In What Way Did Liberal thought Reshape Our Understanding of Markets Essay

In What Way Did Liberal thought Reshape Our Understanding of Markets and Labour - Essay Example Liberalization according to Ramsay (2004) is derived from human nature whereby individuals are assumed to have inherent rights to life, liberty and property and are also considered as autonomous beings with individual interests. Liberal ideas thus emphasize equality, justice, fairness, and freedom and in economic terms, relaxation of trade restrictions to enhance trade between countries. These liberal ideas have reshaped our understanding of markets and labour over ages and given birth to the concept of a free market or capitalism. The paper will discuss how liberal thought reshaped our understanding of markets and labour. This will be achieved by explaining what the market society is, how it came about as well as the key problems that we all face today in the context of an economy in crisis. The Market Society A market society is an economic system where prices are determined by the market forces of demand and supply or the price mechanism. It is mostly referred as capitalism and is characterized by private ownership of property and exchange between legally free individuals (Muller 2002). Due to liberalization, most nations now can trade with other nations all over the world thus shrinking the world into a global village. There is also free movement of labour within and across borders leading to spread of knowledge and ideas which further commerce through innovations and inventions. Each individual in the system pursues self-interests of maximizing utility, profit, and wages. The moral worth of the society is organized around the market and the role of the state is to guard property rights (Aristotle, 1962). Montesquieu (1989) argues that the growth of commerce has made nations to be dependent on each other hence bringing peace among nations. He also criticizes state intervention in the market as it brings about poverty. In a liberal economy, people can achieve their goals as there is nothing preventing them to pursue self-interests. Poverty thus does not exis t in a market society and if it does exist, it is because the individuals do not know the comforts of life; poverty is part of liberty (338). In a market society, there is democracy based on liberal ideas of equality. All members of society thus participate in running of the state as opposed to one man’s rule such as monarchy although in some cases such as England, monarchy does exist even though the state is a free market. A market society is also characterized by competition between various producers as well as nations leading to efficiency in allocation of resources. Nations are able to produce and export whatever they can produce efficiently and import goods which are not efficient to produce due to lack of resources or suitable technology. This enables the citizens to have a greater choice of commodities at affordable prices as a result of competition. This enables individuals to exercise their liberty by having freedom of choice (Hirschman, 1977). Besides having a varie ty of choices, individuals are free to work in any country where wages are competitive and also learn new ideas from other professionals thus widening the scope of commerce .According to Hume (2006), trade enhances production of labour for particular commodities due to increased manufacturing of such items. He also argued that labour could be used to produce in plenty goods for domestic consumption if such goods don’