Liberalism and free business competitions
Introduction
Liberalism talks about an economic theory that bets on a state that does not intervene in the economy, which leave the market in perfect competition, in order to establish balance in supply and demand, and that this is necessary for there to be a free competition of companies. The Austrian school together with Hayek think that if the market is left in its free will, there is full employment, since the market is self-regulated in supply and demand and there will always be a job at the balance price in which we find ourselves, wages are wagesThey self-regulate and in this way there will always be jobs thanks to the self-regulation of the market, we are talking about a trend that bets more on the market than by the State.
Developing
The market meets the needs of absolutely everything, because it is completely efficient. Liberals as Hayek have an opinion of the crisis as an economy therapy due to excessive consumption, understand that if the economy was not intervened by the State it would be completely stable and economic cycles would not be generated such as those produced by Keynesianism, the liberals ensureThat stable monetary rules produce stable economies and avoid crisis, as well as generate favorable expectations, they believe that the State should only intervene to guarantee internal and external security of the country. They also believe that excess taxes breaks the free will of the market and drowns the economy.
That is why they are against them. One of the criticisms that liberals have towards Keynesianism is that being the money of everyone’s taxAnd that the economy flows much better without its intervention. On the other hand, Keynesian’s thinking is contrary to that of Austrians, since they talk about an economic current that understands that markets are not perfect and need the intervention of the State so that they can be fair and can balance, that the market does notIt can be regulated by itself and has imperfections, they are sure that you have to promote the economy and intervene it.
They also believe that the debt is not bad, since it allows us. Indicated that public spending programs to end unemployment were inciting uncontrollable inflation. The critic of the Keynesians before the liberalists is that leaving the market in their free will produces inequalities and that the rich become richer and the poorest, no social justice is carried out. The Keynesian will always bet on consumption, and a liberal will always bet on savings, since usually so that there is consumption before there must be savings.
First you must have that money to be able to spend, on the other hand, the Keynesian understands that you can request that money, ask for a loan or a mortgage, therefore you can consume, so that savings so that there is consumption must not necessarily exist, thisIt is one of the causes that lead us to the crisis and that is what liberals criticize, they are in favor of more savings and less debt. Keynes said that the State must be the promoter of growth because the market alone is not self-regulated, the State must become the generator of economic stability and guarantor of sustained growth, believed that before a crisis, the solution would beInject demand to the economy.
The State, carry out projects to create new jobs and that in this way there would be more demand, therefore more consumption, and leave this way of the crisis, but this is not what liberalists thought, they said that crises are produced byThe excess debt issued, for spending the money we do not have, and conclude that the State does not solve the crises, its intervention causes them. There was a classic way of thinking about unemployment, which said that unemployment is voluntary and is because workers do not accept the salary offered, and that to eliminate this workers should be willing to work for lower salaries. There are those who think, like Arthur Pigou, that unemployment is involuntary.
It is because the demand for a company is determined by the real salary that the company must pay. Having read these articles, I could conclude that the Austrian school or liberalism focuses on the State should not interpose in economic relations or, in any case, that this intervention is minimal, the market must not have any regulationBeyond what individuals decide, since it is able to function without any intervention of the State, supply and demand establishes the cost of products. Similarly, it supports the total freedom of workers and employers to reach agreements, without the State should enter. While Keynesianism points out that using public spending.
conclusion
An alleged stimulus of economic growth, generating deficit, increasing public spending is something good, since market failures supply in insufficient demand. I think that the success of the liberals is because they are pointing to the rulers, the politicians who usually seek power. In my opinion I agree with liberalism in the sense that you cannot spend the money that you do not have, that we must save, I do not believe that debts are the path that leads a country to get out of a crisis, and I agree thatThe involvement of the State in the economy does not bring anything good, since clearly most of the states of each country, if not all, they include more towards power than the benefit for society.
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