Liberalism

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This article discusses liberalism as a worldwide political ideology, its roots and development, and some of its many modern-day variations, including American, European, classical, and modern traditions. For the ideology commonly referred to as liberalism in the various English-speaking countries, see American liberalism, Liberalism in the United Kingdom, Liberalism in Canada, Liberalism in Australia and various entries listed in Liberalism worldwide. For various schools and trends within liberalism, see the articles in the navigation box. For other uses, see Liberal (disambiguation).

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Development

History of liberal thought

Contributions to liberal theory

Schools

Classical liberalism

Conservative liberalism

Cultural liberalism

Economic liberalism

Libertarianism

Neoliberalism

Ordoliberalism

Paleoliberalism

Social liberalism

National variants

American liberalism

Canadian liberalism

Australian liberalism

British liberalism

Ideas

Individual rights

Individualism

Liberal democracy

Liberal neutrality

Negative & positive Liberty

Free market

Mixed economy

Open society

Organizations

Liberal parties worldwide

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Liberalism is an ideology, philosophical view, and political tradition which holds that liberty is the primary political value. Liberalism has its roots in the Western Age of Enlightenment, but the term now encompasses a diversity of political thought.

Broadly speaking, liberalism emphasizes individual rights. It seeks a society characterized by freedom of thought for individuals, limitations on power, especially of government and religion, the rule of law, the free exchange of ideas, a market economy that supports relatively free private enterprise, and a transparent system of government in which the rights of all citizens are protected. In modern society, liberals favour a liberal democracy with open and fair elections, where all citizens have equal rights by law and an equal opportunity to succeed.

Many modern liberals advocate a greater degree of government interference in the free market, often in the form of anti-discrimination laws, civil service examinations, universal education, and progressive taxation. This philosophy frequently extends to a belief that the government should provide for a degree of general welfare, including benefits for the unemployed, housing for the homeless, and medical care for the sick. Such publicly-funded initiatives and interferences in the market are rejected by modern advocates of classical liberalism, which emphasizes free private enterprise, individual property rights and freedom of contract; classical liberals hold that economic inequality, as arising naturally from competition in the free market, does not justify the violation of private property rights.

Liberalism rejected many foundational assumptions which dominated most earlier theories of government, such as the Divine Right of Kings, hereditary status, and established religion. Fundamental human rights that all liberals support include the right to life, liberty, and property.

A broader use of the term liberalism is in the context of liberal democracy (see also constitutionalism). In this sense of the word, it refers to a democracy in which the powers of government are limited and the rights of citizens are legally defined; this applies to nearly all Western democracies, and therefore is not solely associated with liberal parties.

The nature and origins of liberalism

Etymology and historical usage

The word "liberal" derives from the Latin liber ("free, not slave"). It is widely associated with the word "liberty" and the concept of freedom. Livy's History of Rome from Its Foundation describes the struggles for freedom between the plebeian and patrician classes. Marcus Aurelius in his Meditations writes about "...the idea of a policy administered with regard to equal rights and equal freedom of speech, and the idea of a kingly government which respects most of all the freedom of the governed... ." Largely dormant during the vicissitudes of the Middle Ages, the struggle for freedom began again in the Italian Renaissance, in the conflict between the supporters of free city states and the supporters of the Pope. Niccolò Machiavelli, in his Discourses on Livy, laid down the principles of republican government. John Locke in England and the thinkers of the French Enlightenment articulated the struggle for freedom in terms of the Rights of Man.

The Oxford English Dictionary (OED) indicates that the word liberal has long been in the English language with the meanings of "befitting free men, noble, generous" as in liberal arts; also with the meaning "free from restraint in speech or action", as in liberal with the purse, or liberal tongue, usually as a term of reproach but, beginning 1776–88 imbued with a more favorable sense by Edward Gibbon and others to mean "free from prejudice, tolerant."

The first English language use to mean "tending in favour of freedom and democracy", according to the OED, dates from about 1801 and comes from the French libéral, "originally applied in English by its opponents (often in Fr. form and with suggestions of foreign lawlessness)". An early English language citation: "The extinction of every vestige of freedom, and of every liberal idea with which they are associated."

The American War of Independence established the first nation to craft a constitution based on the concept of liberal government, especially the idea that governments rule by the consent of the governed. The more moderate bourgeois elements of the French Revolution tried to establish a government based on liberal principles. Economists such as Adam Smith, in The Wealth of Nations (1776), enunciated the liberal principles of free trade. The editors of the Spanish Constitution of 1812, drafted in Cádiz, may have been the first to use the word liberal in a political sense as a noun. They named themselves the Liberales, to express their opposition to the absolutist power of the Spanish monarchy.

Beginning in the late 18th century, liberalism became a major ideology in virtually all developed countries.

Trends within liberalism

Within the above framework, there are deep, often bitter, conflicts and controversies among liberals. Emerging from those controversies, out of classical liberalism, are a number of different trends within liberalism. As in many debates, opposite sides use different words for the same beliefs, and sometimes use identical words for different beliefs. For the purposes of this article, we will use "political liberalism" for the support of (liberal) democracy (either in a republic or a constitutional monarchy), over absolute monarchy or dictatorship; "cultural liberalism" for the support of individual liberty over laws limiting liberty for patriotic or religious reasons; "economic liberalism" for the support of private property, over government regulation; and "social liberalism" for the support of equality, over inequalities of opportunity. By "modern liberalism" we mean the mixture of these forms of liberalism found in most First World countries today, rather than any one of the pure forms listed above.

Some principles liberals generally agree upon:

• Political liberalism is the belief that individuals are the basis of law and society, and that society and its institutions exist to further the ends of individuals, without showing favour to those of higher social rank. Magna Carta is an example of a political document that asserted the rights of individuals even above the prerogatives of monarchs. Political liberalism stresses the social contract, under which citizens make the laws and agree to abide by those laws. It is based on the belief that individuals know best what is best for them. Political liberalism enfranchises all adult citizens regardless of sex, race, or economic status. Political liberalism emphasizes the rule of law and supports liberal democracy.

• Cultural liberalism focuses on the rights of individuals pertaining to conscience and lifestyle, including such issues as sexual freedom, religious freedom, cognitive freedom, and protection from government intrusion into private life. John Stuart Mill aptly expressed cultural liberalism in his essay "On Liberty," when he wrote,

The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection. That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant.

Cultural liberalism generally opposes government regulation of literature, art, academics, gambling, sex, prostitution, abortion, birth control, terminal illness, alcohol, and cannabis and other controlled substances. Most liberals oppose some or all government intervention in these areas. The Netherlands, in this respect, may be the most liberal country in the world today.

However, some trends within liberalism reveal stark differences of opinion:

• Economic liberalism, also called classical liberalism or Manchester liberalism, is an ideology which supports the individual rights of property and freedom of contract. It advocates laissez-faire capitalism, meaning the removal of legal barriers to trade and cessation of government-bestowed privilege such as subsidy and monopoly. Economic liberals want little or no government regulation of the market. Some economic liberals would accept government restrictions of monopolies and cartels, others argue that monopolies and cartels are caused by state action. Economic liberalism holds that the value of goods and services should be set by the unfettered choices of individuals, that is, of market forces. Some would also allow market forces to act even in areas conventionally monopolized by governments, such as the provision of security and courts. Economic liberalism accepts the economic inequality that arises from unequal bargaining positions as being the natural result of competition, so long as no coercion is used. This form of liberalism is especially influenced by English liberalism of the mid 19th century. Minarchism and anarcho-capitalism are forms of economic liberalism. (See also Free trade, Neo-liberalism, liberalization)

• Social liberalism, also known as new liberalism (not to be confused with 'neoliberalism') and reform liberalism, arose in the late 19th century in many developed countries, influenced by the utilitarianism of Jeremy Bentham and John Stuart Mill. Some liberals accepted, in part or in whole, Marxist and socialist exploitation theory and critiques of "the profit motive", and concluded that government should use its power to remedy these perceived problems. According to the tenets of this form of liberalism, as explained by writers such as John Dewey and Mortimer Adler, since individuals are the basis of society, all individuals should have access to basic necessities of fulfillment, such as education, economic opportunity, and protection from harmful macro-events beyond their control. To social liberals, these benefits are considered rights. These positive rights, which must be produced and supplied by other people, are qualitatively different from the classic negative rights, which require only that others refrain from aggression. To the social liberal, ensuring positive rights is a goal that is continuous with the general project of protecting liberties. Schools, libraries, museums, and art galleries are to be supported by taxes. Social liberalism advocates some restrictions on economic competition, such as anti-trust laws and price controls on wages ("minimum wage laws.") It also expects governments to provide a basic level of welfare, supported by taxation, intended to enable the best use of the talents of the population, to prevent revolution, or simply "for the public good."

The struggle between economic freedom and social equality is almost as old as the idea of freedom itself. Plutarch, writing about Solon (c. 639 - c. 559 BCE), the lawgiver of ancient Athens, wrote:

The remission of debts was peculiar to Solon; it was his great means for confirming the citizens' liberty; for a mere law to give all men equal rights is but useless, if the poor must sacrifice those rights to their debts, and, in the very seats and sanctuaries of equality, the courts of justice, the offices of state, and the public discussions, be more than anywhere at the beck and bidding of the rich.

Economic liberals see positive rights as necessarily violating negative rights, and therefore illegitimate. They see a limited role for government. Some economic liberals see no proper function of government, while others (minarchists) would limit government to courts, police, and defense against foreign invasion. Social liberals, in contrast, see a major role for government in promoting the general welfare - providing some or all of the following services: food and shelter for those who cannot provide for themselves, medical care, schools, retirement, care for children and for the disabled, including those disabled by old age, help for victims of natural disaster, protection of minorities, prevention of crime, and support for the arts and sciences. This largely abandons the idea of limited government. Both forms of liberalism seek the same end - liberty - but they disagree strongly about the best or most moral means to attain it. Some liberal parties emphasize economic liberalism, while others focus on social liberalism. Conservative parties often favour economic liberalism while opposing social and cultural liberalism.

In all of the forms of liberalism listed above there is a general belief that there should be a balance between government and private responsibilities, and that government should be limited to those tasks which cannot be carried out best by the private sector. All forms of liberalism claim to protect the fundamental dignity and autonomy of the individual under law, all claim that freedom of individual action promotes the best society. Liberalism is so widespread in the modern world that most Western nations at least pay lip service to individual liberty as the basis for society.

Comparative influences

Early Enlightenment thinkers contrasted liberalism with the authoritarianism of the Ancien Regime, feudalism, mercantilism and the Roman Catholic Church. Later, as more radical philosophers articulated their thoughts in the course of the French Revolution and throughout the nineteenth century, liberalism defined itself in contrast to socialism and communism, although modern European liberal parties have often formed coalitions with social-democratic parties. In the 20th century liberalism defined itself in opposition to totalitarianism and collectivism. Some modern liberals have rejected the classical Just War theory, which emphasizes neutrality and free trade, in favour of multilateral interventionism and collective security.

Liberalism favors the limitation of government power. Extreme anti-statist liberalism, as advocated by Frederic Bastiat, Gustave de Molinari, Herbert Spencer, and Auberon Herbert, is a radical form of liberalism called anarchism (no state at all) or minarchism (a minimal state, or sometimes called "the nightwatchman state.") These anti-state forms of liberalism are commonly referred to as libertarianism. Most liberals claim that a government is necessary to protect rights, yet the meaning of "government" can range from simply a rights protection organization to a Weberian state. Recently, liberalism has again come into conflict with those who seek a society ordered by religious values: radical Islamism often rejects liberal thought in its entirety, and radical Christian sects in Western liberal-democratic states — especially the US — often find their moral opinions coming into conflict with liberal laws and ideals.

Development of liberal thought

Origins of liberal thought

The focus on "liberty" as an essential right of people within the polity has been repeatedly asserted throughout history. Mentioned above are the conflicts between the plebeians and patricians in ancient Rome and the struggles of Italian city states against the Papal States. The republics of Florence and Venice had forms of elections, the rule of law, and pursuit of free enterprise through much of the 1400s until domination by outside powers in the 16th century. The Dutch resistance against (Spanish) Catholic oppression during the Eighty Years' War is often — despite its refusal to give freedom to Catholics — considered a predecessor of liberal values.

As an ideology, liberalism can trace its roots back to the humanism that began to challenge the authority of the established church during the Renaissance, and the Whigs of the Glorious Revolution in Great Britain, whose assertion of their right to choose their king can be seen as a precursor to claims of popular sovereignty. However, movements generally labeled as truly "liberal" date from the Enlightenment, particularly the Whig party in Britain, the philosophes in France, and the movement towards self-government in colonial America. These movements opposed absolute monarchy, mercantilism, and various kinds of religious orthodoxy and clericalism. They were also the first to formulate the concepts of individual rights under the rule of law, as well as the importance of self-government through elected representatives.

The definitive break with the past was the conception that free individuals could form the foundation for a stable society. This idea is generally dated from the work of John Locke (1632-1704), whose Two Treatises on Government established two fundamental liberal ideas: economic liberty, meaning the right to have and use property, and intellectual liberty, including freedom of conscience, which he expounded in A Letter Concerning Toleration (1689). However, he did not extend his views on religious freedom to Roman Catholics . Locke developed further the earlier idea of natural rights, which he saw as "life, liberty and property". His "natural rights theory" was the distant forerunner of the modern conception of human rights. However, to Locke, property was more important than the right to participate in government and public decision-making: he did not endorse democracy, because he feared that giving power to the people would erode the sanctity of private property. Nevertheless, the idea of natural rights played a key role in providing the ideological justification for the American revolution and the French revolution.

On the European continent, the doctrine of laws restraining even monarchs was expounded by Charles de Secondat, Baron de Montesquieu, whose The Spirit of the Laws argues that "Better is it to say, that the government most conformable to nature is that which best agrees with the humour and disposition of the people in whose favour it is established," rather than accept as natural the mere rule of force. Following in his footsteps, political economist Jean-Baptiste Say and Destutt de Tracy were ardent exponents of the "harmonies" of the market, and in all probability it was they who coined the term laissez-faire. This evolved into the physiocrats, and to the political economy of Rousseau.

The late French enlightenment saw two figures who would have tremendous influence on later liberal thought: Voltaire who argued that the French should adopt constitutional monarchy, and disestablish the Second Estate, and Rousseau who argued for a natural freedom for mankind. Both argued, in different forms, for changes in political and social arrangements based around the idea that society can restrain a natural human liberty, but not obliterate its nature. For Voltaire the concept was more intellectual, for Rousseau, it was related to intrinsic natural rights, perhaps related to the ideas of Diderot.

Rousseau also argued the importance of a concept that appears repeatedly in the history of liberal thought, namely, the social contract. He rooted this in the nature of the individual and asserted that each person knows their own interest best. His assertion that man is born free, but that education was sufficient to restrain him within society, rocked the monarchical society of his age. His assertion of an organic will of a nation argued for self-determination of peoples, again in contravention of established political practice. His ideas were a key element in the declaration of the National Assembly in the French Revolution, and in the thinking of Americans such as Benjamin Franklin and Thomas Jefferson. In his view the unity of a state came from the concerted action of consent, or the "national will". This unity of action would allow states to exist without being chained to pre-existing social orders, such as aristocracy.

A main contributing group of thinkers whose work would become considered part of liberalism are those associated with the " Scottish Enlightenment", including the writers David Hume and Adam Smith, and the German enlightenment philosopher Immanuel Kant.

David Hume's contributions were many and varied, but most important was his assertion that fundamental rules of human behaviour would overwhelm attempts to restrict or regulate them, in A Treatise of Human Nature, 1739-1740. One example of this is in his disparaging of mercantilism, and the accumulation of gold and silver. He argued that prices were related to the quantity of money, and that hoarding gold and issuing paper money would only lead to inflation.

Although Adam Smith is the most famous of the economic liberal thinkers, he was not without antecedents. The physiocrats in France had proposed studying systematically political economy and the self organizing nature of markets. Benjamin Franklin wrote in favour of the freedom of American industry in 1750. In Sweden-Finland the period of liberty and parliamentary government from 1718 to 1772 produced a Finnish parliamentarian, Anders Chydenius, who was one of the first to propose free trade and unregulated industry, in The National Gain, 1765. His impact has proven to be lasting particularly in the Nordic area, but it also had a powerful effect in later developments elsewhere.

The Scotsman Adam Smith (1723–1790) expounded the theory that individuals could structure both moral and economic life without direction from the state, and that nations would be strongest when their citizens were free to follow their own initiative. He advocated an end to feudal and mercantile regulations, to state-granted monopolies and patents, and he promulgated " laissez-faire" government. In The Theory of Moral Sentiments, 1759, he developed a theory of motivation that tried to reconcile human self-interest and an unregulated social order. In The Wealth of Nations, 1776, he argued that the market, under certain conditions, would naturally regulate itself and would produce more than the heavily restricted markets that were the norm at the time. He assigned to government the role of taking on tasks which could not be entrusted to the profit motive, such as preventing individuals from using force or fraud to disrupt competition, trade, or production. His theory of taxation was that governments should levy taxes only in ways which did not harm the economy, and that "The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state." He agreed with Hume that capital, not gold, is the wealth of a nation.

Immanuel Kant was strongly influenced by Hume's empiricism and rationalism. His most important contributions to liberal thinking are in the realm of ethics, particularly his assertion of the categorical imperative. Kant argued that received systems of reason and morals were subordinate to natural law, and that, therefore, attempts to stifle this basic law would meet with failure. His idealism would become increasingly influential, since it asserted that there were fundamental truths upon which systems of knowledge could be based. This meshed well with the ideas of the English Enlightenment about natural rights.

Revolutionary liberalism

These thinkers, however, worked within the political framework of monarchies and in societies in which the class system and an established church were the norm. Although the earlier Wars of the Three Kingdoms had resulted in the republican Commonwealth of England between 1649 and 1660, the idea that ordinary human beings could structure their own affairs had been suppressed with the Restoration and then remained theoretical until the American and French Revolutions. (The Glorious Revolution of 1688 is often cited as a precedent, but it replaced one monarch with another monarch. It had, however, weakened the power of the monarch and strengthened the British Parliament which had refused to accept the Jacobite succession.) The republican ideas of Radicals influenced these two late 18th century revolutions which became the examples which later revolutionary liberals followed. Both used as their philosophical justification the Rights of Man or the rights given, in the words of Henry St. John, by "Nature and Nature's God". They rejected both tradition and established power.

Thomas Paine, Thomas Jefferson, and John Adams would be instrumental in persuading their fellow Americans to revolt in the name of life, liberty and the pursuit of happiness, echoing Locke, but with one important change (opposed by Alexander Hamilton). Jefferson replaced Locke's word "property" by "the pursuit of happiness". The "American Experiment" would be in favour of democratic government and individual liberty.

James Madison was prominent among the next generation of political theorists in America, arguing that in a republic self-government depended on setting "interest against interest", thus providing protection for the rights of minorities, particularly economic minorities. The American constitution instituted a system of checks and balances: federal government balanced against states' rights; executive, legislative, and judicial branches; and a bicameral legislature. The goal was to insure liberty by preventing the concentration of power in the hands of any one man. Standing armies were held in suspicion, and the belief was that the militia would be enough for defense, along with a navy maintained by the government for the purpose of trade.

The French Revolution overthrew monarch, aristocratic social order, and an established Roman Catholic Church. These revolutionaries were more vehement and less compromising than those in America. A key moment in the French Revolution was the declaration by the representatives of the Third Estate that they were the "National Assembly" and had the right to speak for the French people. During the first few years the revolution was guided by liberal ideas, but the transition from revolt to stability was to prove more difficult than the similar American transition. In addition to native Enlightenment traditions, some leaders of the early phase of the revolution, such as Lafayette, had fought in the U.S. War of Independence against Britain, and brought home Anglo-American liberal ideas. Later, under the leadership of Maximilien Robespierre, a Jacobin faction greatly centralized power and dispensed with most aspects of due process, resulting in the Reign of Terror. Instead of an ultimately republican constitution, Napoleon Bonaparte rose from Director, to Consul, to Emperor. On his death bed he confessed "They wanted another Washington", meaning a man who could militarily establish a new state, without desiring a dynasty. Nevertheless, the French Revolution would go farther than the American Revolution in establishing liberal ideals with such policies as universal male suffrage, national citizenship, and a far reaching " Declaration of the Rights of Man and Citizen", paralleling the American Bill of Rights. One of the side-effects of Napoleon's military campaigns was to carry these ideas throughout Europe.

The examples of United States and France were followed in many other countries. The usurpation of the Spanish monarchy by Napoleon's forces in 1808 led to autonomist and independence movements across Latin America, which often turned to liberal ideas as alternatives to the monarchical-clerical corporatism of the colonial era. Movements such as that led by Simón Bolívar in the Andean countries aspired to constitutional government, individual rights, and free trade. The struggle between liberals and corporatist conservatives continued for the rest of the century in Latin America, with anti-clerical liberals like Benito Juárez of Mexico attacking the traditional role of the Roman Catholic Church.

The transition to liberal society in Europe sometimes came through revolutionary or secessionist violence, and there were repeated explicitly liberal revolutions and revolts throughout Europe in the first half of the 19th century. However, in Britain and many other nations, the process was driven more by politics than revolution, even if the process was not entirely tranquil. The anti-clerical violence during the French Revolution was seen by opponents at the time, and for most of the 19th century, as explicitly liberal in origin. At the same time many French liberals too were victim of the Jacobin terror.

With the coming of romanticism, liberal notions moved from being proposals for reform of existing governments, to demands for change. The American Revolution and the French Revolution would add "democracy" to the list of values which liberal thought promoted. The idea, that the people were sovereign, and capable of making all necessary laws and enforcing them, went beyond the conceptions of the Enlightenment. Instead of merely asserting the rights of individuals within the state, all of the state's powers were derived from the nature of man ( natural law), given by God (supernatural law), or by contract ("the just consent of the governed".) This made compromise with previously autocratic orders far less likely, and the resulting violence was justified, in the minds of monarchists, to restore order.

The contractual nature of liberal thought to this point must be stressed. One of the basic ideas of the first wave of thinkers in the liberal tradition was that individuals made agreements and owned property. This may not seem a radical notion today, but at the time most property laws defined property as belonging to a family or to a particular figure within it, such as the "head of the family". Obligations were based on feudal ties of loyalty and personal fealty, rather than an exchange of goods and services. Gradually, the liberal tradition introduced the idea that voluntary consent and voluntary agreement were the basis for legitimate government and law. This view was further advanced by Rousseau with his notion of a social contract.

Between 1774 and 1848, there were several waves of revolutions, each revolution demanding greater and greater primacy for individual rights. The revolutions placed increasing value on self-governance. This could lead to secession - a particularly important concept in the revolutions which ended Spanish control over much of her colonial empire in the Americas, and in the American Revolution. European liberals, particularly after the French Constitution of 1793, thought that democracy, considered as majority rule by propertyless men, would be a danger to private property, and favored a franchise limited to those with a certain amount of property. Later liberal democrats, like de Tocqueville, disagreed. In countries where feudal property arrangements still held sway, liberals generally supported unification as the path to liberty. The strongest examples of this are Germany and Italy. As part of this revolutionary program, the importance of education, a value repeatedly stressed from Erasmus onward, became more and more central to the idea of liberty.

Liberal parties in many European monarchies agitated for parliamentary government, increased representation, expansion of the franchise where present, and the creation of a counterweight to monarchical power. This political liberalism was often driven by economic liberalism, namely, the desire to end feudal privileges, guild or royal monopolies, restrictions on ownership, and laws which did not permit the full range of corporate and economic arrangements being developed in other countries. To one degree or another, these forces were seen even in autocracies such as Turkey, Russia and Japan. As the Russian Empire crumbled under the weight of economic failure and military defeat, it was the liberal parties who took control of the Duma, and in 1905 and 1917 began revolutions against the government. Later Piero Gobetti would formulate a theory of "Liberal Revolution" to explain what he felt was the radical element in liberal ideology. Another example of this form of liberal revolution is from Ecuador where Eloy Alfaro in 1895 lead a "radical liberal" revolution that secularized the state, opened marriage laws, engaged in the development of infrastructure and the economy.

Splits within Liberalism

Role of the State

The Industrial Revolution greatly increased material wealth, but also represented a radical cleavage with the traditional social order, and brought with it new social problems such as pollution, alienation, overcrowding in the cities, and child labour. Material and scientific progress led to greater longevity and a reduced mortality rate. The population increased dramatically. Economic liberals, such as John Locke, Adam Smith, and Wilhelm von Humboldt felt that the problems of an industrial society would correct themselves without government intervention. In the 19th century, the voting franchise in most western countries was extended, and these newly enfranchised citizens often voted in favour of government solutions to the problems they faced in their everyday lives. A rapid increase in literacy and the spread of knowledge led to social activism in a variety of forms. Part of the liberals demanded laws against child labor and laws requiring minimum standards of worker safety and a minimum wage. The laissez faire economic liberals countered that such laws were an unjust imposition on life, liberty, and property, not to mention a hindrance to economic development. By the end of the 19th century, a growing body of liberal thought asserted that, in order to be free, individuals needed access to the requirements of fulfillment, including protection from exploitation and education. In 1911, L.T. Hobhouse published Liberalism, which summarized the new liberalism, including qualified acceptance of government intervention in the economy, and the collective right to equality in dealings, what he called "just consent."

Opposed to these changes was a more conservative strain of liberalism which became increasingly anti-government, in some cases approaching anarchism. Gustave de Molinari in France and Herbert Spencer in England were prominent.

Natural rights vs. utilitarianism

The German Wilhelm von Humboldt developed the modern concepts of liberalism in his book The Limits of State Action. John Stuart Mill (J.S. Mill, 1806-1873) popularized and expanded these ideas in On Liberty (1859) and other works. He opposed collectivist tendencies while still placing emphasis on quality of life for the individual. He also had sympathy for female suffrage and (later in life) for labor co-operatives.

One of Mill's most important contributions was his utilitarian justification of liberalism. Mill grounded liberal ideas in the instrumental and pragmatic, allowing the unification of subjective ideas of liberty gained from the French thinkers in the tradition of Jean-Jacques Rousseau and the more rights-based philosophies of John Locke in the British tradition.

Liberalism and democracy

The relationship between liberalism and democracy may be summed up by Winston Churchill's famous remark, "...democracy is the worst form of Government except all those other forms..." In short, there is nothing about democracy per se that guarantees freedom rather than a tyranny of the masses. The coinage liberal democracy suggests a more harmonious marriage between the two principles than actually exists. Liberals strive after the replacement of absolutism by limited government: government by consent. The idea of consent suggests democracy. At the same time, the founders of the first liberal democracies feared mob rule, and so they built into the constitutions of liberal democracies checks and balances intended to limit the power of government by dividing those powers among several branches. For liberals, democracy is not an end in itself, but an essential means to secure liberty, individuality and diversity.

Liberalism and radicalism

In various countries in Europe and Latin-America the nineteenth century and the beginning of the twentieth century show the existence of a radical political tendency next to or as successor of a more doctrinal liberal tendency. In some countries the radical tendency is a variant of liberalism that is less doctrinal and more willing to accept democratic reforms than traditional liberals. In the United Kingdom the Radicals unite with the more traditional liberal Whigs into the Liberal Party. In other countries, these left wing liberals form their own radical parties with various names (e.g. in Switzerland and Germany (the Freisinn), Bulgaria, Denmark, Spain and the Netherlands but also Argentina and Chile. This doesn't mean that all radical parties were formed by left wing liberals. In the French political literature it is normal to make clear separation between liberalism and radicalism in France. In Serbia liberalism and radicalism had and have almost nothing in common. But even the French radicals were aligned to the international liberal movement in the first half of the twentieth century, in the Entente Internationale des Partis Radicaux et des Partis Démocratiques similaires

Liberalism and the great depression

Despite some dispute whether there was an actual laissez faire capitalist state in existence at the time , the Great Depression of the 1930s shook public faith in "laissez-faire capitalism" and "the profit motive," leading many to conclude that the unregulated markets could not produce prosperity and prevent poverty. Many liberals were troubled by the political instability and restrictions on liberty that they believed were caused by the growing relative inequality of wealth. Key liberals of this persuasion, such as John Dewey, John Maynard Keynes, and Franklin D. Roosevelt, argued for the creation of a more elaborate state apparatus to serve as the bulwark of individual liberty, permitting the continuation of capitalism while protecting the citizens against its perceived excesses. Some liberals, including Hayek, whose work The Road to Serfdom remains influential, argued against these institutions, believing the Great Depression and Second World War to be individual events, that, once passed, did not justify a permanent change in the role of government.

Key liberal thinkers, such as Lujo Brentano, Leonard Trelawny Hobhouse, Thomas Hill Green, John Maynard Keynes, Bertil Ohlin and John Dewey, described how a government should intervene in the economy to protect liberty while avoiding socialism. These liberals developed the theory of modern liberalism (also "new liberalism," not to be confused with present-day neoliberalism). Modern liberals rejected both radical capitalism and the revolutionary elements of the socialist school. John Maynard Keynes, in particular, had a significant impact on liberal thought throughout the world. The Liberal Party in Britain, particularly since Lloyd George's People's Budget, was heavily influenced by Keynes, as was the Liberal International, the Oxford Liberal Manifesto of 1947 of the world organization of liberal parties. In the United States, the influence of Keynesianism on Franklin D. Roosevelt's New Deal has led modern liberalism to be identified with American liberalism and Canadian Liberalism.

Other liberals, including Friedrich August von Hayek, Milton Friedman, and Ludwig von Mises, argued that the great depression was not a result of "laissez-faire" capitalism but a result of too much government intervention and regulation upon the market. In Friedman's work, "Capitalism and Freedom" he elucidated government regulation that occurred before the great depression including heavy regulations upon banks that prevented them, he argued, from reacting to the markets' demand for money. Furthermore, the U.S. Federal government had created a fixed currency pegged to the value of gold. This pegged value created a massive surplus of gold, but later the pegged value was too low which created a massive migration of gold from the U.S. Friedman and Hayek both believed that this inability to react to currency demand created a run on the banks that the banks were no longer able to handle, and that and the fixed exchange rates between the dollar and gold both worked to cause the Great Depression by creating, and then not fixing, deflationary pressures. He further argued in this thesis, that the government inflicted more pain upon the American public by first raising taxes, then by printing money to pay debts (thus causing inflation), the combination of which helped to wipe out the savings of the middle class.

Liberalism against totalitarianism

In the mid-20th century, liberalism began to define itself in opposition to totalitarianism. The term was first used by Giovanni Gentile to describe the socio-political system set up by Mussolini. Stalin would apply it to German Nazism, and after the war it became a descriptive term for what liberalism considered the common characteristics of fascist, Nazi and Marxist-Leninist regimes. Totalitarian regimes sought and tried to implement absolute centralized control over all aspects of society, in order to achieve prosperity and stability. These governments often justified such absolutism by arguing that the survival of their civilization was at risk. Opposition to totalitarian regimes acquired great importance in liberal and democratic thinking, and they were often portrayed as trying to destroy liberal democracy. On the other hand, the opponents of liberalism strongly objected to the classification that unified mutually hostile fascist and communist ideologies and considered them fundamentally different.

In Italy and Germany, nationalist governments linked corporate capitalism to the state, and promoted the idea that their nations were culturally and racially superior, and that conquest would give them their rightful "place in the sun". The propaganda machines of these countries argued that democracy was weak and incapable of decisive action, and that only a strong leader could impose necessary discipline. In Soviet Union, the ruling communists banned private property, claiming to act for the sake of economic and social justice, and the government had full control over the planned economy. The regime insisted that personal interests be linked and inferior to those of the society, of class, which was ultimately an excuse for persecuting both oppositions as well as dissidents within the communists ranks as well as arbitrary use of severe penal code.

The rise of totalitarianism became a lens for liberal thought. Many liberals began to analyze their own beliefs and principles, and came to the conclusion that totalitarianism arose because people in a degraded condition turn to dictatorships for solutions. From this, it was argued that the state had the duty to protect the economic well being of its citizens. As Isaiah Berlin said, "Freedom for the wolves means death for the sheep." This growing body of liberal thought argued that reason requires a government to act as a balancing force in economics.

Other liberal interpretations on the rise of totalitarianism were quite contrary to the growing body of thought on government regulation in supporting the market and capitalism. This included Friedrich Hayek's work, The Road to Serfdom. He argued that the rise of totalitarian dictatorships was the result of too much government intervention and regulation upon the market which caused loss of political and civil freedoms. Hayek also saw these economic controls being instituted in the United Kingdom and the United States and warned against these "Keynesian" institutions, believing that they can and will lead to the same totalitarian governments "Keynesians liberals" were attempting to avoid. Hayek saw authoritarian regimes such as the fascist, Nazis, and communists, as the same totalitarian branch; all of which sought the elimination or reduction of economic freedom. To him the elimination of economic freedom brought about the elimination of political freedom. Thus Hayek believes the differences between Nazis and communists are only rhetorical.

Friedrich von Hayek and Milton Friedman stated that economic freedom is a necessary condition for the creation and sustainability of civil and political freedoms. Hayek believed the same totalitarian outcomes could occur in Britain (or anywhere else) if the state sought to control the economic freedom of the individual with the policy prescriptions outlined by people like Dewey, Keynes, or Roosevelt.

One of the most influential critics of totalitarianism was Karl Popper. In The Open Society and Its Enemies he defended liberal democracy and advocated open society, in which the government can be changed without bloodshed. Popper argued that the process of the accumulation of human knowledge is unpredictable and that the theory of ideal government cannot possibly exist. Therefore, the political system should be flexible enough so that governmental policy would be able to evolve and adjust to the needs of the society; in particular, it should encourage pluralism and multiculturalism.

Liberalism after World War II

In much of the West, expressly liberal parties were caught between "conservative" parties on one hand, and "labor" or social democratic parties on the other hand. For example, the UK Liberal Party became a minor party. The same process occurred in a number of other countries, as the social democratic parties took the leading role in the Left, while pro-business conservative parties took the leading role in the Right.

The post-war period saw the dominance of modern liberalism. Linking modernism and progressivism to the notion that a populace in possession of rights and sufficient economic and educational means would be the best defense against totalitarian threats, the liberalism of this period took the stance that by enlightened use of liberal institutions, individual liberties could be maximized, and self-actualization could be reached by the broad use of technology. Liberal writers in this period include economist John Kenneth Galbraith, philosopher John Rawls and sociologist Ralf Dahrendorf. A dissenting strain of thought developed that viewed any government involvement in the economy as a betrayal of liberal principles. Calling itself "libertarianism," this movement was centered around such schools of thought as Austrian Economics.

The debate between personal liberty and social optimality occupies much of the theory of liberalism since the Second World War, particularly centering around the questions of social choice and market mechanisms required to produce a "liberal" society. One of the central parts of this argument concerns Kenneth Arrow's General Possibility Theorem. This thesis states that there is no consistent social choice function which satisfies unbounded decision making, independence of choices, Pareto optimality, and non-dictatorship. In short, according to the thesis which includes the problem of liberal paradox, it is not possible to have unlimited liberty, a maximum amount of utility, and an unlimited range of choices at the same time. Another important argument within liberalism is the importance of rationality in decision making - whether the liberal state is best based on rigorous procedural rights or whether it should be rooted in substantial equality.

One important liberal debate concerns whether people have positive rights as members of communities in addition to being protected from wrongs done by others. For many liberals, the answer is "yes": individuals have positive rights based on being members of a national, political, or local unit, and can expect protection and benefits from these associations. Members of a community have a right to expect that their community will to a certain degree regulate the economy since rising and falling economic circumstances cannot be controlled by the individual. If individuals have a right to participate in a public capacity, then they have a right to expect education and social protections against discrimination from other members of that public. Other liberals would answer "no": individuals have no such rights as members of communities, for such rights conflict with the more fundamental "negative" rights of other members of the community.

After the 1970s, the liberal pendulum had swung away from increasing the role of government, and towards a greater use of the free market and laissez-faire principles. In essence, many of the old pre-World War I ideas were making a comeback.

In part this was a reaction to the triumphalism of the dominant forms of liberalism of the time, but as well it was rooted in a foundation of liberal philosophy, particularly suspicion of the state, whether as an economic or philosophical actor. Even liberal institutions could be misused to restrict rather than promote liberty. Increasing emphasis on the free market emerged with Milton Friedman in the United States, and with members of the Austrian School in Europe. Their argument was that regulation and government involvement in the economy was a slippery slope, that any would lead to more, and that more was difficult to remove.

Contemporary liberalism

The impact of liberalism on the modern world is profound. The ideas of individual liberties, personal dignity, free expression, religious tolerance, private property, universal human rights, transparency of government, limitations on government power, popular sovereignty, national self-determination, privacy, "enlightened" and "rational" policy, the rule of law, fundamental equality, a free market economy, and free trade were all radical notions some 250 years ago. Liberal democracy, in its typical form of multiparty political pluralism, has spread to much of the world. Today all are accepted as the goals of policy in most nations, even if there is a wide gap between statements and reality. They are not only the goals of liberals, but also of social democrats, conservatives, and Christian Democrats. There is, of course, opposition.

A general overview of political positions of contemporary liberal parties and movements

Today the word "liberalism" is used differently in different countries. (See Liberalism worldwide.) One of the greatest contrasts is between the usage in the United States and usage in Continental Europe. In the US, liberalism is usually understood to refer to modern liberalism, as contrasted with conservatism. American liberals endorse regulation for business, a limited social welfare state, and support broad racial, ethnic, sexual and religious tolerance, and thus more readily embrace pluralism, and affirmative action. In Europe, on the other hand, liberalism is not only contrasted with conservatism and Christian Democracy, but also with socialism and social democracy. In some countries, European liberals share common positions with Christian Democrats.

Before an explanation of this subject proceeds, it is important to add this disclaimer: There is always a disconnect between philosophical ideals and political realities. Also, opponents of any belief are apt to describe that belief in different terms from those used by adherents. What follows is a record of those goals that overtly appear most consistently across major liberal manifestos (e.g., the Oxford Manifesto of 1947). It is not an attempt to catalogue the idiosyncratic views of particular persons, parties, or countries, nor is it an attempt to investigate any covert goals, since both are beyond the scope of this article.

Most political parties which identify themselves as liberal claim to promote the rights and responsibilities of the individual, free choice within an open competitive process, the free market, and the dual responsibility of the state to protect the individual citizen and guarantee their liberty. Critics of liberal parties tend to state liberal policies in different terms. Economic freedom may lead to gross inequality. Free speech may lead to speech that is obscene, blasphemous, or treasonous. The role of the state as promoter of freedom and as protector of its citizens may come into conflict.

Liberalism stresses the importance of representative liberal democracy as the best form of government. Elected representatives are subject to the rule of law, and their power is moderated by a constitution, which emphasizes the protection of rights and freedoms of individuals and limits the will of the majority. Liberals are in favour of a pluralist system in which differing political and social views, even extreme or fringe views, compete for political power on a democratic basis and have the opportunity to achieve power through periodically held elections. They stress the resolution of differences by peaceful means within the bounds of democratic or lawful processes. Many liberals seek ways to increase the involvement and participation of citizens in the democratic process. Some liberals favour direct democracy instead of representative democracy. (Main article: Liberal democracy).

Liberalism advocates civil rights for all citizens: the protection and privileges of personal liberty extended to all citizens equally by law. It includes the equal treatment of all citizens irrespective of race, gender and class. Liberals are divided over the extent to which positive rights are to be included, such as the right to food, shelter, and education. Critics from an internationalist human rights school of thought argue that the civil rights advocated in the liberal view are not extended to all people, but are limited to citizens of particular states. Unequal treatment on the basis of nationality is therefore possible, especially in regard to citizenship itself. (Main article: Civil rights).

The rule of law and equality before the law are fundamental to liberalism. Government authority may only be legitimately exercised in accordance with laws that are adopted through an established procedure. Another aspect of the rule of law is an insistence upon the guarantee of an independent judiciary, whose political independence is intended to act as a safeguard against arbitrary rulings in individual cases. The rule of law includes concepts such as the presumption of innocence, no double jeopardy, and Habeas Corpus. Rule of law is seen by liberals as a guard against despotism and as enforcing limitations on the power of government. In the penal system, liberals in general reject punishments they see as inhumane, including capital punishment.

Racism is incompatible with liberalism. Liberals in Europe are generally hostile to any attempts by the state to enforce equality in employment by legal action against employers, whereas in the United States many liberals favour such affirmative action. Liberals in general support equal opportunity, but not necessarily equal outcome. Most European liberal parties do not favour employment quotas for women and ethnic minorities as the best way to end gender and racial inequality. However, all agree that arbitrary discrimination on the basis of race or gender is morally wrong.

Economic liberals today stress the importance of a free market and free trade, and seek to limit government intervention in both the domestic economy and foreign trade (Main article: Economic liberalism). Modern liberal movements often agree in principle with the idea of free trade, but maintain some skepticism, seeing unrestricted trade as leading to the growth of multi-national corporations and the concentration of wealth and power in the hands of the few. In the post-war consensus on the welfare state in Europe, liberals supported government responsibility for health, education, and alleviating poverty while still calling for a market based on independent exchange. Liberals agree that a high quality of health care and education should be available for all citizens, but differ in their views on the degree to which governments should supply these benefits. Since poverty is a threat to personal liberty, liberalism seeks a balance between individual responsibility and community responsibility. In particular, liberals favour special protection for the handicapped, the sick, the disabled, and the aged.

European liberalism turned back to more laissez-faire policies in the 1980's and 1990's, and supported privatisation and liberalisation in health care and other public sectors. Modern European liberals generally tend to believe in a smaller role for government than would be supported by most social democrats, let alone socialists or communists. The European liberal consensus appears to involve a belief that economies should be decentralized. In general, contemporary European liberals do not believe that the government should directly control any industrial production through state owned enterprises, which places them in opposition to social democrats.

Liberals generally believe in neutral government, in the sense that it is not for the state to determine personal values. As John Rawls put it, "The state has no right to determine a particular conception of the good life". In the United States this neutrality is expressed in the Declaration of Independence as the right to the pursuit of happiness.

Both in Europe and in the United States, liberals often support the pro-choice movement and advocate equal rights for women and homosexuals.

Many liberals share values with environmentalists, such as the Green Party. They seek to minimize the damage done by the human species on the natural world, and to maximize the regeneration of damaged areas. Some such activists attempt to make changes on an economic level by acting together with businesses, but others favour legislation in order to achieve sustainable development. Other liberals do not accept government regulation in this matter and argue that the market should regulate itself in some fashion (Main article: Green liberalism).

There is no consensus about liberal doctrine in international politics, though there are some central notions, which can be deduced from, for example, the opinions of Liberal International. Social liberals often believe that war can be abolished. Some favour internationalism, and support the United Nations. Economic liberals, on the other hand, favour non-interventionism rather than collective security. Liberals believe in the right of every individual to enjoy the essential human liberties, and support self-determination for national minorities. Essential also is the free exchange of ideas, news, goods and services between people, as well as freedom of travel within and between all countries. Liberals generally oppose censorship, protective trade barriers, and exchange regulations.

Some liberals were among the strongest advocates of international co-operation and the building of supra-national organizations, such as the European Union. In the view of social liberals, a global free and fair market can only work if companies worldwide respect a set of common minimal social and ecological standards. A controversial question, on which there is no liberal consensus, is immigration. Do nations have a right to limit the flow of immigrants from countries with growing populations to countries with stable or declining populations?

Conservative liberalism and Liberal conservatism

Conservative liberalism represents the right-wing of the liberal movement, stressing much on economic issues and combining some conservative elements. Examples include the People's Party for Freedom and Democracy in the Netherlands and the Liberal Party of Denmark.

Liberal conservatism is a variant of conservatism which includes some liberal elements. This strain often emerged in countries with strong socialist and/or labour parties, and is often strongly influenced by the writings of Edmund Burke. partiesExamples include the Reform Party of Canada/ Canadian Alliance, the Liberal Front Party (Brazil), the Moderate Party (Sweden), Forza Italia, the Liberal Democratic Party in Japan, National Renewal in Chile, and the Liberal Party of Australia. These parties are mainly member of the International Democratic Union, not of the Liberal International.

Liberal international relations theory

"Liberalism" in international relations is a theory that holds that state preferences, rather than state capabilities, are the primary determinant of state behaviour. Unlike realism where the state is seen as a unitary actor, liberalism allows for plurality in state actions. Thus, preferences will vary from state to state, depending on factors such as culture, economic system or government type. Liberalism also holds that interaction between states is not limited to the political/security ("high politics"), but also economic/cultural ("low politics") whether through commercial firms, organizations or individuals. Thus, instead of an anarchic international system, there are plenty of opportunities for cooperation and broader notions of power, such as cultural capital (for example, the influence of a country's films leading to the popularity of its culture and the creation of a market for its exports worldwide). Another assumption is that absolute gains can be made through co-operation and interdependence - thus peace can be achieved.

Liberalism as an international relations theory is not inherently linked to liberalism as a more general domestic political ideology. Increasingly, modern liberals are integrating critical international relations theory into their foreign policy positions.

Neoliberalism

Neoliberalism is a label for some economic liberal doctrines. The swing away from government action in the 1970s led to the introduction of this term, which refers to a program of reducing trade barriers and internal market restrictions, while using government power to enforce opening of foreign markets. Neoliberalism accepts a certain degree of government involvement in the domestic economy, particularly a central bank with the power to print fiat money. This is strongly opposed by libertarians. While neoliberalism is sometimes described as overlapping with Thatcherism, economists as diverse as Joseph Stiglitz and Milton Friedman have been described — by others — as "neoliberal". This economic agenda is not necessarily combined with a liberal agenda in politics: neoliberals often do not subscribe to individual liberty on ethical issues or in sexual mores. An extreme example was the Pinochet regime in Chile, but some also classify Ronald Reagan, Margaret Thatcher and even Tony Blair and Gerhard Schröder as being neo-liberal.

It should be noted that, in the 1990s, many social democratic parties adopted "neoliberal" economic policies such as privatization of industry and open markets, much to the dismay of many of their own voters. This has led these parties to become de facto neoliberal, and has often resulted in a drastic loss of popular support. For example, critics to the left of the German Social Democratic Party and the British Labour Party accuse them of pursuing neoliberal policies by refusing to renationalise industry. As a result of this, much support for these parties has been lost to the Christian Democratic Union and the Liberal Democrats, respectively. This "adopting of the wolves clothes" has led Labour in the UK to spectacular electoral success. However, tensions between the executive and Labour's backbenches is a consistent issue.

Sometimes "Neoliberalism" is used as a catch-all term for the anti-socialist reaction which swept through some countries during the period between the 70s and 90s. "Neoliberalism" in the form of Thatcher, Reagan, and Pinochet claimed to move from a bureaucratic welfare-based society toward a meritocracy acting in the interests of business. In actuality, these governments cut funding for education and taxed income more heavily than wealth, which increased the influence of big business and the upper class.

Some conservatives see themselves as the true inheritors of classical liberalism. Jonah Goldberg of National Review argues that "most conservatives are closer to classical liberals than a lot of Reason-libertarians" because conservatives want to preserve some institutions that they see as needed for liberty. Further confusing the classification of liberalism and conservatism is that some conservatives claim liberal values as their own.

Criticism and defense of Liberalism

Collectivist opponents of liberalism reject its emphasis on individual rights, and instead emphasize the collective or the community to a degree where the rights of the individual are either diminished or abolished. Collectivism can be found both to the right and to the left of liberalism. On the left, the collective that tends to be enhanced is the state, often in the form of state socialism. On the right, conservative and religious opponents argue that individual freedom in the non-economic sphere can lead to indifference, selfishness, and immorality. The liberal answer to this is that it is not the purpose of the law to legislate morality, but to protect the citizen from harm. However, conservatives often see the legislation of morality as an essential aspect of protecting citizens from harm.

Anti-statist critiques of liberalism, such as anarchism, assert the illegitimacy of the state for any purposes.

A softer critique of liberalism can be found in communitarianism, which emphasizes a return to communities without necessarily denigrating individual rights.

Beyond these clear theoretical differences, some liberal principles can be disputed in a piecemeal fashion, with some portions kept and others abandoned (see Liberal democracy and Neoliberalism.) This ongoing process - where putatively liberal agents accept some traditionally liberal values and reject others - causes some critics to question whether or not the word "liberal" has any useful meaning at all.

In terms of international politics, the universal claims of human rights which liberalism tends to endorse are disputed by rigid adherents of non-interventionism, since intervention in the interests of human rights can conflict with the sovereignty of nations. By contrast, World federalists criticize liberalism for its adherence to the doctrine of sovereign nation-states, which the World federalists believe is not helpful in the face of genocide and other mass human rights abuses.

Left-leaning opponents of economic liberalism reject the view that the private sector can act for the collective benefit, citing the harm done to those individuals who lose out in competition. They oppose the use of the state to impose market principles, usually through an enforced market mechanism in a previously non-market sector. They argue that the dominance of liberal principles in economy and society has contributed to inequality among states, and inequality within states. They argue that liberal societies are characterised by long-term poverty, and by ethnic and class differentials in health, by (infant) mortality and lower life expectancy. Some would even say they have much higher unemployment than centrally planned economies.

A response to these claims is that liberal states tend to be wealthier than less free states, that the poor in liberal states are better off than the average citizen in non-liberal states, and that inequality is a necessary spur to the hard work that produces prosperity. Throughout history, poverty has been the common lot of mankind, and it is only the progress of science and the rise of the modern industrial state that has brought prosperity to large numbers of people.

Liberalism and social democracy

Liberalism shares many basic goals and methods with social democracy, but in some places diverges. The fundamental difference between liberalism and social democracy is disagreement over the role of the state in the economy. Social democracy can be understood to combine features from both social liberalism and democratic socialism. Democratic socialism seeks to achieve some minimum equality of outcome. Democratic socialists support a large public sector and the nationalization of utilities such as gas and electricity in order to avoid private monopolies, achieve social justice, and raise the standard of living. By contrast, liberalism, in its distrust of monopolies (both public and private), prefers much less state intervention, choosing for example subsidies and regulation rather than outright nationalization. Liberalism also emphasizes equality of opportunity, and not equality of outcome, citing the desire for a meritocracy. American liberalism, in contrast to liberalism in most countries, never took a major focus on socialism nor ever demanded the same social welfare state programs as its European counterparts. Today, the United States does not share the welfare state programs applied in most of Europe and has implemented fewer social programs to aid those in the lower socioeconomic level than Canada and Australia.