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.

Gains of Liberal Economic System :

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.

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 system

I.

II.

III.
IV.

V.

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.
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.
In Asia : India, Iran, Israel, Jepang, Korea Selatan, Filipina, Taiwan, Thailand dan
Turki.
In Africa :Egypt, Senegal and South Africa, Algeria, Angola, Benin, Burkina Faso,
cape Verde, Cte d'Ivoire, Equatorial Guinea, Gambia, Ghana, Kenya, Malawi,
Morocco, Mozambique, Seychelles, Tanzania, Tunisia, Zambia and Zimbabwe.
in the islands of Oceania : Australia and New Zealand.

Thank you for

your attention

THE REFERENCES
http://goldmanage.blogspot.com/2010/05/gain-andweakness-of-liberal-economy.html
http://
ana-ekonomi.blogspot.com/2010/05/sistem-ekonomi-li
beral.html
http://id.wikipedia.org/wiki/Ekonomi_liberal
http://ashyrismail.blogspot.com/2012/10/liberal-eco
nomic-system-free-fight.html
http://www.ehow.com/info_8776840_economic-libera
lism.html
http://www.hockeyarenas.com/berntpv/briefingpape
r/papers/13.htm