Economic liberalism is the idea of freedom for the economy, being free from State interference, for example. The economic market would be regulated and controlled by itself, leaving a great part of economic decisions to individuals.
The principle of economic liberalism is defend the freedom of productive action, that is, companies have the right to choose which products to manufacture, as well as the workers of choose who they want to work for and, finally, consumers are free to consume the products they want.
Free competition was encouraged and would represent a benefit to consumers and society in general, as long as it followed the ethical and moral standards previously established by law.
Economic liberalism was born as an alternative to end of mercantilism which, at the end of the 18th century, was already in decline in most developed countries, giving way to capitalism.
THE liberal economy is an idea present in capitalist nations, representing the total opposite of socialist ideology or communist, where there is no right to private property or the free and individual market, by example.
Learn more about Mercantilism.
François Quesnay (1694 - 1774) and Vincent de Gournay (1712 - 1759) were two of the main theorists to develop the theory of economic liberalism. However, he was a British economist Adam Smith (1723 - 1790), known as the "father of economic liberalism", who presented the concepts that would come to establish themselves as characteristic of the free economy.
For Smith, the state did not have to intervene in the economy, as it would be controlled by the "invisible hand of the market". In fact, from this idea came the expression that would summarize the concept proposed by economic liberalism: "laissez faire, laissez aller, laissez passer, le monde va de lui-même", which means "let it go, let it go, let it go, the world goes by itself".
Learn more about laissez-faire.
According to Adam Smith, it would be up to the State to just guarantee law and order, national defense and offer some public goods to citizens that would not be in the interest of the private sector (public health, education, basic sanitation, etc).
Economic liberalism went into crisis with the Great Depression of 1929, but several of its ideas would resurface years later with the rise of Neoliberalism.
See also: neoliberalism.
Characteristics of Economic Liberalism
Among the main characteristics defended by economic liberalism, the following stand out:
- Typical in capitalist societies;
- Individualism: freedom of individual action;
- Free market;
- Free exchange;
- Law of supply and demand, based on free competition;
- Minimal State participation in economic matters;
- Defense of private property;
- Valuing the worker's labor;
- Laissez-faire.
Economic and Political Liberalism
Just as Liberalism defended the non-participation of the State in the functioning of the economy, causing a free competition and commercialization in the nation, political liberalism also deprived state interference in aspects of life Social.
political liberalism restricts the interference of state power in some of the fundamental rights of citizens, such as the right to life, freedom and happiness, for example.
See also:
- Liberalism
- liberal state
- law of supply and demand