POLS 1000 LECTURE 8.docx - Reform Liberalism Vs Classical...

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November 18, 2016 Reform Liberalism Vs Classical Liberalism-> Laissez- Faire economy (hands off economy) Links to a self regulating market Prices will move based on demand and supply Response to create a market clearing price Market- Mechanism- Market clearing price- is the point at which demand equals supply Excess supply-> Prices fall as suppliers want to clear their excess production which causes demand to increase This process continues until it reaches a market clearing price Classical Liberalism (cont) According to classical liberalism the best way of organizing a capitalist economy is to allow the greatest possible organization of markets according to the the principle of through the self regulating market through prices A state to enforce property rights and contracts Individual liberty-> Maximum ability of individuals to interact freely in markets Interpretation of History-> Coincident with the extensions of competitive markets

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