Responding to Classical Liberalism Flashcards

Grassroot Movements

• Protest against the effects of classical liberalism, capitalism, and the industrial revolution

• The change is driven by the people or citizens, from the ground up.

Luddites

• Skilled artisans who were being replaced by machines operated by cheap, relatively unskilled workers

• Led by Ned Ludd

• They formed a protest movement (Army of Redressers, 1811) and broke into factories and destroyed the machines that would make their labour redundant

Luddism

• The fierce opposition of the Industrial Revolution and its changes

• The use of violent means to return society back to its pre-industrial state → extreme right ideology

• By 1817, the government used violent and new laws banning destroying machinery to smother the movement

Chartism

• A working class movement in Britain that focused on political and social reform

• Named after People’s Charter of 1838, if had 6 essential goals:

  • Universal suffrage for all men (currently, only propoerty-owning men could vote)

  • Equal-sized electoral districts

  • Voting by secret ballot

  • Ending the need for property qualifications for Parliament

  • Pay for MP’s

  • Annual elections

• Progressive left ideology

Socialism

Any ideology that believes resources should be controlled by the public for the benefit of everyone in society, and not by private interests for the benefit of private owners and investors. They value economic equality among citizens, which is achieved by providing income security for all through guaranteed employment and guaranteed living standards. The principles of collectivism are favoured over individualism. 

Utopian Socialists

• Essentially humanitarians who advocated an end to the appalling conditions of the average worker in the industrial capitalist countries of the time

• Used the collective ownership of resources to ensure all members of society are benefited, and have access to many public services

Robert Owen

• Believed the harshness of life under laissez-faire capitalism corrupted human nature

• Made New Lanark to demonstrate his utopian principles

• Ensured all infants had access to education and day care

• Healthcare was free

• Incentivised good behaviour and better working conditions

• Achieved highly successful results in New Lanark

Saint-Simon

• “science of society”

• Utopian socialist

• The natural laws of society, like the natural laws of the sciences, should be used to guide progress

Marxism/Communism/Scientific Socialism

• Form of radical socialism (extreme left)

• The workers (proletariat) would uprise against the bourgeoisie (owners); the proletariat wins

• The proletariat establishes a Dictatorship → it creates a command economy, and income is distributed according to the value of work performed

• Economic equality is established

• Social classes gradually disappear

• People work for societal good rather than personal gain

• The state “withers away”

Proletariat

The working class

Fabian Society

• Founded in London in 1884

• Favoured gradual and incremental reform of liberalism toward the principles of socialism

Co-operative Commonwealth Federation (CCF)

Moderate and democratic socialist party founded in 1933

Regina Manifesto

• Document containing the moderate and democratic socialist principles of the CCF

• Was the foundation for the NDP

Classical conservatism

• Reaction to classical liberalism

• Developed by Edmund Burke

• Society is an organic whole that should be structured in a hierarchical fashion with those best suited to leadership at the top, because people do not have equal abilities

• Wanted to revert to the past → monarch systems

• Government should be chosen by a limited electorate with special rights, responsibilities, and privileges

• Leaders should be humanitarian–their role includes the responsibility to care for the welfare of others

• Stability of society is the paramount concern, to be achieved through law and order and the maintenance of the customs and traditions that bind society together

• Highly collectivist

Edmund Burke

• Created classical liberalism

• Horrified by the French Revolution → wanted things to go back to how they were before

• Strongly opposed Rousseau

Welfare capitalism

• A classical liberal economic system combined with a government that used legislation to give workers protections such as limited working hours and a minimum wage

• The evolved form of classical liberalism, as its supporters began seeing the significant shortcomings of laissez-faire economics

• Initiatives by industrialists to provide workers with non-monetary rewards to heat off the growing demand for labour unions; also refers to government programs that would provide social safety nets for workers

Labour unions

Organized groups of workers who demand better wages and working conditions

Factory Acts

• Each act gradually improved the working conditions in factories, decreased working hours, regulated the age at which children could work, and regulated the number of hours women and children could be required to work

• In Britain

Square deal

• Coined by Roosevelt to signify that both labour and capital must be treated fairly

• Occured during a massive labour strike of the United Mine Workers

Progressivism

• New kind of liberalism in Roosevelt’s party aiming to change existing norms, improve suffrage rights for all, increase social and industrial justice, and improve working conditions

Welfare State

• Movement of welfare capitalism to welfare state was spurred by the Great Depression

• State in which the economy is capitalist, but the government uses policies that directly or indirectly modify the market forces in order to ensure economic stability and a basic standard of living for its citizens, usually through social programs

Great Depression

• Period if huge economic regression, causing immense suffering to workers worldwide

• The US produced much of Europe’s grain during and after WW2, but when European crops suddenly started producing, the price of grain plummeted, people panic sold their stocks, and the stock market crashed

• Spurred many political changes, including the development of modern liberalism and the welfare state

Crowsnest Pass Strike

• In 1932, coal workers went on strike in Crowsnest Pass

• This increased the worry that people would turn to communism during the Great Depression

Keynesian/Demand-Side Economics

• Believed that if supply and demand were balanced, this does not necessarily mean full employment → rejected a fundamental principle of classical liberalism economics

• The business cycle was caused by one factor: consumer demand

• During recessionary periods, government should decrease interest rates, decrease taxes, and increase government spending

• During inflationary periods, government should increase interest rates, increase taxes, and decrease government spending

• Begun the shift from a free market to a mixed economy

Monetary Policy

Actions by the central bank, most commonly changing interest rates

Fiscal Policy

Actions directly by the government, commonly changing taxes and government spending

Haymarket Riot

• Initially a protest to shorten the workday to 8 hours

• Turned into a violent confrontation between the workers and police

Labour standards

Government-enforced rules and standards aimed at safe, clean working environments, and the protection of workers’ rights to free association, collective bargaining, and freedom from discrimination

Feminism

The belief that men and women are to be treated equally in all respects.

Denis Diderot

• Related women to the uterus, an organ that causes terrible spasms

• Opposed to giving women the right to vote

Mary Wollstonecraft

• Advocated for feminism and universal suffrage

• Argued that education would make women better wives and mothers, and make them equals of men

Sojourner Truth

• Former slave

• Campaigned for equality and women’s rights

Nellie McClung

• Played the role of the premier during a mock parliament in Manitoba

• A leading suffragist

Monopolies

Firms which take up the entire industry they serve

Sherman Anti-Trust Act

Piece of legislation that prevents collusion and monopolies between competing companies in an industry

• Prevents companies from owning more than 1 competing company

• It was also used to weaken labour unions

Progressivism

• Introduced by Theodore Roosevelt

• At the time, it involved mild increases in government intervention to preserve capitalism and social welfare

Credit Union

Smaller financial institutions owned by their members; profits are used to offer members better lending rates and lower fees. They are more willing to lend to smaller communities than larger banks. They are popular among farmers who can get more loans.

Slphonse Desjardins

• Created the first credit union in north america in Quebec

• Based his credit union on european models

The First Red Scare

• Red represents communism and socialism

• The growing fear of communism in America fueled political conservatism, xenophobia and laissez-faire economics

Isolationism

A retreat from involvement in other countries’ affairs, especially European countries

Nativism

THe promotion of policies that favour the existing dominant culture in a country and reduce immigration

Harding and Coolidge

• President during 1921

• Implemented classical liberal ideas

• His mains policies “return to normalcy”:

  • isolationism

  • nativism

  • limited government

Consumerism

Consumer spending; a preoccupation with consumer goods and their acquisition and display of things in order to denote status.

Income disparity

Difference in earnings between the rich and the poor

Black Thursday

• Stock market crash in 1929

• When the stock exchange stopped rising, people panic-sold their stocks to earn a profit, causing the stock market to plummet

The aftermath of black thursday

• Investors who borrowed money to invest became deeply in debt

• Borrowers found themselves in deep debt

• Savers raced to withdraw their money because they worried about the security of their funds, causing bank runs

Bank run

A situation in which too many depositors try to withdraw their savings from a financial institution

CCF (Co-operative commonwealth federation)

• Founded in Canada in 1932 to support mixed economic policies

Bennet

• Canadian prime minister during great depression

• “Bennet Buggies” cars without engines pulled by horses

  • Bennet’s laissez-faire economics made gas so expensive it was cheaper to ride by horse

New Deal

• Created by Franklin Roosevelt

• First adoption of modern liberalism

• Created Alphabet Agencies to give the government control over crucial industries

• Implemented Keynesian economic policies to reduce the recession

CCC (Civilian Conservation Corps)

• Employed young men from unemployed families to work in rural areas in the form of conservation and building infrastructure

TVA (Tennesse Valley Authority)

• Helped build critical infrastructure such as hydroelectric dams and electricity generators to power the south states

• Helped reduce feelings of enmity in the South towards the North who won the civil war

Social programs

Programs that affect human welfare in a society. Social programs are intended to benefit citizens in areas such as education, health, and income support. Supporters base their support both on humanitarian principles and on economic principles.

Mixed economy

An economic system based on free-market principles but with some government intervention, usually to regulate industry, to moderate the boom-and-bust nature of the free-market business cycle, and to offer social welfare programs. In some mixed economic systems, the government owns some key industries (such as communications, utilities, or transportation).

CD Howe

• Known as the “Minister of Everything”

• His achievements include

  • Using unemployed workers to build airstrips across the country

  • Establishing Air Canada as a crown corporation

  • Centralizing the administration of Canadian ports

  • Reducing the Canadian National Railways debt

  • Helping to create the CBC

• Social programs he created:

  • Bank of Canada became a crown corporation

  • National Film Board

  • Unemployment Insurance Act

  • family allowances

  • National Housing Act → crate housing programs for low-income families

Postwar Consensus

• The period of British politics from the end of WW1 to the 1970s (before stagflation)

• Involved collectivist parties and welfare capitalist ideologies

Staglation of the 1970s

• A recession and high inflation occur at the same time (negative supply shock)

• OPEC made an oil embargo on the US and the Netherlands, reducing oil supply significantly and increasing prices

• Demand-side economics couldn’t solve this issue, and many liberal countries faced immense struggles

Hayek

• Austrian school of economics

• Critical of collectivist thinking

  • In order for collectivism to work, the government should maintain an extremely high level of control over society, which dangers economic liberty

  • It is impossible for central planners to have enough information to make rational decisions

Monetarism (Hayek + Friedman)

Theory that control of a country’s money supply is the best means to encourage economic growth and limit unemployment and inflation. Money is controlled by controlling interest rates (monetary policy)

Supply-side/Trickle-down economics

Government economic policies that include reduced income and business taxes, reduced regulation (controls on business), and increased government spending on military. Generally, these policies favour industry, assuming that if industry prospers, then everyone will prosper as wealth “trickles downs” to the ordinary workers and consumers

• Increasing interest rates reduces inflation

• Decreasing interest rates increases inflation

Reaganomics

Economic policies of the Ronald Reagan US presidency, which advocated less government intervention in the economy and pro-industry, anti-labour, anti-regulation, and anti-environmental regulation policies.

• Implemented supply-side/trickle-down economics

• It only increased income disparity, and wealth did not trickle down

Thatcherism

• Tried to reduce government involvement in the economy and increase economic freedom

• Followed neoliberal principles

• Sold Britain’s social housing

• Privatized many utility companies

• Cracked down on labour unions and strikes with violent force

Blair’s Third Way

• Labour Party prime minister in 1997 → highly moderate policies

• It incorporated a balance of Keynesian economics and monetarism

• Adopted some Thatcherite and free-market policies, while maintaining some social programs

• Increased government spending on health care and education and introduced a minimum wage

• Introduced tuition fees for secondary education, which had previously been free

Netherland’s Polder Model

• Involves employers, unions, and government representatives working together to make decisions; it helps avoid strikes, thus stabilizing the economy

• Polders are an interdependent system of dikes, which prevents flooding

  • Symbolizes the interdependent unions, employers, and government

Kenya’s Harambee

• Bantu word that means “let us all pull together”

• Collectivist economic and social policies

Democratic Socialism (cradle-to-grave): Sweden

• Prioritizes collectivist thinking and social benefits over laissez-faire economics, but acknowledges that capitalism+competition are necessary to drive innovation

• Immigration and government debt pose challenges to this system.