Home > economics, government, liberalism, political theory > Liberalism – what is it? Part 1 of 3

Liberalism – what is it? Part 1 of 3

October 6, 2010

Within the 21st century political landscape of the United States for example, the Republican party to some extent embraces classic liberalism or what can be called conservatism, while the Democrat political party tends to support a new, more progressive liberalism.

Classic Liberal
Classic liberalism or traditionally liberalism as it was originally conceptualized during the 18th, 19th and early 20th century, is the economic philosophy recognizing a political economy needs to be rooted within the honored principles of private property, land or soil, and an individual. A democratic government under classic liberalism goes so far as to suggest that land ownership by individuals or what can be called private property accumulation ensures both a limited government and a fomenting of individual liberty. The idea being that a free market can be attained by defining wealth through making it equal to the labor put into the production or refinement of the resources the land, or private property provides an individual. Classic liberalism is similar to free market capitalism in that a type of economic power is maintained for individuals to counter that of the federal government. Classical liberalism as well as capitalism reject the redistribution of wealth as a legitimate tenet of government.

As 20th century politics within the United States maintained a Keynesian model of economics, at first a supporter of Keynes, Milton Friedman starting in the 1950’s largely lead a revitalization of classic liberalism as a viable political and/or economic philosophy. A reinterpretation of the Keynesian consumption function model, a mathematical formula to express consumer spending, grew into an economic theory of monetarism that included far-reaching assumptions recognizing a constant rate of unemployment and concluding that the federal government should not micromanage the economy. Essentially a carefully crafted monetary policy which recognized constant realities, as was argued by Friedman, could have prevented the Great Depression rather then prolonged it as the Keynesian model of large-scale deficit spending which inevitably leads to increased federal government involvement did.ref1ref2

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