How and to what extent has modern liberalism departed from the ideas of classical liberalism?

However, there remain some significant similarities between the two types of liberalism; both agree on the importance of free trade to a certain extent. Classical Liberals recognised the importance of free trade and laissez faire economics as providing the greatest amount of liberty as well as clearing the way for economic development. Adam Smith, the famous classical liberal economist emphasised the importance of free trade as not just aiding economic prosperity, but also as freedom not to be controlled or coerced. In modern liberalism, this original economic idea is still present, but it has developed into one with more restrictions in order to benefit the greater number of people. The idea of a free market are still supported, but with careful management in place to ensure protection for both workers and consumers. Furthermore, they believe that some essential sectors of the economy should be state managed, in contrast to Classical liberals’ belief that the economy should be 100% based on private enterprise. Healthcare and education are two key areas that modern liberals have singled out as being important for the state to control, in order to ensure that levels of provision are equal and that people have the freedom to self-fulfilment;  again linking back to their strong commitment to positive freedom as opposed to classical liberalism’s negative freedom. Furthermore, modern liberals believe that taxes should be levied and regulation implemented across the economy again to aid the provision of certain state services and protect the consumer, something that has become known as Keynesianism after the modern liberal economist J.M. Keynes. Whilst there are significant areas of modern liberal economic policy that classical liberals would disagree with, there remains a degree of similarity between the two in their desire for a free market economy.

The difference is greater again when modern and classical liberals’ various approaches to social policy are considered. Classical liberals adopted a ‘self-help’ stance towards social justice and welfare, believing that any sort of welfare simply encouraged people to be lazy and was a violation of the freedom of individuals to decide how they spent their money, as taxes would be required to pay for it. Although classical liberals believed in equality before the law, they were decidedly sceptical of any attempt to create material equality, and indeed believed that inequality was inevitable. This viewpoint persevered until well into the 1800s, and was reflected in public opinion – in 1859 Samuel Smiles famously wrote that “heaven helps those who help themselves”, clearly representing a belief in the individual’s importance in their own affairs rather than relying on exterior help. However, Modern liberals have most significantly departed from this early liberal belief, and this can be considered to be because of their belief in equal opportunities and self-realisation as the key to freedom. T.H. Green, a modern liberal thinker, believed that Liberty was only attainable in favourable economic circumstances, and this necessitated some form of help to be given to those in need in order for them to be free, and modern liberals see welfare as a ‘hand up, not a hand out’. This clearly represents a significant departure from Classical liberalism.

Over the years, modern liberalism has departed from classical liberalism to a large extent. Their fundamental difference in what constitutes freedom – Classical liberals and negative freedom, the belief that freedom constitutes protection from exterior limits to individual liberty, and Modern liberals who believe in positive freedom, that liberty constitutes the opportunity to realise ones potential to its full extent – have lead modern liberals to depart quite significantly from the classical philosophy. They have rejected the ideas of a limited state and embraced the concept of welfare and social justice as well as imposing regulation and limits on the economy with the aim of securing individual liberty via ‘positive’, rather than classical liberalism’s ‘negative’ liberal policy.