In today’s times with increasing importance granted to the interventionist measures of the states, the study of the origins and role of the state becomes necessary in order to facilitate the understanding of the reasons and of the consequences of such measures through the opinions of some of the most important philosophers and economists about the formation and the role of modern states. That is why, in this essay, we shall scrutinize briefly some aspects concerning one of these views, namely Liberal Theory.
Liberalism is an ideology based on a commitment to individualism, freedom, toleration, and consent. These principles have had enormous political, social, cultural, and economic implications. Liberalism gained momentum in the 17th century and its popularity expanded during the 18th century with the emergence of a civic culture and the Age of Enlightenment.
The liberal theory of the role, its functions and the nature of state power would invariably focus on:
The liberal state is essentially the perfect form of government that guarantees people’s freedom and rights. Liberalism focuses on individual rights and freedoms, which means that a liberal government is uninhibited by arbitrary authority. The state is not assumed to know what’s best for its citizens. A liberal state is based on the consent of the people as it acknowledges the freedom and dignity of all individuals. It replaces the divine right theory where power resides in monarchs who are attached to a supreme being.
States work for the common good of the society and its major activity is understood as to be maintaining law and order and ensuring that everyone is treated with equality without any discrimination. In other words, a liberal state regards individuals as moral and rational agents. State’s role is seen as providing them with the conducive conditions for growth and prosperity.
Its origin and growth can be traced back to the political struggles that took place in England and France with the rise and growth of capitalism which had led to a free market economy. These struggles focused on individual dignity, self-respect, private property and, power and status particularly of the emerging middle class of the society.
Three distinct phases or streams of liberal tradition can be identified. These are:
Philosophical and political roots of negative liberalism can be traced in the social contract theory of Hobbes and Locke. Subsequently, it was developed, revised and amplified by Bentham and J. S. Mill's utilitarianism, Spencer's ‘survival of the fittest’ doctrine, Paine's doctrine of State as a ‘necessary evil’ and others. On the economic front, the Physiocrats, Adam Smith, David Ricardo, Thomas Robert Malthus and others provided the ground and arguments for economic liberty. The two—negative liberty and economic liberty—combined were destined to give birth to what we call classical liberalism or laissez-faire individualism.
Features of negative liberalism include the following:
Nineteenth-century, however, ruefully confessed the inherent shortcomings of free economy and the limited state. The conflict of interest between the landed or the aristocratic class and the rising capitalist class was already won in favour of the latter. Now, the growing problem of inequality and economic hardship in terms of working conditions, poor sanitation, health and habitation and other attendant problems were staring in the eyes of the labour class.
While negative liberalism dealt with the issue of liberty, it neither thought of nor required to deal with the issue of equality. The latter was to get its due when the ‘self-interested individual’ has come to face a class of its own creed having neither the same psychology nor capacity to use it. The condition and plight of the proletariat, the working class, was in no way an expression of their self-interest. They had neither economic freedom nor political liberty.
Thus came positive liberalism, remorseful, espousing the cause of equality, morality and self-development of the individual and ready to compensate for the wretchedness that its earlier avatar, negative individualism, has created.
Neoliberalism is contemporarily used to refer to market-oriented reform policies such as "eliminating price controls, deregulating capital markets, lowering trade barriers" and reducing, especially through privatization and austerity, state influence in the economy. The features of Neoliberalism include the following:
