[Note: This post is part of a series on the History of the Classical Liberal Tradition]

Introduction and the Problem of Definition

“Liberal” and “Liberalism” as concepts have been contested since their first appearance, most probably sometime in the late 18th century, when the adjective “liberal” began to be used to describe an individual’s behaviour or views (“liberal sympathies”) or the nature of institutions (a “liberal system” or “order”), and the early to mid-19th century when the noun “liberalism” began to be used to describe a separate political ideology.

Liberalism has evolved over time to the point where its different versions require modification by an appropriate adjective, to “hyphenate” it if you will, in order to distinguish them from earlier and later versions of themselves. This makes it problematical for the historian to discuss liberalism’s origin, evolution, and meanings; and for the contemporary advocate to clearly explain to others what they mean by these terms.

Some CL thinkers believe the problem of definition has become so confusing that we need to do the following:

1.) to “reclaim” the word “liberal” for our own purposes and discontinue the use of “hyphens” to distinguish one form from another (this is Dan Klein’s approach)

• This would help us make it clear that there is a distinction between “real” liberals and those who are LINO (liberals in name only), and that this difference is based on significant differences in people’s attitudes about some very fundamental notions, such as property rights, free markets, and the coercive powers of the state

2.) to use the related word “libertarian” which emerged in the 1970s to distinguish it from the other forms of “corrupted” or “false” liberalism;

• this is especially a problem in the US where “liberal” means the exact opposite of what it once meant;
• this is less of a problem in the rest of the world where the word “liberal” still has some attachment to the ideas of free markets and small/limited government; but even here “liberal parties” are often what I call “LINO” – liberal in name only as they accept the role of and in fact seek the increase of the welfare state, the regulatory state, and the “nanny state”

3.) to use another term entirely given the intellectual baggage which accompanies the word “liberal”, for example;

• “individualism” is the preferred term for Steve Davies (IEA), which he uses to distinguish it from anything which gives priority to other things that are deemed to be “social”, such as “socialism”
• “voluntaryism” used by Carl Watner to refer to a system where voluntary and not coercive relationships exist between individuals; this is based upon the views of the late-19thC voluntaryists like Auberon Herbert
• “anarcho-capitalism” used by Rothbard and his followers from the late-1960s

Modern “liberalism” has drifted so far from these two streams of liberal thought that it should be regarded as a very different political animal. Something similar has happened to other non-liberal traditions, such as socialism and “labourism”, which have moved a great distance away from what they were when they emerged in the mid and late 19thC. They have incorporated numerous aspects of “liberalism” into their own and created a new kind of “hybrid” political philosophy.

One might say that modern “liberalism” has become more social/socialist and might be better termed “liberal socialism” (socialism with some liberal aspects grafted onto it); while at the same time modern “socialism” has become more “liberal” and might be better termed “socialist liberalism” (liberalism with some socialist aspects grafted onto it).

Thus, socialists today face the same problem liberals do when trying to make sense of all this. What is “real” socialism? What is “real” liberalism? What is the connection between the “ideal” of socialism and what they used to call “actually existing” socialism? And similarly, what is the connection between the “ideal” of liberalism and how these ideas have actually been implemented by liberal parties?

And in the end, does this matter any more when the differences between “liberalism” and “socialism” in the modern era have, for all intents and purposes, practically disappeared?

The Emergence of “Hyphenated” Liberalism

We can distinguish between the different forms CL has taken by the following criteria:

1. the historical period in which it emerged or became dominant
2. how consistently or extensively the idea of liberty was applied
3. whether one has freedom “by right” or “by permission”
4. different attitudes about the nature of the state and its proper role
5. different ideas about what the ultimate goal of what politics/liberalism should be
6. the different value or weight given to the various (three) bundles of freedom (political, economic, social)
7. different ideas about what a liberal society should or could be

In this post I would like to address the first two of these criteria. I will address the others in later posts.

1.) the historical period in which it emerged or became dominant

• “proto-liberalism” (before the word “liberal” was used by adherents to describe themselves – Levellers, Commonwealthmen, Whigs)
• “old” or classical liberalism which emerged in the mid-19thC – especially Richard Cobden, John Stuart Mill, the English Liberal Party (1859), William Gladstone, (PM on and off between 1868-94)
• modern or “new” liberalism (first wave): emerged in Britain in the late 19thC (1880s and 1890s) with works by L.T. Hobhouse, John A. Hobson, T.H. Green, who argued that state could and should be used as a “positive” influence to increase the “liberty” of people (understood not as the absence of coercion but as an increased capacity to do things)
• “neo-liberalism” or new liberalism (second wave): it emerged post-1938 as an attempt to revive interest in liberal ideas in a world increasingly dominated by fascism and communism; the idea was to use the state to provide greater welfare services (welfare state) and to regulate the economy to provide more “competition” (an “ordered economy”) , thus it would meld aspects of the welfare-state, greater regulation of the economy, and private ownership of property and the free market; it arose out of the work of the German economist Walter Eucken in 1937 (Ordnung der Wirtschaft (The Order of the Market) (1937)) and a meeting in Paris in 1938, the “Colloque Walter Lippman”, to discuss his recent book An Enquiry into the Principles of the Good Society (1937); this resulted in the formation of organisations such as the Walter Eucken Institut (1954) and the movement known as “Ordo-liberalismus” (ordered liberalism, or liberalism ordered by the state); the Mont Pèlerin Society in (1947) founded by Friedrich Hayek, Frank Knight, Karl Popper, Ludwig von Mises, George Stigler and Milton Friedman; it should be noted that the Australian Liberal Party was formed at roughly the same time by Robert Menzies (October 1944) and thus needs to be seen as part of this second wave of new or “neo” liberalism.
• Side Note 1: Robert Menzies gave a series of influential radio addresses in 1942 in which he laid out his ideas about liberalism in preparation for the formation of the new Liberal Party in 1944. It was then that he gave his famous talk on “The Forgotten People” (22 May, 1942), the ordinary tax-payers and citizens, whose interests he wanted the Liberal Party to represent.
• Side Note 2: It is an interesting question to ask when “liberals” first became aware that they had a coherent worldview which could be applied to many (perhaps all) aspects of how a society could be organised on liberal principles. I think a good marker of this self-awareness is the appearance of one volume treatments of their philosophy which attempted to tie all the various pieces together in an overview of their position. I have drawn up a list of such attempts in order to track this development which spans the nearly 100 years between 1792 (Humboldt) to 1888 (Bruce Smith) . [See my comments in this post: One Volume Surveys of Classical Liberal Thought | Reflections on Liberty and Power.]]

2.) how consistently or extensively the idea of liberty was applied

• “radical” liberalism: the pure, consistent, radical, or across-the-board application of liberal principles to all aspects of social, political, and economic activity (the Enlightenment (part of Israel’s “radical Enlightenment”), radicals in the American and French revolutions, radicals in early and mid- 19thC (Thomas Jefferson, Thomas Hodgskin, Herbert Spencer, Frédéric Bastiat, Gustave de Molinari); believed that the role of the role should be “ultra-minimal” (Bastiat and others of the “Paris school of political economy) or even non-existent (Spencer, Molinari)

[A side note on other language used to describe this:]

• cf. Hayek’s concept of “true” vs. “false” individualism could also be applied to liberalism; thus “radical” liberals would see themselves as advocates of “true liberalism” and others (moderates, new liberals) as advocates of “false liberalism”; another German work one could use is “ersatz” or fake (substitute) liberalism
• cf. Isaiah Berlin’s idea of the difference between “negative” freedom and “positive” freedom could also be applied to the idea of liberalism itself; thus there is “negative” liberalism (where the state abstains (largely) from intervention in peoples’ lives and the economy, and “positive” liberalism (where the state plays a very active role in providing welfare and regulation (health and safety)
• the historian and economist Walter Grinder uses the term “real” liberalism to describe this group
• liberalism “proper” vs. “proper liberalism” (Gottfried Dietze): “liberalism proper” which advocates liberty without restriction (libertarianism), while “proper liberalism” advocates limited government which enforces some moral restrictions on behaviour
• “moderate” liberalism: this describes what most people have historically regarded as “classical liberalism” which emerged after the defeat of Napoleon (1815), the first electoral reform act which allowed many of the middle class in England to vote (1832), the rise of the Anti-Corn Law League (1838) and its success in introducing free trade in England (1846), and the formation of the English “Liberal Party” (1859). Moderate liberals thought the role of the state should be “limited” to national defence, the police, and some public goods (classic statement by Adam Smith – roads, money, post office). Some CLs (like Cobden) thought it should also provide education for children; others accepted the “civilising” and “liberalising”, and “Christianising” influence of the (British) Empire
• “new” liberalism (also called “social” liberalism): this was a late 19th century phenomenon (Green, Hobhouse, Hobson) which introduced aspects of “socialism” into the CL tradition whereby the state should play a much greater role in maximising “positive” liberty by using legislation/coercion to reduce “harm” (factory legislation, child labour, public health/hygiene) or provide positive benefits to ordinary working people (compulsory public education, health and unemployment insurance), or to do things more “efficiently” or “rationally” than the market and its “profit-makers” (public works – gas, electricity, railroads – as part of “municipal socialism”). It was justified by ideas which were inherent in liberal thinking at the time (the utilitarianism of Bentham, JSM) and the weakness of natural law/rights thinking in the British (Australian) stream of CL thought.