Classical liberalism had come the full circle of its utility before the 20th century. People seemed satiated with what governmental non-intrusion in the affairs of large industrialists did to their financial wellbeing. People were at no liberty to enjoy the deserved fruits of their labor. Thus, naturally, the welfare state of modern liberalism became a response to the shortcomings of the classical doctrine. However, the WW1 frustration coupled with the Great Depression in later years undermined the prevalence of modern liberalism giving rise to ideologies like Nazism, yet the Keynesian liberalism overcame the corrupt vision. Although an ally of liberalism in their fight against Nazism, communism was forced to give way to classical liberalism in disillusioned Eastern Europe within the sphere of the Soviet influence. Neoclassical liberalism or libertarianism emerged at the back end of the 20th century making governments provide individual freedoms and enjoy limited power. The point is that liberalism did undergo a series of changes over the course of the 20th century often under the influence of geopolitical developments, and, whenever it would, these changes were made to bring the doctrine closer to its ideal of universal freedom, whether economic, political, or social.
Reasons for Classical Liberalism to Give Way
If liberalism changed in the 20th century, it had every reason to. In the wake of the Industrial Revolution, on the threshold of the new century, people were being querulous over the economic cornerstone of the classical liberalism, which was the ideal of the market economy, and rightfully so. The privileged majority of financiers and industrialists had accumulated fortune, with profit system staying disproportionate. What it led to was that a great number of individuals were left with no choice except to be living impoverished in extensive slums not being able to capitalize on the wealth flowing from enterprises. The inflated production system used to generate plenty of services and goods people had no way of affording, which led to unhealthy market surplus. In the aftermath, the system would often come to a standstill entering the periods of depression (Girvetz 2016). Since the philosophy implemented in the economic context left ordinary people out of pocket, the domestic market had a poor purchasing capacity while foreign ones like that of Britain experienced similar conditions due to classical liberalism prevalence; therefore, goods lay unpurchased, which they did at warehouses or even lay decaying translating into direct losses for producers. Girvetz (2016) confirmed the presence of the doctrine in Roman Catholic states like Italy, France, and Spain.
At this juncture, there was no use producing more; thus, money did not work. In all likelihood, these elites were no more content with classical liberalism than lower classes were. Worse, according to Girvetz (2016), the owners of the production means had acquired enough power to sway and manipulate the government and electorate, to halt social reforms, and curb competition. Thus, modern liberals were of the belief that the government must clear the obstacles in the way of individual liberty obstructed by the excessive powers of the ruling body. So thought the prominent reformers and thinkers like T.H. Green, a British political philosopher. The governmental help with woes, such as ignorance, discrimination, disease, and poverty, was needed (Girvetz 2016).
Modern Liberalism and the Welfare State
The 20th century saw social state emerge in response to the threats and failures of the laissez-faire liberalism of the preceding century (Brannen, Moss, and Mooney 2016, p.23). However, what was the case in the 19th century may be argued to have been a shell of classical liberalism based on non-intervention with respect to ordinary people since strong was the intrusion of the government in the progress of individual reforms. All the economic non-intrusion played into the hands of were capital holders. BBC (2014) referred to the new concept as the welfare state. In 1906, local administrations took to providing free school meals upon obtaining the permission. The Children’s Charter of 1908 was the continuation of the Children and Young Persons Act of the same year. Based on the new document, severe penalization awaited whomever treated children cruelly or neglected them.
Forcing children to solicit alms or sell cigarettes thereto was no longer legal. Juvenile courts for children charged with a crime replaced prisons with borstals presently known as young offender institutions. Those on the right side of their 70s and beyond started receiving pensions as from 1908. Labor exchanges for the unemployed were put into operation in 1909. The National Insurance Act of 1911 provided sick pay, free medical treatment, and the right to the unemployment pay. The Workers Compensation Act of 1906 rendered workers eligible for redress in case of a workplace trauma. Miners had their working day reduced to eight hours in 1908 (BBC 2014). The welfare state seemed to be assuming a clear shape, as the authorities were making clear efforts to do away with the wrong of the classical liberalism.
WW1 Liberalism Disillusionment
The protracted four-year manslaughter of the WW1 that started in 1914 stopped the continued progress of liberalism in Europe. In overthrowing the major imperial dynasties in Austria-Hungary, Germany, Ottoman Turkey, and Russia, the war gave momentum to the liberal democracy. The Treaty of Versailles reshaped Europe based on national self-determination (Girvetz 2016). The re-carving of the geopolitical map gave individual freedom to nations that were inferior to dominant ethnic groups within the imperial political formations staying unable to enjoy important privileges. Lauren (2013, p.92) claimed that innocent people to have been enduring persecution when within the Ottoman and Austro-Hungarian Empires and to the point of their disintegration.
Still, as suggested by Girvetz (2016), the trauma of the world conflict sent people disillusioned with the liberal view of progress towards the world that would be more humane. Ignoble peace terms coupled with the distress caused by the 1929 Great Depression laid the groundworks for the Nazi ascension in weakened Weimer Republic of Germany. Not only the Nazi regime, but also communism posed danger to liberalism that came under fire during the interwar years. That being said, the New Deal national program of Franklin Roosevelt typified modern liberalism in its enhanced business regulation and its considerable expansion of the sphere of governmental activities. Planned for the period between 1933 and 1939, it was to pull the country out of the Great Depression. Larger power to labor unions, the provision of those on the employment line with temporary jobs, and the Social Security program were among the measures (Girvetz 2016).
Keynesian Views in Liberalism
After the WW2, liberalism overcame the fascist worldview in the strategic tandem with the Soviet communism. The peoples of Japan, Italy, and West Germany had liberal democracy reestablished on their soil. Focus on growth levels replaced the old rhetoric about wealth sharing, as liberals deriving inspiration from Keynes took advantage of the power of the government to tax, borrow, and spend to both boost economy expansion and counter the cutback of the business cycle. In the period following the war, the final and further expansion of social welfare programs took place in the liberal democratic countries. In the 1950s and the early 1960s, African and Asia former colonies and breakaway states formed after their secession from the French and British empires adopted the liberal democratic model as well (Girvetz 2016).
About 30 years of the never-before-seen overall prosperity experienced by the West following the war marked the culminating point of modern liberalism that found itself challenged by growth slowdown in the mid-1970s. The maintenance of social benefits of the welfare state improved the unemployment situation only slightly largely coming at the price of excessive taxation, an increase inflation, and accruing debt, with the Keynesian economic model proving much less efficient than before. It being hard for modern liberals to cope with sluggish living standards in fully-fledged industrial economies, some discerned the chance to reanimate classical liberalism resting upon the works of Milton Friedman and Friedrich von Hayek (Girvetz 2016).
Back to Classical Liberalism
According to Raico (2010), millions of Americans of different social standing nourished the values of private property and the free market as early as 1962. Classical liberalism gathered steam in the 1970s and the 1980s after interventionist programs and socialist planning coming to no good. So serious was dissatisfaction with these, that the political leaders of the former member states of the Warsaw Pact pronounced themselves the disciples of Friedman and Hayek, as Western states did in their time (Raico 2010). The latter proved a centrally planned economy impossible also arguing that interventionist measures oriented on wealth redistribution unavoidably resulted in totalitarianism (Girvetz 2016). The desire of a return to classical laissez-faire liberalism and the criticism of the Soviet model make themselves felt in this view.
The above-described frustration is unsurprising since Warsaw pact states were Soviet satellites with controlled economy counterproductively pursuing the same isolationist anti-capitalist developmental policy. Golan (1973, p.50) confirmed the stagnation of the Czechoslovak economy during 1963 and the growing criticism of the centralize command economy. Such frustrating state of development in the pro-Soviet Eastern Europe leading to liberalism gaining popularity looks logical considering the intellectual level of the so-called Soviet ruling elite. Obolonsky (2003, p.200) stated that the better part of the senior political hierarchy under Stalin were bad mannered, intellectually primitive, and poorly educated individuals. It is safe to deduce that the soviet leaders exerting influence in Eastern Europe in the 1960s and the 1970s were as inapt a part of the Stalin entourage. Liberalism received greater proliferation penetrating the European periphery.
Libertarianism or Neoclassical Liberalism
According to Girvetz (2016), what Friedman, the founder of the contemporary monetarist schools of economics, believed in was that interest rate money supply rather than the fiscal policy of the government were responsible for determining the business cycle, which already contradicted the long-standing view of the Keynesian school. The chief conservative political parties in the USA and the UK accepted the new arguments with enthusiasm, which is why they discarded the classical liberal viewpoint that the market, regardless of their flaws, is a better beacon of the economic policy than governments are. Conservatives in both countries enjoyed lengthy political tenures around the time, with the US President Ronald Reagan and the British Prime-Minister Margaret Thatcher staying in dominant political positions between 1981 and 1989 and 1979 and 1990 respectively. Although their policies and ideology belonged to the history of conservatism rather than liberalism, they gain influence, as shown by the cautiously pragmatic policies of President Clinton in the 1990s and the official departure from the commitment to the common ownership of production means by the Labor Party of the UK.
That libertarianism appeared as a political force, as is evident from the progressive rise of US Libertarian Party to political prominence and activity of think tanks trying to promote philosophy ideals like restricted governments and the libertarian market ideal shows the significance of the neoclassical version of liberalism (Girvetz 2016). Boaz (2016) explained that libertarianism was a political philosophy, based on which individual liberty takes precedence as the chief political value. Interpreted as a manifestation of liberalism, libertarianism aimed to define and justify the legitimate governmental authority regarding God-given or natural individual privileges like private property, speech, association, and speech freedom, liberty, life, moral autonomy, and equality under the law. The philosophy assigned to the government the role of individual rights protector restricting the authority of the ruling body to the degree that will allow the performance of this protective function.
Conclusions
The philosophy dominant in the West for three decades running was increasingly losing its efficiency at the turn of the century if not earlier. The accumulation of wealth by industrialists, the impoverishment of the average people, and market stagnation led to disillusionment with classical liberalism and led to its eventual replacement with its modern version based on the notion of the social or welfare state that was more anthropocentric in its earlier years than the previous doctrine had ever been. It must be that classical liberalism was not liberalism in its pure and ideal form since it was largely by the rich that its ideals were enjoyed. It was they who took away individual freedom by imposing inhumane working conditions all the while enjoying government laissez faire.
However, despite having awarded plenty of ethnic groups with the right to self-determination, the WW1 and the post-conflict arrangement of the world left many deprecating the tenets of the political and economic doctrine, which led to Nazism rising to popularity. Thus, the economic dimension mattered more to people than social liberties did. However, liberalism overcame Hitler’s ideology in the strategic alliance with communism. Following the war, the Keynesian views were acting as inspiration to modern liberals. Classical liberalism regained its popularity in the 1970s and beyond especially in Eastern Europe dissatisfied with the soviet political and economic influence. Libertarianism obliging government to grant individual freedoms and keeping its power limited assumed shape in the 1990s. Every new phase pf liberalism, be it modern, Keynesian, the repackaged classical, or libertarian, sought to improve the failures of its preceding incarnations approaching the ideals of liberalism as such.
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