Difference between Classical Liberalism and Modern Liberalism

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nIntroduction

nLiberalism is a philosophy in the political sphere, which is normally, depicted as a doctrine of the developed countries especially the West. Initially, the term was used to describe the belief of safeguarding and promoting the liberties of people in a particular country. The ideology arose during the early 19th century as a political thought (Horwitz, 2015). However, over the years, the term has transformed via massive social changes since the 16th century. Furthermore, the values and thoughts of liberalism were used in the ancient Rome and Greece, although there are many differences in the major elements. According to Heywood, (2012), liberalism has various common features that exist in all types of ideologies. These include individualism, equality or egalitarian, Universalism and meliorism. Nonetheless, modern liberalism and classical liberalism have a wide range of differences (Heywood, 2012). The main aim of this paper is to explore the differences of modern liberalism and classical liberalism.

nClassical liberalism

nThe political fundamentals of classical liberalism are based on a broad-range of social transformation that started in the 16th century. In this regard, in European society, there was the collapse of feudalism and the emergence of absolutism (Horwitz, 2015). Moreover, there was a religious reformation in those nations where the papacy powers were significantly reduced. Meanwhile, leaders had to impose the rule of law based on either Protestantism or Roman Catholicism. Consequently, these systems of governance were a source of conflicts between and within the states. For instance, between 1616 and1648, European nations were engaged in the Thirty Years War, which caused massive destructions. The following century led to the development of industrialization leading to the emergence of social classes (Heywood, 2012). Subsequently, they acquired more economic freedoms and political rights. More importantly, these factors promoted revolutions in the 17th and 18th century, for instance, French Revolution in 1789, the American Revolution between 1775 and1783 and Glorious Revolution in the UK in 1688. Due these situations, liberalism slowly rose as a political philosophy (Smith, 2013).

nOne of the most important features of classical liberalism is provision of economic rights and freedom of the people. Smith Adam typically developed the doctrine in the Wealth of Nations. In this respect, classical liberalism supports Laissez-faire, which is based on the idea that the market should have minimum control of the government hence it should be self-regulating. In so doing, the market prosperity and the rights and freedoms of the people in such markets would be guaranteed (Horwitz, 2015). The logical validation of classical liberalism is complemented by utilitarianism. Scholars such as Mill J.S, Mill James, and Bentham Jeremy introduced the principle of utilitarianism. They thought that the objective of a community is to acquire the highest level of happiness (Heywood, 2012). In order to accomplish this goal, it is important to have a representative authority, which defends liberties.

nFurthermore, classical liberalism had widespread effects on the political environment for a long time. It encouraged the development of constitutional, independent and unified nations, which were formed on representative doctrines, and philosophy of the rule of law. Following the end of the Glorious Revolution, there was the formation of the Liberal Party in the UK under the leadership of the Whigs (Smith, 2013). Consequently, the principles of classical liberalism have for a long period, played a huge part in politics and governance of the UK. In other countries such as France, the Third Republic has accomplished liberal goals.

nIn the economic sector, the principles of classical liberalism helped to abolish various feudal barriers on internal business and manufacturing (Horwitz, 2015). Additionally, restrictions and tariffs on imports aimed to safeguard the local manufacturers were introduced.

nModern Liberalism

nIn the late 19th century, the free market economy had a wide range of problems, especially in North America and England. For instance, large companies held profits from flourishing sectors, while the common people had little to enjoy. Ultimately, the gap between the poor and the rich was immensely extended (Ryan, 2012). Furthermore, the poor people were disadvantaged since they could not purchase good yet there were excess supply leading to depressions. On the other hand, the rich obtained more and more power, which they used to reduce competition and sway politics. Due to these challenges, there was the need for reforms. Scholars such as Hobhouse L.T and Green T.H started this process, which was robustly inspired by ideas from Mill J.S (Heywood, 2012).

nModern liberalism maintains that freedom should not be mean that it should be left alone. When humans are left alone by the government, they turn out to be weaker rather than powerful. Consequently, they would suffer from helplessness, illness, hunger and poverty hence they have less liberty to enjoy (Vanberg, 2013). In this regard, modern liberalism advocated for social welfare, which the government must provide for its people. In addition, it rejects the principles of laissez-faire capitalism. Some of the modern liberalists such as Keynes J.M noted that policies based on laissez-faire led to substantial unemployment across the globe. Similarly, it is a source of economic instability in the modern world (Ryan, 2012). Therefore, it was important for the authorities to initiate proper management of the aggregate demand via spending policies and taxes in the economy.

nThrough modern liberalism, the government has initiated social welfare, especially in education and health care. Most of the governments have initiated a free education in public institutions and accident insurance for workers (Vanberg, 2013). Meanwhile, modern liberalism has assisted to develop different welfare programs in family allowances, pensions and social insurance.

nMajor Differences between Modern and Classical Liberalism

nPositive Liberty v Negative Liberty

nThe differences between modern liberalism and classical liberalism are based on diverse knowledge on liberty. According to Isaiah Berlin, there are two ideas of liberty, which include positive liberty and negative liberty (Smith, 2013). Based on Berlin argument, being extremely free is a damaging/negative value since other people do not power to cause interference of the individuals. On the other hand, positive liberty suggests that freedom refers to the ability of a person to be his/her own leader or master. In this regard, classical liberalism concentrates on increasing negative liberty (Horwitz, 2015). On the contrary, modern liberalism proposes that the government must help people to acquire their positive freedom (Heywood, 2012).

nSocial Welfare v Minimum State

nClassical liberalism supports the system of minimal state with an intention of optimizing the negative liberty. Where minimum state exists, the government has only three main purposes (Smith, 2013). Firstly, it is responsible for upholding the local order with various institutions such as police services. Secondly, it is required to impose agreements or contracts between its people, which explains the role of the judiciary (Horwitz, 2015). Finally, under classical liberalism, the government must defend the lives of its citizens from foreign attacks hence the need for a military.

nOn the contrary, modern liberalism proposes that the state must help people to accomplish their positive freedom. Thus, programs of social welfare are powerfully encouraged. Nonetheless, based on Green T.H argument, the government should only intervene in cases where citizens are in danger of being limited by liberty (Ryan, 2012). Therefore, the government should only utilize social welfare to assist only underprivileged persons in the society. John Rawls in the Theory of Justice highlighted two principles to validate redistribution. Firstly, he noted that though the principle of equality, persons must have equal freedoms to fundamental liberty. Secondly, the difference principle pointed out that inequality is acceptable only in circumstances where it enhances the well-being of the underprivileged persons in the economy (Vanberg, 2013). However, this should not create new form of inequality. More importantly, modern liberalism argues that government should not introduce excessive welfares because it would create a sense of dependence and erode self-realization.

nGovernment intervention v Laissez-faire

nAccording to Smith Adam, the self-interests of a person in a liberal market can contribute to the growth of the economy (Smith, 2013). For an individual to achieve benefits in the market, he/she must produce based on the market demand, which he called ‘invisible hand’. By contrast, the intervention of the government is destructive because it power is exercised by persons who do not understand the plight of the people (Heywood, 2012). On the other hand, modern liberals such as Keynes asserted that people are unable to impeccably self-manage the economy. When the provisions of supply and demand do not apply, it would lead to monopolization. A few people in the economy benefit from huge profits while the majority of people are unable to consume (Ryan, 2012). Consequently, it leads to collapse of circulation of capital, which hurts the growth of the economy.

nIn this regard, modern liberalism has abandoned the concept of free markets. However, modern liberalists do not aim to nationalize private companies or obstruct the principle of demand and supply (Vanberg, 2013). Modern liberals, including, Keynes also proposes that the ‘visible hand’ works not by reducing salaries to cover complete employment, but by ‘expansionary monetary program”, such as expenditure of resources on public infrastructure to increase demand (Ryan, 2012).

nHistorical Context

nClassical liberalism arose during the period of transition from feudalism to absolutism. It was an era when rulers had excessive power over the subjects. Therefore, it was based on deep mistrust of the government (Horwitz, 2015). Consequently, there was the introduction of social contract aiming to reduce the authority of the rulers at all costs. By contrast, modern liberalism attempted to solve the challenges that emerged from industrialization. It is apparent that although people are free from foreign barriers, they are sometimes incapable and vulnerable to various factors in the economy (Heywood, 2012). Additionally, with the enhancement of representative democracy, the authorities have acquired more trust from the people that it can address their predicaments.

nConclusion

nModern liberalism and classical liberalism have a variety of differences as they express diverse principles of liberty. Relative to classical liberalism, modern liberalism has more trust in government interventions, especially in economic and social affairs (Ryan, 2012). In addition, modern liberalism supports positive liberty as opposed to classical liberalism that enhances negative liberty (Smith, 2013). Additionally, modern liberalism is inclined to more economic regulations through taxation as compared to classical liberalism that advocate for low tariffs and lower level of taxation.

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nReferences

nHeywood, A. (2012). Political ideologies: An introduction. Palgrave Macmillan.

nHorwitz, S. (2015). Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions. Springer.

nRyan, A. (2012). The making of modern liberalism. Princeton University Press.

nSmith, G. H. (2013). The system of liberty: themes in the history of classical liberalism. Cambridge University Press.

nVanberg, V. J. (2013). James M. Buchanan’s contractarianism and modern liberalism (No. 13/4). Freiburger Diskussionspapiere zur Ordnungsökonomik.