Politics in Minutes (2016)

Economic liberalism

Economic liberalism, the belief in a capitalist market economy and private ownership of the means of production, is contrasted with social liberalism (see here), and the two are sometimes awkward to reconcile. But while classical liberalism, and later neoliberalism (see here), have strictly applied the principles of free-market economics, there has always been a strand of liberalism that concedes there is a place for some government intervention and regulation of commerce, and that certain public goods and services are legitimately the responsibility of the state.

A commitment to free trade and open competition, for example, does not preclude regulation to prevent monopolies, or tariffs to control competition from other countries. Even in the most liberalized economies, trade is never entirely free – copyright and patent laws, immigration control and taxes all place some restrictions on the markets, and government subsidies and even bailouts give some firms a competitive advantage.