Liberal, Conservative, and Radical Economic School Of Thought
Liberal economic school of thought
Liberal economic school of thought emerged as the primary critics of the mercantilism school of thought. Mercantilism school of thought believed that for nations to prosper, they must promote agriculture and manufacturing sectors. The primary objective of this proposal was to increase exports and limit a country’s imports so as to generate wealth by retaining gold and other precious metals. The liberal school of thought advanced their belief of free trade and capitalism in which individual households were the owners of capital assets (Tanaka & Robert, 2016). It believed in an economic system in which the individuals are responsible for making economic decisions and not letting collective institutions make these decisions on their behalf.
Liberal economic school of thought assumed that economic actions by individuals are based on self-interest, which is an invisible hand that pushes individuals to perform economic actions. It further assumed that as long as there is justice and availability of public information within a society, individuals should be allowed to act without any restriction. Through this, they will produce results that are best for everyone in a spontaneous order. Liberal economic school of thought was against government intervention in free markets though it supported government regulation to a certain degree in regards to the provision of infrastructure and other necessary public goods.
Conservative School Of Thought
The conservative economic school of thought is a line of economic knowledge that was built and engrained on authority and hierarchy as well as property rights. Conservative school of thought assumed that for an economy to prosper, it must have an organic society (Helleiner, 2019). An organic society is a society with a relatively high moral density with strong social bonds. The standard norms in this kind of society are based on restitutive sanctions and prevail in cooperative laws. The collective conscience of individuals in such a society are based on hierarchy and authority, as well as property rights.
Conservative school of thought championed for an economy that is unique on its own and built on the traditions and cultures of that particular society. On the same note, it emphasized on the importance of specific institutions like parliamentary government and religion in ensuring continuity and social stability. In a nutshell, the Conservative school of thought believed in the creation of organic society and utmost respect to institutions within the society that symbolizes the existing unity and prosperity.
Radical Economic School Of Thought
The beliefs in this particular school of thought is primarily built on the beliefs of the liberal economic school of thought with technology and rationality that exists among consumers. The self-interest that exists among individuals drives firms into maximizing profits in a competitive market. The rapid technological advancements witnessed in the contemporary world have created a competitive market, which is a supreme good and is also known as summum bonun (Nelson, 2019). Technology creates this supreme good by determining the manner in which goods are to be produced, transported, and exchanged. The rationality that exists among consumers makes them determine what individual firms should produce. An endowment of resources in regards to skills, talents, and materials also determines who the goods are to be distributed. These factors are the basis in which economies are built in the contemporary world.