Economic growth

The argument

One of the many positive aspects of Liberalism is that it promotes economic growth. The political philosophy does this by adhering to a free market, meaning the market is free from state regulation. Many people know this economic theory as Laissez-Faire, which in English means let it be. When industries are free from regulation, they can set their own market standards and prices — which matters because a producer who is free to set terms is also free to try an arrangement nobody has tried before, including one that a regulator would not have thought to permit. 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. Those three decisions were connected rather than separate acts of generosity: the production line lowered the cost per car, the wage held a workforce capable of running it, and the resulting price brought the product within reach of the people making it. He was able to accomplish this, in part, because of the free market principle of Liberalism, which left him free to set the terms of all three. This freedom also promotes competition within each industry, and competition is what turns one firm's innovation into a general gain. In response to the standards Ford set, other car manufacturers began adopting his methods, so the improvement did not stay with the firm that discovered it. New cars appeared in people's driveways, and these automakers' employees had more money and more free time to spend their earnings — which is growth in the sense that matters, more goods produced and more people able to buy them. A free market helps economic growth.

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.

Premises

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. 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.

Rejecting the premises

[Rejecting P1] The Ford example does not show what it is offered for: the moving assembly line and the five-dollar day were a firm's decisions, not consequences of an absence of regulation, and the same period's growth occurred alongside antitrust law, tariffs and a rapidly expanding state — so nothing here isolates laissez-faire as the cause. [Rejecting P2] Liberalism as a political philosophy is not identical with laissez-faire economics; the tradition includes strands that treat market regulation as a condition of liberty rather than an infringement of it, so crediting liberalism with growth via the free market takes one economic doctrine as the whole of it.