Compare and contrast the radical and liberal approaches to economic development.
The liberal approach and the radical approach to economic development are very different. The radical approach supports having significant government control over the functioning of the economy. The government is actively involved in making economic decisions and in making economic plans. This approach was seen in many of the Eastern European countries after World War II where there was heavy government involvement in economic matters.
The liberal approach calls for the opposite to occur. According to this approach, the government should have a very limited role in the economy. The concepts of supply and demand, of free trade, and of few government restrictions are found in this approach. This approach was seen in our country during the 1920s. A laissez-faire or hands-off approach existed. The government had little involvement in our economy. The liberal approach continues to dominate the economic philosophy today in the United States.
These approaches are very different from each other.
The liberal and radical approaches to economic development are almost diametrically opposed to one another. The only thing that they can be said to have in common is the goal of developing and creating economic prosperity.
The liberal approach holds that government intervention in the economy should be minimal. Trade between nations should be free and the market within a country should be allowed to operate without significant government intervention. The radical approach holds just the opposite view. Radicals believe that the government must intervene very strongly in the economy. They believe that economies within countries must be centrally planned and that trade should be strictly limited so as to promote domestic growth.
In this way, the two approaches have very little in common with one another.