Explain why liberal economic theory, policy and institutions are so Essay

Explain why liberal economic theory, policy and institutions are so dominant today. Is this good for business and for society - Essay Example In addition to this, it has been slowly been assimilated by other states that have seen the need to adopt to it while others have been dictated to adopt the idea. For instance, the third world countries which depend mostly on financial assistance from the West have been forced to strictly follow this policy through the World Bank or even the IMF. Despite the policy having competition from states that prefer socialism to capitalism, it has continued to dominate the business world especially after the collapse of the socialism era (Barry 1993). How the policies of liberal business have managed to dominate in business up-to-date For many years, the liberal form of economy has been dominating the business world. Furthermore, updating of the classical liberal economy to the now neo liberalism has contributed numerous terms of dominating the business empire. For instance, it has played a vital role in the economic policy making in US and the UK, dominated economic policymaking in the US an d the UK. Although the theory has faced numerous oppositions in the business world, it has continued to dominate some parts of the world in its own way. A good example is the third world countries have been forced to adopt the liberal policies through organizations like the IMF and the World Bank (Jason 2005). There was a comeback in the old religion of classical liberalism, through academic economics, and then in the real field of public policy. The neo-liberalism has been clearly viewed as an economic theory, as well as, a platform of policy making. Due to its capitalism nature, the market is free for individual choices that are able to meet the ultimate goals of economic success together with its distributional procedures (Barry 1993). In most cases, the state has very little command in terms of property rights, law enforcement, and limiting the amount of profit an individual or company has made. For this reason, a state cannot act as a mediator because of mistrust amongst the bu siness partners. The policy on liberal economic theory is mainly based on the regulation of welfare state whereby, there is privatization of public assets, tax regulation, and business regulation. Additionally, this it has embraced the investing class too. Internationally, liberalism encourages liberated transit of goods and services across the borders globally (Andrew 2008). The policy has been a success by ensuring that different corporations, individual investors, as well as, the banks are free to transact any form of business without being limited by the boundaries of a state despite such action being not part of the liberalism policy. In 1970s, economist viewed the liberal theory as just a temporal solution towards the economic in stability at that time. This is because the key Asian regulations’ policies never solved their solutions at that particular moment. The only possible solution was to shift their attention to the liberal policies, which was their only way out to counter the obstacles that hindered them from making any substantial profit (Andrew 2008). However, the policy proved to be adoptive on a more permanent basis rather than being a temporal solution. Such policies have made it possible for the likes of politicians such as Margret Thatcher of the UK and her US counterpart Ronald Reagan to be on the map of success under their parties’ administration in 1990s hence solidifying its dominating ground in the economic world (Sawyer and