Classical Liberalism - Relationship To Modern Liberalism

Relationship To Modern Liberalism

Many modern scholars of liberalism argue that no particularly meaningful distinction between classical and modern liberalism exists. Alan Wolfe summarises 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... odern liberalism is instead the logical and sociological outcome of classical liberalism.

According to William J. Novak, however, liberalism in the United States shifted, "between 1877 and 1937...from laissez-faire constitutionalism to New Deal 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 rates and the spread of knowledge led to social activism in a variety of forms. Social liberals called for laws against child labour, laws requiring minimum standards of worker safety, laws establishing a minimum wage 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, as well as a hindrance to economic development, 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 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 conceptualised them; and that classical liberalism has grown into two divergent philosophies since the beginning of the twentieth century: social liberalism and market liberalism.