Classical Liberalism is the oldest of the two streams. By the beginning of the industrial age during the first decades of the 19th century, Classical Liberalism had gained very vast support, across the Anglo-Saxon world. Indeed, as the 19th century is considered the golden age of this stream of liberalism, it is sometimes referred to as ‘Liberalism of the 19th century’.
Classical liberalism arguments have been presented in several different ways over the years, but they tend to emphasise the following:
- • Abstract individualism: The liberal emphasis upon the individual is very apparent in the ideas of classical liberalism. This is an extreme individualism. Society is seen as no more than a collection of individuals trying to look after their different needs and wishes. They believe that people are independent and can look after themselves. Also, that the individual has no responsibility towards other individuals or society in general.
- • Negative freedom: The Classical Liberalist’s perspective of the nature of society – that is, a collection of independent individuals – influences their consideration of freedom. Their perspective has been described as negative. They believe that the individual is free if left alone to live life without intrusion, and that the individual may behave in any way he or she sees acceptable (whilst respecting the law, of course). This is described as a negative perspective as it believes that anything preventing the individual from accomplishing different tasks should be eliminated.
- • Limited state: The idea of negative freedom, in turn, influences the Classical Liberalist’s ideas on the role of state. The feelings of Classical Liberalists towards the state were seen in the words of Tom Paine describing it as ‘a necessary evil’ – something necessary, yet nothing to be praised. On the one hand, the state is necessary as it maintains order and therefore prevents conflict between individuals. An orderly society would be impossible without rules – pure negative freedom would mean permanent instability as individuals conflicted. But on the other hand, Classical Liberalists state that the state should not be celebrated or praised, as it is sure to lead to restricting much of everyone’s freedom. So, to keep as much as possible to the idea of negative freedom, Classical Liberalists believe that the state should be substantially limited. Generally speaking, the state should not be allowed to do anything more than it must to maintain law and order and safeguard individuals and their property. Every other responsibility should belong to the independent individuals living in society. As such, Classical Liberalists do not believe in the concept of state intervention in important social or economic policies, such as education, health or employment.
As noted above, the first half of the 19th century was the golden age of this stream of liberalism. During this period, it became a very popular political idea. The development of the modern capitalist society made people feel that they had an opportunity to control their lives. For example, society was now more mobile, and its structure was changing. Therefore, it is understandable that political ideas limiting state intervention and emphasising individual freedom were very popular in some circles.
However, Classical Liberalism is more than just a body of political ideas belonging to the 19th century which is now of only historic interest. Although this stream of liberalism became much less popular by the early 20th century, many of the arguments and principles were seen to gain new support from around the 1970s onwards. The work of figures such as Friedreich von Hayek, Ayn Rand and Robert Nozick supported a modern form of classical liberalism. Once again, it was in the Anglo-Saxon world, and the United States and United Kingdom in particular, that these neo-liberal ideas began – especially during the era of Ronald Reagan in the United States and Margaret Thatcher in Britain during the 1980s. However, following economic globalisation, they were seen to spread across the rest of the world by the early 21st century. This more recent stream of thinking is very often called ‘libertarianism’, especially during discussions between people like Nozick and egalitarian liberals such as John Rawls. But the term ‘neo-liberalism’ is now very popular in describing the ideology of Reagan and Thatcher. It has developed emphasising not only economic policies opposing state intervention and emphasising the market, but those that also give a lot of value to individualism, wealth and competition within public sectors such as health. For these reasons, neo-liberalism may be linked to the conservative tradition (the connections will be further discussed in the unit on Conservatism).
By the 1880s, some liberalists wanted a change of direction, reconsidering some of the Classical Liberalism arguments. The backdrop was the further development of industrial capitalism during the second half of the 19th century. Some in society had successfully become wealthy due to the Industrial Revolution. At the same time, there were serious social issues. Poverty, illness, a lack of education and difficult working conditions were seen. Due to these issues, a number of liberalists struggled to defend some of the classical ideas. They began to question whether the state should intervene in fields such as education, working conditions and healthcare to help individuals. Augmenting this discussion were the socialist ideas and the connection between politics and social and economic problems.
This eventually led to a new stream of liberalism – Modern Liberalism. This development is often linked to the work of those such as T.H. Green, L.T. Hobhouse and J.A. Hobson between the 1880s and 1920s. This stream of liberalism would indeed develop into one of great importance during the 20th century, with great influence upon the social and economic policies of most western countries. Although its influence has lessened during the last decades, as neo-liberal ideas increased in popularity since the 1970s, Modern Liberalism continues to be an important stream of thinking in the liberal tradition. Modern Liberalists generally emphasise the following:
- • Individualism: Modern Liberalists look at individualism in a very different way to Classical Liberalists. The social individualism of Modern Liberalists continues to focus upon the individual. This individualism however also considers the connection between people and wider units, such as family, society and even the nation. For example, T.H. Green states that society, and the friendship and dependency that can develop as a result, is very important in order to give individuals the opportunity to discover their true character and reach their potential.
- • Positive freedom: Modern Liberalists have also given another meaning to freedom. They believe that freedom demands much more than negative action only that means eliminating obstacles and leaving the individual alone. They believe that true freedom calls for giving fair opportunity to the individual to develop their ability and understanding of the world around them in order to reach their potential as a person. To create such conditions, positive steps will need to be taken to ensure social, economic and political opportunities for the individual, allowing them to be an independent person.
- • An interventionist state: As well as another meaning of freedom, Modern Liberalists also look differently at the role of the state. They believe it is not possible for each individual to receive the freedom to develop and reach their potential if the state is very limited, concentrating solely on keeping the peace. As a result, Modern Liberalists support a state that intervenes in social areas (e.g. the fields of education and health) and in the economy (e.g. through work creation schemes) in order to improve individual situations and social equality. This will then give the freedom to members of society to live independent lives.
As in almost every other political ideology, liberalism was not a single neat body of ideas. As a result, while some have tried to argue that liberalism is a single pure doctrine, the majority believe in several streams of liberalism. The most prominent are Classical Liberalism and Modern Liberalism. As seen below, both streams share the same main liberal principles, such as individualism and freedom. However, over the years, those belonging to the two separate streams have considered these principles in a different way. This has led to a very different opinion on how society should be organised.