CHAPTER 8
Classical Liberalism
Defense of Industrial Capitalism
LEARNING OBJECTIVES
Understand the ideological basis for classical liberals to advocate for free trade and a
minimum of government intervention.
OUTLINE OF CHAPTER
I. The Rise of Classical Liberalism
KEY TERMS
division of labor
subdivided tasks, each worker producing only the commodity for which his or her abilities are
best suited
inert
that t
he government should not be involved
ANSWERS TO END OF CHAPTER REVIEW QUESTIONS
Understand the ideological basis for classical liberals to advocate for free trade and a
minimum of government intervention.
1. List and explain the four assumptions made by classical liberals about human nature.
People were believed to be egoistic, coldly calculating, essentially inert and atomistic.
Egoism was blended with psychological hedonism, the view that all actions re motivated
2. What did this doctrine imply about the motivations of workers and how they should be
treated? What did it imply about the motivations of higher ranks of individuals?
3. Compare and contrast the ideology of the classical liberals with that of those supporting
4. How did classical liberals bridge the gap between egotistic humans who would only harm
society if not for government and the need for an unfettered capitalist system?
The apparent contradiction between the view that human motives are inherently selfish
5. How do Smith and Hobbes differ in their views of the outcome of human
competitiveness?
Hobbes believed human motives would lead to a natural state of war. Smith believed that
the welfare of all society.
6.
7. What does Adam Smith mean by division of labor? Why is this concept important?
8. What three functions did classical liberals, and Adam Smith in particular, think that
government should be responsible for? How did these three functions provide an
additional advantage to the capitalists?
Smith listed three functions for governments: protection of the country against foreign
9. Malthus is often credited with giving e
10. Compare the rates of growth for the population and the rate of grown for food. What is
the outcome of this difference?
11. According to Malthus, there are preventative checks and positive checks to population
poor?
Population growth could be prevented by restraint; however, people were incapable of
12. According to Malthus, whose fault is poverty and why? Do you see any parallels in