuss the ideas of economic liberalism as it relates to my thinking and beliefs about how best people should co-exist on earth without affecting the economic development negatively.
Economic liberalism relates to the political and economic ideas that promote capitalism. It goes against government interference in business and backing up all the ideas of free trade and marketing. It was developed in the eighteenth century, and its theories are believed to have been formulated by Adam Smith, a Scottish philosopher and an economist of the 18th century (Grampp, 1982). The idea set a belief that if anyone or everyone was left to live under his or her own rules and governed by their own decisions instead of being pushed around by the government and its laws, their output would be great. It would encourage teamwork, equality in the society and success in economic development. The foundation of the theory led to the end of the capitalist economic system during those times. It was based on the idea that the actions and activities of people were self-centered and that if they were left to work under no pressure or strict rules it would lead to increased productivity. Of course, this did not mean that there should be no rules of the law, because lawlessness in a country is bad for business also, as large businesses depend on the government for security especially during mass transportation.
In my own view, I would go with economic liberalism because as a businessperson I would enjoy it if I worked at my own pace and comfort, obviously not forgetting the essence of time. For example if I produced tomatoes, I would not wish to have any external interference controlling the rate of harvesting and supplying of my product as this would hinder my strategy in targeting the market my customers. The government owns you and your business indirectly if it has the right to control how much you should produce and how much to supply. If you experience excess production in a certain year, you might not have the right to supply all your goods just because some laws cut off or limits the amount of goods and services reaching the consumers. In another important view, there would be no boundaries to market my products, especially in the case of surplus production, I would be able to transit my tomatoes and seek external and international markets without any limitations. There would be no delayed transactions, as I would carry out my won plans to make sure I seal deals in time without depending on the state to issue directives on every move. This will ensure that I schedule my plans and know when to expect income and returns from sales and when to arrange for additional stock for the next production period.
Economic radicalism supports the idea that if business was left on its own, the competition in trade would harm the environment, impact negatively on the market and the general economy would deteriorate over time (Edie, 2007). According to the theory, uncontrolled trade network results in decreased and unpredictable production would lead to collective unemployment due to reduced income in the society. It insists that other economics like the orthodoxy economy always ends up in economic crunches, irregular and increased world inequality because employees are denied recognition from the products they come up with. They are also kept at a distance from the process of production in which their control is mild and refuted. Under this theory, consumers are continuously manipulated by sellers who are under the pressure of competition, and what follows is the disconnection in the producer-consumer chain in economic planning.
The idea of economic radicalism pushes for the states’ control of business from production to marketing, where business people would not have a say on which products to concentrate on this year or that. As a result, there is reduced or no invention and innovation in production. What I thought best to invest in producing at a certain period might not be the idea of the government, it is like waiting for instructions on what to do and what not to, and this leads to monotony and boredom. This definitely would not be an idea I would support because I do not agree that dependency and self-control in business amounts to failures because individualism ensures self-discipline and internal motivation and competition. Competition only becomes unhealthy if it tends to grow into rivalry among traders. The theory further supports the idea of community organizations with no private ownership of industry in addition to there being a general drive for economic development for the community as a whole. It aimed at production for necessity and not profit as the governing subject (Edie, 2007).
Although economic liberalism advantaged markets uncontrolled by the government, it recognized the ideal role of the state in providing public goods. Smith for example, mentioned in respect that the government has the right to provide for the means of communication like canals, bridges, roads and airways to enable the transit of goods and serves from place to place. This is because private sectors would not afford to put up efficient means of transport network throughout the country, and because the government has the international relationship that allows exportation of products and importation of materials. Smith still preferred that the goods be paid for in equal ratios as per consumption. On top of that, he suggested on disciplinary taxes to encourage free trade, and copyrights on products to promote invention and originality.
Economic nationalism opposes globalization and refers to the policies that a country implements to control its own economy. This was accompanied by the enforcement of tariffs and other trade restrictions to control the movement of goods and services in a country. Some of the examples are the MITI in Japan used to pick winners and losers, the ‘currency control’ rules by the Malaysian government following the currency crisis in 1997, the economic system in the US named Henry Clay’s American System, the policy of tariffs in Argentina during the financial crisis in 2001, and others. This theory is mainly aimed at controlling production and quality of output within a country, and by the laws it sets on trade (Colbourne, 2007). It regulated the dispatch of goods from warehouse by ensuring that goods and services were moved at strict regular basis and as per the change in demand. This helped in avoiding unnecessary and surplus supply of goods and services that would lead to losses and poor business.
Keynesianism is the theory of a British economist, John Maynard Keynes, in the twentieth century and was based on the idea of a mixed economy. It supported the government’s role in the economy of the country, arguing that the decisions by the private sector sometimes poor and inefficient results in production. This included the active role of the government in setting up monetary policies and rules by the central bank and actions to steady the amount of output from the business sector. The theory also asserted that cumulative and a large demand for goods would be inadequate during the economic crisis, and that would lead to an increase in unemployment and decrease in production (Colbourne, 2007). On this point, Keynes’ idea was that the government would set policies to increase collective demand, which would promote economic activity and reduce unemployment and depreciation in the economic growth. On the provision of special services, this theory supported government’s investment, as it would increase income, which in turn contributes to more spending in different sectors. The more the government spends in economy, the more the contribution to production and the circle continues.
Colbourne, M. D. (2007). Economic nationalism. Beverly, MA: Figurehead
Edie, L. D. (2007). Principles of the new economics, Crowell’s social science series. Cambridge, MA: Thomas Y. Crowell Company
Grampp, W. (1982). Economic Liberalism. Gloucester, MA: Peter Smith