Economic growth
A key fixture of Liberalism is a free market. Free markets promote economic growth. This is accomplished by a lack of government regulation that can inhibit economic expansion.
(1 of 2)
Next argument >
Context
Economic Liberalism in the Western world was at its peak between the mid-nineteenth century and the Great Depression. FDR's New Deal was a response to economic Liberalism, as it injected federal funding into the markets and began stricter regulations.
The Argument
One of the many positive aspects of Liberalism is that it promotes economic growth.[1] The political philosophy does this by adhering to a free market – meaning the market is free from state (government) regulation. Many people know this economic theory as Laissez-Faire, which in English means, let it be (it is the market).[2] When industries are free from regulation, they can set their own market standards and prices. For example, Henry Ford standardized the automotive industry by utilizing the production line, paying employees $5 a day for an eight-hour workday, and creating a car that most people could afford.[3] He was able to accomplish this, in part, because of the free market principle of Liberalism.
This freedom also promotes competition within each industry. In response to the standards Ford set, other car manufacturers began adopting his methods. New cars appeared in people’s driveways, and these automakers' employees had more money and more free time to spend their earnings. A free market helps economic growth.
Counter arguments
While Liberalism seemingly helps economic growth, a deeper dive into the matter shows that the political philosophy is not clean. A key facet of economic Liberalism is competition. The problem with free-market competition is that some competitors seemingly always take advantage of others. Older, marginalized, weaker, and younger people who enter a market are at a disadvantage compared to more established people and companies within a market.[4]
Competition also can lead to monopolies. When one company in the market gains strength and power, they can buy their competitors. When they buy enough, there is no one else in the market to compete with, and they can set prices and standards however they wish. Government regulation helps keep the market fair. It can prevent companies from taking over an entire market and allow others to flourish.