Evolution of Liberalism

These flashcards cover key vocabulary terms related to the evolution of liberalism, economics, and political theory.

Classical Liberal Economic System

An economic system where the law of supply and demand is used to guide production and distribution, emphasizing individual economic freedom.

Mercantilism

An economic theory and practice dominant in Europe from the 15th to the 18th century that emphasized governmental regulation of a nation's economy for augmenting state power.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating behavior of the marketplace.

Opportunity Cost

The value of the next best alternative forgone when making a choice.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Utilitarianism

An ethical theory suggesting that the best action is the one that maximizes utility, usually defined as maximizing happiness and reducing suffering.

Centrally Planned Economy

An economy where the government makes all decisions about the production and distribution of goods and services.

Laissez-Faire

An economic philosophy of free-market capitalism that opposes government intervention.

Progressive Taxation

A system where the tax rate increases as the taxable amount increases, placing a higher burden on wealthier individuals.

Proletariat

The working class who sells their labor for wages.

Bourgeoisie

The capitalist class who owns most of society's wealth and means of production.

Demand and Supply

The economic model of price determination whereby the quantity demanded by consumers and the quantity supplied by producers interact.

Socialism

An economic and political theory advocating for social ownership of the means of production.

Communism

A classless, stateless society where the means of production are collectively owned.

Demand Shock

An event that increases or decreases demand for goods and services in the economy.

Fiscal Policy

Government policy that attempts to influence the direction of the economy through changes in government spending or taxes.