The Definition of Classical Liberalism

Topics: Classical liberalism, Liberalism, Political economy Pages: 15 (4189 words) Published: April 12, 2015
 Liberalism, as the root of the word connotes, places an emphasis on liberty for individuals within a society. While there are several variants to liberalism – social liberalism, classical liberalism, neo-liberalism – one of these philosophies has existed, either in fragmented segments and individual ideas or a complete concept, for a long time. Classical liberalism, also referred to as traditional liberalism endorses the model of laissez-faire economics. If a nation-state sanctions laissez-faire economics, by definition they have “an attitude of letting things take their own course, without interference” (Merriam-Webster). This concept of laissez-faire is an essential element of classical liberalism and must be analyzed at both the domestic and international levels of the economy. Classical liberalism has a large influence on both economics and politics, which must also be analyzed individually and collectively.

Classical liberalism was born out of 19th century Europe and America when industrialization and urbanization were becoming more widespread daily. Ideas commonly associated with classical liberalism arose earlier in the 18th century, but it was not until this era of European and American history that these ideas were enmeshed together to create the uniform concept of classical liberalism. Philosophers that contributed to this framework include Adam Smith, David Ricardo, John Stuart Mill, and Milton Friedman. While early philosophers such as John Locke communicated concepts similar to those associated with classical liberalism, their thoughts did not combine economics but focused primarily on political philosophy. Classical liberalism in terms of a combination between economics and politics began to develop fully in 19th century Europe and originally drew on the economic writings of Adam Smith. His writing The Wealth of Nations discussed heavily why mercantilism cannot be victorious; mercantilism’s positions on government intervention and protectionism stunts any economy from becoming too profitable and lasting long-term. While Smith did appreciate the concept of the “invisible hand” in political economy, he did not agree that pure capitalism could be completely successful either. He saw the value in government having a small role in the functions of the economy. Ultimately, Adam Smith stated that classical liberalism works as follows: “Man is generally considered by statesmen and projectors as the materials of a sort of political mechanics. Projectors disturb nature in the course of her operations on human affairs, and it requires no more than to leave her alone and give her fair play in the pursuit of her ends that she may establish her own designs. Little else is required to carry a state to the highest degree of affluence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things. All governments which thwart this natural course, which force things into another channel, or which endeavor to arrest the progress of society at a particular point, are unnatural, and, to support themselves, are obliged to be oppressive and tyrannical” (Smith). David Ricardo is by far one of the most influential economists involved in the formation of classical liberalism. His creation of the notion called “comparative advantage”, which we will discuss later in this paper, is one of the most important aspects of classical liberalism. Ricardo believed that, “nothing contributes so much to the prosperity and happiness of a country as high profits” and the best way to attain high profits is by leaving it up to the people and entrepreneurship, not the government (Ricardo). John Stuart Mill, widely known for his work with the concept of utilitarianism, also had staunch opinions on the liberty entitled to individuals. He was quoted saying: “The only purpose for which power can be rightfully exercised over any member of a civilized...

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