Essentials of Political Ideas

Liberalism

PREVIEW

The term ‘liberal’ has been in use since the fourteenth century but has had a wide variety of meanings. The Latin liber referred to a class of free men; in other words, men who were neither serfs nor slaves. It has meant generous, as in ‘liberal’ helpings of food and drink; or, in reference to social attitudes, it has implied openness or open-mindedness. It also came to be associated increasingly with the ideas of freedom and choice. The term ‘liberalism’, to denote a political allegiance, made its appearance much later: it was not used until the early part of the nineteenth century, being first employed in Spain in 1812. By the 1840s, the term was widely recognised throughout Europe as a reference to a distinctive set of political ideas. However, it was taken up more slowly in the UK: though the Whigs started to call themselves Liberals during the 1830s, the first distinctly Liberal government was not formed until Gladstone took office in 1868.

The central theme of liberal ideology is a commitment to the individual and the desire to construct a society in which people can satisfy their interests and achieve fulfilment. Liberals believe that human beings are, first and foremost, individuals, endowed with reason. This implies that each individual should enjoy the maximum possible freedom consistent with a like freedom for all. However, although individuals are entitled to equal legal and political rights, they should be rewarded in line with their talents and their willingness to work. Liberal societies are organised politically around the twin principles of constitutionalism and consent, designed to protect citizens from the danger of government tyranny. Nevertheless, there are significant differences between classical liberalism and modern liberalism. Classical liberalism is characterised by a belief in a ‘minimal’ state, whose function is limited to the maintenance of domestic order and personal security. Modern liberalism, in contrast, accepts that the state should help people to help themselves.

CONTENTS

•Historical overview

•Core ideas and principles

–Classical liberalism

–Modern liberalism

HISTORICAL OVERVIEW

As a systematic political creed, liberalism may not have existed before the nineteenth century, but it was based on ideas and theories that had developed during the previous 300 years. Liberalism as a developed ideology was a product of the breakdown of feudalism in Europe, and the growth, in its place, of a market or capitalist society. In many respects, liberalism reflected the aspirations of the rising middle classes, whose interests conflicted with the established power of absolute monarchs and the landed aristocracy. Liberal ideas were radical: they sought fundamental reform and even, at times, revolutionary change. The English Revolution of the seventeenth century, and the American Revolution of 1776 and French Revolution of 1789 each embodied elements that were distinctively liberal, even though the word ‘liberal’ was not at the time used in a political sense. Liberals challenged the absolute power of the monarchy, supposedly based on the doctrine of the ‘divine right of kings’. In place of absolutism, they advocated constitutional and, later, representative government. Liberals criticised the political and economic privileges of the landed aristocracy and the unfairness of a feudal system in which social position was determined by the ‘accident of birth’. They also supported the movement towards freedom of conscience in religion and questioned the authority of the established church.

The nineteenth century was in many ways the liberal century. As industrialisation spread throughout western countries, liberal ideas triumphed. Liberals advocated an industrialised and market economic order ‘free’ from government interference, in which businesses would be allowed to pursue profit and states encouraged to trade freely with one another. Such a system of industrial capitalism developed first in the UK, from the mid-eighteenth century onwards, and subsequently spread to North America and throughout Europe, initially into western Europe and then, more gradually, into eastern Europe. From the twentieth century onwards industrial capitalism exerted a powerful appeal for developing states in Africa, Asia and Latin America, especially when social and political development was defined in essentially western terms. However, developing-world states have sometimes been resistant to the attractions of liberal capitalism because their political cultures have emphasised community rather than the individual. In such cases, they have provided more fertile ground for the growth of socialism, nationalism or religious fundamentalism (see p. 135), rather than western liberalism.

Liberalism has undoubtedly been the most powerful ideological force shaping the western political tradition. Nevertheless, historical developments since the nineteenth century have clearly influenced the nature and substance of liberal ideology. The character of liberalism changed as the ‘rising middle classes’ succeeded in establishing their economic and political dominance. The radical, even revolutionary, edge of liberalism faded with each liberal success. Liberalism thus became increasingly conservative, standing less for change and reform, and more for the maintenance of existing – largely liberal – institutions. Liberal ideas, too, could not stand still. From the late nineteenth century onwards, the progress of industrialisation led liberals to question, and in some ways to revise, the ideas of early liberalism. Whereas early or classical liberalism had been defined by the desire to minimise government interference in the lives of its citizens, modern liberalism came to be associated with welfare provision and economic management. As a result, some commentators have argued that liberalism is an incoherent ideology, embracing contradictory beliefs, notably about the desirable role of the state.

Feudalism: A system of agrarian-based production that is characterised by fixed social hierarchies and a rigid pattern of obligations.

Divine right: The doctrine that earthly rulers are chosen by God and thus wield unchallengeable authority; divine right is a defence for monarchical absolutism.

Absolutism: A form of government in which political power is concentrated in the hands of a single individual or small group, in particular, an absolute monarchy.

Government: The machinery through which collective decisions are made on behalf of the state, usually comprising a legislature, an executive and a judiciary.

Classical liberalism: A tradition within liberalism that seeks to maximise the realm of unconstrained individual action, typically by establishing a minimal state and a reliance on market economics.

Modern liberalism: A tradition within liberalism that provides (in contrast to classical liberalism) a qualified endorsement for social and economic intervention as a means of promoting personal development.

State: A political association that establishes sovereign jurisdiction over a defined territory and typically possesses a monopoly of the means of armed conflict.

CORE IDEAS AND PRINCIPLES

HUMAN NATURE

The central idea of liberalism is that human beings should be understood as individuals. Individualism (see below) is thus the basic principle of liberalism. Just about every aspect of liberal thinking can be traced back to assumptions about the primacy of the individual. But what does it mean to view human beings as ‘individuals’? Thinking of people as individuals has two contrasting implications. The first is that each human being is a separate and unique entity, defined by inner qualities and attributes that are specific to themselves. To be an individual, in this sense, is to be different. This implication of individualism is captured in the idea of individuality. The second implication is that, as individuals, each of us shares the same status. Our identity is not defined by social categories such as gender, social class, ethnicity, religion, nationality and so on, but by the fact that we are individuals. To be an individual, in this sense, is to be the same. Liberals, in this light, are often portrayed as being ‘difference-blind’.

Individuality: Self-fulfilment achieved through the realisation of an individual’s distinctive or unique identity qualities; what distinguishes one person from all others.

Perhaps the clearest expression of ethical individualism lies in the doctrine of rights, the belief that the basic condition for justice is that rights are upheld and respected. For liberals, rights belong strictly to the individual, ideas such as group rights or minority rights being looked on with much suspicion. Human beings should therefore be treated as ‘rights-holders’. In the form of natural rights or, in their modern guise, human rights, these rights reflect the fact that human beings are ‘born’ equal in the sense that each individual is of equal moral worth, an idea sometimes referred to as ‘foundational equality’. Such thinking not only provided inspiration for the writing of documents such as the US Declaration of Independence (1776), the French Declaration of the Rights of Man and the Citizen (1789) and, more recently, the UN’s Universal Declaration of Human Rights, but it has also meant that liberalism has provided fertile ground for the growth of feminist thinking. Liberal feminism (discussed in greater detail in Chapter 7) has been articulated by thinkers ranging from Mary Wollstonecraft (see below) to Betty Friedan (see p. 14).

Rights: Entitlements to act or be treated in a particular way; rights may have a moral or legal character.

Justice: A moral standard of fairness and impartiality; social justice is the idea of a morally justifiable distribution of wealth and rewards in society.

Natural rights: God-given rights that are fundamental to human beings and are therefore inalienable (they cannot be taken away, as discussed later in the chapter).

Human rights: Rights to which people are entitled by virtue of being human; human rights are universal, fundamental and absolute.

Key concept … INDIVIDUALISM

Individualism is the belief in the supreme importance of the individual over any social group or collective body. In the form of methodological individualism, this suggests that the individual is central to any political theory or social explanation – all statements about society should be made in terms of the individuals who compose them. Ethical individualism, on the other hand, implies that society should be constructed so as to benefit the individual, giving moral priority to individual rights, needs or interests. Classical liberals and the New Right subscribe to egoistical individualism, which places emphasis on self-interestedness and self-reliance. Modern liberals, in contrast, have advanced a developmental form of individualism that prioritises human flourishing over the quest for interest satisfaction.

A further component of the liberal view of human nature is the belief that humans are reason-guided creatures, capable of personal self-development and of bringing about wider social and political development. In this sense, liberalism is, and remains, very much part of the Enlightenment project. The central theme of the Enlightenment was the desire to release humankind from its bondage to superstition and ignorance, and unleash an ‘age of reason’. Enlightenment rationalism (see below) has influenced liberalism in a number of ways. For example, it strengthened its faith in both the individual and freedom. To the extent that human beings are rational, thinking creatures, they are capable of defining and pursuing their own best interests. By no means do liberals believe that individuals are infallible in this respect, but the belief in reason builds into liberalism a strong bias against paternalism (see p. 47). A faith in reason, moreover, inclines liberals to believe that conflict can generally be resolved by debate, discussion and argument, greatly reducing the need for force and bloodshed.

Human nature: The essential and innate character of all human beings: what the individual owes to nature rather than to society.

Enlightenment: An intellectual movement that reached its height in the eighteenth century which challenged traditional beliefs in religion, politics and learning in general in the name of reason and progress.

Freedom (or liberty): The ability to think and act as one wishes, a capacity that can be associated with the individual, a social group or a nation.

KEY FIGURE

Mary Wollstonecraft (1759–97)

A British philosopher and novelist, Wollstonecraft developed the first systematic feminist critique some 50 years before the emergence of the female suffrage movement. Her A Vindication of the Rights of Men (1790) was a response to Burke’s (see p. 40) views on the French Revolution. Wollstonecraft’s most famous work, A Vindication of the Rights of Women (1792), advanced an agenda for women’s emancipation based on the assertion that, as human beings, women are rational creatures. As such, they are entitled to the same rights of liberty and self-determination as male rational creatures claim for themselves. Wollstonecraft placed a particular emphasis on the capacity of education to develop women’s talents and character. Wollstonecraft’s writings are widely seen to have established the basis for the tradition of liberal feminism, characterised as it is by a commitment to formal equality; that is, an equal distribution of both legal and political rights, and civil liberties, including the right to a career. For more on Wollstonecraft, see pp. 138 and 147.

Key concept … RATIONALISM

Rationalism is the belief that the world has a rational structure, and that this can be disclosed through the exercise of human reason and critical enquiry. As a philosophical theory, rationalism is the belief that knowledge flows from reason rather than experience, and thus contrasts with empiricism. As a general principle, however, rationalism places a heavy emphasis on the capacity of human beings to understand and explain their world, and to find solutions to problems. While rationalism does not dictate the ends of human conduct, it certainly suggests how these ends should be pursued. It is associated with an emphasis on principle and reason-governed behaviour, as opposed to a reliance on custom or tradition, or on non-rational drives and impulses.

SOCIETY

Liberals subscribe to an individualist conception of society. They assume that society is a human artefact, constructed by individuals to serve their interests for purposes. In its extreme form, such a view amounts to atomism; indeed, it can lead to the belief that ‘society’ itself does not exist, but is merely a collection of self-sufficient individuals. Such radical individualism is based on the assumption that the individual is egoistical, essentially self-seeking and largely self-reliant. C. B. Macpherson (1973) characterised early liberalism as ‘possessive individualism’, in that it regarded the individual as ‘the proprietor of his own person capabilities, owing nothing to society for them’. In contrast, later liberals have held a more optimistic view of human nature, and have been prepared to believe that egoism is tempered by a sense of social responsibility, especially a responsibility for those who are unable to look after themselves. Whether egoism is unrestrained or is qualified by a sense of social responsibility, liberals are united in their desire to create a society in which each person is capable of developing and flourishing to the fullness of his or her potential.

A further aspect of the liberal conception of society is that society is seen to be firmly distinct from the state. In this sense, society can be understood as ‘civil society’. From the liberal perspective, society is a ‘realm of freedom’, by comparison with the state, which is a ‘realm of coercion’. Freedom is therefore the supreme social value of liberalism. Liberals, nevertheless, do not claim that individuals have an absolute entitlement to freedom. If liberty is unlimited it can degenerate into the abuse of others. In On Liberty ([1859] 1972), John Stuart Mill (see p. 27) argued 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’. Mill’s position is libertarian in that it accepts only the most minimal restrictions on individual freedom, and then only in order to prevent ‘harm to others’. This idea is sometimes described as the ‘harm principle’. An alternative way in which liberals have highlighted legitimate constraints on freedom is through the notion of an equal right to liberty. This has been expressed by John Rawls (see p. 30) in the principle that everyone is entitled to the widest possible liberty consistent with a like liberty for all.

Atomism: A belief that society is made up of a collection of self-interested and largely self-sufficient individuals, or atoms, rather than social groups.

Egoism: A concern for one’s own welfare or interests, or the theory that the pursuit of self-interest is an ethical priority.

Civil society: A sphere of autonomous groups and associations, such as businesses, pressure groups, clubs, families and so on.

KEY FIGURE

Betty Friedan (1921–2006)

A US feminist political activist and founder of the National Organization for Women (NOW), Friedan was a key exponent of the liberal approach to women’s liberation. Her The Feminine Mystique (1963) is often credited with having stimulated the emergence of second-wave feminism. In it, she examined ‘the problem with no name’: the sense of frustration and despair afflicting suburban American women. Defining women’s liberation largely in terms of the establishment of a formally equal status with men in society and the widening of opportunities for women in education and careers in particular, Friedan argued that the root cause of female subordination was the embedded image of women as essentially feminine, and not human, beings. Her chief object of attack was therefore the ‘feminine mystique’, an image that encourages women to define themselves in relation to their husbands, home and children, and so discourages them from competing with men in the public realm. For more on Friedan, see pp. 139 and 146–7.

PERSPECTIVES ON

FREEDOM

LIBERALS give priority to freedom as the supreme individualist value. While classical liberals support negative freedom, understood as the absence of constraints – or freedom of choice – modern liberals advocate positive freedom in the sense of personal development and human flourishing.

CONSERVATIVES have traditionally endorsed a weak view of freedom as the willing recognition of duties and responsibilities, negative freedom posing a threat to the fabric of society. The New Right, however, endorses negative freedom in the economic sphere, freedom of choice in the marketplace.

SOCIALISTS have generally understood freedom in positive terms to refer to self-fulfilment achieved through either free creative labour or cooperative social interaction. Social democrats have drawn close to modern liberalism in treating freedom as the realisation of individual potential.

ANARCHISTS regard freedom as an absolute value, believing it to be irreconcilable with any form of political authority. Freedom is understood to mean the achievement of personal autonomy, not merely being ‘left alone’ but being rationally self-willed and self-directed.

NATIONALISTS view freedom as national self-determination, the right of a nation to shape its own destiny by achieving independence from foreign control and establishing itself as a sovereign entity through constructing a nation-state.

FEMINISTS have understood freedom both in terms of women’s emancipation, focusing on the acquisition of legal and political rights, and in terms of women’s liberation, focusing on the overthrow of the patriarch, possibly also implying sexual fulfilment as subjects, not as objects.

ECOLOGISTS, particularly deep ecologists, treat freedom as the achievement of oneness, self-realisation through the absorption of the personal ego into the ecosphere or universe. In contrast with political freedom, this is sometimes seen as ‘inner’ freedom, freedom as self-actualisation.

However, although liberals have agreed that individuals should enjoy the greatest possible freedom, they have not always agreed about what it means for an individual to be ‘free’. In ‘Two Concepts of Liberty’ ([1958] 1969), Isaiah Berlin (see p. 196) distinguished between a ‘negative’ theory of liberty and a ‘positive’ one. Early or classical liberals have believed in negative freedom, in that freedom consists in each person being left alone, free from interference and able to act in whatever way he or she may choose. This conception of freedom is ‘negative’ in that it is based on the absence of external restrictions or constraints on the individual. Modern liberals, on the other hand, have been attracted to a more ‘positive’ conception of liberty, positive freedom, defined by Berlin as the ability to be one’s own master; to be autonomous. Self-mastery requires that the individual is able to develop skills and talents, broaden his or her understanding, and gain fulfilment. This led to an emphasis on the capacity of human beings to develop and ultimately achieve self-realisation. These rival conceptions of liberty have not merely stimulated academic debate within liberalism, but have also encouraged liberals to hold very different views about the desirable relationship between the individual and the state.

Negative freedom: The absence of external restrictions or constraints on the individual, allowing freedom of choice.

Positive freedom: Self-mastery or self-realisation; the achievement of autonomy or the development of human capacities.

Equality of opportunity: Equality defined in terms of life chances or opportunities, allowing people to rise or fall but only on the basis of personal differences.

Meritocracy: Literally, rule by those with merit, merit being intelligence plus effort; a society in which social position is determined exclusively by ability and hard work.

Social contract: A (hypothetical) agreement among individuals through which they form a state in order to escape from the disorder and chaos of the ‘state of nature’.

State of nature: A pre-political society characterised by unrestrained freedom and the absence of established authority.

Finally, liberals have a distinctive view of the structure of society in terms of the distribution of wealth and other rewards. This is based on a commitment to equality of opportunity. For liberals, each and every individual should have the same chance to rise or fall in society. The game of life, in that sense, must be played on a ‘level playing field’. This is not to say that there should be equality of outcome or reward, or that living conditions and social circumstances should be the same for all. Liberals believe social equality to be undesirable because people are not born the same. They possess different talents and skills, and some are prepared to work much harder than others. Liberals believe that it is right to reward merit (ability and the willingness to work); indeed, they think it is essential to do so if people are to have an incentive to realise their potential and develop the talents with which they were born. Equality, for a liberal, means that individuals should have an equal opportunity to develop their unequal skills and abilities. This leads to a belief in meritocracy. However, whereas classical liberals have endorsed strict meritocracy, on grounds of both fairness (some people deserve to be better off than others) and incentives, modern liberals are inclined to believe that equality of opportunity can only be ensured if material inequalities are relatively narrow.

THE STATE

Liberal thinking about politics focuses primarily on the nature and role of the state and the organisation of government power. Such thinking is underpinned by the core assumption that the liberty of one person is always in danger of becoming a licence to abuse another. Each person can be said to be both a threat to, and under threat from, every other member of society. Our liberty therefore requires that the other members of society are restrained from encroaching on our freedom and, in turn, their liberty requires that they are safeguarded from us. This protection is provided by a sovereign state, capable of restraining all individuals and groups within society. The classical form of this argument is found in the social contract theories that were developed in the seventeenth century by thinkers such as Thomas Hobbes (see p. 36) and John Locke (see p. 17). Hobbes and Locke constructed a picture of what life had been like before government was formed, in a stateless society or what they called a ‘state of nature’. As individuals are selfish, greedy and power-seeking, the state of nature would be characterised by an unending civil war of each against all, in which, in Hobbes’ words, human life would be ‘solitary, poor, nasty, brutish and short’. As a result, they argued, rational individuals would enter into an agreement, or ‘social contract’, to establish a sovereign government, without which orderly and stable life would be impossible.

KEY FIGURE

John Locke (1632–1704)

Locke was an English philosopher and politician whose political views were developed against the backdrop of the English Revolution, and are often seen as providing justification for the ‘Glorious Revolution’ of 1688, which ended absolutist rule in Britain by establishing a constitutional monarchy. Locke was a key thinker of early liberalism, placing a particular emphasis on the idea of ‘natural’ or God-given rights, identified as the rights to life, liberty and property. On this basis, he argued that no one can become subject to the authority of anyone else, or, for that matter, any law, save by his consent, thereby embracing the principle of limited government. The foundation of such thinking was social contract theory, in which the state and government are seen to arise from a theoretical voluntary agreement made by all citizens. Locke’s most important political work is Two Treatises of Government (1690). For more on Locke, see pp. 16, 18, 21–2, 97 and 106.

The social contract argument embodies two important liberal attitudes towards the state in particular, and political authority in general. First, it emphasises that political authority comes, in a sense, ‘from below’; it is fashioned by citizens themselves and exists to serve their needs and interests. This implies that citizens do not have an absolute obligation to obey all laws or accept any form of government. If government is based on a contract, made by the governed, government itself may break the terms of this contract. When the legitimacy of government evaporates, the people have the right of rebellion. Second, in social contract theory, the state is not created by a privileged elite, wishing to exploit the masses, but by an agreement among all the people. The state therefore embodies the interests of all its citizens and acts as a neutral referee when individuals or groups come into conflict with one another. The state is thus devoid of bias towards particular groups or interests

However, although liberals are convinced of the need for government, they are also acutely aware of the dangers that government embodies. In their view, all governments are potential tyrannies against the individual. This position reflects a distinctively liberal fear of power. As human beings are self-seeking creatures, if they have power – the ability to influence the behaviour of others – they will inevitability seek to use it for their own benefit and at the expense of others. Simply put, the liberal position is that egoism plus power equals corruption. This was expressed in Lord Acton’s famous warning: ‘Power tends to corrupt, and absolute power corrupts absolutely,’ and in his conclusion: ‘Great men are almost always bad men’ (Acton, 1956). Liberals therefore support the principle of limited government, achieved through constitutionalism and democracy.

Constitutionalism can take two forms. In the first place, the powers of government bodies and politicians can be limited by the introduction of external and, usually, legal constraints. The most important of these is a so-called written constitution, which codifies the major powers and responsibilities of government institutions within a single document. Second, constitutionalism can be established by the introduction of internal constraints which disperse political power among a number of institutions and create a network of ‘checks and balances’. As the French political philosopher Montesquieu (1689–1775) put it, ‘power should be a check to power’ (Montesquieu, [1748] 1969). All liberal political systems exhibit some measure of internal fragmentation, most particularly through the application of the doctrine of the separation of powers, proposed by Montesquieu himself.

Constitutionalism: The theory or practice of limiting government power through the use of external (legal) and internal (institutional) constraints.

Democracy: Rule by the people; democracy implies both popular participation and government in the public interest, and can take a wide variety of forms (see p. 19).

Written constitution: A single authoritative document that defines the duties, powers and functions of government institutions and so constitutes ‘higher’ law.

The liberal approaches to democracy have been characterised by ambivalence. This has been evident in the type of democracy they endorse – liberal democracy (see below) – which qualifies a ‘democratic’ emphasis on free, fair and competitive elections, based on universal suffrage, through ‘liberal’ stress on the need to guarantee civil liberty and ensure a healthy civil society. The central liberal concern about democracy is that popular rule ultimately boils down to the rule of the 51 per cent, a prospect that the French politician and social commentator Alexis de Tocqueville (1805–59) famously described as ‘the tyranny of the majority’. Individual liberty and minority rights can thus be crushed in the name of the people. By the twentieth century, however, most liberal thinkers had come to accept the broader benefits of democracy. The earliest liberal argument in favour of democracy was that voting rights protect citizens from the encroachment of government. John Locke thus developed a limited theory of democracy by arguing that the franchise should be extended to the propertied, who could then defend their natural rights against government. Such thinking was later revised to encompass all adult citizens, and not just the propertied few. Liberals have nevertheless also supported democracy on the more radical grounds that it promotes what J. S. Mill called the ‘highest and most harmonious development of human capacities’. In this view, participation in political life enables citizens to enhance their understanding, strengthen their sensibilities and achieve a higher level of personal development. (For a fuller account to the nature and types of democracy, see Chapter 2 of Essentials of UK Politics.)

Separation of powers: The principle that legislative, executive and judicial power should be separated through the construction of three independent branches of government.

Civil liberty: The private sphere of existence, belonging to the citizen, not to the state; freedom from government.

Civil society: A realm of autonomous associations and groups, formed by private citizens and enjoying independence from the government; civil society includes businesses, clubs, families and so on.

Key concept … LIBERAL DEMOCRACY

A liberal democracy is a political regime in which a ‘liberal’ commitment to limited government is blended with a ‘democratic’ belief in popular rule. Its key features are: (1) the right to rule being gained through success in regular and competitive elections based on universal adult suffrage; (2) constraints on government imposed by a constitution, institutional checks and balances, and protections for individual rights; and (3) a vigorous civil society including a private enterprise economy, independent trade unions and a free press. While liberals view liberal democracy as being universally applicable, on the grounds that it allows for the expression of the widest possible range of views and beliefs, critics regard it as the political expression of either western values or capitalist economic structures.

PERSPECTIVES ON ...

DEMOCRACY

LIBERALS understand democracy in individualist terms as consent expressed through the ballot box, democracy being equated with regular and competitive elections. While democracy constrains abuses of power, it must always be conducted within a constitutional framework to prevent majoritarian tyranny.

CONSERVATIVES endorse liberal-democratic rule but with qualifications about the need to protect property and traditional institutions from the untutored will of ‘the many’. The New Right, however, has linked electoral democracy to the problems of over-government and economic stagnation.

SOCIALISTS traditionally endorsed a form of radical democracy based on popular participation and the desire to bring economic life under public control, dismissing liberal democracy as simply capitalist democracy. Nevertheless, modern social democrats are now firmly committed to liberal-democratic structures.

ANARCHISTS endorse direct democracy and call for continuous popular participation and radical decentralisation. Electoral or representative democracy is merely a façade that attempts to conceal elite domination and reconcile the masses to their oppression.

ECOLOGISTS have often supported radical or participatory democracy. ‘Dark’ greens have developed a particular critique of electoral democracy that portrays it as a means of imposing the interests of the present generation of humans on (unenfranchised) later generations, other species and nature as a whole.

MULTICULTURALISTS commonly argue that the majoritarian bias in conventional forms of democracy denies minority groups and minority cultures a political voice.

THE ECONOMY

Liberal thinking on the economy largely derives from the work of figures such as the Scottish economist and philosopher Adam Smith (1723–90), and David Ricardo (1770–1823), the British political economist and politician. Smith’s The Wealth of Nations ([1776] 1976) was in many respects the first economics textbook. His ideas drew heavily on liberal and rationalist assumptions about human nature and made a powerful contribution to the debate about the desirable role of government within civil society. Smith wrote at a time of wide-ranging government restrictions on economic activity. Mercantilism, the dominant economic idea of the sixteenth and seventeenth centuries, had encouraged governments to intervene in economic life in an attempt to encourage the export of goods and restrict imports. Smith’s economic writings were designed to attack mercantilism, arguing instead for the principle that the economy works best when it is left alone by government.

Smith thought of the economy as a market, indeed as a series of inter-related markets. He believed that the market operates according to the wishes and decisions of free individuals. Freedom within the market means freedom of choice: the ability of businesses to choose what goods to make, the ability of workers to choose an employer, and the ability of consumers to choose what goods or services to buy. Relationships within such a market – between employers and employees, and between buyers and sellers – are thus voluntary and contractual, made by self-interested individuals for whom pleasure is equated with the acquisition and consumption of wealth. Economic theory therefore drew on utilitarianism (see p. 23) in constructing the idea of ‘economic man’, the notion that human beings are essentially egoistical and bent on material acquisition.

Mercantilism: A school of economic thought that emphasises the state’s role in managing international trade and delivering prosperity.

Market: A system of commercial exchange between buyers and sellers, controlled by impersonal economic forces: ‘market forces’.

However, liberalism encompasses two contrasting economic traditions. Classical liberals have viewed the market economy as a vast network of commercial relationships, in which both consumers and producers indicate their wishes through the price mechanism. The clear implication of this is that government is relieved of the need to regulate or plan economic activity; economic organisation can simply be left to the market itself. Indeed, if government interferes with economic life, it runs the risk of upsetting the delicate balance of the market. In this view, so long as the economy operates as a free market, efficiency and prosperity are guaranteed by the irresistible tendency of the market mechanism to draw resources to their most profitable use. Modern liberals, on the other hand, reject the idea of a self-regulating market economy, arguing instead that the economy should be regulated, or ‘managed’, by government. In this view, although it remains the ultimate source of economic dynamism, the market, if left to its own devices, is flawed, tending, as it does, towards short-termism, unemployment and inequality. This helps to explain the attraction of Keynesianism (see p. 31) to many modern liberals.

Free market: The principle or policy of unfettered market competition, free from government interference.

TYPES OF LIBERALISM

CLASSICAL LIBERALISM

Classical liberalism was the earliest liberal tradition. Classical liberal ideas developed during the transition from feudalism to capitalism, and reached their high point during the early industrialisation of the nineteenth century. As a result, classical liberalism has sometimes been called ‘nineteenth-century liberalism’. The cradle of classical liberalism was the UK, where the capitalist and industrial revolutions were the most advanced. Its ideas have always been more deeply rooted in Anglo-Saxon countries, particularly the UK and the USA, than in other parts of the world. However, classical liberalism is not merely a nineteenth-century form of liberalism, whose ideas are now only of historical interest. Its principles and theories, in fact, have had growing appeal from the second half of the twentieth century onwards. Though what is called ‘neoclassical liberalism’, or ‘neoliberalism’ (see p. 51), initially had the greatest impact in the UK and the USA, its influence has spread much more broadly, in large part fuelled by the advance of globalisation.

Classical liberal ideas have taken a variety of forms, but they have a number of common characteristics. Classical liberals:

subscribe to egoistical individualism. They view human beings as rationally self-interested creatures, with a pronounced capacity for self-reliance. Society is therefore seen as atomistic, composed of a collection of largely self-sufficient individuals, meaning that the characteristics of society can be traced back to the more fundamental features of human nature.

believe in negative freedom. The individual is free in so far as he or she is left alone, not interfered with or coerced by others. As stated earlier, freedom in this sense is the absence of external constraints on the individual.

regard the state as, in Thomas Paine’s words, a ‘necessary evil’. It is necessary in that, at the very least, it lays down the conditions for orderly existence; and it is evil in that it imposes a collective will on society, thereby limiting the freedom and responsibilities of the individual. Classical liberals thus believe in a minimal state, which acts, using Locke’s metaphor, as a ‘night watchman’. In this view, the state’s proper role is restricted to the maintenance of domestic order, the enforcement of contracts, and the protection of society against external attack.

have an essentially positive view of civil society. Civil society is not only regarded as a realm of choice, personal freedom and individual responsibility, but it is also seen to reflect the principle of balance or equilibrium. This is expressed most clearly in the classical liberal belief in a self-regulating market economy.

Classical liberalism nevertheless draws on a variety of doctrines and theories. The most important of these are:

natural rights

utilitarianism

economic liberalism

social Darwinism.

Natural rights

The natural rights theorists of the seventeenth and eighteenth centuries, such as John Locke in England and Thomas Jefferson in America, had a considerable influence on the development of liberal ideology. Modern political debate is littered with references to ‘rights’ and claims to possess ‘rights’. A right, most simply, is an entitlement to act or be treated in a particular way. Such entitlements may be either moral or legal in character. For Locke and Jefferson, rights are ‘natural’ in that they are invested in human beings by nature or God. Natural rights are now more commonly called ‘human rights’. They are, in Jefferson’s words, ‘inalienable’ because human beings are entitled to them by virtue of being human: they cannot, in that sense, be taken away. Natural rights are thus thought to establish the essential conditions for leading a truly human existence. For Locke, there were three such rights: ‘life, liberty and property’. Jefferson did not accept that property was a natural or God-given right, but rather, claimed it was one that had developed for human convenience. In the US Declaration of Independence he therefore described inalienable rights as those of ‘life, liberty and the pursuit of happiness’. The idea of natural or human rights has affected liberal thought in a number of ways. For example, the weight given to such rights distinguishes authoritarian thinkers such as Thomas Hobbes from early liberals such as John Locke. As explained earlier, both Hobbes and Locke believed that government was formed through a ‘social contract’. However, Hobbes ([1651] 1968) argued that only a strong government, preferably a monarchy, would be able to establish order and security in society. He was prepared to invest the king with sovereign or absolute power, rather than risk a descent into a ‘state of nature’. The citizen should therefore accept any form of government because even repressive government is better than no government at all. Locke, on the other hand, argued against arbitrary or unlimited government. Government is established in order to protect natural rights. When these are protected by the state, citizens should respect the government and obey the law. However, if government violates the rights of its citizens, they in turn have the right of rebellion. Locke thus approved of the English Revolution of the seventeenth century, and applauded the establishment of a constitutional monarchy in 1688.

For Locke, moreover, the contract between state and citizen is a specific and limited one: its purpose is to protect a set of defined natural rights. As a result, Locke believed in limited government. The legitimate role of government is limited to the protection of ‘life, liberty and property’. Therefore, the realm of government should not extend beyond its three ‘minimal’ functions:

maintaining public order and protecting property

providing defence against external attack

ensuring that contracts are enforced.

Other issues and responsibilities are properly the concern of private individuals. Thomas Jefferson expressed a similar sentiment a century later when he declared: ‘That government is best which governs least.’

Utilitarianism

Natural rights theories were not the only basis of early liberalism. An alternative and highly influential theory of human nature was put forward in the early nineteenth century by the utilitarian thinkers, notably Jeremy Bentham (1748–1832) and James Mill (1773–1836). Bentham regarded the idea of rights as ‘nonsense’ and called natural rights ‘nonsense on stilts’. In their place, he proposed what he believed to be the more scientific and objective idea that individuals are motivated by self-interest, and that these interests can be defined as the desire for pleasure, or happiness, and the wish to avoid pain, both calculated in terms of utility. The principle of utility is, furthermore, a moral principle in that it suggests that the ‘rightness’ of an action, policy or institution can be established by its tendency to promote happiness. Just as each individual can calculate what is morally good by the quantity of pleasure an action will produce, so the principle of ‘the greatest happiness for the greatest number’ can be used to establish which policies or institutions will benefit society at large.

Utility: Use-value; in economics, ‘utility’ describes the satisfaction that is gained from the consumption of material goods and services.

Utilitarian ideas have had a considerable impact on classical liberalism. In particular, they have provided a moral philosophy that explains how and why individuals act as they do. The utilitarian conception of human beings as rationally self-interested creatures was adopted by later generations of liberal thinkers. Moreover, each individual is thought to be able to perceive his or her own best interests. This cannot be done on their behalf by some paternal authority, such as the state. Bentham argued that individuals act so as to gain pleasure or happiness in whatever way they choose. No one else can judge the quality or degree of their happiness. If each individual is the sole judge of what will give him or her pleasure, then the individual alone can determine what is morally right. On the other hand, utilitarian ideas can also have illiberal implications. Bentham held that the principle of utility could be applied to society at large and not merely to individual human behaviour. Institutions and legislation can be judged by the yardstick of ‘the greatest happiness’. However, this formula has majoritarian implications, because it uses the happiness of ‘the greatest number’ as a standard of what is morally correct, and therefore allows that the interests of the majority outweigh those of the minority or the rights of the individual.

Economic liberalism

The development of classical political economy in the late eighteenth and early nineteenth centuries was powerfully shaped by liberal ideas and assumptions, so much so that it is often portrayed as economic liberalism. The attraction of classical economic thinking was that, while each individual is materially self-interested, the economy itself is thought to operate according to a set of impersonal pressures – market forces – that tend naturally to promote economic prosperity and well-being. For instance, no single producer can set the price of a commodity – prices are set by the market, by the number of goods offered for sale and the number of consumers who are willing to buy. These are the forces of supply and demand. The market is a self-regulating mechanism; it needs no guidance from outside. The market should be ‘free’ from government interference because it is managed by what Adam Smith referred to as an ‘invisible hand’. This idea of a self-regulating market reflects the liberal belief in a naturally existing harmony among the conflicting interests within society. Smith ([1776] 1976) expressed the economic version of this idea as follows:

Key concept … UTILITARIANISM

Utilitarianism is a moral philosophy that was developed by Jeremy Bentham and James Mill. It equates ‘good’ with pleasure or happiness, and ‘evil’ with pain or unhappiness. Individuals are therefore assumed to act so as to maximise pleasure and minimise pain, these being calculated in terms of utility or use-value, usually seen as satisfaction derived from material consumption. The ‘greatest happiness’ principle can be used to evaluate laws, institutions and even political systems. Act utilitarianism judges an act to be right if it produces at least as much pleasure-over-pain as any other act. Rule utilitarianism judges an act to be right if it conforms to a rule which, if generally followed, produces good consequences.

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 interests.

Free-market ideas became economic orthodoxy in the UK and the USA during the nineteenth century. The high point of free-market beliefs was reached with the doctrine of laissez-faire. This suggests that the state should have no economic role, but should simply leave the economy alone and allow businesspeople to act however they please. Laissez-faire ideas opposed all forms of factory legislation, including restrictions on the employment of children, limits to the number of hours worked, and any regulation of working conditions. Such economic individualism is usually based on a belief that the unrestrained pursuit of profit will ultimately lead to general benefit. Laissez-faire theories remained strong in the UK throughout much of the nineteenth century, and in the USA they were not seriously challenged until the 1930s.

However, since the late twentieth century, faith in the free market has been revived through the rise of neoliberalism. Neoliberalism was counter-revolutionary: it aimed to halt, and if possible reverse, the trend towards ‘big’ government that had dominated most western countries, especially since 1945. Although it had its greatest initial impact in the two countries in which free-market economic principles had been most firmly established in the nineteenth century, the USA and the UK, from the 1980s onwards neoliberalism exerted a wider influence. At the heart of neoliberalism’s assault on the ‘dead hand’ of government lies a belief in market fundamentalism. In that light, neoliberalism can be seen to go beyond classical economic theory. For instance, while Adam Smith is rightfully viewed as the father of market economics, he also recognised the limitations of the market and certainly did not subscribe to a crude utility-maximising model of human nature. Thus, although some treat neoliberalism as a form of revived classical liberalism, others see it is a form of economic libertarianism (see p. 48), which perhaps has more in common with the anarchist tradition, and in particular anarcho-capitalism (discussed in Chapter 5), than it does with the liberal tradition. The matter is further complicated by the fact that in the case of both ‘Reaganism’ in the USA and ‘Thatcherism’ in the UK, neoliberalism formed part of a larger, New Right ideological project that sought to foster laissez-faire economics with an essentially conservative social philosophy. This project is examined in more detail in Chapter 3.

Social Darwinism

One of the distinctive features of classical liberalism is its attitude to poverty and social equality. An individualistic political creed will tend to explain social circumstances in terms of the talents and hard work of each individual human being. Individuals make what they want, and what they can, of their own lives. Those with ability and a willingness to work will prosper, while the incompetent or the lazy will not. This idea was memorably expressed in the title of Samuel Smiles’ book Self-Help ([1859] 1986), which begins by reiterating

Laissez-faire: Literally, ‘leave to do’; the doctrine that economic activity should be entirely free from government interference.

Market fundamentalism: An absolute faith in the market, reflecting the belief that the market mechanism offers solutions to all economic and social problems.

the well-tried maxim that ‘Heaven helps those who help themselves’. Such ideas of individual responsibility were widely employed by supporters of laissez-faire in the nineteenth century. For instance, the UK economist and politician Richard Cobden (1804–65) advocated an improvement of the conditions of the working classes, but argued that it should come about through ‘their own efforts and self-reliance, rather than from law’. He advised them to ‘look not to Parliament, look only to yourselves’.

Ideas of individual self-reliance reached their boldest expression in Herbert Spencer’s The Man versus the State ([1884] 1940). Spencer (1820–1904), a UK philosopher and social theorist, developed a vigorous defence of the doctrine of laissez-faire, drawing on ideas that the UK scientist Charles Darwin (1809–82) had developed in On the Origin of Species ([1859] 1972). Darwin developed a theory of evolution that set out to explain the diversity of species found on Earth. He proposed that each species undergoes a series of random physical and mental changes, or mutations. Some of these changes enable a species to survive and prosper: they are pro-survival. Other mutations are less favourable and make survival more difficult or even impossible. A process of ‘natural selection’ therefore decides which species are fitted by nature to survive, and which are not. By the end of the nineteenth century, these ideas had extended beyond biology and were increasingly affecting social and political theory.

Spencer, for example, used the theory of natural selection to develop the social principle of ‘the survival of the fittest’. People who are best suited by nature to survive, rise to the top, while the less fit fall to the bottom. Inequalities of wealth, social position and political power are therefore natural and inevitable, and no attempt should be made by government to interfere with them. Spencer’s US disciple William Sumner (1840–1910) stated this principle boldly in 1884, when he asserted that ‘the drunkard in the gutter is just where he ought to be’.

MODERN LIBERALISM

Modern liberalism is sometimes described as ‘twentieth-century liberalism’. Just as the development of classical liberalism was closely linked to the emergence of industrial capitalism in the nineteenth century, so modern liberal ideas were related to the further development of industrialisation. Industrialisation had brought about a massive expansion of wealth for some, but was also accompanied by the spread of slums, poverty, ignorance and disease. Moreover, social inequality became more difficult to ignore as a growing industrial working class was seen to be disadvantaged by low pay, unemployment and degrading living and working conditions. These developments had an impact on UK liberalism from the late nineteenth century onwards, but in other countries they did not take effect until much later; for example, US liberalism was not affected until the depression of the 1930s. In these changing historical circumstances, liberals found it progressively more difficult to maintain the belief that the arrival of industrial capitalism had brought with it general prosperity and liberty for all. Consequently, many came to revise the early liberal expectation that the unrestrained pursuit of self-interest produced a socially just society. As the idea of economic individualism came increasingly under attack, liberals rethought their attitude towards the state. The minimal state of classical theory was quite incapable of rectifying the injustices and inequalities of civil society. Modern liberals were therefore prepared to advocate the development of an interventionist or enabling state.

However, modern liberalism has been viewed in two, quite different, ways:

Classical liberals have argued that modern liberalism effectively broke with the principles and doctrines that had previously defined liberalism, in particular that it had abandoned individualism and embraced collectivism (see p. 64).

Modern liberals, however, have been at pains to point out that they built on, rather than betrayed, classical liberalism. In this view, whereas classical liberalism is characterised by clear theoretical consistency, modern liberalism represents a marriage between new and old liberalism, and thus embodies ideological and theoretical tensions, notably over the proper role of the state.

The distinctive ideas of modern liberalism include:

individuality

positive freedom

social liberalism

economic management.

Individuality

John Stuart Mill’s ideas have been described as the ‘heart of liberalism’. This is because he provided a ‘bridge’ between classical and modern liberalism: his ideas look both back to the early nineteenth century and forward to the twentieth century and beyond. Mill’s interests ranged from political economy to the campaign for female suffrage, but it is the ideas developed in On Liberty ([1859] 1972) that show Mill most clearly as a contributor to modern liberal thought. This work contains some of the boldest liberal statements in favour of individual freedom. Mill suggested that, ‘Over himself, over his own body and mind, the individual is sovereign’, a conception of liberty that is essentially negative as it portrays freedom in terms of the absence of restrictions on an individual’s ‘self-regarding’ actions. Mill believed this to be a necessary condition for liberty, but not in itself a sufficient one. He thought that liberty was a positive and constructive force. It gave individuals the ability to take control of their own lives, to gain autonomy or achieve self-realisation.

Mill was influenced strongly by European romanticism and found the notion of human beings as utility maximisers both shallow and unconvincing. He believed passionately in individuality. The value of liberty is that it enables individuals to develop, to gain talents, skills and knowledge and to refine their sensibilities. Mill disagreed with Bentham’s utilitarianism in so far as Bentham believed that actions could only be distinguished by the quantity of pleasure or pain they generated. For Mill, there were ‘higher’ and ‘lower’ pleasures. Mill was concerned to promote those pleasures that develop an individual’s intellectual, moral or aesthetic sensibilities. He was clearly concerned not with simple pleasure-seeking, but with personal self-development, declaring that he would rather be ‘Socrates dissatisfied than a fool satisfied’. As such, he laid the foundations for a developmental model of individualism that placed emphasis on human flourishing rather than the crude satisfaction of interests.

KEY FIGURE

John Stuart Mill (1806–73)

A British philosopher, economist and politician, Mill was a key liberal thinker whose work straddles the divide between the classical and modern traditions. His distrust of state intervention was firmly rooted in nineteenth-century principles, but his emphasis on the quality of individual life (reflected in a commitment to individuality) looked forward to later developments. In On Liberty (1859), Mill argued that every society’s code of justice should recognise a basic right to absolute liberty in purely self-regarding matters, restrictions on liberty being justified only in order to prevent harm to others. In moral philosophy, this is known as the ‘harm principle’. Such thinking also encouraged him to defend toleration and raise concerns about democracy, especially as the latter implies that majority opinions are more worthwhile than minority ones. At the heart of Mill’s case for toleration lies a belief in individuals as autonomous agents, free to exercise sovereign control over their own lives and circumstances. For more on J. S. Mill, see below, pp. 14–15, 18, 26, 125, 138, 146–7 and 172.

Positive freedom

The clearest break with early liberal thought came in the late nineteenth century with the work of the British philosopher and social theorist T. H. Green (1836–82), whose writing influenced a generation of so-called ‘new liberals’ such as L. T. Hobhouse (1864–1929) and J. A. Hobson (1854–1940). Green believed that the unrestrained pursuit of profit, as advocated by classical liberalism, had given rise to new forms of poverty and injustice. The economic liberty of the few had blighted the life chances of the many. Following J. S. Mill, he rejected the early liberal conception of human beings as essentially self-seeking utility maximisers, and suggested a more optimistic view of human nature. Individuals, according to Green, have sympathy for one another; their egoism is therefore constrained by some degree of altruism. The individual possesses social responsibilities and not merely individual responsibilities, and is therefore linked to other individuals by ties of caring and empathy. Such a conception of human nature was clearly influenced by socialist ideas that emphasised the sociable and cooperative nature of humankind. As a result, Green’s ideas have been described as ‘socialist liberalism’.

Green also challenged the classical liberal notion of freedom. Negative freedom merely removes external constraints on the individual, giving the individual freedom of choice. In the case of the businesses that wish to maximise profits, negative freedom justifies their ability to hire the cheapest labour possible; for example, to employ children rather than adults, or women rather than men. Economic freedom can therefore lead to exploitation, even becoming the ‘freedom to starve’. Freedom of choice in the marketplace is therefore an inadequate conception of individual freedom.

Altruism: Concern for the interests and welfare of others, based either on enlightened self-interest or on a belief in a common humanity.

In the place of a simple belief in negative freedom, Green proposed that freedom should also be understood in positive terms. In this light, freedom is the ability of the individual to develop and attain individuality; it involves people’s ability to realise their individual potential, attain skills and knowledge, and achieve fulfilment. Thus, whereas negative freedom acknowledges only legal and physical constraints on liberty, positive freedom recognises that liberty may also be threatened by social disadvantage and inequality. This, in turn, implied a revised view of the state. By protecting individuals from the social evils that cripple their lives, the state can expand freedom, and not merely diminish it. In place of the minimal state of old, modern liberals therefore endorsed an enabling state, exercising an increasingly wide range of social and economic responsibilities.

While such ideas undoubtedly involved a revision of classical liberal theories, they did not amount to the abandonment of core liberal beliefs. Modern liberalism drew closer to socialism, but it did not place society before the individual. For Green, for example, freedom ultimately consisted in individuals acting morally. The state could not force people to be good; it could only provide the conditions in which they were able to make more responsible moral decisions. The balance between the state and the individual had altered, but the underlying commitment to the needs and interests of the individual remained. Modern liberals share the classical liberal preference for self-reliant individuals who take responsibility for their own lives; the essential difference is the recognition that this can only occur if social conditions allow it to happen. The central thrust of modern liberalism is therefore the desire to help individuals to help themselves.

Social liberalism

The twentieth century witnessed the growth of state intervention in most western states and in many developing ones. Much of this intervention took the form of social welfare: attempts by government to provide welfare support for its citizens by overcoming poverty, disease and ignorance. If the minimal state was typical of the nineteenth century, during the twentieth century modern states became welfare states. This occurred as a consequence of a variety of historical and ideological factors. Governments, for example, sought to achieve national efficiency, healthier work forces and stronger armies. They also came under electoral pressure for social reform from newly enfranchised industrial workers and, in some cases, the peasantry. However, the political argument for welfarism has never been the prerogative of any single ideology. It has been put, in different ways, by socialists, liberals, conservatives, feminists and even at times by fascists. Within liberalism, the case for social welfare has been made by modern liberals, in marked contrast to classical liberals, who extol the virtues of self-help and individual responsibility.

Welfare state: A state that takes primary responsibility for the social welfare of its citizens, discharged through a range of social-security, health, education and other services.

Modern liberals defend welfarism on the basis of equality of opportunity. If particular individuals or groups are disadvantaged by their social circumstances, then the state possesses a social responsibility to reduce or remove these disadvantages to create equal, or at least more equal, life chances. Citizens have thus acquired a range of welfare or social rights, such as the right to work, the right to education and the right to decent housing. Welfare rights are positive rights because they can only be satisfied by the positive actions of government, through the provision of state pensions, benefits and, perhaps, publicly funded health and education services. During the twentieth century, liberal parties and liberal governments were therefore converted to the cause of social welfare. For example, the expanded welfare state in the UK was based on the Beveridge Report (1942), which set out to attack the so-called ‘five giants’ – want, disease, ignorance, squalor and idleness. It memorably promised to protect citizens ‘from the cradle to the grave’. In the USA, liberal welfarism developed in the 1930s during the administration of F. D. Roosevelt, but reached its height in the 1960s with the ‘New Frontier’ policies of John F. Kennedy, and Lyndon Johnson’s ‘Great Society’ programme.

Social liberalism was further developed in the second half of the twentieth century with the emergence of so-called social-democratic liberalism, especially in the writings of John Rawls. Social-democratic liberalism is distinguished by its support for relative social equality, usually seen as the defining value of socialism. In A Theory of Justice (1970), Rawls developed a defence of redistribution and welfare based on the idea of ‘equality as fairness’. He argued that if people were unaware of their social position and circumstances, they would view an egalitarian society as ‘fairer’ than an inegalitarian one, on the grounds that the desire to avoid poverty is greater than the attraction of riches. He therefore proposed the ‘difference principle’: that social and economic inequalities should be arranged so as to benefit the least well-off, recognising the need for some measure of inequality to provide an incentive to work. Nevertheless, such a theory of justice remains liberal rather than socialist, as it is rooted in assumptions about egoism and self-interest, rather than a belief in social solidarity.

Differences between … CLASSICAL AND MODERN LIBERALISM

CLASSICAL LIBERALISM •economic liberalism •egoistical individualism •maximise utility •negative freedom •minimal state •free-market economy •rights-based justice •strict meritocracy •individual responsibility •safety-net welfare	MODERN LIBERALISM •social liberalism •developmental individualism •personal growth •positive freedom •enabling state •managed economy •justice as fairness •concern for the poor •social responsibility •cradle-to-grave welfare

KEY FIGURE

John Rawls (1921–2002)

A US academic and philosopher, Rawls’ major work, A Theory of Justice (1970), is regarded as the most important work of political philosophy written in English since World War II, influencing modern liberals and the social democrats, in particular. Rawls proposed a theory of ‘justice as fairness’, based on the belief that social inequality can be justified only if it is of benefit to the least advantaged. This presumption in favour of equality is rooted in the assumption that most people, deprived of knowledge about their talents and abilities, would choose to live in an egalitarian, rather than an inegalitarian, society. This use of the so-called ‘veil of ignorance’ supposedly ensures that views about justice do not just reflect narrow self-interest. Such ideas have been used to justify redistribution and social welfare, although Rawls also insisted that there is a continuing need for some level of material inequality to act as an incentive to enterprise and so to promote economic growth. For more on Rawls, see pp. 15, 29, 84, 190 and 194.

Economic management

In addition to providing social welfare, twentieth-century western governments also sought to deliver prosperity by ‘managing’ their economies. This once again involved rejecting classical liberal thinking, in particular its belief in a self-regulating free market and the doctrine of laissez-faire. The abandonment of laissez-faire came about because of the increasing complexity of industrial capitalist economies and their apparent inability to guarantee general prosperity if left to their own devices. The Great Depression of the 1930s, sparked off by the Wall Street Crash of 1929, led to high levels of unemployment throughout the industrialised world and in much of the developing world. This was the most dramatic demonstration of the failure of the free market. After World War II, virtually all western states adopted policies of economic intervention in an attempt to prevent a return to the pre-war levels of unemployment. To a large extent these interventionist policies were guided by the work of the UK economist John Maynard Keynes (1883–1946).

In The General Theory of Employment, Interest and Money ([1936] 1963), Keynes challenged classical economic thinking and rejected its belief in a self-regulating market. Classical economists had argued that there was a ‘market solution’ to the problem of unemployment and, indeed, all other economic problems. Keynes argued, however, that the level of economic activity, and therefore of employment, is determined by the total amount of demand – aggregate demand – in the economy. He suggested that governments could ‘manage’ their economies by influencing the level of aggregate demand. Government spending is, in this sense, an ‘injection’ of demand into the economy. Taxation, on the other hand, is a ‘withdrawal’ from the economy: it reduces aggregate demand and damp-ens down economic activity. At times of high unemployment, Keynes recommended that governments should ‘reflate’ their economies by either increasing public spending or cutting taxes. Unemployment could therefore be solved, not by the invisible hand of capitalism, but by government intervention, in this case by running a budget deficit, meaning that the government literally ‘overspends’.

Key concept … KEYNESIANISM

Keynesianism refers, narrowly, to the economic theories of J. M. Keynes (1883–1946) and, more broadly, to a range of economic policies that have been influenced by these theories. Keynesianism provides an alternative to neoclassical economics and, in particular, advances a critique of the ‘economic anarchy’ of laissez-faire capitalism. Keynes argued that growth and employment levels are largely determined by the level of ‘aggregate demand’ in the economy, and that government can regulate demand, primarily through adjustments to fiscal policy, so as to deliver full employment. Keynesianism came to be associated with a narrow obsession with ‘tax and spend’ policies, but this ignores the complexity and sophistication of Keynes’ economic writings. Influenced by economic globalisation, a form of neo-Keynesianism has emerged that rejects ‘top-down’ economic management but still acknowledges that markets are hampered by uncertainty, inequality and differential levels of knowledge.

Keynesian demand management thus promised to give governments the ability to manipulate employment and growth levels, and hence to secure general prosperity. As with the provision of social welfare, modern liberals have seen economic management as being constructive in promoting prosperity and harmony in civil society. Keynes was not opposed to capitalism; indeed, in many ways, he was its saviour. He simply argued that unrestrained private enterprise is unworkable within complex industrial societies. The first, if limited, attempt to apply Keynes’ ideas was undertaken in the USA during Roosevelt’s ‘New Deal’. By the end of World War II, Keynesianism was widely established as an economic orthodoxy in the West, displacing the older belief in laissez-faire. Keynesian policies were credited with being the key to the ‘long boom’, the historically unprecedented economic growth of the 1950s and 1960s, which witnessed the achievement of widespread affluence, at least in western countries. However, the re-emergence of economic difficulties in the 1970s generated renewed sympathy for the theories of classical political economy, and led to a shift away from Keynesian priorities. Nevertheless, the failure of the free-market revolution of the 1980s and 1990s to ensure sustained economic growth resulted in the emergence of the ‘new’ political economy, or neo-Keynesianism. Although this recognised the limitations of the ‘crude’ Keynesianism of the 1950s–1970s, it nevertheless marked a renewed awareness of the link between unregulated capitalism and low investment, short-termism and social fragmentation.

QUESTIONS FOR DISCUSSION

Does individualism necessarily imply egoism?

In what sense is liberalism linked to the Enlightenment project?

How, within liberalism, is freedom linked to rationalism?

Why do liberals reject unlimited freedom?

How convincing is the liberal notion that human beings are reason-guided creatures?

What are the key implications of social contract theory?

How do classical liberals defend unregulated capitalism?

How far are modern liberals willing to go in endorsing social and economic intervention?

Do modern liberals have a coherent view of the state?

Is liberal democracy the final solution to the problem of political organisation?

To what extent is cosmopolitanism based on liberal assumptions?

Are liberal principles universally valid?