Economic individualism is the idea that people should have the freedom to make their own economic choices and decisions. As such, it is a central concept in individualism, liberalism and modern economic thought. Economic individualism is centred on the principles of economic freedom, private ownership, competition, self-interest and self-reliance. In general, the concept of economic individualism is important to modern capitalism and has played an important role in many modern economies.<\/p>\n\n\n\n
Individualism is an important concept in both economics and politics.\u00a0 Similar to collectivism it is a foundational principle to understand most ideological systems.\u00a0 At its heart, individualism is a set of principles centered on the belief in the moral worth of the individual.\u00a0 This means, that economic or political systems based on the principles of individualism favor policies that limit the control of the government and instead allow more freedoms for the individual person.<\/p>\n\n\n\n
On the economic spectrum, individualism is positioned on the right side.\u00a0 This is because the right side of the spectrum is most often associated with limited government intervention in economic affairs.\u00a0 Therefore, people who support the principles of individualism argue in favor of self-reliance and independence.\u00a0 This means that they support the idea that individual people should be responsible for their own well-being\u00a0and not count on the government (or any other outside agency) to assist them in their lives.\u00a0 Self-reliance is best understood as the concept upon which people take care of their own interests without assistance.\u00a0 Economically, this would mean that people should not rely on the government for programs such a welfare and instead support themselves financially.\u00a0 Click here to read more about political individualism.<\/p>\n\n\n\n
Economic individualism is centered on the idea of less government involvement or intervention in the economy. People who support individualism prioritize the principles of economic freedom, private ownership, competition, self-interest and self-reliance. Similar to political individualism, discussed above, the principles of economic individualism are foundational elements of liberalism, which is the idea that individual people should be free from government control and intervention. Because of this, economic individualism is best positioned on the right side of the economic spectrum. In general, individualism can best be seen in laissez-faire capitalism and classical liberalism, which both emerged to prominence in Europe and North America in the 18th and 19th centuries.<\/p>\n\n\n\n
One of the most important figures in economic individualism is the famous Scottish economist, Adam Smith.\u00a0 His ideas, along with others, are credited with laying the foundation for laissez-faire capitalism.\u00a0 Often, laissez-faire capitalism is also referred to as free-market capitalism or market capitalism.\u00a0 Simply put, laissez-faire translates to \u2018leave us alone\u2019 meaning that the government should remain out of the economy and instead allow individuals to freely carry out their own economic affairs. Historically, laissez-faire capitalism was most common during the 18th and 19th centuries in the timeframe of the\u00a0Industrial Revolution.\u00a0 At the time, it was a revolutionary idea, because in the previous centuries, mercantilism\u00a0had been the dominant economic system.\u00a0 In general, mercantilism is viewed as an economic system that favored heavy government control and regulation.\u00a0 At the time,\u00a0absolute monarchs\u00a0ruled over vast empires and controlled almost all aspects of the economy.\u00a0 However, prominent thinkers, including\u00a0Adam Smith, began to argue against mercantilism in favor of an economic system with more freedom for individuals.\u00a0 The development of capitalism as an economic system, sought to reject the idea of government control of the economy and instead put the focus on individuals.<\/p>\n\n\n\n
Adam Smith expressed his economic ideas in his famous work titled \u2018An Inquiry into the Nature and Causes of the Wealth of Nations\u2019 which is just often shortened to \u2018Wealth of Nations\u2019.\u00a0 The book was published in 1776 and became one of the most influential economic writings of all time.\u00a0 It challenged the idea that the government should control the economy and instead proposed the idea of free trade and competition with a lesser role of the government.\u00a0 The ideas of this book would eventually lay the foundation for the principles of capitalism, which is an economic system that supports the idea of free trade and choice as a way of achieving prosperity.\u00a0 Like the physiocrats, Smith argued against mercantilism and government control of the economy and instead proposed the idea of the \u2018invisible hand\u2019.\u00a0 Simply put, the invisible hand is the idea that the market forces of supply and demand should drive the economy of a country.\u00a0 As such, historians consider Adam Smith and the ideas expressed in \u2018Wealth of Nations\u2019 as vital to the understanding of economic individualism, laissez-faire capitalism and classical liberalism.<\/p>\n\n\n\n
Classical liberalism is a form of liberalism that emerged during the 19th century in Europe and North America but was most notable in England.\u00a0 As an ideology it is based heavily on both political and economic individualism.\u00a0 This means that classical liberalism is a right-wing ideology that heavily favors liberty of the individual in both matters pertaining to government and the economy.\u00a0 For instance, the following people are considered to be prominent classical liberal thinkers from the time: Adam Smith, John Locke, Baron de Montesquieu and John Stuart Mill.\u00a0 Each of these thinkers argued for less government intervention and for the protection of rights and freedoms for individuals.<\/p>\n\n\n\n
As stated previously, economic individualism focused on a few central principles, such as: economic freedom, private ownership, competition, self-interest and self-reliance.\u00a0 Each of these principles demonstrate why economic individualism and its related ideologies of laissez-faire capitalism and classical liberalism are all right-wing systems.<\/p>\n\n\n\n
The first main principle of economic individualism is economic freedom.\u00a0 Economic freedom is an important element of capitalist or classical liberal societies because it allows people individual choice in their economic decision-making.\u00a0 For instance, economic freedom in classical liberal societies (ex. England during the Industrial Revolution), is largely centered around free trade and free market economy.\u00a0 Under these systems, government intervention is low and instead most economic decisions are determined by individual consumers and producers.\u00a0 As such, people are given the freedom and choice on how to earn and spend their money, and on what goods and services they would like to produce or consume.<\/p>\n\n\n\n
The second main principle of economic individualism is private ownership.\u00a0 It is the idea that individuals should have the ability to own property, which could include: land, businesses, products, ideas, etc.\u00a0 For example, during the Industrial Revolution, entrepreneurs began to use their wealth to establish privately owned factories, mines and mills.\u00a0 This allowed individuals to control what they produced, how it was produced and for whom they were producing it.\u00a0 Before the development of capitalism, these decisions would have been controlled by the government.\u00a0 Thus, private ownership shifted the economic decision-making from the government to the people.\u00a0 Private ownership can be seen in modern societies in that people own their own homes, businesses or other forms of property.<\/p>\n\n\n\n
Competition is another central principle of economic individualism.\u00a0 Under more collectivist systems, the government controls the means of production and therefore there is little to no competition.\u00a0 Laissez-faire capitalism introduced the idea that individuals and businesses should compete against each other and their success should be determined by the market forces of supply and demand.\u00a0 Therefore, consumers had the ability to decide the success of a business based upon whether they purchased the good or service.\u00a0 Supporters of economic individualism argue that competition benefits society in a number of ways, including: it lowers the price of goods and service as producers compete for the business of consumers, and it fosters innovation of goods and services as companies compete to outdo each other.\u00a0 For example, modern companies such as Apple and Samsung compete for consumers business which causes them to innovate their phones with new features, while still trying to keep costs as low as possible.<\/p>\n\n\n\n
Another important principle of economic individualism is self-interest.\u00a0 Self-interest is the idea that individuals should act, economically, in their own best interest.\u00a0 Further to this idea, supporters of economic individualism capitalists argue that individuals should constantly seek to improve their own well-being over that of the collective society.\u00a0 For example, self-interest is apparent in the decision-making process of most business owners during the Industrial Revolution.\u00a0 They generally made decisions to increase their own wealth over the economic or personal well-being of their workers.\u00a0 While this method of thinking led to issues such as child labor, the business workers of the time benefitted greatly.\u00a0 Regardless, supporters of economic individualism argue that self-interest was positive for society as a whole through its indirect impacts.\u00a0 For instance, when wealthy business owners acted based on self-interest they were working to improve the economic standing of their overall company.\u00a0 If the company gained more income, it could then use that income to hire more workers and provide more goods or services.\u00a0 Therefore, the belief was that everyone acting in their own self-interest would in the end create more jobs and economic activity to improve the overall economy of a society.<\/p>\n\n\n\n
The final main principle of economic individualism is self-reliance. Similar to self-interest, it is the idea that individuals should be responsible for their own well-being and should not rely on the government for assistance. For example, in modern welfare capitalist states, the government provides many social programs to assist citizens. A social program is a government-funded and program that is, in general, universally provided to all citizens of the country. There are many examples of social programs in modern democratic nations, including: old age pensions, some form of government funded healthcare, public education, welfare, etc. However, as stated previously, economic individualism like laissez-faire capitalism is in favor of people being responsible for themselves and therefore the government should not intervene in the economy in order to provide assistance. It was argued that self-reliance would push individuals to work harder and would therefore benefit the society more as a whole.<\/p>\n","protected":false},"excerpt":{"rendered":"
Economic individualism is centered on the idea of less government involvement or intervention in the economy. This article details the history and main principles of economic individualism.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":10,"footnotes":""},"categories":[49,37,11,111],"tags":[88,62,15,17,113],"class_list":["post-3925","post","type-post","status-publish","format-standard","hentry","category-economics","category-age-of-enlightenment","category-industrial-revolution","category-liberalism","tag-age-of-enlightenment","tag-economics","tag-history","tag-industrial-revolution","tag-liberalism"],"_links":{"self":[{"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/posts\/3925","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/comments?post=3925"}],"version-history":[{"count":2,"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/posts\/3925\/revisions"}],"predecessor-version":[{"id":3927,"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/posts\/3925\/revisions\/3927"}],"wp:attachment":[{"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/media?parent=3925"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/categories?post=3925"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crunchlearning.com\/website_ec2cbfb0\/wp-json\/wp\/v2\/tags?post=3925"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}