Classical liberalism

Classical liberalism

Overview
Classical liberalism is the philosophy committed to the ideal of limited government
Limited government
Limited government is a government which anything more than minimal governmental intervention in personal liberties and the economy is generally disallowed by law, usually in a written constitution. It is written in the United States Constitution in Article 1, Section 8...

, constitutionalism
Constitutionalism
Constitutionalism has a variety of meanings. Most generally, it is "a complex of ideas, attitudes, and patterns of behavior elaborating the principle that the authority of government derives from and is limited by a body of fundamental law"....

, rule of law
Rule of law
The rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...

, due process
Due process
Due process is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it...

, and liberty of individuals including freedom of religion
Freedom of religion
Freedom of religion is a principle that supports the freedom of an individual or community, in public or private, to manifest religion or belief in teaching, practice, worship, and observance; the concept is generally recognized also to include the freedom to change religion or not to follow any...

, speech
Freedom of speech
Freedom of speech is the freedom to speak freely without censorship. The term freedom of expression is sometimes used synonymously, but includes any act of seeking, receiving and imparting information or ideas, regardless of the medium used...

, press
Freedom of the press
Freedom of the press or freedom of the media is the freedom of communication and expression through vehicles including various electronic media and published materials...

, assembly
Freedom of assembly
Freedom of assembly, sometimes used interchangeably with the freedom of association, is the individual right to come together and collectively express, promote, pursue and defend common interests...

, and free markets.

Classical liberalism developed in the 19th century in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

 and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

. Although classical liberalism built on ideas that had already developed by the end of the 18th century, it advocated a specific kind of society, government and public policy as a response to the Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 and urbanization.
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Encyclopedia
Classical liberalism is the philosophy committed to the ideal of limited government
Limited government
Limited government is a government which anything more than minimal governmental intervention in personal liberties and the economy is generally disallowed by law, usually in a written constitution. It is written in the United States Constitution in Article 1, Section 8...

, constitutionalism
Constitutionalism
Constitutionalism has a variety of meanings. Most generally, it is "a complex of ideas, attitudes, and patterns of behavior elaborating the principle that the authority of government derives from and is limited by a body of fundamental law"....

, rule of law
Rule of law
The rule of law, sometimes called supremacy of law, is a legal maxim that says that governmental decisions should be made by applying known principles or laws with minimal discretion in their application...

, due process
Due process
Due process is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it...

, and liberty of individuals including freedom of religion
Freedom of religion
Freedom of religion is a principle that supports the freedom of an individual or community, in public or private, to manifest religion or belief in teaching, practice, worship, and observance; the concept is generally recognized also to include the freedom to change religion or not to follow any...

, speech
Freedom of speech
Freedom of speech is the freedom to speak freely without censorship. The term freedom of expression is sometimes used synonymously, but includes any act of seeking, receiving and imparting information or ideas, regardless of the medium used...

, press
Freedom of the press
Freedom of the press or freedom of the media is the freedom of communication and expression through vehicles including various electronic media and published materials...

, assembly
Freedom of assembly
Freedom of assembly, sometimes used interchangeably with the freedom of association, is the individual right to come together and collectively express, promote, pursue and defend common interests...

, and free markets.

Classical liberalism developed in the 19th century in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

 and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

. Although classical liberalism built on ideas that had already developed by the end of the 18th century, it advocated a specific kind of society, government and public policy as a response to the Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 and urbanization. Notable individuals who have contributed to classical liberalism include Jean-Baptiste Say
Jean-Baptiste Say
Jean-Baptiste Say was a French economist and businessman. He had classically liberal views and argued in favor of competition, free trade, and lifting restraints on business...

, Thomas Malthus
Thomas Malthus
The Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....

 and David Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

. It drew on the economics of Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 and on a belief in natural law
Natural law
Natural law, or the law of nature , is any system of law which is purportedly determined by nature, and thus universal. Classically, natural law refers to the use of reason to analyze human nature and deduce binding rules of moral behavior. Natural law is contrasted with the positive law Natural...

, utilitarianism
Utilitarianism
Utilitarianism is an ethical theory holding that the proper course of action is the one that maximizes the overall "happiness", by whatever means necessary. It is thus a form of consequentialism, meaning that the moral worth of an action is determined only by its resulting outcome, and that one can...

, and progress. Classical liberals established political parties that were called "liberal", although in the United States classical liberalism came to dominate both existing major political parties. There was a revival of interest in classical liberalism in the 20th century led by Ludwig von Mises
Ludwig von Mises
Ludwig Heinrich Edler von Mises was an Austrian economist, philosopher, and classical liberal who had a significant influence on the modern Libertarian movement and the "Austrian School" of economic thought.-Biography:-Early life:...

, Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...

 and Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...

.

Some call the late 19th century development of classical liberalism "neo-classical liberalism," which argued for government to be as small as possible in order to allow the exercise of individual freedom, while some refer to all liberalism before the 20th century as classical liberalism. Libertarianism
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...

 is a modern form of neo-classical liberalism.

The term classical liberalism was applied in retrospect to distinguish earlier 19th-century liberalism from the newer social liberalism
Social liberalism
Social liberalism is the belief that liberalism should include social justice. It differs from classical liberalism in that it believes the legitimate role of the state includes addressing economic and social issues such as unemployment, health care, and education while simultaneously expanding...

. Some conservatives and right-libertarians use the term classical liberalism to describe their belief in the primacy of economic freedom and minimal government. It is not always clear which meaning is intended.

Core principles


According to E. K. Hunt, classical liberals made four assumptions about human nature: People were "egoistic, coldly calculating, essentially inert and atomistic". Being egoistic, people were motivated solely by pain and pleasure. Being calculating, they made decisions intended to maximize pleasure and minimize pain. If there were no opportunity to increase pleasure or reduce pain, they would become inert. Therefore, the only motivation for labor was either the possibility of great reward or fear of hunger. This belief led classical liberal politicians to pass the Poor Law Amendment Act 1834
Poor Law Amendment Act 1834
The Poor Law Amendment Act 1834, sometimes abbreviated to PLAA, was an Act of the Parliament of the United Kingdom passed by the Whig government of Lord Melbourne that reformed the country's poverty relief system . It was an Amendment Act that completely replaced earlier legislation based on the...

, which limited the provision of social assistance. On the other hand, classical liberals believed that men of higher rank were motivated by ambition. Seeing society as atomistic, they believed that society was no more than the sum of its individual members. These views departed from earlier views of society as a family and, therefore, greater than the sum of its members.

Classical liberals agreed with Thomas Hobbes
Thomas Hobbes
Thomas Hobbes of Malmesbury , in some older texts Thomas Hobbs of Malmsbury, was an English philosopher, best known today for his work on political philosophy...

 that government had been created by individuals to protect themselves from one another. They thought that individuals should be free to pursue their self-interest without control or restraint by society. Individuals should be free to obtain work from the highest-paying employers, while the profit motive would ensure that products that people desired were produced at prices they would pay. In a free market, both labor and capital would receive the greatest possible reward, while production would be organized efficiently to meet consumer demand.

Adopting Thomas Malthus
Thomas Malthus
The Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....

's population theory, they saw poor urban conditions as inevitable, as they believed population growth would outstrip food production; and they considered that to be desirable, as starvation would help limit population growth. They opposed any income or wealth redistribution, which they believed would be dissipated by the lowest orders.

Government, as explained by Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

, had only three functions: protection against foreign invaders, protection of citizens from wrongs committed against them by other citizens, and building and maintaining public institutions and public works that the private sector could not profitably provide. Classical liberals extended protection of the country to protection of overseas markets through armed intervention. Protection of individuals against wrongs normally meant protection of private property and enforcement of contracts and the suppression of trade unions and the Chartist
Chartism
Chartism was a movement for political and social reform in the United Kingdom during the mid-19th century, between 1838 and 1859. It takes its name from the People's Charter of 1838. Chartism was possibly the first mass working class labour movement in the world...

 movement. Public works included a stable currency, standard weights and measures, and support of roads, canals, harbors, railways, and postal and other communications services.

Overview


Classical liberalism places a particular emphasis on the sovereignty of the individual, with private property
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...

 rights being seen as essential to individual liberty. This forms the philosophical basis for laissez-faire public policy. According to Alan Ryan
Alan Ryan
Alan James Ryan, FBA was Warden of New College, Oxford, and Professor of Politics at the University of Oxford and currently a lecturer at Princeton University....

, the ideology of the original classical liberals argued against direct democracy
Direct democracy
Direct democracy is a form of government in which people vote on policy initiatives directly, as opposed to a representative democracy in which people vote for representatives who then vote on policy initiatives. Direct democracy is classically termed "pure democracy"...

, where law is made by majority vote by citizens, "for there is nothing in the bare idea of majority rule to show that majorities will always respect the rights of property or maintain rule of law." For example, James Madison
James Madison
James Madison, Jr. was an American statesman and political theorist. He was the fourth President of the United States and is hailed as the “Father of the Constitution” for being the primary author of the United States Constitution and at first an opponent of, and then a key author of the United...

 argued for a constitutional republic
Constitutional republic
A constitutional republic is a state in which the head of state and other officials are representatives of the people and must govern according to existing constitutional law that limits the government's power over all of its citizens...

 with protections for individual liberty over a pure democracy, reasoning that, in a pure democracy, a "common passion or interest will, in almost every case, be felt by a majority of the whole...and there is nothing to check the inducements to sacrifice the weaker party...."

According to Anthony Quinton, classical liberals believe that "an unfettered market" is the most efficient mechanism to satisfy human needs and channel resources to their most productive uses: they "are more suspicious than conservative
Conservatism
Conservatism is a political and social philosophy that promotes the maintenance of traditional institutions and supports, at the most, minimal and gradual change in society. Some conservatives seek to preserve things as they are, emphasizing stability and continuity, while others oppose modernism...

s of all but the most minimal government." Anarcho-capitalist Walter Block
Walter Block
Walter Edward Block is a free market economist and anarcho-capitalist associated with the Austrian School of economics.-Personal history and education:...

 claims, however, that, while Adam Smith was an advocate of economic freedom
Economic freedom
Economic freedom is a term used in economic and policy debates. As with freedom generally, there are various definitions, but no universally accepted concept of economic freedom...

, he also allowed for government to intervene in many areas.

Classical liberalism holds that individual rights are natural, inherent, or inalienable, and exist independently of government. Thomas Jefferson called these inalienable rights: "...rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law', because law is often but the tyrant's will, and always so when it violates the rights of the individual." For classical liberalism, rights are of a negative
Negative and positive rights
Philosophers and political scientists make a distinction between negative and positive rights . According to this view, positive rights permit or oblige action, whereas negative rights permit or oblige inaction. These permissions or obligations may be of either a legal or moral character...

nature—rights that require that other individuals (and governments) refrain from interfering with individual liberty, whereas social liberalism
Social liberalism
Social liberalism is the belief that liberalism should include social justice. It differs from classical liberalism in that it believes the legitimate role of the state includes addressing economic and social issues such as unemployment, health care, and education while simultaneously expanding...

 (also called modern liberalism or welfare liberalism) holds that individuals have a right to be provided with certain benefits or services by others. Unlike social liberals, classical liberals are "hostile to the welfare state
Welfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...

." They do not have an interest in material equality but only in "equality before the law
Equality before the law
Equality before the law or equality under the law or legal egalitarianism is the principle under which each individual is subject to the same laws....

". Classical liberalism is critical of social liberalism and takes offense at group rights being pursued at the expense of individual rights
Individual rights
Group rights are rights held by a group rather than by its members separately, or rights held only by individuals within the specified group; in contrast, individual rights are rights held by individual people regardless of their group membership or lack thereof...

.

Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...

 identified two different traditions within classical liberalism: the "British tradition" and the "French tradition". Hayek saw the British philosophers David Hume
David Hume
David Hume was a Scottish philosopher, historian, economist, and essayist, known especially for his philosophical empiricism and skepticism. He was one of the most important figures in the history of Western philosophy and the Scottish Enlightenment...

, Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

, Adam Ferguson
Adam Ferguson
Adam Ferguson FRSE, also known as Ferguson of Raith was a Scottish philosopher, social scientist and historian of the Scottish Enlightenment...

, Josiah Tucker
Josiah Tucker
Josiah Tucker , also known as Dean Tucker, was a Welsh churchman, known as an economist and political writer. He was concerned in his works with free trade, Jewish emancipation and American independence...

, Edmund Burke
Edmund Burke
Edmund Burke PC was an Irish statesman, author, orator, political theorist and philosopher who, after moving to England, served for many years in the House of Commons of Great Britain as a member of the Whig party....

 and William Paley
William Paley
William Paley was a British Christian apologist, philosopher, and utilitarian. He is best known for his exposition of the teleological argument for the existence of God in his work Natural Theology, which made use of the watchmaker analogy .-Life:Paley was Born in Peterborough, England, and was...

 as representative of a tradition that articulated beliefs in empiricism
Empiricism
Empiricism is a theory of knowledge that asserts that knowledge comes only or primarily via sensory experience. One of several views of epistemology, the study of human knowledge, along with rationalism, idealism and historicism, empiricism emphasizes the role of experience and evidence,...

, the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...

, and in traditions and institutions which had spontaneously evolved but were imperfectly understood. The French tradition included Rousseau
Jean-Jacques Rousseau
Jean-Jacques Rousseau was a Genevan philosopher, writer, and composer of 18th-century Romanticism. His political philosophy influenced the French Revolution as well as the overall development of modern political, sociological and educational thought.His novel Émile: or, On Education is a treatise...

, Condorcet
Marquis de Condorcet
Marie Jean Antoine Nicolas de Caritat, marquis de Condorcet , known as Nicolas de Condorcet, was a French philosopher, mathematician, and early political scientist whose Condorcet method in voting tally selects the candidate who would beat each of the other candidates in a run-off election...

, the Encyclopedist
Encyclopédie
Encyclopédie, ou dictionnaire raisonné des sciences, des arts et des métiers was a general encyclopedia published in France between 1751 and 1772, with later supplements, revised editions, and translations. It was edited by Denis Diderot and Jean le Rond d'Alembert...

s and the Physiocrats
Physiocrats
Physiocracy is an economic theory developed by the Physiocrats, a group of economists who believed that the wealth of nations was derived solely from the value of "land agriculture" or "land development." Their theories originated in France and were most popular during the second half of the 18th...

. This tradition believed in rationalism and the unlimited powers of reason and sometimes showed hostility to tradition and religion. Hayek conceded that the national labels did not exactly correspond to those belonging to each tradition: Hayek saw the Frenchmen Montesquieu
Charles de Secondat, baron de Montesquieu
Charles-Louis de Secondat, baron de La Brède et de Montesquieu , generally referred to as simply Montesquieu, was a French social commentator and political thinker who lived during the Enlightenment...

, Constant
Benjamin Constant
Henri-Benjamin Constant de Rebecque was a Swiss-born French nobleman, thinker, writer and politician.-Biography:...

 and Tocqueville
Alexis de Tocqueville
Alexis-Charles-Henri Clérel de Tocqueville was a French political thinker and historian best known for his Democracy in America and The Old Regime and the Revolution . In both of these works, he explored the effects of the rising equality of social conditions on the individual and the state in...

 as belonging to the "British tradition" and the British Thomas Hobbes
Thomas Hobbes
Thomas Hobbes of Malmesbury , in some older texts Thomas Hobbs of Malmsbury, was an English philosopher, best known today for his work on political philosophy...

, Priestley
Joseph Priestley
Joseph Priestley, FRS was an 18th-century English theologian, Dissenting clergyman, natural philosopher, chemist, educator, and political theorist who published over 150 works...

, Richard Price
Richard Price
Richard Price was a British moral philosopher and preacher in the tradition of English Dissenters, and a political pamphleteer, active in radical, republican, and liberal causes such as the American Revolution. He fostered connections between a large number of people, including writers of the...

 and Thomas Paine
Thomas Paine
Thomas "Tom" Paine was an English author, pamphleteer, radical, inventor, intellectual, revolutionary, and one of the Founding Fathers of the United States...

 as belonging to the "French tradition". Hayek also rejected the label "laissez faire" as originating from the French tradition and alien to the beliefs of Hume, Smith and Burke.

History


Classical liberalism in the United Kingdom developed from Whiggery and radicalism
Radicalism (historical)
The term Radical was used during the late 18th century for proponents of the Radical Movement. It later became a general pejorative term for those favoring or seeking political reforms which include dramatic changes to the social order...

, and represented a new political ideology. Whiggery had become a dominant ideology following the Glorious Revolution
Glorious Revolution
The Glorious Revolution, also called the Revolution of 1688, is the overthrow of King James II of England by a union of English Parliamentarians with the Dutch stadtholder William III of Orange-Nassau...

 of 1688, and was associated with the defence of Parliament, upholding the rule of law and defending landed property
Landed property
Landed property or landed estates is a real estate term that usually refers to a property that generates income for the owner without the owner having to do the actual work of the estate. In Europe, agrarian landed property typically consisted of a manor, several tenant farms, and some privileged...

. The origins of rights were seen as being in an ancient constitution, which had existed from time immemorial
Time immemorial
Time immemorial is a phrase meaning time extending beyond the reach of memory, record, or tradition, indefinitely ancient, "ancient beyond memory or record"...

. These rights, which some Whigs considered to include freedom of the press and freedom of speech, were justified by custom rather than by natural rights
Natural rights
Natural and legal rights are two types of rights theoretically distinct according to philosophers and political scientists. Natural rights are rights not contingent upon the laws, customs, or beliefs of any particular culture or government, and therefore universal and inalienable...

. They believed that the power of the executive had to be constrained. While they supported limited suffrage, they saw voting as a privilege, rather than as a right. However there was no consistency in Whig ideology, and diverse writers including John Locke
John Locke
John Locke FRS , widely known as the Father of Liberalism, was an English philosopher and physician regarded as one of the most influential of Enlightenment thinkers. Considered one of the first of the British empiricists, following the tradition of Francis Bacon, he is equally important to social...

, David Hume
David Hume
David Hume was a Scottish philosopher, historian, economist, and essayist, known especially for his philosophical empiricism and skepticism. He was one of the most important figures in the history of Western philosophy and the Scottish Enlightenment...

, Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 and Edmund Burke
Edmund Burke
Edmund Burke PC was an Irish statesman, author, orator, political theorist and philosopher who, after moving to England, served for many years in the House of Commons of Great Britain as a member of the Whig party....

 were all influential among Whigs, although none of them were universally accepted.

British radicals, from the 1790s to the 1820s, concentrated on parliamentary and electoral reform, emphasizing natural rights
Natural rights
Natural and legal rights are two types of rights theoretically distinct according to philosophers and political scientists. Natural rights are rights not contingent upon the laws, customs, or beliefs of any particular culture or government, and therefore universal and inalienable...

 and popular sovereignty. Richard Price
Richard Price
Richard Price was a British moral philosopher and preacher in the tradition of English Dissenters, and a political pamphleteer, active in radical, republican, and liberal causes such as the American Revolution. He fostered connections between a large number of people, including writers of the...

 and Joseph Priestly adapted the language of Locke to the ideology of radicalism. The radicals saw parliamentary reform as a first step toward dealing with their many greivances, including the treatment of Protestant Dissenters
English Dissenters
English Dissenters were Christians who separated from the Church of England in the 16th, 17th and 18th centuries.They originally agitated for a wide reaching Protestant Reformation of the Established Church, and triumphed briefly under Oliver Cromwell....

, the slave trade, high prices and high taxes.

There was greater unity to classical liberalism ideology than there had been with Whiggery. Classical liberals were committed to individualism, liberty and equal rights. They believed that required a free economy with minimal government interference. Writers such as John Bright
John Bright
John Bright , Quaker, was a British Radical and Liberal statesman, associated with Richard Cobden in the formation of the Anti-Corn Law League. He was one of the greatest orators of his generation, and a strong critic of British foreign policy...

 and Richard Cobden
Richard Cobden
Richard Cobden was a British manufacturer and Radical and Liberal statesman, associated with John Bright in the formation of the Anti-Corn Law League as well as with the Cobden-Chevalier Treaty...

 opposed both aristocratic privilege and property, which they saw as an impediment to the development of a class of yeoman
Yeoman
Yeoman refers chiefly to a free man owning his own farm, especially from the Elizabethan era to the 17th century. Work requiring a great deal of effort or labor, such as would be done by a yeoman farmer, came to be described as "yeoman's work"...

 farmers. Some elements of Whiggery opposed this new thinking, and were uncomfortable with the commercial nature of classical liberalism. These elements became associated with conservatism.

Classical liberalism was the dominant political theory of the United Kingdom from the early 19th century until the First World War. Its notable victories were the Catholic Emancipation Act of 1829
Catholic Relief Act 1829
The Roman Catholic Relief Act 1829 was passed by the Parliament of the United Kingdom on 24 March 1829, and received Royal Assent on 13 April. It was the culmination of the process of Catholic Emancipation throughout the nation...

, the Reform Act of 1832, and the repeal of the Corn Laws
Corn Laws
The Corn Laws were trade barriers designed to protect cereal producers in the United Kingdom of Great Britain and Ireland against competition from less expensive foreign imports between 1815 and 1846. The barriers were introduced by the Importation Act 1815 and repealed by the Importation Act 1846...

 in 1846. The Anti-Corn Law League
Anti-Corn Law League
The Anti-Corn Law League was in effect the resumption of the Anti-Corn Law Association, which had been created in London in 1836 but did not obtain widespread popularity. The Anti-Corn Law League was founded in Manchester in 1838...

 brought together a coalition of liberal and radical groups in support of free trade under the leadership of Richard Cobden
Richard Cobden
Richard Cobden was a British manufacturer and Radical and Liberal statesman, associated with John Bright in the formation of the Anti-Corn Law League as well as with the Cobden-Chevalier Treaty...

 and John Bright
John Bright
John Bright , Quaker, was a British Radical and Liberal statesman, associated with Richard Cobden in the formation of the Anti-Corn Law League. He was one of the greatest orators of his generation, and a strong critic of British foreign policy...

, who opposed militarism and public expenditure. Their policies of low public expenditure and low taxation were adopted by William Ewart Gladstone
William Ewart Gladstone
William Ewart Gladstone FRS FSS was a British Liberal statesman. In a career lasting over sixty years, he served as Prime Minister four separate times , more than any other person. Gladstone was also Britain's oldest Prime Minister, 84 years old when he resigned for the last time...

 when he became chancellor of the exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...

 and later prime minister. Classical liberalism was often associated with religious dissent and nonconformism
Nonconformism
Nonconformity is the refusal to "conform" to, or follow, the governance and usages of the Church of England by the Protestant Christians of England and Wales.- Origins and use:...

.

Although classical liberals aspired to a minimum of state activity, they accepted the principle of government intervention in the economy from the early 19th century with passage of the Factory Acts
Factory Acts
The Factory Acts were a series of Acts passed by the Parliament of the United Kingdom to limit the number of hours worked by women and children first in the textile industry, then later in all industries....

. From around 1840 to 1860, laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....

 advocates of the Manchester School
Manchester capitalism
Manchester Capitalism, Manchester School, Manchester Liberalism, and Manchesterism are terms for the political, economic, and social movements of the 19th century that originated in Manchester, England....

 and writers in The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...

were confident that their early victories would lead to a period of expanding economic and personal liberty and world peace but would face reversals as government intervention and activity continued to expand from the 1850s. Jeremy Bentham
Jeremy Bentham
Jeremy Bentham was an English jurist, philosopher, and legal and social reformer. He became a leading theorist in Anglo-American philosophy of law, and a political radical whose ideas influenced the development of welfarism...

 and James Mill
James Mill
James Mill was a Scottish historian, economist, political theorist, and philosopher. He was a founder of classical economics, together with David Ricardo, and the father of influential philosopher of classical liberalism, John Stuart Mill.-Life:Mill was born at Northwater Bridge, in the parish of...

, although advocates of laissez-faire, non-intervention in foreign affairs, and individual liberty, believed that social institutions could be rationally redesigned through the principles of Utilitarianism
Utilitarianism
Utilitarianism is an ethical theory holding that the proper course of action is the one that maximizes the overall "happiness", by whatever means necessary. It is thus a form of consequentialism, meaning that the moral worth of an action is determined only by its resulting outcome, and that one can...

. The Conservative
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...

 prime minister, Benjamin Disraeli, rejected classical liberalism altogether and advocated Tory Democracy. By the 1870s, Herbert Spencer
Herbert Spencer
Herbert Spencer was an English philosopher, biologist, sociologist, and prominent classical liberal political theorist of the Victorian era....

 and other classical liberals concluded that historical development was turning against them. By the First World War, the Liberal Party
Liberal Party (UK)
The Liberal Party was one of the two major political parties of the United Kingdom during the 19th and early 20th centuries. It was a third party of negligible importance throughout the latter half of the 20th Century, before merging with the Social Democratic Party in 1988 to form the present day...

 had largely abandoned classical liberal principles.

The changing economic and social conditions of the 19th led to a division between neo-classical and social liberals who, while agreeing on the importance of individual liberty, differed on the role of the state. Neo-classical liberals, who called themselves "true liberals", saw Locke's Second Treatise as the best guide, and emphasized "limited government", while social liberals supported government regulation and the welfare state. Herbert Spencer
Herbert Spencer
Herbert Spencer was an English philosopher, biologist, sociologist, and prominent classical liberal political theorist of the Victorian era....

 in the United Kingdom and William Graham Sumner
William Graham Sumner
William Graham Sumner was an American academic and "held the first professorship in sociology" at Yale College. For many years he had a reputation as one of the most influential teachers there. He was a polymath with numerous books and essays on American history, economic history, political...

 were the leading neo-classical liberal theorists of the 19th century. Neo-classical liberalism has continued into the contemporary era, with writers such as Robert Nozick
Robert Nozick
Robert Nozick was an American political philosopher, most prominent in the 1970s and 1980s. He was a professor at Harvard University. He is best known for his book Anarchy, State, and Utopia , a right-libertarian answer to John Rawls's A Theory of Justice...

.

In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, liberalism took a strong root because it had little opposition to its ideals, whereas in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

 liberalism was opposed by many reactionary interests. In a nation of farmers, especially farmers whose workers were slaves, little attention was paid to the economic aspects of liberalism. But, as America grew, industry became a larger and larger part of American life; and, during the term of America's first populist president, Andrew Jackson
Andrew Jackson
Andrew Jackson was the seventh President of the United States . Based in frontier Tennessee, Jackson was a politician and army general who defeated the Creek Indians at the Battle of Horseshoe Bend , and the British at the Battle of New Orleans...

, economic questions came to the forefront. The economic ideas of the Jacksonian era were almost universally the ideas of classical liberalism. Freedom was maximized when the government took a "hands off" attitude toward industrial development and supported the value of the currency by freely exchanging paper money for gold. The ideas of classical liberalism remained essentially unchallenged until a series of depression
Depression (economics)
In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. It is a more severe downturn than a recession, which is seen by some economists as part of the modern business cycle....

s, thought to be impossible according to the tenets of classical economics
Classical economics
Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....

, led to economic hardship from which the voters demanded relief. In the words of William Jennings Bryan
William Jennings Bryan
William Jennings Bryan was an American politician in the late-19th and early-20th centuries. He was a dominant force in the liberal wing of the Democratic Party, standing three times as its candidate for President of the United States...

, "You shall not crucify the American farmer on a cross of gold." Despite the common recurrence of depressions, classical liberalism remained the orthodox belief among American businessmen until the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

. The Great Depression saw a sea change in liberalism, leading to the development of modern liberalism. In the words of Arthur Schlesinger Jr.:

John Locke



Central to classical liberal ideology was their interpretation of John Locke
John Locke
John Locke FRS , widely known as the Father of Liberalism, was an English philosopher and physician regarded as one of the most influential of Enlightenment thinkers. Considered one of the first of the British empiricists, following the tradition of Francis Bacon, he is equally important to social...

's Second treatise of government and "A letter concerning toleration
A Letter Concerning Toleration
A Letter Concerning Toleration by John Locke was originally published in 1689. Its initial publication was in Latin, though it was immediately translated into other languages. Locke's work appeared amidst a fear that Catholicism might be taking over England, and responds to the problem of religion...

", which had been written as a defence of the Glorious Revolution
Glorious Revolution
The Glorious Revolution, also called the Revolution of 1688, is the overthrow of King James II of England by a union of English Parliamentarians with the Dutch stadtholder William III of Orange-Nassau...

 of 1688. Although these writings were considered too radical at the time for the United Kingdom's new rulers, they later came to be cited by Whigs, radicals and supporters of the American Revolution. However much of later liberal thought was absent in Locke's writings or scarcely mentioned, and his writings have been subject to various interpretations. There is little mention for example of constitutionalism, the separation of powers and limited government.

James L. Richardson identified five central themes in Locke's writing: individualism, consent, the concepts of the rule of law and government as trustee, the significance of property and religious toleration. Although Locke did not develop a theory of natural rights, he envisioned individuals in the state of nature as being free and equal. The individual, rather than the community or institutions, was the point of reference. Locke believed that individuals had given consent to government and therefore authority derived from the people rather than from above. This belief would influence later revolutionary movements.

As a trustee Government was expected to serve the interests of the people not the rulers, and rulers were expected to follow the laws enacted by legislatures. Locke also held that the main purpose of men uniting into commonwealths and governments was for the preservation of their property. Despite the ambiguity of Locke's definition of property, which limited property to "as much land as a man tills, plants, improves, cultivates, and can use the product of", this principle held great appeal to individuals possessed of great wealth.

Finally, Locke held that the individual had the right to follow his own religious beliefs and that the state should not impose a religion against Dissenters. But there were limitations. No tolerance should be shown for atheists, who were seen as amoral, or to Catholics, who were seen as owing allegiance to the Pope over their own national government.

Adam Smith



Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

's The Wealth of Nations
The Wealth of Nations
An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith...

, published in 1776, was to provide most of the ideas of classical liberal economics, at least until the publication of J. S. Mill's Principles in 1848. Smith addressed the motivation for economic activity, the causes of prices and the distribution of wealth, and the policies the state should follow in order to maximize wealth.

Smith saw self-interest, rather than altruism, as the motivation for the production of goods and services. An "invisible hand
Invisible hand
In economics, invisible hand or invisible hand of the market is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith...

" directed the tradesman to work toward the public good. This provided a moral justification for the accumulation of wealth, which had previously been viewed as sinful. He assumed that workers could be paid as low as was necessary for their survival, which was later transformed by Ricardo and Malthus into the "Iron Law of Wages". His main emphasis was on the benefit of free internal and international trade, which he thought could increase wealth through specialization in production. He also opposed restrictive trade preferences, state grants of monopolies, and employers' organisations and trade unions. Government should be limited to defence, public works and the administration of justice, financed by taxes based on income.

Smith's economics was carried into practice in the 19th century with the lowering of tariffs in the 1820s, the repeal of the Poor Relief Act
Poor Relief Act 1662
The Poor Relief Act 1662 was an Act of the Cavalier Parliament of England. It was an Act for the Better Relief of the Poor of this Kingdom and is also known as the Settlement Act or, more honestly, the Settlement and Removal Act. The purpose of the Act was to establish the parish to which a person...

, that had restricted the mobility of labour, in 1834, and the end of the rule of the East India Company
East India Company
The East India Company was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading mainly with the Indian subcontinent and China...

 over India in 1858.

Say, Malthus and Ricardo


In addition to Adam Smith's legacy, Say's law
Say's law
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say , who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind...

, Malthus theories of population and Ricardo's iron law of wages became central doctrines of classical economics. The pessimistic nature of these theories led to Carlyle calling economics the dismal science
Dismal Science
"The dismal science" is a derogatory alternative name for economics devised by the Victorian historian Thomas Carlyle in the 19th century. The term is an inversion of the phrase "gay science," meaning "life-enhancing knowledge", a reference to the technical skills of song and verse writing...

 and it provided a basis of criticism of capitalism by its opponents.

Jean Baptiste Say was a French economist who introduced Adam Smith's economic theories into France and whose commentaries on Smith were read in both France and the United Kingdom. Say challenged Smith's labour theory of value, believing that prices were determined by utility and also emphasized the criterical role of the entrepreneur in the economy. However neither of those observations became accepted by British economists at the time. His most important contribution to economic thinking was "Say's law
Say's law
Say's law, or the law of market, is an economic principle of classical economics named after the French businessman and economist Jean-Baptiste Say , who stated that "products are paid for with products" and "a glut can take place only when there are too many means of production applied to one kind...

", which was interpreted by classical economists that there could be no overproduction in a market, and that there would always be a balance between supply and demand. This general belief influenced government policies until the 1930s. Following this law, since the economic cycle was seen as self-correcting, government did not intervene during periods of economic hardship because it was seen as futile.

Thomas Malthus
Thomas Malthus
The Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....

 wrote two books, An essay on the principle of population
An Essay on the Principle of Population
The book An Essay on the Principle of Population was first published anonymously in 1798 through J. Johnson . The author was soon identified as The Reverend Thomas Robert Malthus. While it was not the first book on population, it has been acknowledged as the most influential work of its era...

, published in 1798, and Principles of political economy
Principles of Political Economy (Malthus)
Principles of Political Economy was a successful book by Thomas Malthus . The last chapter of the book was devoted to rebutting Say's law, and argued that the economy could stagnate with a lack of "effectual demand". In other words, wages if less than the total costs of production cannot purchase...

, published in 1820. The second book which was a rebuttal of Say's law had little influence on contemporary economists. His first book however became a major influence on classical liberalism. In that book, Malthus claimed that population growth would outstrip food production, because population grew geometrically, while food production grew arithmetically. As people were provided with food, they would reproduce until their growth outstripped the food supply. Nature would then provide a check to growth in the forms of vice and misery. No gains in income could prevent this, and any welfare for the poor would be self-defeating. The poor were in fact responsible for their own problems which could have been avoided through self-restraint.

David Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

, who was an admirer of Adam Smith, covered many of the same topics but while Smith drew conclusions from broadly empirical observations, Ricardo used induction, drawing conclusions by reasoning from basic assumptions. While Ricardo accepted Smith's labour theory of value, he acknowledged that utility could influence the price of some rare items. Rents on agricultural land were seen as the production that was surplus to the subsistence required by the tenants. Wages were seen as the amount required for workers' subsistence and to maintain current population levels. According to his Iron Law of Wages, wages could never rise beyond subsistence levels. Ricardo explained profits as a return on capital, which itself was the product of labour. But a conclusion many drew from his theory was that profit was a surplus appropriated by capitalists to which they were not entitled.

Utilitarianism


Utilitarianism
Utilitarianism
Utilitarianism is an ethical theory holding that the proper course of action is the one that maximizes the overall "happiness", by whatever means necessary. It is thus a form of consequentialism, meaning that the moral worth of an action is determined only by its resulting outcome, and that one can...

 provided the political justification for implementation of economic liberalism by British governments, which was to dominate economic policy from the 1830s. Although utilitarianism prompted legislative and administrative reform and John Stuart Mill
John Stuart Mill
John Stuart Mill was a British philosopher, economist and civil servant. An influential contributor to social theory, political theory, and political economy, his conception of liberty justified the freedom of the individual in opposition to unlimited state control. He was a proponent of...

's later writings on the subject foreshadowed the welfare state, it was mainly used as a justification for laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....

.

The central concept of utilitarianism, which was developed by Jeremy Bentham
Jeremy Bentham
Jeremy Bentham was an English jurist, philosopher, and legal and social reformer. He became a leading theorist in Anglo-American philosophy of law, and a political radical whose ideas influenced the development of welfarism...

, was that that public policy should seek to provide "the greatest happiness of the greatest number". While this could be interpreted as a justification for state action to reduce poverty, it was used by classical liberals to justify inaction with the argument that the net benefit to all individuals would be higher.

Political economy


Classical liberals saw utility
Utilitarianism
Utilitarianism is an ethical theory holding that the proper course of action is the one that maximizes the overall "happiness", by whatever means necessary. It is thus a form of consequentialism, meaning that the moral worth of an action is determined only by its resulting outcome, and that one can...

 as the foundation for public policies. This broke both with conservative "tradition" and Lockean "natural rights", which were seen as irrational. Utility, which emphasizes the happiness of individuals, became the central ethical value of all liberalism. Although utilitarianism inspired wide-ranging reforms, it became primarily a justification for laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....

economics. However, classical liberals rejected Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

's belief that the "invisible hand" would lead to general benefits and embraced Thomas Malthus
Thomas Malthus
The Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....

' view that population expansion would prevent any general benefit and David Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

's view of the inevitability of class conflict. Laissez-faire was seen as the only possible economic approach, and any government intervention was seen as useless. The Poor Law Amendment Act 1834
Poor Law Amendment Act 1834
The Poor Law Amendment Act 1834, sometimes abbreviated to PLAA, was an Act of the Parliament of the United Kingdom passed by the Whig government of Lord Melbourne that reformed the country's poverty relief system . It was an Amendment Act that completely replaced earlier legislation based on the...

 was defended on "scientific or economic principals" while the authors of the Elizabethan Poor Law
Elizabethan Poor Law (1601)
The Act for the Relief of the Poor 1601, popularly known as the "Elizabethan Poor Law", "43rd Elizabeth" or the "Old Poor Law" was an Act of Parliament passed in 1601 which created a national poor law system for England and Wales....

 of 1601 were seen as not having had the benefit of reading Malthus.

Commitment to laissez-faire, however, was not uniform. Some economists advocated state support of public works and education. Classical liberals were also divided on free trade. Ricardo, for example, expressed doubt that the removal of grain tariffs advocated by Richard Cobden
Richard Cobden
Richard Cobden was a British manufacturer and Radical and Liberal statesman, associated with John Bright in the formation of the Anti-Corn Law League as well as with the Cobden-Chevalier Treaty...

 and the Anti-Corn Law League
Anti-Corn Law League
The Anti-Corn Law League was in effect the resumption of the Anti-Corn Law Association, which had been created in London in 1836 but did not obtain widespread popularity. The Anti-Corn Law League was founded in Manchester in 1838...

 would have any general benefits. Most classical liberals also supported legislation to regulate the number of hours that children were allowed to work and usually did not oppose factory reform legislation.

Despite the pragmatism of classical economists, their views were expressed in dogmatic terms by such popular writers as Jane Marcet
Jane Marcet
Jane Marcet was a successful writer of popular introductory science books.-Life:She was born in London, one of twelve children of the merchant and banker Anthony Francis Haldimand and his wife Jane , and was tutored at home with her brothers...

 and Harriet Martineau
Harriet Martineau
Harriet Martineau was an English social theorist and Whig writer, often cited as the first female sociologist....

. The strongest defender of laissez-faire was The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...

founded by James Wilson
James Wilson (UK politician)
James Wilson was a Scottish businessman, economist and Liberal politician. He founded The Economist and the Standard Chartered Bank.-Early life:...

 in 1843. The Economist criticized Ricardo for his lack of support for free trade and expressed hostility to welfare, believing that the lower orders were responsible for their economic circumstances. The Economist took the position that regulation of factory hours was harmful to workers and also strongly opposed state support for education, health, the provision of water, and granting of patents and copyrights. A rigid belief in laissez-faire also guided government response in 1846–1849 to the Great Famine in Ireland, during which an estimated 1.5 million people died. It was expected that private enterprise and free trade, rather than government intervention, would alleviate the famine.

Free trade and world peace


Several liberals, including Adam Smith and Richard Cobden
Richard Cobden
Richard Cobden was a British manufacturer and Radical and Liberal statesman, associated with John Bright in the formation of the Anti-Corn Law League as well as with the Cobden-Chevalier Treaty...

, argued that the free exchange of goods between nations could lead to world peace, a view recognized by such modern American political scientists as Dahl, Doyle, Russet, and O'Neil. Dr. Gartzke, of Columbia University states, "Scholars like Montesquieu, Adam Smith, Richard Cobden, Norman Angell
Norman Angell
Sir Ralph Norman Angell was an English lecturer, journalist, author, and Member of Parliament for the Labour Party.Angell was one of the principal founders of the Union of Democratic Control...

, and Richard Rosecrance
Richard Rosecrance
Richard N. Rosecrance is an American economist, historian and political scientist. His research and teaching is focussed on international relations, in particular the link between economics and international relations. Rosecrance is considered an adherent of Liberal international relations...

 have long speculated that free markets have the potential to free states from the looming prospect of recurrent warfare." American political scientists John R. Oneal and Bruce M. Russett, well known for their work on the democratic peace theory, state:
The classical liberals advocated policies to increase liberty and prosperity. They sought to empower the commercial class politically and to abolish royal charters, monopolies, and the protectionist policies of mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...

 so as to encourage entrepreneurship and increase productive efficiency. They also expected democracy and laissez-faire economics to diminish the frequency of war.


Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 argued in the Wealth of Nations that, as societies progressed from hunter gatherers to industrial societies, the spoils of war would rise but that the costs of war would rise further, making war difficult and costly for industrialized nations.
Cobden believed that military expenditures worsened the welfare of the state and benefited a small but concentrated elite minority, summing up British imperialism
Imperialism
Imperialism, as defined by Dictionary of Human Geography, is "the creation and/or maintenance of an unequal economic, cultural, and territorial relationships, usually between states and often in the form of an empire, based on domination and subordination." The imperialism of the last 500 years,...

, which he believed was the result of the economic restrictions of mercantilist policies. To Cobden, and many classical liberals, those who advocated peace must also advocate free markets.

Relationship to modern liberalism


Many modern scholars of liberalism argue that no particularly meaningful distinction between classical and modern liberalism exists. Alan Wolfe summarizes this viewpoint, which
reject(s) any such distinction and argue(s) instead for the existence of a continuous liberal understanding that includes both Adam Smith and John Maynard Keynes... The idea that liberalism comes in two forms assumes that the most fundamental question facing mankind is how much government intervenes into the economy... When instead we discuss human purpose and the meaning of life, Adam Smith and John Maynard Keynes are on the same side. Both of them possessed an expansive sense of what we are put on this earth to accomplish. Both were on the side of enlightenment. Both were optimists who believed in progress but were dubious about grand schemes that claimed to know all the answers. For Smith, mercantilism was the enemy of human liberty. For Keynes, monopolies were. It makes perfect sense for an eighteenth-century thinker to conclude that humanity would flourish under the market. For a twentieth century thinker committed to the same ideal, government was an essential tool to the same end.


According to William J. Novak, however, liberalism in the United States shifted, "between 1877 and 1937...from laissez-faire constitutionalism to New Deal
New Deal
The New Deal was a series of economic programs implemented in the United States between 1933 and 1936. They were passed by the U.S. Congress during the first term of President Franklin D. Roosevelt. The programs were Roosevelt's responses to the Great Depression, and focused on what historians call...

 statism, from classical liberalism to democratic social-welfarism".

Hobhouse, in Liberalism (1911), attributed this purported shift, which included qualified acceptance of government intervention in the economy and the collective right to equality in dealings, to an increased desire for what Hobhouse called "just consent". F. A. Hayek wrote that Hobhouse's book would have been more accurately titled Socialism, and Hobhouse himself called his beliefs "liberal socialism".

Joseph A. Schumpeter attributes this supposed shift in liberal philosophy to the 19th century expansion of the franchise to include the working class. Rising literacy
Literacy
Literacy has traditionally been described as the ability to read for knowledge, write coherently and think critically about printed material.Literacy represents the lifelong, intellectual process of gaining meaning from print...

 rates and the spread of knowledge led to social activism
Activism
Activism consists of intentional efforts to bring about social, political, economic, or environmental change. Activism can take a wide range of forms from writing letters to newspapers or politicians, political campaigning, economic activism such as boycotts or preferentially patronizing...

 in a variety of forms. Social liberals
Social liberalism
Social liberalism is the belief that liberalism should include social justice. It differs from classical liberalism in that it believes the legitimate role of the state includes addressing economic and social issues such as unemployment, health care, and education while simultaneously expanding...

 called for laws against child labor
Child labor
Child labour refers to the employment of children at regular and sustained labour. This practice is considered exploitative by many international organizations and is illegal in many countries...

, laws requiring minimum standards of worker safety
Occupational safety and health
Occupational safety and health is a cross-disciplinary area concerned with protecting the safety, health and welfare of people engaged in work or employment. The goal of all occupational safety and health programs is to foster a safe work environment...

, laws establishing a minimum wage
Minimum wage
A minimum wage is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labour. Although minimum wage laws are in effect in a great many jurisdictions, there are differences of opinion about...

 and old age pensions, and laws regulating banking with the goal of ending cyclic depressions, monopolies, and cartels. Laissez faire economic liberals considered such measures to be an unjust imposition upon liberty
Liberty
Liberty is a moral and political principle, or Right, that identifies the condition in which human beings are able to govern themselves, to behave according to their own free will, and take responsibility for their actions...

, as well as a hindrance to economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...

, and, as the working class in the West became increasingly prosperous, they also became more conservative.

Another regularly asserted contrast between classical and modern liberals: classical liberals tend to see government power as the enemy of liberty, while modern liberals fear the concentration of wealth and the expansion of corporate power. Others such as Michael Johnston and Noam Chomsky
Noam Chomsky
Avram Noam Chomsky is an American linguist, philosopher, cognitive scientist, and activist. He is an Institute Professor and Professor in the Department of Linguistics & Philosophy at MIT, where he has worked for over 50 years. Chomsky has been described as the "father of modern linguistics" and...

 assert that classical liberalism as such can no longer exist in a modern day context as its principles were only relevant at the time its founding thinkers conceptualized them; and that classical liberalism has grown into two divergent philosophies since the beginning of the twentieth century: social liberalism
Social liberalism
Social liberalism is the belief that liberalism should include social justice. It differs from classical liberalism in that it believes the legitimate role of the state includes addressing economic and social issues such as unemployment, health care, and education while simultaneously expanding...

 and market liberalism
Market liberalism
The term market liberalism is used in two distinct meanings.Especially in the United States, the term is often used as a synonym to classical liberalism...

.

See also

  • Age of Enlightenment
    Age of Enlightenment
    The Age of Enlightenment was an elite cultural movement of intellectuals in 18th century Europe that sought to mobilize the power of reason in order to reform society and advance knowledge. It promoted intellectual interchange and opposed intolerance and abuses in church and state...

  • Austrian School
    Austrian School
    The Austrian School of economics is a heterodox school of economic thought. It advocates methodological individualism in interpreting economic developments , the theory that money is non-neutral, the theory that the capital structure of economies consists of heterogeneous goods that have...

  • Capitalism
    Capitalism
    Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

  • Classical economics
    Classical economics
    Classical economics is widely regarded as the first modern school of economic thought. Its major developers include Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Malthus and John Stuart Mill....

  • Contributions to liberal theory
    Contributions to liberal theory
    Individual contributors to classical liberalism and political liberalism are associated with philosophers of the Enlightenment. Liberalism as a specifically named ideology begins in the late 18th century as a movement towards self-government and away from aristocracy...

  • Deregulation
    Deregulation
    Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...

  • The Economist
    The Economist
    The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...

  • Fiscal conservatism
    Fiscal conservatism
    Fiscal conservatism is a political term used to describe a fiscal policy that advocates avoiding deficit spending. Fiscal conservatives often consider reduction of overall government spending and national debt as well as ensuring balanced budget of paramount importance...

  • Free market
    Free market
    A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...

  • Foundation for Economic Education
    Foundation for Economic Education
    The Foundation for Economic Education is one of the oldest free-market organizations established in the United States to study and advance the freedom philosophy. Murray Rothbard recognizes FEE for creating a "crucial open center" that he credits with launching the movement...

  • Hoover Institution
    Hoover Institution
    The Hoover Institution on War, Revolution and Peace is a public policy think tank and library founded in 1919 by then future U.S. president, Herbert Hoover, an early alumnus of Stanford....

  • Institute for Humane Studies
    Institute for Humane Studies
    The Institute for Humane Studies is a classical liberal non-profit organization whose stated mission is “to support the achievement of a freer society by discovering and facilitating the development of talented students, scholars, and other intellectuals who share an interest in liberty and in...

  • Liberal democracy
    Liberal democracy
    Liberal democracy, also known as constitutional democracy, is a common form of representative democracy. According to the principles of liberal democracy, elections should be free and fair, and the political process should be competitive...

  • Libertarianism
    Libertarianism
    Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...

  • Ludwig von Mises Institute
    Ludwig von Mises Institute
    The Ludwig von Mises Institute , based in Auburn, Alabama, is a libertarian academic organization engaged in research and scholarship in the fields of economics, philosophy and political economy. Its scholarship is inspired by the work of Austrian School economist Ludwig von Mises...

  • Manchester capitalism
    Manchester capitalism
    Manchester Capitalism, Manchester School, Manchester Liberalism, and Manchesterism are terms for the political, economic, and social movements of the 19th century that originated in Manchester, England....

  • Minarchism
    Minarchism
    Minarchism has been variously defined by sources. It is a libertarian capitalist political philosophy. In the strictest sense, it maintains that the state is necessary and that its only legitimate function is the protection of individuals from aggression, theft, breach of contract, and fraud, and...

  • Modernity
    Modernity
    Modernity typically refers to a post-traditional, post-medieval historical period, one marked by the move from feudalism toward capitalism, industrialization, secularization, rationalization, the nation-state and its constituent institutions and forms of surveillance...

  • Natural rights
    Natural rights
    Natural and legal rights are two types of rights theoretically distinct according to philosophers and political scientists. Natural rights are rights not contingent upon the laws, customs, or beliefs of any particular culture or government, and therefore universal and inalienable...

  • neoliberalism
    Neoliberalism
    Neoliberalism is a market-driven approach to economic and social policy based on neoclassical theories of economics that emphasizes the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the...

  • New classical macroeconomics
    New classical macroeconomics
    New classical macroeconomics, sometimes simply called new classical economics, is a school of thought in macroeconomics that builds its analysis entirely on a neoclassical framework. Specifically, it emphasizes the importance of rigorous foundations based on microeconomics...

  • Paleoconservatism
    Paleoconservatism
    Paleoconservatism is a term for a conservative political philosophy found primarily in the United States stressing tradition, limited government, civil society, anti-colonialism, anti-corporatism and anti-federalism, along with religious, regional, national and Western identity. Chilton...

  • Paleolibertarianism
    Paleolibertarianism
    Paleolibertarianism is a school of thought within American libertarianism associated with the late economist Murray Rothbard, and the Ludwig von Mises Institute. It is based on a combination of right-libertarianism in politics and cultural conservatism in social thought...

  • Social liberalism
    Social liberalism
    Social liberalism is the belief that liberalism should include social justice. It differs from classical liberalism in that it believes the legitimate role of the state includes addressing economic and social issues such as unemployment, health care, and education while simultaneously expanding...

  • The Spirit of the Laws
    The Spirit of the Laws
    The Spirit of the Laws is a treatise on political theory first published anonymously by Charles de Secondat, Baron de Montesquieu in 1748 with the help of Claudine Guérin de Tencin...

  • Two Treatises of Government
    Two Treatises of Government
    The Two Treatises of Government is a work of political philosophy published anonymously in 1689 by John Locke...

  • Utilitarianism
    Utilitarianism
    Utilitarianism is an ethical theory holding that the proper course of action is the one that maximizes the overall "happiness", by whatever means necessary. It is thus a form of consequentialism, meaning that the moral worth of an action is determined only by its resulting outcome, and that one can...

  • The Wealth of Nations
    The Wealth of Nations
    An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, is the magnum opus of the Scottish economist and moral philosopher Adam Smith...