"Modern Conservatism is more concerned with economic freedom than with social stability" Discuss.

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Caroline Howard                                                        December 2005

“Modern Conservatism is more concerned with economic freedom than with social stability” Discuss.

There is debate among political scientists as to the extent to which the Neo-Conservative and Neo-Liberal elements that form Modern Conservative ideology can work coherently. This can be seen most poignantly in their Neo-Liberal commitment to economic freedom which directly contrasts the Conservative ideas of stability within society.

Neo-Liberal economics have been influenced by Classical Liberalism, including Adam Smith and David Ricardo and Modern Conservative economic policy is merely a re-discoverance of free-market economics. Post-1945, Keynesianism had been the dominant economic policy, advocating “managed capitalism” but Modern Conservatives believed this was responsible for decline that had occurred in Britain. Their main aim in the late 1970s/early 1980s was to reverse this decline, even if it did cause social instability.

Modern Conservatism ideology stipulates that governments cannot deliver economic stability/growth which they believe was the main factor in causing economic decline. They object to government intervention in the economy, epitomised by planned economies such as that of the former Soviet Union, as it does not allow for the “invisible hand of capitalism” to control the market and ensure it functions using the principles of supply and demand. Friedman explained that intervention causes economic problems because the economy has been over-regulated/inflexible and over-regulation results in stagnation/economic decline. He also described a “natural state of unemployment” which is determined by market forces if they are allowed to function. Consequently Thatcher’s response to unemployment was to not intervene, thus removing regulation from the economy. This demonstrates the Modern Conservative commitment to an economy free from regulation even though it did not solve the problem of unemployment which was a serious social problem at the time as between 1979 and 1983 it rose sharply to a peak of over 3 million.

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This also demonstrates the Modern Conservative view that the inflation rate is paramount, not full employment. This is one of the main factors that differentiates free-market economics from Keynesianism as full employment is an important aim of Keynesianism. Modern Conservatives place importance on the rate of inflation because they argue that for trade and markets to occur then there needs to be a stable value of money. Friedman described this as the “health of the economy” and argued that the alternative to a money market, a barter one, is not viable and therefore confidence and faith in the value ...

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