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Economic liberalism is a political and economic ideology that supports a market economy based on individualism and private property in the means of production.[1] Adam Smith is considered one of the primary initial writers on economic liberalism, and his writing is generally regarded as representing the economic expression of 19th-century liberalism up until the Great Depression and rise of Keynesianism in the 20th century. Historically, economic liberalism arose in response to feudalism and mercantilism.
Economic liberalism is associated with markets and private ownership of capital assets. Economic liberals tend to oppose government intervention and protectionism in the market economy when it inhibits free trade and competition, but tend to support government intervention where it protects property rights, opens new markets or funds market growth, and resolves market failures.[2] An economy that is managed according to these precepts may be described as a liberal economy or operating under liberal capitalism. Economic liberals commonly adhere to a political and economic philosophy that advocates a restrained fiscal policy and a balanced budget through measures such as low taxes, reduced government spending, and minimized government debt.[3] Free trade, deregulation, tax cuts, privatization, labour market flexibility, and opposition to trade unions are also common positions.[4]
Economic liberalism can be contrasted with protectionism because of its support for free trade and an open economy, and is considered opposed to planned economies and non-capitalist economic orders, such as socialism.[5] As such, economic liberalism today is associated with classical liberalism, neoliberalism, right-libertarianism, and some schools of conservatism like liberal conservatism and fiscal conservatism. Economic liberalism follows the same philosophical approach as classical liberalism and fiscal conservatism.[6]
- ^ Adams 2001, p. 20.
- ^ Oatley, Thomas (2019). International Political Economy: Sixth Edition. Routledge. pp. 25, 34–35. ISBN 978-1351034647. Archived from the original on 2021-07-21. Retrieved 2021-07-21.
- ^ Simmons, Beth A.; Dobbin, Frank; Garrett, Geoffrey (2006). "Introduction: The International Diffusion of Liberalism". International Organization. 60 (4): 781–810. doi:10.1017/S0020818306060267. ISSN 1531-5088. S2CID 146351369.
- ^ Boudreaux, Don (2015-03-31). "Milton Friedman on the Real World Effects of Labor Unions". Cafe Hayek. Archived from the original on 2020-11-25. Retrieved 2020-10-13.
- ^ Brown, Wendy (2005). Edgework: Critical Essays on Knowledge And Politics. Princeton University Press. p. 39..
- ^ Gamble, Andrew (2013). "Neo-Liberalism and Fiscal Conservatism". In Thatcher, Mark; Schmidt, Vivien A. (eds.). Resilient Liberalism in Europe's Political Economy. Cambridge University Press. pp. 53–77. ISBN 978-1107041530. Archived from the original on 2021-07-26. Retrieved 2021-07-26.