Has Liberalism betrayed its classical principles?
Classical liberalism seeks to maximise the realm of unconstrained individual action, by establishing a minimal state and a reliance on market economics. These ideas developed a lot during the early industrialisation of the 19th century.
Modern liberalism provides a qualified endorsement for social and economic intervention as a means of promoting personal development. These ideas were related to the further development of industrialisation.
Classical liberals thought that the best way to promote individualism was to allow individuals to make the most out of their individualism whereas modern liberals make sure everyone has the support network that is needed to become individual.
Modern liberalism could be seen as an ideology which betrayed its initial principles; however, it can also be seen as a developed version of classical liberalism. As society changes overtime, ideologies may have to view certain aspects differently to adapt to society. This could have been the case between classical liberalism and modern liberalism.
One way this could be demonstrated is with the economy. Classical liberals believed in a market free from government interference and constraint, which is known as free-market economy. Political economists such as Adam Smith were against mercantilism which emphasised the state's role in managing international trade and delivering prosperity. Instead, Smith believed that the economy works best when it is left alone by government and is managed by what he referred to as the 'invisible hand'. The classical liberals had a strong liberal view on the economy as freedom within the market meant freedom of choice, which allowed businesses to choose what goods to produce, and who to employ. Free-market beliefs were backed up with the doctrine of laissez-faire which suggested that the state should leave the economy alone and have no economic role. This remained strong in UK throughout 19th century and in USA, they were not seriously challenged until the 1930's. This is where the liberal’s view of the economy changed and became modern.
Modern liberals completely rejected classical liberals thinking of the economy, mainly its belief in a self-regulating free market and the doctrine of laissez-faire. This was due to the Great Depression, sparked of by the Wall Street Crash of 1929, which made it difficult for liberals to maintain the belief that industrial capitalism brought general prosperity for all if they were left alone. After World War II, all western states had policies of economics intervention to prevent the levels of unemployment they were at before the war. Most of these policies were inspired from UK economist John Maynard Keynes, who didn't believe in a self-regulating market but thought that government could manage their economies by influencing the level of aggregate demand. Therefore, unemployment could be solved by government intervention, not by the 'invisible hand'.
The modern liberal idea of a managed economy shouldn't be seen as a betrayal to its classical principles but rather a development as the economy itself changed which may have led to the change in from classical to modern liberalism, economically. These were only changed to adapt to the western modern states as depression levels were high, and a self-regulating market wasn't ideal. However, having the state intervene in the economy added constraints to businesses. Freedom within a market means freedom of choice which was a main aspect of liberalism, which could be seen as the modern views betraying its classical principles.
True liberalism is limiting the states power and intervention, to let individuals be free, which links with the idea of negative freedom and positive freedom.
Classical liberals believe that the state should play a minimal role, which is known as negative freedom; freedom from restriction and interference. Having no interference from...
Please join StudyMode to read the full document