Liberalism in economic and social spheres


Intro and history

  • Liberalism is the social and political philosophy that centres on equality and liberty.
  • Key ideas that are founded around liberalism are minimal government intervention, toleration, individual liberty and civil liberties as well as equality and freedom.
  • As time has progressed the idea over the state’s role in society and economy has changed within the confides of liberalism.
  • Whilst its roots are in the 16th century, liberalism didn’t really emerge until the 17th/18th century after the events of the American and notably the French revolutions. K
  • ey thinkers during this time included John Locke, Montesquieu and Hobbes who argued for minimal government intervention and a government by consent.
  • They also felt the importance of a constitution and a representative government.
  • This idea encases the thinking of classical liberals who had distinct ideas over the role of the state in economics and social aspects of society.
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Classical liberalism and economy

  • A key element in classical liberalism is economic liberalism which advocated a laissez fair economy operating strictly according to the laws of supply and demand which was further advocated by Adam Smith in his book ‘The Wealth of Nations’.
  • Individuals would be allowed to enter and succeed or fail in the market on their own merits without help or assistance.
  • The repeal of the Corn Laws in 1846 marked a triumph of such a laissez fair approach in the UK.
  • Inequality was seen as an incentive to enterprise.
  • Samuel Smiles advocated the idea of self help in the market and Herbert Spencer also opposed government intervention comparing laissez fair liberalism to Darwin’s theory of evolution, his ideal society was characterised with survival of the fittest. 
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Progressive liberalism and economy

  • Adam Smith argued ‘man is an animal which makes bargains’ therefore expressing that we are more than capable of keeping our own economy.
  • However this attitude changed at and during the 19th century.
  • The industrial revolution saw that the gap between the rich and the poor had increased and something had to be done to ensure the greatest happiness to the greatest number, a feature of utilitarianism.
  • Liberals such as Thomas Green and Leonard Hobhouse started the process of reform as problems in the free market economy were revealed ergo government intervention was needed.
  • Redistribution of wealth was needed and material inequality reduced albeit by state intervention.
  • Therefore attitudes towards the role of the state have changed as it was felt that true individual liberty was unachievable following the classic structure.
  • It seems a natural split had followed at this time due to the individual changes within the UK.
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Liberalism and social sphere

  • The role of the state in the social spheres has also changed. Classical liberals followed a survival of the fittest approach to society enforced through the idea of negative freedom.
  • Their commitment to negative freedom advocated freedom from external interference especially by government and the state.
  • The state was viewed as a form of necessary evil to enforce order and security when needed.
  • Classical liberals also endorsed strict meritocracy in that people should be treated upon merit and their skills rather than aristocracy of hereditary titles.
  • This left people to themselves which modern liberals altered as they believed that the state should aim to improve social welfare.
  • This is due to free market capitalism for the lower classes who were impoverished already through ignorance and sickness.
  • Progressive liberalism began to challenge the classical ideas began to switch to positive freedom as opposed to negative freedoms evidenced through policy such as the Beveridge Report in 1942 and Lloyd George’s pension reforms.
  • T. H. Green began the idea of positive freedom as a means for a person to have the power to fulfil their potential and to be free from internal restraints.
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Liberals today

  • Although a clear divide is evident during these periods Liberal Democrats today are, somewhat, a mixture of the two ideas involving state intervention.
  • The post war liberals and the Liberal Democrats today continued to support the progressive approach towards social policy whist some divisions became apparent over the extent to which the state should play in welfare provisions and social policy.
  • However differences were less pronounced here than they are in the economic sphere. Progressive ideas dominated here with leaders such as Kennedy, Ashdown and Campbell having policies regarding taxation, public spending and green policies.
  • Since the 2010 coalition saw Nick Clegg enter into power with the Conservatives divisions became apparent in their attitude towards the economic policy. Clegg was known as an orange booker as he believed the party had moved too far left on economic policy. He had ideas based on redistributive taxation, improvement in schooling and constitutional reform.The state played a role socially in passing a law on gay marriage meaning that people are one step closer to being truly free in a liberal society.
  • They continue to hold ideas under the new leadership of Tim Farron of a restricted market in the economical sphere. 
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  • John Maynard Keynes argues that only with government intervention can the economy have prolonged prosperity as leaving it alone only disadvantages the poorest in society which does not enable Farron’s idea of equality of opportunity.
  • Therefore liberalism today would advocate that there is a need for state intervention but not so much that individual liberty and freedoms are threatened.
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