Economic liberalism

Economic liberalism[lower-alpha 1] is a political and economic ideology based on strong support for an individualist market economy and private property in the means of production. Economic liberals tend to oppose government intervention in the market when it inhibits free trade and open competition, but support government intervention to protect property rights and resolve market failures.[3] Economic liberalism has been generally described as representing the economic expression of classical liberalism.

As an economic system, economic liberalism is organized on individual lines, meaning that the greatest possible number of economic decisions are made by individuals or households rather than by collective institutions or organizations.[4] An economy that is managed according to these precepts may be described as liberal capitalism or a liberal economy.

Economic Liberalism is the theory of economics in Classical Liberalism, developed during the Enlightenment, particularly by Adam Smith, which advocates minimal interference by government in the economy. This was initially to promote the idea of private ownership and trade. However due to growing awarness of concerns regarding policy economic liberalism paved way for a new form of liberalism, which allowed for government intervention in order to help the poor. Economic. As a consequence, the widespread appeal of Smith’s economic theories of free trade, the division of labour and the principle of individual initiative has helped to obscure the rich body of political liberalism to be found in his work. This promoted the everyday man to hold ownership of his own property and trade which slowly allowed for individuals to take control of their places within society.

Economic liberalism is associated with markets and private ownership of capital assets. Historically, economic liberalism arose in response to mercantilism and feudalism. Today, economic liberalism is also considered opposed to non-capitalist economic orders such as socialism and planned economies.[5] It also contrasts with protectionism because of its support for free trade and open markets.

Economic liberals commonly adhere to a political and economic philosophy which advocates a restrained fiscal policy and the balancing of budgets, through measures such as low taxes, reduced government spending, and minimized government debt.[6] Free trade, deregulation of the economy, lower taxes, privatization, labour market flexibility, and opposition to trade unions are also common positions.[7] Economic liberalism follows the same philosophical approach as classical liberalism and fiscal conservatism.[8]

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