You've probably noticed that we're in times of recession now. Many companies need to lay off people because they can't afford it anymore. The fact that people don't spend a lot of money because they are "trying" to save doesn't help the recession at all. Wouldn't it be better if some companies would go bankrupt? The classical liberalism theory describes that when demand goes down, the product, and even the company should pull them out of the industry.
Why don't we do that? It's more complicated than we think. Lets say, for example they would close a car company because the demand for those cars is decreasing. Think about how many other industries would suffer from closing down one car company? Like the industry who designs and delivers all the materials in order to make the cars and many other industries. Will they go bankrupt too? The Government understands the system of Classical Liberalism, but they are afraid for the result of their actions. Imagine that the Classical Liberalism theory is just a theory and wouldn't work out as they've planned. We could go into a depression which would be even worse for us than the economic crisis is now.
Why don't we do that? It's more complicated than we think. Lets say, for example they would close a car company because the demand for those cars is decreasing. Think about how many other industries would suffer from closing down one car company? Like the industry who designs and delivers all the materials in order to make the cars and many other industries. Will they go bankrupt too? The Government understands the system of Classical Liberalism, but they are afraid for the result of their actions. Imagine that the Classical Liberalism theory is just a theory and wouldn't work out as they've planned. We could go into a depression which would be even worse for us than the economic crisis is now.
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