Implementing Classical Liberalism in the World

by Nayyar Abbas

When a nation wants to trade with the world, it has to follow certain rules and regulations. Tariffs, levies, taxes, exchange rates, and other norms and laws apply to international trade. Entrepreneurs and businesses adhere to the laws and regulations of the state to carry out economic activities. Political economy studies the effects of laws and regulations on the economy. The nature of political economy varies depending upon the political philosophy a nation follows. For instance, the United States’ political philosophy adheres to capitalism, democracy, and a free market; in China, there is Confucianism, communism, and a centralized state; in Iran, there is a theocracy, Islamic socialism, and presidential democracy.  Different political philosophies are taking hold in different regions of the world. The problem is that when these philosophies are challenged based on prejudice, self-interests, and hegemony, global socio-economic, political and security challenges arise. The rationality is to accept political and economic diversity and lead spontaneous order to decide international values and norms.

There are three major political philosophies emerging in the world. By analyzing and understanding their nature, we can mitigate future socio-economic, political and security challenges. 

The government of the United States consists of three distinct branches: legislative, executive, and judicial. The Constitution is the supreme law that governs and vests the powers to the congress for legislation, the president to executive, and the courts the judicial authority. Apart from the government structure, the U.S. economy operates on the principle of a free market economy in consumer goods, services, and business, and a command economy in the areas of defense, health, and retirement benefits. It is a mixed economy with a capitalist and socialist orientation.

The Chinese state structure is centralized. The President is the most powerful figure in the Chinese political system. The Chinese Communist Party dominates all state institutions; it controls every government department, military force, court, and parliament. The structure of the state follows this hierarchy: the President is at the top, then the Chinese Communist Party, and at the bottom, there is the National People’s Congress. The seven most influential people at the core of the Communist Party make up the inner circle of the Political Bureau. The wider Political Bureau consists of eighteen members. Altogether, both inner and wider circles hold the highest roles in the government, party, or military. The congress is considered the top governing body and consists of 3000 delegates having different political orientations. They supervise the government and write laws.

The economy of China is a socialist market economy featuring a dominant state in the center parallel with capitalism and private ownership. The Chinese government plays an important role in defining and managing the economy. It sets goals, strategies, and targets to be achieved.

Like the U.S, the Iranian government consists of three branches: the president, the legislature, and the judiciary. The visible difference lies in the fact that Iran is an Islamic theocracy. The supreme leader exercises the highest power. His power comes from both political and ideological sovereignty. The Constitution of Iran delineates the supreme leader the power to supervise both Iran’s domestic and foreign policies. He is also the commander-in-chief of the armed forces and controls the Islamic Republic’s intelligence and security operations. The Supreme Leader is nominated by the Council of Guardians. 

The president is the second highest rank in Iran. He is elected by the parliament, and is answerable to the supreme leader in his/her executive powers. The Iranian parliament is a unicameral legislative body. It is elected by the public through voting. It drafts legislation, ratifies international treaties, and approves the country’s budget. Judiciary is a branch of Iran’s government.

The economic orientation of the Islamic Republic of Iran is structured around the Islamic economic development strategy after the Islamic revolution. It tried to eliminate interest rates from the banking system. It also demonstrated strong anti-market policies in the 1980s. After the Iran-Iraq war, the policies shifted in a more pro-market direction and adopted a structural adjustment program designed by the World Bank and International Monetary Fund. Its founder advocated staunch support of property rights and the role of the private sector based on Shiite traditions.  

The interesting debates over the structure of economy and government in these cases stem from the political philosophy each country adheres to.

American political philosophy is based on three major doctrines: natural rights, republicanism, and constitutionalism. Democracy is the foundation of the government and Americans believe in the government of the people, by the people, for the people. Individual liberty and freedom are the core values in the political philosophy of the country. Contemporary debates revolve around the importance of free elections and free press versus social and economic democracy and issues around women’s rights, civil liberties, economic justice, and overcoming racial discrimination.

Owing to the perceived failures of the market economy; the need for strong government was felt in the U.S, leading to its current position as a mixed economy. It works on the features of capitalism and socialism. A mixed economy allows for property rights and free-economic transactions whereas it also supports a strong government to achieve social aims and public goods.    

Chinese political philosophy originates from the well-known Chinese political philosophy of Confucianism, based on the teachings of the Chinese thinker Confucius. According to Confucius’ thoughts about government and the legitimacy of rulers, a ruler must be virtuous, and lead by example. This philosophy upholds that a morally upright ruler decides the moral character of the state. People are otherwise self-interested and have a desire for profit, and without a virtuous leader they end up in chaos and disruption. 

Mao Zedong followed the soviet model of development after the Chinese Communist Revolution. In the 1950s, the sino-soviet split led Mao to abandon Marxism-Leninism and develop Maoism, a Chinese interpretation of communism. China shifted to Market-Socialism under Deng Xiaoping’s leadership. The modern economic-political philosophy adheres to the constitution created in 1982. This constitution includes many civil rights: free speech, press, worship, the right to trial, and ownership of property. In practice, the constitution is not being followed.. 

Present-day Iran’s political structure is based on the concept of Velayat-e Faqih, or the rule of the Islamic jurist. According to its architect, Imam Khomeini, the government should be run following Sharia or Islamic law. An Islamic jurist must be there to oversee the country’s political structure to ensure that the government follows the Qur’an and Sharia. The rule of the Islamic Jurist stems from the belief that in the absence of Imam Mahdi – the Hidden Imam or the twelfth imam of the Shia faith – the government is run by the one who is higher among the ranks of clergies. Today, the concept of Khomeini’s philosophy has evolved as a system of government that combines elements of Islamic theocracy with bits of democracy.

In Islamic economic philosophy, property ownership has been divided into three kinds: absolute, p, and private. Absolute ownership belongs to God; public ownership means the ownership of all natural resources on the land, sea, and space belong to the general public; private ownership means things you earn through work. Wealth in Islam is not abundant; therefore, it must circulate among all strata of the society.

The world needs to revive the ideas of classical liberalism. The priority must be individual freedom in social, political, and economic life. These priorities are also significant to pursue at the global level, where conflicting political philosophies and orientation are present. It is paramount to understand the potential political and economic structures. Samuel P. Huntington’s Clash of Civilizations envisions international relations based on cultural and civilizational fault lines. The rise of China and the proxy wars in the Middle East are indicators that the world is divided based on political and economic philosophies. The need of the hour is to revive classical liberal values such as spontaneous order, civil society, the rule of law, justice, private property, toleration, and free trade. There is no doubt that support for economic, political, and social freedom is spreading throughout the world. Spontaneous world order is the best solution to ensure the progress and development of humanity. It will only emerge when different political philosophies prevail freely in the world.  

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