Economics, Society and the Individual

Individualism & Economics In economic liberalism the government has little (or zero) control over the economy and private individuals make the major economic decisions. Mercantilism was the dominant economic system in Europe before the emergence of liberalism. Mercantilism emphasized exporting goods, accumulation of wealth in gold and silver, and the use of taxes and quotas to limit imports

Adam Smith – The Wealth of Nations (1776) Smith proposed a free market economy where prices were set by the law of supply and demand **DRAW SUPPLY/DEMAND CHART HERE**

Smith’s key idea: - If everyone acts in their own self-interest this will indirectly benefit society as a whole Government should stay out of the economy – “Laissez-faire” – means “leave alone” in French

Economic freedom – means producers and consumers are free to act as they want. Decisions are made based on self-interest. Competition is an important part of economic liberalism. Competition between producers results in lower prices and higher quality goods/services for consumers. (example: Cell phone companies) Private property – land, businesses, etc. (the means of production) are owned by individuals, NOT the gov’t. Profit motive – is what drives the actions of producers and other individuals in a market economy

Society & Individualism Liberalism emphasizes the importance of the individual and rights and freedoms, however it also addresses the unfair treatment of individuals through gov’t intervention. During the Great Depression (1930s) governments became more involved in society and the economy to address rampant poverty. The gov’t also intervenes (in Canada) to provide all citizens with health care and education. United States… not so much. These issues are sources of great debate and disagreement.

Gov’t makes laws to protect minorities from unfair treatment. Capital punishment (death penalty) is another area of debate