Economic Liberalism

Economic liberalism is the ideological belief in organizing the economy on individualist and voluntarist lines, meaning that the greatest possible number of economic decisions are made by individuals and not by collective institutions or organizations. Not to be confused with capitalism, although they are strongly related, capitalism is based on individual decision founded in capital and materialistic incentives mainly, while economic liberalism is not only focus in this view. Economic liberalism is not founded in the idea of laissez-faire but in the more general and abstract idea of individual freedom. Economic liberalism can also be supportive of government regulation to a certain degree, but 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 favours markets unfettered by the government, it maintains that the state has a legitimate role in providing public goods.

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 and planned economies.

See also

Capitalism, Economic freedom

Papers

• De Haan, J., & Sturm, J. E. (2000). On the relationship between economic freedom and economic growth. European Journal of Political Economy, 16(2), 215-241.
• Easton, S. T., & Walker, M. A. (1997). Income, growth, and economic freedom. The American Economic Review, 87(2), 328-332.
• Carlsson, F., & Lundström, S. (2002). Economic freedom and growth: Decomposing the effects. Public choice, 112(3-4), 335-344.
• Berggren, N. (2003). The benefits of economic freedom: a survey. The independent review, 8(2), 193-211.
• Helleiner, E. (2002). Economic nationalism as a challenge to economic liberalism? Lessons from the 19th century. International Studies Quarterly, 46(3), 307-329.
• Martinez, E., & Garcia, A. (1998). What is’ neo-liberalism’?. Third World Resurgence, 7-8.

Books

• Friedman, M. (2009). Capitalism and freedom. University of Chicago press.
• Schumpeter, J. A. (2013). Capitalism, socialism and democracy. Routledge.