Briefly explain the ideas theories associated with economic liberalism

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EXAM 1
QUESTION 1: Briefly explain the ideas, concepts, and theories associated with economic liberalism that was covered in class, the commanding heights documentary, and the chapter entitled ‘Laisserz-Faire: The Economic Liberal Perspective,’
Economic liberalism is both an economic and sociopolitical issue. It is anchored on the principles of personal freedom and liberty to own, sell, or transact property, in an environment where there is limited government interventions or regulations: it is characterized by open market s and free trade. The concept of capitalism and self-interest constitute the fundamental driving force behind economic liberalism in markets. The self-interest boosts economic activity through resource distribution, which enhances society’s welfare. The desire to own property leads to a strong desire to adopt the effective use of resources, which leads to betters innovation and lower prices (IR 206; Economic liberalism Slides, slide 6).
Due to liberalism in the markets, there is more likelihood of competition, which is attributed to the desire to pursue self-driven interests; this competition, coupled with innovation, brings a wider base of preferences and choices. Thus, in liberalized markets and economies, there is an increased diversity and variety in terms of products, jobs, and services. The existence of economic liberalism is further by the idea that human beings are naturally cooperative, this kind of trade stands to benefit all and promote peace, has a comparative advantage, and the overall gains are better than individual gain (IR 206; Economic liberalism Slides,slide2). Laissez-faire describes the ideal ideology of economic liberalism where the capitalist economic system functions are perceived to function optimally in the absence of state intervention (IR 206; Economic liberalism Slides, slide7).
The concept of economic liberalism has been advanced by many theorists, including Adam Smith, who proposed liberalism based on political reasons, negative rights, positive rights, and democracy. The liberals support political and economic freedoms, and such stands tend to gravitate around free trade with less or no restrictions, low or no tariffs, right to private property y ownership. However, the skeptics of trade liberalism feel that excessive personal interest, pursuits, and capitalism, are likely to nurture significant levels of inequality in society. The liberal skeptics have pointed out flaws in liberal economies. For example, John Maynard Keynes cites the Great Depression as a problematic issue in liberal markets during times of risks, ignorance, and uncertainties in markets (IR 206; Economic liberalism Slides,slide11).
Instead, John Maynard Keynes suggests an economy where there is government intervention, and such governments or states can shore up market failures and an activist macroeconomic policy. Some feel that people would save money and failed to invest or use the money, but John Maynard Keynes says that the government can spend when individuals fail to do so in a bid to bridge the gap (IR 206; Economic liberalism Slides, slide11). Bretton woods is a solution that emerged out of fragilities that were seen in liberal markets: this was ch...