What is Economic liberalism

LO1: Define Economic Liberalism

LO2: Identify characteristics of "Capitalism"
LO3: Compare capitalism to other economic system -(communism, socialism)

Economic liberalism is an economic system organized on individual lines, which means the greatest possible number of economic decisions are made by individuals or households than by collective institutions or organizations. It includes a spectrum of different economic policies, such as freedom of movement, but its basis is on strong support for a market economy and private property in the means of production. Although economic liberalism can also be supportive of government regulation to a certain degree, it tends to oppose government intervention in the free market when it inhibits free trade and open competition.

Capitalism

Capitalism is "production for exchange" driven by the desire for personal accumulation of money, mediated by free markets. The markets themselves are driven by the needs and wants of consumers and those of society as a whole.

Capital accumulation: Production for profit and accumulation as the implicit purpose of all or most of production, constriction or elimination of production formerly carried out on a common social or private household basis. Commodity production: Production for exchange on a market; to maximise exchange-value instead of use-value. Private ownership of the means of production: High levels of wage labour. The investment of money to make a profit. The use of the price mechanism to allocate resources between competing uses. Freedom of capitalists to act in their self-interest in managing their business and investments.