Liberalism: Economy and Society
The economic system of liberalism was marked by a strong trend called "economic" liberalism, created by Adam Smith known worldwide as the father of the economy. He was born linked to the industrial revolution, since his fundamental basis says that individual interest is the mobile that guides man to act in his economic field. Adam Smith was a Scottish economist and philosopher, who marked a big difference in the world of economy with his book an investigation of nature and the causes of the wealth of nations. During the time of Smith, the concept was directly related to the capital of the moment, that is to say with gold and silver.
Imports abroad were considered harmful to having to pay to deliver the exported goods in question, which would decrease their wealth. However, he did not totally agre. In addition, his position against exports denoted a very different interpretation. Smith believed in free exchange, in a nutshell, no one would trade if they hoped to lose, both merchant and sell would benefit. Economic liberalism is known today as a specific doctrine regarding the organization of societies.
He affirms that the market economy constitutes the best form of economic growth of a country and to improve, in addition, the standard of living of a given society (level of strata and, above all, in the most helpless of society). Private Property System, where production decisions are mainly made by companies, which seek to obtain benefits under the signal of the price system and in the context of competition. It is based on a very powerful behavior such as the search for personal interest. This implies a self-regulatory mechanism called "the invisible hand of the market", a metaphor created by Adam Smith to name economic competition.
Liberal opinion before the clear vision of a conflict could be solved by applying the “short-plates”, that is, the applications of short-term favoring measures, but harmful in the long term. Capital savings and accumulation are the factors that promoted economic development. State intervention generated inefficiency, since they broke the natural balance of supply and demand. Supply and demand by free interaction balanced production and consumption. Individuals have the responsibility to save to educate their children, pay their health and stay during old age. Individuals must also seek their own personal benefit.
Thus they will boost social welfare. As in the previous section, we cannot talk about society during liberalism without mentioning another of the most important trends of the moment known as "social" liberalism, a term founded by the philosopher John Stuart Mill, considered the teacher of the liberal school. Mill began to support this ideology through criticism and sincere protests towards liberalism, disseminating their thinking in a broad extent towards an educational and scientific liberalism. A very important aspect of Mill in his exhibition for liberalism was the abandonment of Laisse-Faire and his acceptance of sentimental-humanitarian arguments against the liberal economy system of the moment.
It was assumed that the key to all problems was education. In his famous essay on freedom, he responds to the fact that the idea of freedom was nothing more than a condition in the development of human nature and that is why only in freedom can man live with nature and, consequently, only insideFrom a free change of the goods produced by him, the maximum natural well -being is achieved. Mill’s "social" liberalism or liberalism arises as a criticism of the political system, maintaining that the freedoms of this political system disregard realities and do not act accordingly positively. In 1848 he thought he was forced, in his book Principles of Political Economy.
To review some judgments. From that moment on, "Mill advises the intervention of the State to create production cooperatives, recover the benefit of land income and mitigate inequality limiting the right of inheritance" as Jacques Droz explains very well in his book Europe:Restoration and Revolution. Mill believes that the State must intervene in all social processes, modifying them as agreed to social utility, referring to the fact that the State must act as another competitor, without taking into account the nature of the government. While liberalism, defined by Mill, believes that power arises from the convenience of individuals and that the government is the necessary instrument.
"Social" liberalism supports that these individuals are fully unaware of their own interests and that power emerges from the need to be directed. Another known author of the time and that represents the same essence that John Stuart Mill on bourgeois and liberal thinking is Auguste Comte. He publishes in his scientific works plan necessary to reorganize society, although in the system he proposes in his book he only manages to influence the following generation. Comte demonstrates that individuals has seized individual anarchy and believes that it is "western disease" that defines as "not recognizing more spiritual authority than individual reason".