Free Markets & Rights:

John LockeThe right to life, liberty and property

Criticism to Lockean TheoryFocus on 4 Issues:Assumption that individuals have the natural rightsConflict between negative and positive rightsConflict between Lockean theory and principles of justiceIndividualistic assumption of Locke and their conflict with demands of caring

John LockeHuman beings have certain natural rights that only free market system can serveThese rights are:Right of freedom andRights of private propertyFree markets are supposed to preserve the right to freedom so far as they enable each individual to voluntarily exchange goods free from any coercive power of Govt.They are suppose to preserve private property in so far as each individual is free to decide will be done with what he or she owns without any interference of Govt.

John LockeAs per Locke the law of nature teaches that each has a right to enjoy his liberty without any interference from the Govt.People agree to form the Govt. to protect their right to freedom and property.

Adam SmithUnregulated markets and private property will produce greater benefits than any amount of regulation couldIn a system with free markets and private property, buyers will seek to purchase what they want at lowest pricesSo they will pay business houses to produce and sell what consumers' want that too at lowest pricesThis will maximize the economic utility of members of the society

Adam SmithWhen private individuals are left free to seek their own interests in free markets, they will inevitably be led to further the public welfare by an INVISIBLE HAND (Market Competition)Competition will ensure enhancing value of products and lowering down of prices

Adam SmithMarket competition ensures that pursuit for self interest in market enhances publics welfare which Govt.s interference does not enhance

Criticism of Adam SmithIt rests on unrealistic assumptionsIt is a false assumption that relevant costs are paid by manufacturersIt is wrong to believe that human0beings are motivated by self-interested desire for profitSome degree of economic planning is possible and desirable

Maynard KeynesIn an economy, all available resources are used and demand always expands to absorb the supply of commodities made from themThe sum of demand is from 3 sectors of economy household, business and governmentFree markets alone are not the most efficient means for coordinating the use of sovietys resources

Social DarwinismIt believes that economic competition produces human progressBelieves in the survival of the fittestWhatever happens naturally is always the best

David RicardoGives the Theory of Absolute Advantage vs. Comparative AdvantageIt talks about a situation where the production costs of making a commodity are lower for one country than for anotherSpecialization can mutually benefit each other inspite of not being the cheapest. This is called Comparative Advantage

Criticism to RicardoToday there is easy movement of capital between companiesIt is wrong to believe that countries production costs are constantThere is influence of international rule setter

Karl MarxBelieved in the equality of private property, and was against free markets and free tradeSufferings in industry is due to capitalism and that can be regulated by setting standards equal for everyone

Mixed EconomyAn economy that retains a market and private property system but relies heavily on govt. policies to remedy deficiencies.Talks about intellectual property