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Discuss Basic Microeconomic Concepts In Terms Of The Preferences Of Liberals And Conservatives. Which Approach Makes More Sense And Why?

Preferences Of Liberals And Conservatives

It is a fact that when it comes to issues of microeconomics, every person wants to have the best especially on the various aspects that affect them directly. The challenge however, come in on the disparities on how this potential can be achieved. Conservatives and liberalists are one example of the antagonizing forces with each holding their values and ideologies to be the best in economic issues precisely in microeconomics.  The holdings of these two group on issues of particular markets and economies are discussed below.

Conservatives posit that a free market is essential for economic stability. This means the government should have little or no interventions. Government interference is associated with the uncertainties through the changing policies and regulations, which hinder the private enterprises to plan effectively for their future activities. They are for the idea that free markets are the solution to economic growth, unemployment and living standards. Liberals on the other hand, believe that a market that is regulated by the government is beneficial to all the participants. The government protects the consumers from the greed of businesses who aim at maximizing profits and protects the enterprises from unfair and unhealthy competition. This is possible because the liberalists hold that the government has its motivation deriving from public interest. They posit that the source of economic instabilities and unemployment arise from the acts of the private sector which in most instances require government bailouts leading to economic instability. In market and economic matters, the government should be in play to ensure a level playing ground.

Conservatives on consumer choice and preference posit that the availability of free markets ensure that there are a lot of products from which one is able to make an appropriate choice. This basically the caveat emptor principle that the buyer at the point of reaching the decision to purchase a given product, is aware of the relevant details. Liberalists on the other hand hold that consumer choice is best made when the producer gives information on their products in order to enable consumers make informed decisions. They argue that as much as the consumer has the right of choice which should be necessitated with availability of a range of products, they have to be protected through regulations that make it a necessity for the consumers to be availed with information.

The labor market is an area of contention between the liberalists and the conservatives precisely regarding labor unions. The liberalists hold that labor unions must exist in any market to ensure fair pay, equal opportunities and benefits together with a healthy working environment. They argue that the desire to make profits may be at the cost of the human resource thus creating the need for a channel for airing of grievances together and advocating for rights of the employees. The conservatives on the other hand have view labor unions as a hindrance to survival, profit making and growth of companies.  They further posit that if those unions exist, member of a given cluster should not be bound to join them.

On taxation, the conservatives believe that taxes should be low in the market in order to reduce either the cost of production or prices of goods thus enabling the consumers to easily access goods and increase savings while producers sufficiently supply while make reasonable profits. Liberalists on the other hand believe the government should tax more in order to have the revenue to provide better services to the consumers in matters such as health and education which is relatively costly in the private sector.

The existence of a free market economy is hypothetical and is harmful to the extent of its practicality. Government intervention serves to protect the interest of the sovereign, the people. With the contemporary economic challenges, the government has a role in ensuring the market players are protected. The liberalists hold more applicable views in regards to various microeconomics issues.

References

Röpke, W. (2014). A humane economy: the social framework of the free market. Open Road Media.

Thatcher, M. (2013). Resilient liberalism in Europe’s political economy. Cambridge University Press.

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