Liberalism: Classical, Reformist and Neo-Liberalism1

“Liberalism is a belief that society can safely be founded on ... self-directing power of
personality, that it is only on this foundation that a true community can be built, and that so
established its foundations are so deep and so wide that there is no limit that we can place to
the extent of the building.” – Hobhouse

“[Liberalism is] an idea committed to freedom as a method and policy in government, as an

organising principle in society, and a way of life for the individual and community.”
– Encyclopaedia Britannica

“Liberalism is a tentative attitude towards social problems which stresses the role of reason
and human ingenuity.... Liberalism looks ahead with flexible approach; seeking to make
future better for more people, as conservatism looks back aiming mainly to preserve the
attainment of past.” – Grimes

The elements of liberalism as a way of life and an outlook can be traced back to the classical
Greece and Rome. The ideas of the Sophists, Protagoras and Gorgias, Democritus the
atomist and Pericles in the ancient Greece and Solon, Cicero, Justinian, Constantine, Livy
and Tacitus of the Roman age contain a multitude of liberal elements. Even the Christianity
in its early stage also contained some liberal-individualistic elements. However, as a political
current and an intellectual tradition, an identifiable strand in thought and practice, liberalism
is no older than the 17th century. Earlier the term ‘liberal’ used to denote the classical virtue
of humanity, generosity and open-mindedness. During the Scottish Enlightenment the term
was considered as a derivative of ‘liberality’. It was only in 1812 that the term was used for
the first time to denote a political movement when ‘liberalism’ was adopted as the political
ideology by the ‘Spanish Party of Liberals’.

As a dynamic political ideology liberalism has been evolving and being reshaped constantly
through the major events of the Western world, such as the dissolution of the feudal order
and rise of the bourgeoisie as the dominating social class in Europe during the 16th and 17th
centuries, the French and American revolutions in the late 18th century, the emergence of
democratic and socialist mass movements in the second half of the 19th century and also by
the near eclipse of the liberal society by totalitarian regimes in Europe in the first half of the
20th century.

Accordingly three distinct but overlapping phases of evolution of liberalism have been
identified by the scholars. They are:

• Classical liberalism, spanning from the 17th century to the late 19th century, with John
Locke, James Mill, Jeremy Bentham, Adam Smith, David Ricardo and others as the chief
propagators.
• Reformist or Positive liberalism, spanning from the late 19th to the late 20th century,
with John Stuart Mill, Thomas Hill Green, MacIver, Harold J. Laski, Sydney Webb,

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Prepared by Sandipan Sen for PLSA – III Paper V Half 1 Topic 4a

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 Beatrice Webb, Lindsay, Ernest Barker, Hobhouse, Cole, J.M. Keynes and John Rawls
among others as the main thinkers.
• Contemporary or Neo-liberalism, emerging since the late 20th century and running
through the early 21st century, being propagated by thinkers like Milton Friedman,
Schumpeter, R.A. Dahl, F.A. Hayek, Robert Nozick and others.

The distinctive features of liberalism, marked by its conception of man and society have
been altered and reshaped throughout the last four hundred years, but they have not
changed out of recognition. A common thread characterized by a definitive and modern
conception of man and society consisting of four key elements, helps us to distinguish
liberalism as a modern intellectual tradition and political movement from any other political
ideologies, in spite of its ever-changing contours. These conceptual elements have been
identified by John Gray in his Liberalism as the following:

1. Individualism: liberalism asserts the moral primacy of the person against the claims of
any social collectivity.
2. Egalitarianism: liberalism confers all men the same moral status and denies relevance
to legal or political order of differences in moral worth among human beings.
3. Universalism: liberalism affirms the moral unity of human species and accords
secondary importance to specific historical or cultural forms.
4. Meliorism: liberalism affirms the corrigibility and improvability of all social institutions
and political arrangements.

Classical Liberalism

The background of the emergence of liberalism as a political ideology was prepared during
16th to 19th centuries by the Reformation, Renaissance, Industrial Revolution, Puritan and
Glorious Revolutions in England, the Scottish Enlightenment, the French Enlightenment
and the French Revolution and the American War of Independence.

Nicolo Machiavelli made the pioneering attempts towards secularization of politics. Jean
Bodin invented the concept of sovereignty to distinguish the secular authority from the
divine one and provided the legal foundation of the bourgeois state. Rene Descartes
emphasized the pursuit of material and scientific enquiry for human progress. Montesquieu
pleaded for the separation of power to ensure the rule of law and termed liberty as
something permitted by law.

The modern systematic political theory begins with Thomas Hobbes (1588 – 1679). He
provided a materialist or secular foundation of politics. For him political obligation was a
deliberate rational activity of man and it was not guided by morality but self-interest and
consent was the basis of authority. Thus he was a modernist. He considered the state and
society as products of rational human deliberations not as natural phenomena. Hobbes was
also an uncompromisingly individualist as he affirmed equal liberty to all men
(egalitarianism) in the state of nature and rejected purely hereditary titles to political
authority.

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Benedict de Spinoza (1632 – 77) was also a modernist as he conceived of peace and freedom
as conditions of one another. He considered liberal democracy as the preferred such political
arrangements which can secure human freedom as it guaranteed the freedom of thought,
expression and association.

In spite of these seminal contributions to the emergence of liberalism, Hobbes and Spinoza
are not considered as liberals, as they did not endorse the meliorist outlook of liberalism. For
Hobbes, civil society was always likely to fall back into barbarous state of nature. And, for
Spinoza, free man was a rarity, as most men were likely to be ruled by passion and illusion
rather than reason.

With the Whig ascendency following the Glorious Revolution in 1688, the debates during
the English Civil War and ultimately in the ideas contained in the Two Treatises on Civil
Government (1692) by John Locke (1632 – 1704) the central elements of the liberal outlook
were crystallized for the first time. It was a strong assertion of parliamentary government
under the rule of law against the monarchical absolutism, with an emphasis on freedom of
association and private property. These aspects of the English political experience (for
centuries) were theorized by Locke in his concept of ‘civil society’ of free men, equal under
the rule of law, bound together by no common purpose but sharing a respect for each
others’ rights.

Some of the basic features of classical liberalism as identified by Hallowell in Main Currents in
Modern Political Thought are as following:
1. Liberalism is a faith in spiritual equality of the individual and absolute value of the
human personality.
2. It is a belief in rationality and goodness of man.
3. It is a belief in the existence of certain inalienable rights of man like the rights to life,
liberty and property.
4. Liberalism is a consideration that the state is an artificial institution, which was created
with the sole objective of preserving and protecting the rights of the individuals.
5. It is an assumption that the relationship between the state and individual is contractual
and if a government fails to observe the terms of the contract and protect the rights of
the people, the people have the right to replace it.
6. Liberalism is a faith in the rule of law instead of the rule by whims.
7. It is a consideration that the state is a necessary evil and the best state is one which
performs the least. It has assigned negative functions to the state.
8. Liberalism is an affirmation of the freedom of individual in all aspects – political, social,
cultural, economic, moral and spiritual.
9. Liberalism believes that the individual is a rational person and when he pursues his own
interests; the interests of the society are automatically promoted. There is no
contradiction between the interests of the individual and the society.
10. Liberalism believes that complete freedom in economic sphere and non-interference by
the state in economic matters (laissez faire) is the best condition for the individual to
pursue his self-interest.

These principles are embodied in the Glorious Revolution of 1688, American Declaration of
Independence of 1776 and the Declaration of the Rights of Man of 1789, and are considered

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as the essence of classical liberal views on the nature of relationship between the individual
and the state authority.

Reformist or Positive Liberalism:

By mid 19th century, in the backdrop of the Industrial Revolution in England, the socio-
economic disparities between the propertied class and the labouring classes were on the rise.
As a consequence, different shades of socialist ideas emerged to voice the growing
resentments of a vast majority of the population, challenging the existing social fabric and its
constituting liberal ideas. In response to these challenges the necessity to reform some
aspects of the classical liberal ideas was felt. The change in liberal philosophy first became
visible in the writings of Jeremy Bentham (1748 – 1832) and James Mill (1772 – 1836). They
sought to reconcile the idea of individual liberty with the principle of general good or
happiness. From their utilitarian perspective they demanded that public policies should be
based on the principle of utility, i.e., greatest good for the greatest number. They had asked
for the end of all sorts of privileges. They favoured state initiated reforms in the fields of
education, law, parliament, municipality, poor relief and prison management etc., so that the
public grievances may be addressed more efficiently.

However, it was in the writings of John Stuart Mill (1806 – 1873), that positive liberalism
assumed more concrete shape. Though J.S. Mill was an ardent champion of the individual
liberty, yet he was in favour of increasing the functions of the state for the promotion of the
welfare of the society.

In his On Liberty (1859) J.S. Mill wrote: “... the sole end for which mankind are warranted,
individually or collectively, in interfering with the liberty of action of any of their member is
self-protection. That the only purpose for which power can be rightfully exercised over any
member of a civilised community, against his will, is to prevent harm to others.... Over
himself, over his own body and mind, the individual is sovereign.”

So Mill was ready to accept state interference into individual’s rights only in those aspects
whereby the social welfare for a peaceful and harmonious life could be promoted. At the
same time, in his other works like On Representative Government (1861) and Principles of Political
Economy (1880) he pleaded for state initiatives in the spheres of compulsory education for
children, liberating individuals from contracts like marriage and slavery, controlling
monopoly in business, checking exploitation of workers, regulating working hours and
conditions, fixing minimum wages and compensation in case of injury, maintenance of
public wealth, etc. He vested these functions only to a representative government elected
periodically on the basis of proportional representation method.

Thomas Hill Green (1836 – 1882) in his Lectures on the Principles of Political Obedience (1882)
pleaded for direct intervention by the state to eradicate three gigantic social evils – ignorance,
pauperism and addiction to liquor. He insisted that the state should not only remain busy in
dealing with conventional functions like maintaining law and order or preventing external
invasion, but instead it should “… remove external hindrances to the voluntary performance
of good acts.” Green sought to turn individualism into a morally sound and socially
committed ideal. According to Green the state has the right to interfere or control an

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individual’s behaviour only to remove the obstacles to his moral development or to restrain
his animal impulses that tend to act against the common good of society.

L.T. Hobhouse (1864 – 1929) in his Liberalism (1911) favoured harmonious development of
all aspects of the individual culminating into his comprehensive elevation. He said, “The
heart of liberalism is the understanding that progress is not a matter of mechanical
contrivance, but of the liberation of living spiritual energy.” He was against any arbitrary
government and he demanded “no taxation without representation”, liberation form foreign
rule and autonomy at various levels within the country.

R.M. MacIver asserted that the essential functions of a modern state include the
establishment of areas and frontiers of political authority and control over import and
export, transportation, communications, acting as guarantor to contracts, currency and
marriages, planning for rural and urban development, promotion of primary healthcare and
education system etc. So a socialist overtone is clearly visible all through MacIver’s views on
state.

Harold J. Laski, under the influence of the socialist ideas, had examined the questions of
individual liberty and state-interference and emphasized that the state was an institution for
securing general welfare for the largest possible number.

The other important contributors to the reformist liberal ideas Sydney Webb, Beatrice
Webb, Lindsay, Ernest Barker, Cole, the liberal welfarists like J.M. Keynes and most notably,
John Rawls. Some of the major aspects of the reformist liberal ideas are as following:

1. Reformist liberalism treats the state as a positive instrument for the promotion of general
welfare of the society.
2. Reformist liberalism does not favour curtailment of state functions. Rather, it prefers the
participation of the state in socio-economic, political, cultural and other activities in the
general interest of the individual.
3. It considers the state as a moral institution capable of promoting moral as well as
intellectual faculties of the citizen.
4. Reformist liberalism considers that the rights and liberties of the individual have to be
considered in the social context and the state has legal authority to impose restraints on
them if they obstruct the welfare of the society.
5. Reformist liberalism favours regulation and control of the economy in the larger interest
of the society.
6. It prefers state-sponsored reforms in the socio-economic structure.
7. Reformist liberalism welcomes state initiatives to eradicate poverty, hunger, disease, and
to improve the standard of living for the society at large.
8. Reformist liberalism expects the state to establish unity and order in the society, to
safeguard and promote the rights and liberties of the people, to create healthy
environment for moral and intellectual development of the people and to create
adequate conditions conducive to the proper development of human personality and
social welfare.

Neo-liberalism:

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During the inter-War period there was a steady rise in totalitarian regimes in different parts
of the world. The Communist rule in the USSR, the Fascist government in Italy and the Nazi
regime in Germany posed considerable threats to individual liberty. Even in so called liberal
countries in West Europe and the US, there was a growing tendency of state activism,
particularly during the Great Depression of 1930s and in the two World Wars. In the post-
World War II era in the name of economic reconstruction the Labour government in the
UK initiated the Beveridge Plan and the US President Roosevelt introduced the
‘managerialist’ policy of the New Deal. Undoubtedly, these were major state interventions
into the economic sphere. The relative success of war time economic planning convinced
most opinion leaders under the influence of economists like J.M. Keynes that the same
techniques could and should be used to promote full employment in a context of rapid
economic growth. But these increased state activities faced strong criticisms from a section
of the liberal thinkers who sought to revive the classical liberal idea of ‘minimalist state’ to
resist undue state interventions and protect individual liberty.

The pioneers of this critical line of thinking were the members of the Austrian School of
Economics like Carl Manger and F. Von Wieser and Lionel Robbins of the London School
of Economics. They were followed by thinkers like F.A. Hayek, Karl Popper, J.L. Talmon,
Isaiah Berlin, Robert Nozick, Milton Friedman of the Chicago School, James Buchanon of
the Public Choice School.

Some of the major features of the neo-liberal ideas of state are:

1. Neo-liberalism seeks to save the mankind from the tyranny of totalitarian political
systems.
2. Neo-liberalism lays more importance on the personality of the individual and his social
groups than the authority of the state.
3. Neo-liberalism is generally against the state and it treats the state as little more than a
federation of groups, a union of guilds, or a community of communities, which
coordinates the activities of these groups and adjusts their conflicting claims.
4. Neo-liberalism upholds those institutional policies that protect and foster both free
expression and confidence in freedom of the individual.
5. While emphasizing the equality of opportunity for all, neo-liberalism never compromises
with the liberty and rational choice of human beings.

Critical evaluation:

Liberalism has been criticized on various grounds. Some of the major points raised against
liberalism are as following:
1. As a political ideology liberalism is highly flexible, inconsistent and has no definite
programme acceptable to all.
2. Liberalism is essentially the political philosophy of the bourgeois class as it protects
their class interest at the cost of the welfare of all, and seeks to preserve the status
quo by opposing any initiative for radical change.
3. Classical liberalism paved the way for anarchy, again positive liberalism compromised
with individual’s liberty in the name of state-run welfare programmes.
4. According to the Marxists, no fundamental change in a society can be brought
through peaceful means as suggested by the liberals.

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 5. Liberalism is a deceptive theory as it strengthens the hands of a bourgeois state with
an apprehension of a false threat on individual liberty.
In spite of all these criticisms liberalism remains the most acceptable political ideology world
over even in the 21st century, more than four hundred years since its inception in England.