Guest Post: Liberalism: Classical vs. Modern

A guest post from Michael Cash:

Former British Prime Minister Winston Churchill once stated that, “If you’re not a liberal at twenty you have no heart – if you’re not a conservative at forty you have no brain.” However, American composer and conductor Leonard Bernstein claimed that “A liberal is a man or a woman or a child looks forward to a better day, a more tranquil night, and a bright, infinite future.”

Obviously, the definition of “liberal” can change depending on the country and the time period being discussed. It is often thought that classical liberalism is European and modern liberalism is American; however, graduates of political science schools will tell you that both areas of the world contributed to the development of both forms of government. Both classical and modern liberalism advocate personal freedoms and limited governmental power. The essential differences lie in the beliefs concerning the role of government in economic and social issues.

Foundations of Classical Liberalism

Classic liberalism is a political ideology that arose in the early nineteenth century in and America. Its principles began to develop in the eighteenth century as a reaction to the new type of society that was being formed due to the industrial revolution. Whereas classical conservative principles included maintaining the traditional governmental institutions of the time and only seeking gradual change in society, classical liberalism advocated progress, natural law, economic freedom, limited government and liberty for each individual.

John Locke, one of the most famous philosophers of the enlightenment era, provided the foundation for many of the principles of classical liberalism. He suggested that a human, rather than living in the fear inherent in an anarchistic environment, gives up some sovereignty and enters into a “social contract” with a government in exchange for property protection. While Locke never specifically defined what he meant by “property,” this idea led to the core belief that legitimate authority must only come from the consent of the governed.

Another important person in the development of classical liberalism was Adam Smith. Through his book, The Wealth of Nations, he described how a free market economy that relies on individual competition and capitalist principles is the most productive and beneficial for a society. These ideas helped form the liberal principles regarding economics.

Some of the ideals of classical liberalism can be clearly seen in two famous American documents:

1. The Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights…”

2. The First Amendment to the U.S. Constitution: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”

These statements derive from the classic liberal principles of individual freedoms and restricted government.

Development of Modern Liberalism

While the ideas of classical liberalism were met with some dissent in Europe, it became the prevailing political ideology throughout much of the western world in the nineteenth century. Many countries that adopted this ideology were economically prosperous at this time, and while there were many causes for the prosperity, it was partly due to the free market economy supported by classical liberal ideals. However, economic principles in both and the U.S. started to come into question beginning with the Panic of 1873, which led to a serious economic depression in Britain. A series of further economic panics including the worldwide Great Depression of the 1930s, in addition to escalating civil rights and labor movements, caused many politicians to rethink the role of government, leading to modern liberalism.

Modern liberalism is based on classical ideals, but it accepts the notion that government should be less limited in order to provide social justice. This means that a modern liberal government can address and influence economic issues as well as social issues such as health care, unemployment, education and civil rights. Proponents of modern liberalism suggest that there are inadequacies involved with the laissez-faire capitalism of a strictly classical liberal government. These inherent problems prevent poor people from having as much liberty as the more fortunate. A modern liberalism government strives to assist every individual in the acquisition of his or her maximum amount of and to “level the playing field.” This, in turn, leads to more government involvement and control in the lives of citizens. Modern liberalism has been a predominant political ideology since World War II.

Social and Economic Policies

While the principles of classical liberalism would prevent a government from getting involved in economic or social issues, many famous policies and initiatives have been developed by modern liberal governments. In the U.S. for example, Franklin D. Roosevelt is famous for initiating the large-scale New Deal, which was an initiative that created jobs for the unemployed and regulated economic policies in order to recover from the Great Depression. Other examples of modern liberal actions include the development of welfare, social security, child labor restrictions, laws, worker safety regulations, affirmative action and the Civil Rights Act. More recent examples include the 2008 U.K. bank rescue package and the 2010 South Canterbury Finance bailout in New Zealand.

The sweeping policies enacted by modern liberalism governments have certainly not gone unquestioned. Many countries contain political parties that attempt to shift the government back towards classical liberalism principles. With the election of in the 1980s, the U.S. government aimed to lessen its regulation of economic matters dramatically. The resulting policies, known as “Reaganomics,” were echoed in similar actions taken by other world leaders such as the “Rogernomics” enacted by New Zealand Finance Minister in 1984. These policies did not mark a complete change back to classical liberalism by any means, but they were influenced by those ideals.

Current Political Parties

There are numerous political parties throughout the world that advocate different forms of classical liberalism or modern liberalism. For example, the Libertarian Party in the U.S. supports strong civil liberties, unregulated markets and a foreign policy of non-interventionism. The style of limited government that the party promotes is one of the closest options to classical liberalism that a voter in the U.S. has. The two predominant parties, and Republicans, can both arguably be called modern liberal parties.

Some political parties undergo many changes throughout their existence. The New Zealand Liberal Party for example started as a modern liberal party that advocated women’s suffrage and aid for small farmers, among other issues. After roughly 20 years of dominance around the turn of the twentieth century, the party dissolved. However, a faction of the Liberal Party went on to create the United Party, which eventually became the New Zealand National Party. This party is now considered to be generally conservative.

I self-identify as a classical liberal, and it is a pity it does get confused with US modern liberalism. As Michael points out they do have some aspects in common – but differ greatly on economic issues.

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