Liberal Economic Ideology
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A Liberal Economic Ideology is a macro-economic ideology that espouses free economic activity (labor is voluntary, capital is mostly in private hands, and production is coordinated in a decentralized way and motivated by profit).
- AKA: Capitalism, Free-Market Economics.
- Context:
- It can (typically) require strong Private Property Laws (to enforce private property rights).
- It can (typically) require strong Contract Laws (to enforce economic promises).
- It can (often) attempts to describe Free-Market National Economies.
- It can range from being a Lightly-Regulated (Laissez-Faire) Liberal Economic Doctrine to being a Highly-Regulated Liberal Economic Doctrine (e.g. Progresive Capitalism / Exploitative Capitalism).
- It can be used as a means to promote Economic Investment, Economic Innovation, Economic Growth and Economic Prosperity.
- It can be held by a Capitalist Idealog.
- It can be analyzed with the relationships among 1.Workers, 2. The means of production (factories, machines, tools), and 3. Those who own or control the means of production.
- …
- Example(s):
- the doctrine of (Fukuyama, 1992).
- the doctring of (Sen, 1999).
- the doctrine of (Friedman, 1966).
- an Authoritarian Capitalist Ideology.
- State Capitalism,
- …
- Counter-Example(s):
- See: Liberal Democratic Doctrine, Individualism, Private Property, Public Good, Social Liberalism, Means of Production, Capital Accumulation, Competition (Economics), Colonialism.
References
2019
- https://foreignaffairs.com/articles/united-states/2019-12-10/clash-capitalisms
- QUOTE: ... Capitalism rules the world. With only the most minor exceptions, the entire globe now organizes economic production the same way: labor is voluntary, capital is mostly in private hands, and production is coordinated in a decentralized way and motivated by profit. …
2018a
- http://capitalism.columbia.edu/glossary-0
- QUOTE: Capitalism is a system where the means of production are owned privately and operated for profit. It is a system opened to new ideas, new firms and new owners where decisions on investment, production, trade and pricing are largely determined by market forces. This does not mean that the state has no role in capitalism. On the contrary, the state needs to create the appropriate regulatory and legal framework without which markets will not function properly. Also, the state needs to provide public goods and ensure that there is adequate physical and human infrastructure. Capitalism, also known as “free enterprise”, is …
2018b
- http://auburn.edu/~johnspm/gloss/capitalism
- QUOTE: A form of economic order characterized by private ownership of the means of production and the freedom of private owners to use, buy and sell their property or services on the market at voluntarily agreed prices and terms, with only minimal interference with such transactions by the state or other authoritative third parties.
2018c
- https://www.thoughtco.com/capitalism-definition-p2-3026124
- QUOTE: The key to capitalism as a social system is a set of three relationships among 1. Workers, 2. The means of production (factories, machines, tools), and 3. Those who own or control the means of production.
2018d
- https://theguardian.com/news/2018/may/08/how-the-chicken-nugget-became-the-true-symbol-of-our-era
- QUOTE: … And yet responsibility for the dramatic change in our consumption lies not so much in general human activity, but capitalism. Although we’re taught to understand it as an economic system, capitalism doesn’t just organise hierarchies of human work. Capitalism is what happens when power and money combine to turn the natural world into a profit-making machine. Indeed, the way we understand nature owes a great deal to capitalism. …
2016
- http://filmsforaction.org/articles/anarchists-what-we-stand-for/
- QUOTE: … We are opposed to colonialism. Capitalism was founded on the profits reaped from African slaves and the stolen land of the indigenous people of the Americas. This brutal dispossession, subordination and exploitation or elimination of entire peoples continues today. The colonized people are everywhere among the poorest and most exploited. …
2014a
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/economic_liberalism Retrieved:2014-10-9.
- Economic liberalism is the ideological belief in organizing the economy on individualist lines, meaning that the greatest possible number of economic decisions are made by individuals and not by collective institutions or organizations.[1] It includes a spectrum of different economic policies, but it is always based on strong support for a market economy and private property in the means of production. Although economic liberalism can also be supportive of government regulation to a certain degree, it tends to oppose government intervention in the free market when it inhibits free trade and open competition. However, economic liberalism may accept government intervention in order to remove private monopoly, as this is considered to limit the decision power of some individuals. While economic liberalism favors markets unfettered by the government, it maintains that the state has a legitimate role in providing public goods.
Economic liberalism is often associated with support for free markets and private ownership of capital goods, and is usually contrasted with similar ideologies such as social liberalism and social democracy, which generally favor alternative forms of capitalism such as welfare capitalism, state capitalism or mixed economies. Economic liberalism also contrasts with protectionism because of its support for free trade and open markets. Historically, economic liberalism arose in response to mercantilism and feudalism. Today, economic liberalism is also generally considered to be opposed to non-capitalist economic orders, such as socialism, market socialism and planned economies. [2]
- Economic liberalism is the ideological belief in organizing the economy on individualist lines, meaning that the greatest possible number of economic decisions are made by individuals and not by collective institutions or organizations.[1] It includes a spectrum of different economic policies, but it is always based on strong support for a market economy and private property in the means of production. Although economic liberalism can also be supportive of government regulation to a certain degree, it tends to oppose government intervention in the free market when it inhibits free trade and open competition. However, economic liberalism may accept government intervention in order to remove private monopoly, as this is considered to limit the decision power of some individuals. While economic liberalism favors markets unfettered by the government, it maintains that the state has a legitimate role in providing public goods.
2014b
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/capitalism Retrieved:2014-10-11.
- Capitalism is an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit. [1] [2] Central characteristics of capitalism include capital accumulation, competitive markets and wage labour. [3] In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged. [4] The degree of competition, role of intervention and regulation, and scope of public ownership varies across different models of capitalism.[5] Economists, political economists, and historians have taken different perspectives in their analysis of capitalism and recognized various forms of it in practice. These include laissez-faire capitalism, welfare capitalism, crony capitalism and state capitalism; each highlighting varying degrees rof dependency on markets, public ownership, and inclusion of social policies. The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy. Many states have what are termed capitalist mixed economies, referring to a mix between planned and market-driven elements.[6] Capitalism has existed under many forms of government, in many different times, places, and cultures. Following the demise of feudalism, capitalism became the dominant economic system in the Western world. Capitalism was carried across the world by broader processes of globalization such as imperialism and, by the end of the nineteenth century, became the dominant global economic system, in turn intensifying processes of economic and other globalization. Later, in the 20th century, capitalism overcame a challenge by centrally-planned economies and is now the encompassing system worldwide, [7] with the mixed economy being its dominant form in the industrialized Western world. Barry Gills and Paul James write:
Different economic perspectives emphasize specific elements of capitalism in their preferred definition. Laissez-faire and liberal economists emphasize the degree to which government does not have control over markets and the importance of property rights. Neoclassical and Keynesian macro-economists emphasize the need for government regulation to prevent monopolies and to soften the effects of the boom and bust cycle. Marxian economists emphasize the role of capital accumulation, exploitation and wage labor. Most political economists emphasize private property as well, in addition to power relations, wage labor, class, and the uniqueness of capitalism as a historical formation. Proponents of capitalism argue that it creates more prosperity than any other economic system, and that its benefits are mainly to the ordinary person. [8] Critics of capitalism variously associate it with economic instability, [9] an inability to provide for the well-being of all people, and an unsustainable danger to the natural environment. Socialists maintain that, although capitalism is superior to all previously existing economic systems (such as feudalism or slavery), the contradiction between class interests will only be resolved by advancing into a completely social system of production and distribution in which all persons have an equal relationship to the means of production. [10] The term capitalism, in its modern sense, is often attributed to Karl Marx. In his magnum opus Capital, Marx analysed the “capitalist mode of production” using a method of understanding today known as Marxism. However, Marx himself rarely used the term "capitalism", while it was used twice in the more political interpretations of his work, primarily authored by his collaborator Friedrich Engels. In the 20th century, defenders of the capitalist system often replaced the term capitalism with phrases such as free enterprise and private enterprise and replaced capitalist with rentier and investor in reaction to the negative connotations associated with capitalism.The process remains uneven, but notwithstanding the continuing importance of national and regional economies today, global capitalism is undoubtedly the dominant framework of economics in the world. There are many debates about what this means, but across the political spectrum "capitalism" has become the taken-for-granted way of naming the economic pattern that weaves together the current dominant modes of production and exchange.
- Capitalism is an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit. [1] [2] Central characteristics of capitalism include capital accumulation, competitive markets and wage labour. [3] In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged. [4] The degree of competition, role of intervention and regulation, and scope of public ownership varies across different models of capitalism.[5] Economists, political economists, and historians have taken different perspectives in their analysis of capitalism and recognized various forms of it in practice. These include laissez-faire capitalism, welfare capitalism, crony capitalism and state capitalism; each highlighting varying degrees rof dependency on markets, public ownership, and inclusion of social policies. The extent to which different markets are free, as well as the rules defining private property, is a matter of politics and policy. Many states have what are termed capitalist mixed economies, referring to a mix between planned and market-driven elements.[6] Capitalism has existed under many forms of government, in many different times, places, and cultures. Following the demise of feudalism, capitalism became the dominant economic system in the Western world. Capitalism was carried across the world by broader processes of globalization such as imperialism and, by the end of the nineteenth century, became the dominant global economic system, in turn intensifying processes of economic and other globalization. Later, in the 20th century, capitalism overcame a challenge by centrally-planned economies and is now the encompassing system worldwide, [7] with the mixed economy being its dominant form in the industrialized Western world. Barry Gills and Paul James write:
- ↑ "Capitalism" Oxford Dictionaries. “capitalism. an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." Retrieved 4 January 2013.
- ↑ Chris Jenks. Core Sociological Dichotomies. “Capitalism, as a mode of production, is an economic system of manufacture and exchange which is geared toward the production and sale of commodities within a market for profit, where the manufacture of commodities consists of the use of the formally free labor of workers in exchange for a wage to create commodities in which the manufacturer extracts surplus value from the labor of the workers in terms of the difference between the wages paid to the worker and the value of the commodity produced by him/her to generate that profit." London, England, UK; Thousand Oaks, California, USA; New Delhi, India: SAGE. p. 383.
- ↑ Heilbroner, Robert L. "capitalism." Durlauf, Steven N.and Lawrence E. Blume, eds., The New Palgrave Dictionary of Economics. 2nd ed. (Palgrave Macmillan, 2008)
- ↑ http://www.merriam-webster.com/dictionary/capitalism "an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market"
- ↑ Macmillan Dictionary of Modern Economics, 3rd Ed., 1986, p. 54.
- ↑ Stilwell, Frank. “Political Economy: the Contest of Economic Ideas.” First Edition. Oxford University Press. Melbourne, Australia. 2002.
- ↑ James Fulcher, Capitalism, A Very Short Introduction, “In one respect there can, however, be little doubt that capitalism has gone global and that is in the elimination of alternative systems.” p. 99, Oxford University Press, 2004, ISBN 978-0-19-280218-7.
- ↑ Friedman, Milton. Capitalism and Freedom. [Chicago]: University of Chicago, 1962.
- ↑ Krugman, Paul, Wells, Robin, Economics, Worth Publishers, New York, (2006)
- ↑ The Rise of Capitalism, 2011. Socialist Standard, no. 1284, August 2011.
2014c
- (Thiel & Masters, 2014) ⇒ Peter Thiel, and Blake Masters. (2014). “Zero to One: Notes on Startups, Or How to Build the Future." Crown Publishing Group. ISBN:9780804139304
- QUOTE: Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away. The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.
2007
- (Hall et al., 2007) ⇒ Peter A. Hall. (2007). “The Evolution of Varieties of Capitalism in Europe.” In: Beyond Varieties of Capitalism: conflict, contradictions, and complementarities in the European economy
2003
- (Howell et al., 2003) ⇒ Chris Howell. (2003). “Varieties of Capitalism: And Then There Was One?." Comparative Politics
2001
- (Hall & Soskice, 2001) ⇒ Peter A. Hall, and David Soskice. (2001). “Varieties of Capitalism: The Institutional Foundations of Comparative Advantage." Oxford University Press. ISBN:0199247757
- BOOK OVERVIEW: … Building on a distinction between 'liberal market economies' and 'coordinated market economies', it explores the impact of these variations on economic performance and many spheres of policy-making, including macroeconomic policy, social policy, vocational training, legal decision-making, and international economic negotiations. ...
- QUOTE: … In other works by the contributors to this volume, ‘organized market economy’ is sometimes used as a term synonymous with ‘coordinated market economy.’ Although all of the economies we discuss are ‘coordinated’ in the general sense of the term, by markets if not by other institutions, the term reflects the prominence of strategic interaction and hence of coordination in the game-theoretic sense in CMEs. … All capitalist economies also contain the hierarchies that firms construct to resolve the problems that cannot be addressed by markets (Williamson 1985). In liberal market economies, these are the principal institutions on which firms rely to coordinate their endeavors. … http://www.people.fas.harvard.edu/~iversen/PDFfiles/HallSoskice.pdf
1999
- (Sen, 1999) ⇒ Amartya Sen. (1999). “Development As Freedom." Oxford University Press.
- QUOTE: Behavioral codes vary even among the developed capitalist economies, and so does their effectiveness in promoting economic performance. While capitalism has been very successful in radically enhancing output and raising productivity in the modern world, it is still the case that the experiences of different countries are quite diverse. The successes of East Asian economies (in recent decades), and most notably of Japan (stretching further back), raise important questions about the modeling of capitalism in traditional economic theory. To see capitalism as a system of pure profit maximization based on individual ownership of capital is to leave out much that has made the system so successful in raising output and in generating income.
Japan has frequently been seen as the greatest example of successful capitalism, and despite the longish period of recent recession and financial turmoil, this diagnosis is unlikely to be completely washed away. However, the motivation pattern that dominates Japanese business has much more content than would be provided by pure profit maximization. … Indeed, there is some truth even in the apparently puzzling claim made in The Wall Street Journal that Japan is “the only communist nation that works.”27 That enigmatic remark points to the nonprofit motivations underlying many economic and business activities in Japan. We have to understand and interpret the peculiar fact that one of the most successful capitalist nations in the world flourishes economically with a motivation structure that departs, in some significant spheres, from the simple pursuit of self-interest, which — we have been told — is the bedrock of capitalism.
- QUOTE: Behavioral codes vary even among the developed capitalist economies, and so does their effectiveness in promoting economic performance. While capitalism has been very successful in radically enhancing output and raising productivity in the modern world, it is still the case that the experiences of different countries are quite diverse. The successes of East Asian economies (in recent decades), and most notably of Japan (stretching further back), raise important questions about the modeling of capitalism in traditional economic theory. To see capitalism as a system of pure profit maximization based on individual ownership of capital is to leave out much that has made the system so successful in raising output and in generating income.
2011
- (Graeber, 2011) ⇒ David Graeber. (2011). “Debt: The First 5000 Years." Cambridge Univ Press. ISBN:1612190987
- QUOTE: So what is capitalism?
1992
- (Fukuyama, 1992) ⇒ Francis Fukuyama. (1992). “The End of History and the Last Man." Free Press. ISBN:9780029109755
- QUOTE: In its economic manifestation, liberalism is the recognition of the right of free economic activity and economic exchange based on private property and markets. Since the term “capitalism” has acquired so many pejorative connotations over the years, it has recently become a fashion to speak of “free-market economics” instead; both are acceptable alternative terms for economic liberalism. It is evident that there are many possible interpretations of this rather broad definition of economic liberalism, ranging from the United States of Ronald Reagan and the Britain of Margaret Thatcher to the social democracies of Scandinavia and the relatively statist regimes in Mexico and India. All contemporary capitalist states have large public sectors, while most socialist states have permitted a degree of private economic activity. There has been considerable controversy over the point at which the public sector becomes large enough to disqualify a state as liberal. Rather than try to tset a precise percentage, it is probably more useful to look at what attitude the state takes in principle to the legitimacy of private property and enterprise. Those that protect such economic rights we will consider liberal; those that are opposed or base themselves on other principles (such as "economic justice") will not qualify. …
… In our grandparents' time, many reasonable people could foresee a radiant socialist future in which private property and capitalism had been abolished, and in which politics itself was somehow overcome. Today, by contrast, we have trouble imagining a world that is radically better than our own, or a future that is not essentially democratic and capitalist
- QUOTE: In its economic manifestation, liberalism is the recognition of the right of free economic activity and economic exchange based on private property and markets. Since the term “capitalism” has acquired so many pejorative connotations over the years, it has recently become a fashion to speak of “free-market economics” instead; both are acceptable alternative terms for economic liberalism. It is evident that there are many possible interpretations of this rather broad definition of economic liberalism, ranging from the United States of Ronald Reagan and the Britain of Margaret Thatcher to the social democracies of Scandinavia and the relatively statist regimes in Mexico and India. All contemporary capitalist states have large public sectors, while most socialist states have permitted a degree of private economic activity. There has been considerable controversy over the point at which the public sector becomes large enough to disqualify a state as liberal. Rather than try to tset a precise percentage, it is probably more useful to look at what attitude the state takes in principle to the legitimacy of private property and enterprise. Those that protect such economic rights we will consider liberal; those that are opposed or base themselves on other principles (such as "economic justice") will not qualify. …
1990
- (Esping-Andersen, 19??) ⇒ Gosta Esping-Andersen. (1990). “The Three Worlds of Welfare Capitalism." Princeton University Press.
1985
- (Williamson, 1985) ⇒ Oliver E. Williamson. (1985). “The Economic Institutions of Capitalism." Simon and Schuster.
1976
- (Jensen & Meckling, 1976) ⇒ Michael C. Jensen, and William H. Meckling. (1976). “Theory of the firm: Managerial behavior, agency costs, and ownership structure." Springer.
- ABSTRACT: This paper integrates elements from the theory of agency, the theory of property rights and the theory of finance no develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the ‘separation and control’ issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem.
1962
- (Friedman, 1962) ⇒ Milton Friedman. (1962). “Capitalism and Freedom." University of Chicago Press.
- QUOTE: … there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. …
1942
- (Schumpeter, 1942) ⇒ Joseph Schumpeter. (1942). “Socialism, Capitalism and Democracy."
1931
- (Tawney, 1931) ⇒ Richard H. Tawney. (1931). “Equality." ISBN 0-04-323014-8)
- QUOTE: … Seen in historical perspective, the attempt to combine the equality of civil and political rights, which is of the essence of democracy, with the inequality of economic and social opportunities, which is of the essence of capitalism, is still in its first youth… It may well be the case that democracy and capitalism, which at moments in their youth were allies, cannot live together once both have come of age. …
1905
- (Weber, 1905) ⇒ Max Weber. (1905). “The Protestant Ethic and the Spirit of Capitalism."
1863
- (Marx, 1863) ⇒ Karl Marx. (1863). “Theories of Surplus-Value" Volume IV of Das Capital …
1758
- (Hume, 1758) ⇒ David Hume. (1758). “Essays: Moral, political, and literary.".
- QUOTE: … Let us, therefore, rest contented with asserting, that two opposite vices in a state may be more advantageous than either of them alone; but let us never pronounce vice in itself advantageous. …