Economy

Question 1

Introduction - Themes

Answer 1

• Capitalism
• State
• Property

Question 2

Introduction - Argument

Answer 2

Although both agree fundamentally in capitalsm and limited state interventions, they greatly differ in the way they believe the economy should be run

Question 3

Capitalism - Agree - Point

Answer 3

In line with liberalisms strong belief in individualism, all liberals therefore support capitalism. This endorsement of capitalism can be linked to liberalism’s positive view of human nature

Question 4

Captialism - Disagree - Point

Answer 4

• Classical liberals believe that Laissez-Faire captialism would be best for individual freedom
• Modern liberals in line with their greater emphaisis on state involvment, believe Keynesian economics should be adopted

Question 5

Capitalism - Disagree - Example
(Classical)

Answer 5

Adam Smith’s ‘Wealth of Nations’ argued that the ‘invisible hands’ of market forces, had limitless capacity to enrich society and the individuals within it. The wealth aquired would ‘trickle down’ to the rest of the population

Question 6

Capitalism - Disagree - Example
(Modern)

Answer 6

Modern liberals have adopted the view of John Maynard Keynes - capitalism that requires regualr state management to ensure full employment

Question 7

The State - Agree - Point

Answer 7

Both classical and modern liberals agree that the state does need to play some role in overseeing the workings of the economy

Question 8

The State - Disagree - Point

Answer 8

• Classical liberals, in line with egotistical individualism, argue that the state should play no real role in the economy rather oversee it
• Modern liberals think there should be more state involvement in order to develop individuals

Question 9

The State - Disagree - Example
(Classical)

Answer 9

Classical liberals have adopted a ‘nightwatchman’ approach - this means they support low taxes and no regulation. They advocate for the end of tariffs and duties and the spread of ‘free trade’

Question 10

The State - Disagree - Example
(Modern)

Answer 10

John Rawls takes the viewpoint that in order to achieve a ‘just’ society there has to be significant redistribution of wealth via an enabling state with extensive public spending and progressive tax

Question 11

Property - Agree - Point

Answer 11

All liberals are devoted to private property - this devotion informs its approach to the economy. There is an assertion that private property is a fundamental part to a liberal economy

Question 12

Property - Disagree - Point

Answer 12

• Classical liberals see private property as an arbitrate between individuals competing for trade and resources
• Modern liberals view private property as an important tool to promote a ‘just’ and equal society

Question 13

Property - Disagree - Example
(Classical)

Answer 13

John Locke was a firm believer that there was a ‘natural right’ to private property - this highlights the key beliefs of classical liberals that the state plays little role and economics is to do with individualism and negative freedom

Question 14

Property - Disagree - Example
(Modern)

Answer 14

John Rawls supported the view that there should be a ‘property owning democracy’ this meant that he did not feel that property should be used as an arbitrage between competing individuals, rather a way to promote a ‘just’ and equal society