Liberal Thought of Markets and Labour - Essay Example

? Topic: Lecturer: Presentation: Introduction In recent times, the terms liberalization and globalization havebecome common items of discourse in society. They are blamed for many social evils in society such as corruption, greed for massive acquisition of property and corrosion of societal morals. On the other hand, they have been praised for enabling free trade or free market across countries, spread of knowledge and innovations as well as economic growth especially for developing countries hence raising the well-being of the society. The question that begs an answer then is; what is liberalization? Liberalization according to Ramsay (2004) is derived from human nature whereby individuals are assumed to have inherent rights to life, liberty and property and are also considered as autonomous beings with individual interests. Liberal ideas thus emphasize equality, justice, fairness, and freedom and in economic terms, relaxation of trade restrictions to enhance trade between countries. These liberal ideas have reshaped our understanding of markets and labour over ages and given birth to the concept of a free market or capitalism. The paper will discuss how liberal thought reshaped our understanding of markets and labour. This will be achieved by explaining what the market society is, how it came about as well as the key problems that we all face today in the context of an economy in crisis. The Market Society A market society is an economic system where prices are determined by the market forces of demand and supply or the price mechanism. It is mostly referred as capitalism and is characterized by private ownership of property and exchange between legally free individuals (Muller 2002). Due to liberalization, most nations now can trade with other nations all over the world thus shrinking the world into a global village. There is also free movement of labour within and across borders leading to spread of knowledge and ideas which further commerce through innovations and inventions. Each individual in the system pursues self-interests of maximizing utility, profit, and wages. The moral worth of the society is organized around the market and the role of the state is to guard property rights (Aristotle, 1962). Montesquieu (1989) argues that the growth of commerce has made nations to be dependent on each other hence bringing peace among nations. He also criticizes state intervention in the market as it brings about poverty. In a liberal economy, people can achieve their goals as there is nothing preventing them to pursue self-interests. Poverty thus does not exist in a market society and if it does exist, it is because the individuals do not know the comforts of life; poverty is part of liberty (338). In a market society, there is democracy based on liberal ideas of equality. All members of society thus participate in running of the state as opposed to one man’s rule such as monarchy although in some cases such as England, monarchy does exist even though the state is a free market. A market society is also characterized by competition between various producers as well as nations leading to efficiency in allocation of resources. Nations are able to produce and export whatever they can produce efficiently and import goods which are not efficient to produce due to lack of resources or suitable technology. This enables the citizens to have a greater choice of commodities at affordable prices as a result of competition. This enables individuals to exercise their liberty by having freedom of choice (Hirschman, 1977). Besides having a variety of choices, individuals are free to work in any country where wages are competitive and also learn new ideas from other professionals thus widening the scope of commerce .According to Hume (2006), trade enhances production of labour for particular commodities due to increased manufacturing of such items. He also argued that labour could be used to produce in plenty goods for domestic consumption if such goods don’t have foreign markets. How Market Society Came about Muller (2002) acknowledges that traditionally, commerce had little or no room for the Greeks and Christians. For the Greeks, commerce was a vice as it was believed to destroy the common purpose and willingness to sacrifice. On the other hand, they believed that war between nations was inevitable hence devotion to the well-being of society and to military defence was considered a virtue. They also believed that wealth was fixed but commerce led people to acquire excess wealth thus bringing inequalities among society members as it involved some gaining and some losing from trade. Commerce in this sense was morally illegitimate and money lending was highly condemned as it was seen as a way of taking from others. However, Aristotle saw no evil in pursuing riches but he condemned active pursuit of riches through trade (5). The Christians especially Roman Catholics condemned trade as immoral and based their arguments on biblical teachings whereby Jesus cautioned his disciples against earthly riches. According to them, riches would hinder individuals from salvation (Muller, 2002). On one occasion, Jesus told a king that he had to give out his riches and be born gain like a child if he wanted to enter the kingdom of heaven. This shows that Christian teachings are against acquisition of wealth for selfish gains; the common good of the society should prevail upon the self-interest of individuals and since commerce creates individuality, it is morally wrong. Most of the trade especially money lending was conducted by the Jews who were considered as outsiders or non-citizens. There were various disagreements between the Catholics and the Protestants especially because the Protestants allowed trade to a certain limit and this would have led to civil war. However, political theorists such as Hobbes, Locke, and Grotius with their liberal ideas influenced the thinking of the Greeks and Christians to embrace commerce (Muller, 2002). They emphasized on earthly well-being as opposed to eternal salvation as a means of glorifying God. The items considered as vices were redefined as virtues and virtues as vices hence the civic republican virtues of courage and command was seen as threatening peace. According to Weber (1992), the protestant work ethic was the beginning of capitalism or the market society. Work was considered as a virtue or a calling. Individuals were encouraged to work hard and make self-sacrifices for the sake of better rewards or in pursuit of worldly riches. Giving charity to the poor was condemned as it was considered as laziness. Individuals thus started pursuing self-interests hence freedom and liberty and the growth of capitalism. People began exchanging their labour for wages so as to acquire material wealth and fulfil their needs. The market was liberal in nature in that people exchanged labour for wages freely and wages are determined by the market (Mises, 1985). Dision of labour in society arose out of capitalism as workers began specializing in their professional areas. This was mostly due to the influence of Taylor’s principles of scientific management. Workers were trained in one field where they specialized in so as to increase efficiency hence a complex division of labour (Taylor, 2010). Problems of Capitalism Capitalism has been criticized for bringing about alienation of individuals from their work, product of their work, and from themselves. This is as a result of workers being owned by individuals who pay their wages and to eliminate this problem, modern organizations have been trying to introduce various measures like teamwork, work life balance, and high-commitment cultures to provide workers with shared norms and values (Fleming, 2009). Another problem is the formation of identity based on work instead of workers being their own self. Nowadays, people are identified with the work they do and not who they are hence losing self-identity. The market society also makes nations to be dependent on each other and this has harmful consequences in case of an economic crisis. Liberal ideas allow nations to trade with each other and lend money to each other hence acquire goods from foreign markets and avoid manufacturing such products (Montesquieu, 1989). In case of unfavourable conditions in that country, those countries that depend on those products are affected. Capitalism also concentrates wealth to individuals who own means of production and to those nations highly endowed with resources hence the richer keep getting richer and the poor get poorer especially if the right government is not in place to ensure equality in distribution of wealth. It also allows transfer of cultures from one country to another leading to erosion of societal values and establishment of the dominant culture especially from western nations. Conclusion The liberal thought has had great impact on our understanding of markets and labour. In traditional societies, slaves provided labour for free to their masters and commerce was discouraged. It was viewed as a vice in society as it allowed excessive accumulation of wealth and led to self-interest at the expense of common good for society. Moreover, accumulation of wealth is prohibited in the biblical teachings. However, the political liberal thinkers like Hobbes influenced the Christians with their ideas changing the nature of work and trade. The protestant work ethic put value on hard work as a virtue and commerce as essential for well-being and as a means of glorifying God. This led to capitalism where the market forces control the market with little or no government intervention. The role of the state is to guarantee property rights. This has led to growth in trade; spread of culture, knowledge, and ideas; emergence of good governance or democracy. It has also led to alienation of workers, dependency among nations, corruption, and loss of self-identity. References Aristotle (1962) Politics. Harmondsworth: Penguin Classics. Fleming, P (2009) Authenticity and the Cultural Politics of Work: New Forms of Informal Control. Oxford: Oxford University Press. Hirschman, A (1977). The Passions and the Interests. Princeton: Princeton University Press. Hume, D. (2006) Essays: Moral, Political and Literary. New York: Cosimo. Mises V (1985) Liberalism in the Classical Tradition. 3edn, California: Cobden Press Montesquieu (1989) The Spirit of the Laws. Cambridge: Cambridge University Press. Muller, J (2002) The Mind and the Market: Capitalism in Western Thought. New York: Anchor Books. Ramsay, M. (2004) What's Wrong with Liberalism? A Radical Critique of Liberal Political Philosophy. New York: Continuum Taylor, F (2010) The Principles of Scientific Management. New York: Harper Brothers. Weber, M (1992) Protestant Ethic and the Spirit of Capitalism. London: Routledge. Read More