Classical And Social Liberalism: A Comparative Analysis

This essay aims to analyze the different principles that characterize classical liberalism and social liberalism. In the first part it will be defined ‘liberalism’ and we will see what aspects are shared in the different forms of this doctrine. In the second part, on the other hand, we will analyze what have been the triggering historical events that led to classical liberalism and social liberalism. In the concluding part, I will deal in more detail with the differences between classical and social liberalism.

Before all else, liberalism represents the political belief that there should be free trade, that people should be allowed more personal freedom, and that changes in society should be made gradually (Liberalism, meaning in the Cambridge English Dictionary, 2020)

Nevertheless, liberalism had its origins in the rise of the merchant class and represents a consequent response to the ending of the European feudalistic system. The liberals, in fact, challenged the monarchist power for constitutional power. For instance, the key idea of liberalism was contained in the precise idea of freedom. Otherwise, freedom realistically was the driving force behind the French Revolution of 1789 and the American Revolution of 1776. We can say it was thanks to the liberal ideals which represented these two revolutions that this political movement began to spread. All the more in England, the peaceful uprising of the glorious revolution of 1688 received enormous support, especially from the merchant class. But even among the intellectuals, this phenomenon initiated to become even more influent and supported by John Locke (1632–1704), an educator who lived in exile in Holland during the reign of James II and returned to England after the Glorious Revolution, published his Two Treatises of Government in 1690. In it, he argued the government was a form of contract between the leaders and the people, and that representative government existed to protect “life, liberty and property.’ (The Glorious Revolution and the English Empire | United States History I, 2020)

The ideological and moral behavior of liberalism can be found in a series of values and beliefs that characterize all the various forms of this political doctrine. Among the most relevant, we note the emphasis on the individual, negative freedom, confidence in reason and fairness in rights and tolerance. To begin with, if in the past had developed societies based on collectivism and the idea of community, with the advent of liberalism, the role of the individual was reconsidered. Individualism was a belief centered on the supreme importance of the individual over a group, and for this reason, any kind of social declarations should have been made with respect for individuals. Secondly, the early or classic liberals believed in negative freedom, which provided autonomy from external restrictions imposed on the individual, consequently making possible freedom of choice. Third, the liberal concept of freedom is linked to faith in reason. This belief in human reason was at odds with the concept of paternalism, which prevented individuals from making choices dictated by their morals. Moreover, reason makes it possible to promote one’s own personal growth also, leading to social improvements because of the importance of debate and discussion among individuals. As well as liberals are committed to a society that offers the same opportunities for all its citizens so that they can derive the greatest benefit from it. Therefore, legal and political equity should not be unlimited only to a close circle of citizens but extended to all. In light of the above, the ultimate value assigned by this political doctrine represents tolerance.These are the roots of future democratic principles. The French writer Voltaire (1694-1778) expressed in a memorable declaration ‘ I detest what you say but will defend to the death your right to say it.’ (Heywood, 2017: p.33)

However, classical and social liberalism were born as theories that were then implemented only after historical facts that made possible their dissemination.

Classical liberalism represents the first form of liberalism and these political foundations developed as a result of some social changes in the 16th century. There was a transition from feudalism to capitalism driven primarily by the bourgeois – capitalistic class that wanted to expand the market but also to establish a strong state. In the early nineteenth century, the nascent industrialization was spreading more and more, especially in English towns like Manchester, Newcastle and Birmingham.

But round the end of the 19th century, the considerable problems that the Industrial Revolution had brought with it were evident. The key problem represents the massive economic gap between the bourgeoisie and the working class, which was becoming increasingly wide. The former held much of the wealth, while the latter could not always enjoy the goods necessary for ordinary life, therefore causing a surplus of goods. But while the poor were suffering, the bourgeoisie class was getting richer and richer, imposing its influence even in areas that included the organization of power. Due to these problems of inequality, poverty and ignorance, it came to social or modern liberalism. At this point it was necessary to increment state intervention to increase the living conditions of many citizens.

First and foremost, to understand the distinction between classical and modern liberalism, we must define their different perception of the concept of freedom. According to the distinction between positive and negative freedom made by the English philosopher Isaiah Berlin ‘For many liberals, negative liberty is modern individual liberty manifested in markets while interference by the State is a form of positive liberty.’ (Collignon, 2018: p.36)

Negative freedom is, therefore, freedom from external constraints, like religious authority. While, positive freedom represents the ability to develop and attain individuality, but to reach it it is necessary more intervention from the state that should be committed to provide for basic services e.g. this is a typical characteristic of the Welfare state. As far as the role of the state is concerned, classical liberalism identifies in this authority a role limited to maintaining domestic order through the police forces, exercising justice to ensure equal rights among its citizens and protecting society from external attacks through an army. Consequently, we could define it as a minimum state, in which most of the functions of government are maximized through negative freedom. On the contrary, according to social liberalism, the government must provide support to its citizens to support them achieving their positive freedom. Moreover, modern liberals believe that the state undertakes the responsibility to reduce or at least mitigate situations where there are disadvantages because welfarism is supported due to the idea that it is perceived as the basis for social equity.

The main exponent of economic liberalism was Adam Smith (1723-1790). In his work ‘The Wealth of Nations’ (1776) he highlights the three principles of the market economy. First, the principle of the individual interest, in enunciating it he points out that the productive work is only manual and from it are created goods of commutable value in time for the producer.

Due to this: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.” (Wealth Happens, 2020)

By pursuing their own individual interests, each individual contributes to the collective well-being faster than if the state was to promote it itself. In addition, the expression ‘invisible hand’ is used by Smith in the analysis of the problem of protectionism and free trade. More precisely, Smith refers to it when he explains that, following their selfish preferences, capital holders prefer to invest in assets located in their own country, thus creating benefits to it and to society, even if this was not their intention. According to Smith, individuals would be driven by an ‘invisible hand’ to operate in a way that ensures such benefits, while pursuing nothing but individual benefits. Lastly, the principle of free trade theorized by Adam Smith, states that all countries could produce goods more congenial to them, specializing in such production and then trade these products through international trade. However, this theory could not have been applied in case a nation would have been more profitable in the production of more goods, because in this case it would not need the exchange with other countries.

But the most important criticism of such economic liberalism comes from the social liberal John Maynard Keynes (1883-1946), founder of the Keynesian economy and inspirer of the New Deal during the economic crisis of 1929. The abandonment of a laissez-faire inspired economy came about because of the growing inability of the capitalist industrial economy to ensure prosperity. The Wall Street crush in 1929 is the most dramatic demonstration of the failure of the free market. Keynes recommended governments to reduce taxes by increasing public spending. Therefore, a solution to unemployment could have been found not through ‘the invisible hand’ theorized by Smith, but through government intervention, running a budget deficit, it means that the government should have overspent.

It is significant to note how liberalism can be adapted to various historical periods and circumstances. From its birth in the seventeenth century to its change in the nineteenth century due to the problems of industrialization, until the last decades.

Modern liberals, in contrast to classical liberals, place more trust in the government and support its intervention in numerous affairs. However, faith in human reason and respect for the rights of all remain unchanged. Today in our contemporary society, we can affirm that the role of the government in defending the positive freedom of every citizen has been accepted. But it is equally factual that the question as to how far the power of government should be exercised still arises.