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Free Market Liberalism and New Deal Liberalism

Compare and contrast the philosophies of free market liberalism (19th century) and New Deal liberalism (20th century). Eplain the differnces in economic policy, the role of the government, the role of the business, and the part that the public workers, unions, taxpayers) played in each system.

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Free Market Liberalism

We will look at each movement separately and list the key principles and basic ideologies of each. This will help you point out the differences.

Free market liberalism in the 19th century:
?Free market liberalism in the 19th century was also known as classical liberalism and saw its origins in Western Europe and America.
?It stresses individual freedom and limited government and was built around theories of how politics and economics interact based on the work of Adam Smith in "Wealth of Nations" (1776) (Velm, 2008) where he promoted the idea of "Laissez Faire", or letting the economy run itself with little or no government interference.
?Other notable influences to classical liberalism included Ludwig von Mises, David Ricardo, Voltaire, Montesquieu, Thomas Paine (Velm, 2008) whose writings stressed the importance of human rationality, individual property rights, natural rights, the protection of civil liberties, constitutional limitations of government, free markets, and individual freedom from restraint.
?Classical liberalism places a particular emphasis on the sovereignty of the individual, with private property rights being seen as essential to individual liberty. This forms the philosophical basis for laissez-faire public policy.
?The ideology of the classical liberals argued against direct democracy advocating the ideas of Thomas Hobbes who perceived people as rational beings but unlike Jefferson and Locke, Hobbes had no faith in their abilities to live in harmony with one another without government. "Classical liberals agreed with Thomas Hobbes that government had been created by individuals to protect themselves from one another. They thought that individuals should be free to pursue their self-interest without control or restraint by society. Individuals should be free to obtain work from the highest-paying employers, while the profit motive would ensure that products that people desired were produced at prices they would pay. In a free market, both labor and capital would receive the greatest possible reward, while production would be organized efficiently to meet consumer demand" (Wikipedia, 2011)
?In economics, some classical liberals believe that "an unfettered market" is the most efficient mechanism to satisfy human needs and channel resources to their most productive uses. Their advocacy of an "unregulated free market" is founded on an "assumption about individuals being rational, self-interested and methodical in the pursuit of their goals" (Wiegand, 2009).
?In such a market the theoretically free choices of individual buyers and sellers determine how the resources of society (labor, goods, capital) shall be employed. These ...

Solution Summary

The solution lists facts that help compare and contrasts the differences between the philosophies of free market liberalism (19th century) and New Deal liberalism (20th century). The two philosophies are listed seperately.