Liberal capitalism is the economy and market with minimum government intervention. Based on the principle of laissez-faire economic theory, it opens up competition between various market forces domestically and globally, moving the economy towards a real market, rather than a government-decided one.
Liberal capitalism would mean end of MGNREGA,RSBY etc.No more subsidies.This would consequentially mean lifting red tape and bureaucracy and decreasing tax rates and increasing supply side enterprises to make up for the slack left by the government.
Positive aspects of Liberal capitalism
In the advancing age of technology and communication, liberal capitalism is important as,
1. It helps unveil the potential of competition, which eventually increases the ‘quality’ of manufacturing and services, and eventually increasing employment too due to more competing industries.
2. With less intervention of Government and less stringent policies, international trade and FDIs will increase.
3. Government priority list is generally for social elevation, which at times kills the advancing technology market due to less support, like by no clearance for land in various areas.
4. Removes the demand and supply mismatch.
Nevertheless, for a developing countries, government intervention is necessary up to an extent, as,
1. Open market generally favours the rich (Capitalism — making the rich richer, and poor poorer), which increases the inequality between social strata.
2. Diverged development of areas lead to migration which eventually leads to various other problems.
3. There are regions (like tribal areas) where a private player wouldn’t want to invest, and government needs to take the lead there either by aiding the private players or by a direct public enterprise.
4. In poor countries, setting up industries where capital investment is huge.
Unequal development is the result of liberal capitalism which leads to migration from rural areas to urban in search of job which eventually ended up in rise of slums , epidemic s, poor sanitation, transport issues, overpollution and congestion
On the other side of capitalism , people are exploited by the rich capitalists, they are not being provided with minimum salary specified by the government.
Bonded labour is increasing and no mechanism to curb, like in IT sector there is no political interventions to protect the interest of employees. They are being provided small salary even engineers provided with 5000,6000 etc.
No security of job, they can expel employees at any time.
We do need liberal capitalism today, but with government’s intervention in social areas only.Therefore, it is very important to return to the earlier concept of Liberal capitalism where companies would compete with each other without government interference. There would be more creation of Industrial capital and eventually social capital.