LIBERAL ECONOMIC SYSTEM

By: Dhera Agung Dharmawan

Origins of liberal economic system

The basic theories of economic liberalism were first laid out by Adam Smith of Scotland in his book "An Inquiry into the Nature and Causes of the Wealth of Nations,“ which was published in 1776.

WHAT IS LIBERAL ECONOMIC SYSTEM ?

Liberal economic system is economic system where the management of the economy regulated by market forces. This economic system requires the existence of individual freedom in economic activity. That is, each individual recognized and they are free to compete. On the other hand, The participation of the government in economic activities is very limited.

Why ?

The government is only in charge of protecting, maintaining, and providing facilities for each individual to be able to run it and freedoms as well as possible. so, the government functioning only as a complement.

The characteristics of Liberal Economic System

o Implementing a system of free competition.

o Capital is very important .

o Economic activity intended for profit maximization (profit oriented).

o The participation of the government in economic activities is very limited.

o Activities are always considering the market situation.

o The market economy is the basis of every action.

o The prices are determined by market forces.

Economic activity more fast progressing because the competition.

free individual has to production resources, one that its following will push society participation in economics.

Evoking initiative and creativity in managing the economy, because the public no longer need to wait for instruction / command of the government.

High efficiency and effectiveness, as any action based economy for profit motive.

Gains of Liberal Economic System :

Weakness of Liberal Economic System:

Rich society gets rich, one that indigent getting indigent

A lot of arise monopoly practices that harm public

Equity income is difficult because the free competition .

There are many happening it distortion in economics because resource allocation fault by individual.

The countries that use liberal economic systemI. In America :USA, Argentina, Bolivia, Brazil, Chile, Cuba, Colombia, Ecuador, Honduras,

Canada, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay, and Venezuela, Aruba, Bahamas, Dominican Republic, Greenland, Grenada, Costa Rica, Puerto Rico, and Suriname.

II. In Europe : America Albania, Armenia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Macedonia, Moldova, Netherlands, Norway , Poland, Portugal, Romania, Russia, Serbia and Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine and United Kingdom.

III. In Asia : India, Iran, Israel, Jepang, Korea Selatan, Filipina, Taiwan, Thailand dan Turki.

IV. In Africa :Egypt, Senegal and South Africa, Algeria, Angola, Benin, Burkina Faso, cape Verde, Côte d'Ivoire, Equatorial Guinea, Gambia, Ghana, Kenya, Malawi, Morocco, Mozambique, Seychelles, Tanzania, Tunisia, Zambia and Zimbabwe.

V. in the islands of Oceania : Australia and New Zealand.

Thank you for your attention

THE REFERENCES

http://goldmanage.blogspot.com/2010/05/gain-and-weakness-of-liberal-economy.html

http://ana-ekonomi.blogspot.com/2010/05/sistem-ekonomi-liberal.html

http://id.wikipedia.org/wiki/Ekonomi_liberal

http://ashyrismail.blogspot.com/2012/10/liberal-economic-system-free-fight.html

http://www.ehow.com/info_8776840_economic-liberalism.html

http://www.hockeyarenas.com/berntpv/briefingpaper/papers/13.

htm