Session 3 1
The liberal perspective on IPE reveals many insights about political economy that
mercantilists miss or did not address.
liberty under the law
. Hence it focuses on the side of human
nature which is competitive but guided by reason not emotion.
Although liberals believe that
human beings are fundamentally self interested, but it is not a disadvantage because broad
areas of society are set up in such a way that competing interests can engage one another
Liberalism rooted in reaction to important trends and events that occurred in Europe in the
centuries. The first step was taken in France by
1774) who led a group of French philosophers called the
government interference in the market, because it brought harm to society. Their motto was
laissez-faire, laissez passer.
(1723-1790) a Scottish contemporary of Quesnay, who was regarded as
the father of modern economics, and took laissez-passé as his theme to offset state
intervention, hence regarded state as a dangerous and untrustworthy and condemned the
tariffs. That was when the state was heavily mercantilist in 1776. And he brought the idea of
which has two tightly intertwined parts:
self-interest and competition.
looked at the abusive potential of the state and thought that government run industry is
His works struck the right note at the right time and so gained a measure of respect and
influence that is rare. Hence, his book
The Wealth of nations
makes it appear that liberalism
is concerned about only economics and wealth.
Although Adam Smith was against the state intervention in the market activities, but the state
had a number limited task to perform in society that individuals cannot perform by them,
which is to help create an institutional environment that fosters individual action, such as
establishing and maintaining basic
Economic liberals tend to focus on the domain in which nation-states show their cooperative,
peaceful, constructive natures through harmonious competition.
in adopting the economic liberal view of
international affairs. For Ricardo, free commerce makes nations
efficient and general
and efficiency is a quality that liberals value as highly as liberty. In IPE jargon,
liberals think that outcomes of state, market, and society relations is a
which everyone can potentially get more out of a bargain than she or he put into it.
Due to the dynamism of IPE field, liberal view has evolved over the years. Thus, a critical
person in the intellectual development of liberalism was
John Stuart Mill
John Stuart Mill
presented a philosophy of social progress that was moral and spiritual
progress rather than accumulation of wealth. He proposed that, to achieve social progress, the