midterm exam

One of the major problems with the analysis of liberalism is that markets are not a natural phenomenon. Liberalism often thinks that the market can adjust itself. However, the evidences from many economics crises show that there are instances where the markets are unable to adjust itself. Furthermore, economic liberalism does not look at the political and social context which is needed if we are to understand how economic actors operate. Liberalism sees individuals as rational actors operating in a system free from political boundaries and social constraints. However, actors are not always rational. Actors are not equal thus they don’t have the equal opportunity to achieve their set goals. Liberalism also only the reflection of the values and ideas associated with the capitalists. Thus, the analysis rather static and the virtues of the status quo are assumed. Furthermore, the lack of government control does not make the market stronger and individual prosperity greater as expect. The uneven distribution of income would create tension between the classes. At the international level, the asymmetry in term of development between North and South shows that liberalism only serves the interests of the strong, particularly a few developed states. Thus, liberal trade policy can create tensions between states instead of bringing peace. Furthermore, free trade has left many industries in different states crumble such as textile and agriculture. Many started to subsidies those products to keep the industry alive.
For the mercantilist, international economic relations are viewed as a competitive exercise. In economic mercantilism, there is an assumption that it is possible to have a comprehensive and objective national interest. In facts, mos...

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...n Social Thoughts at least agree with the mercantilist that the state need to intervene in the market to create boundaries and guideline. The most important thing is that the church should be the principle guide of the society. However, the world has become increasing more secular with the separation of church and the states. Thus, while the church can provide advices, it does not have the ability to influence policies or carry out policies. This is true even in states where the Christianity is dominantly important such as in South American countries. The church could not change the landscape of the economy where very few elites control the wealth of the entire nations, where labour practices are less than desirable. When the most important actor in the economy lacks the ability to control and carry out policies, it is impossible for the actor to achieve its goals.