- Economic liberalism
Economic liberalism is the
economiccomponent of classical liberalism.
Theories in support of economic liberalism were developed in the Enlightenment, and believed to be first fully formulated by
Adam Smithwhich advocatesminimal interference by government in the economy, though it does not necessarily oppose the state's provision of a few basic public goods. [Eric Aaron, "What's Right?" (Dural, Australia: Rosenberg Publishing, 2003), 75.] These theories began in the eighteenth century with the then-startling claim that if everyone is left to their own economic devices instead of being controlled by the state, then the result would be a harmonious and more equal society of ever-increasing prosperity [Adams, Ian. Political Ideology Today. Manchester U Press 2001. p 20] . This underpinned the move towards a capitalist economic system in the late 18th century, and the subsequent demise of the mercantilist system.
propertyand individual contracts form the basis of liberalism. The early theory was based on the assumption that the economic actions of individuals are largely based on self-interest, ( invisible hand) and that allowing them to act without any restrictions will produce the best results, ( spontaneous order) provided that at least minimum standards of public information and justice exist, e.g., no-one should be allowed to coerce or steal.
While economic liberalism favors markets unfettered by the government, it maintains that the state has a legitimate role in providing
public goods.cite web|title=Adam Smith|publisher=econlib.org|url=http://www.econlib.org/library/Enc/bios/Smith.html] For instance, Adam Smith argued that the state has a role in providing roads, canals, schools and bridges that cannot be efficiently implemented by private entities. However, he preferred that these goods should be paid proportionally to their consumption (e.g. putting a toll). In addition, he advocated retaliatory tariffs to bring about free trade, and copyrights and patents to encourage innovation.cite web|title=Adam Smith|publisher=econlib.org|url=http://www.econlib.org/library/Enc/bios/Smith.html]
Initially, the economic liberalism had to contend with the supporters of feudal privileges for the wealthy, aristocratic traditions and the rights of kings to run national economies in their own personal interests. By the end of the 19th century and the beginning of the 20th, these were largely defeated.
In the mid-19th century,
Abraham Lincolnfollowed the Whig tradition of economic liberalism, which included increased state control such as the provision and regulation of railroads. The Pacific Railway Actsprovided the development of the First Transcontinental Railroad. [citation|first=Allen C.|last=Guelzo|title=Abraham Lincoln: Redeemer President|isbn=0-8028-3872-3|year=1999|url=http://www.questia.com/PM.qst?a=o&d=99466893]
Today, economic liberalism is associated with
classical liberalism, " neoliberalism", libertarianism, and some schools of conservatism, particularly liberal conservatism.
List of countries by economic freedom
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