Liberalism
Social liberal theory

Jean Charles Léonard Simonde de Sismondi 's New Principles of Political Economy (French: Nouveaux principes d'économie politique, ou de la richesse dans ses rapports avec la population) (1819) represents the first comprehensive liberal critique of early capitalism and laissez-faire economics, and his writings, which were studied by John Stuart Mill and Karl Marx among many others, had a profound influence on both liberal and socialist responses to the failures and contradictions of industrial society. By the end of the 19th century, the principles of classical liberalism were being increasingly challenged by downturns in economic growth, a growing perception of the evils of poverty, unemployment and relative deprivation present within modern industrial cities, as well as the agitation of organised labour. The ideal of the self-made individual who could make his or her place in the world through hard work and talent seemed increasingly implausible. A major political reaction against the changes introduced by industrialisation and laissez-faire capitalism came from conservatives concerned about social balance, although socialism later became a more important force for change and reform. Some Victorian writers, including Charles Dickens, Thomas Carlyle and Matthew Arnold, became early influential critics of social injustice.

New liberals began to adapt the old language of liberalism to confront these difficult circumstances, which they believed could only be resolved through a broader and more interventionist conception of the state. An equal right to liberty could not be established merely by ensuring that individuals did not physically interfere with each other or by having impartially formulated and applied laws. More positive and proactive measures were required to ensure that every individual would have an equal opportunity for success.

John Stuart Mill contributed enormously to liberal thought by combining elements of classical liberalism with what eventually became known as the new liberalism. Mill's 1859 On Liberty addressed the nature and limits of the power that can be legitimately exercised by society over the individual. He gave an impassioned defence of free speech, arguing that free discourse is a necessary condition for intellectual and social progress. Mill defined " social liberty " as protection from "the tyranny of political rulers". He introduced many different concepts of the form tyranny can take, referred to as social tyranny and tyranny of the majority. Social liberty meant limits on the ruler's power through obtaining recognition of political liberties or rights and establishing a system of " constitutional checks".

His definition of liberty, influenced by Joseph Priestley and Josiah Warren, was that the individual ought to be free to do as he wishes unless he harms others. However, although Mill's initial economic philosophy supported free markets and argued that progressive taxation penalised those who worked harder, he later altered his views toward a more socialist bent, adding chapters to his Principles of Political Economy in defence of a socialist outlook and defending some socialist causes, including the radical proposal that the whole wage system be abolished in favour of a co-operative wage system.

Another early liberal convert to greater government intervention was T. H. Green. Seeing the effects of alcohol, he believed that the state should foster and protect the social, political and economic environments in which individuals will have the best chance of acting according to their consciences. The state should intervene only where there is a clear, proven and strong tendency of liberty to enslave the individual. Green regarded the national state as legitimate only to the extent that it upholds a system of rights and obligations most likely to foster individual self-realisation.

The New Liberalism or social liberalism movement emerged in about 1900 in Britain. The New Liberals, including intellectuals like L. T. Hobhouse and John A. Hobson, saw individual liberty as something achievable only under favourable social and economic circumstances. In their view, the poverty, squalor and ignorance in which many people lived made it impossible for freedom and individuality to flourish. New Liberals believed these conditions could be ameliorated only through collective action coordinated by a strong, welfare-oriented, interventionist state. It supports a mixed economy that includes public and private property in capital goods.

Principles that can be described as social liberal have been based upon or developed by philosophers such as John Stuart Mill, Eduard Bernstein, John Dewey, Carlo Rosselli, Norberto Bobbio and Chantal Mouffe. Other important social liberal figures include Guido Calogero, Piero Gobetti, Leonard Trelawny Hobhouse and R. H. Tawney. Liberal socialism has been particularly prominent in British and Italian politics.
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