Social liberalism

Great Britain

By the end of the nineteenth century, the principles of classical liberalism were challenged by downturns in economic growth, a growing awareness of poverty and unemployment present within modern industrial cities, and also by the agitation of organized labour. 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.

John Stuart Mill contributed enormously to liberal thought by combining elements of classical liberalism with what eventually became known as the new liberalism. The new liberals tried 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 merely by having laws that were impartially formulated and applied. More positive and proactive measures were required to ensure that every individual would have an equal opportunity of success.

New Liberalism

In the late nineteenth century and early twentieth century, a group of British thinkers, known as the New Liberals, made a case against laissez-faire classical liberalism and argued in favor of state intervention in social, economic, and cultural life. What they proposed is now called social liberalism. The New Liberals, which included intellectuals like T. H. Green, L. T. Hobhouse, and John A. Hobson, saw individual liberty as something achievable only under favorable 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 that these conditions could be ameliorated only through collective action coordinated by a strong, welfare-oriented and interventionist state.

The Liberal governments of Henry Campbell-Bannerman and H. H. Asquith, especially thanks to Chancellor of the Exchequer and later Prime Minister David Lloyd George, established the foundations of the welfare state in the UK before the First World War. The comprehensive welfare state built in the UK after the Second World War, although largely accomplished by the Labour Party, was significantly designed by two Liberals: John Maynard Keynes, who laid the economic foundations, and William Beveridge, who designed the welfare system.

Historian Peter Weiler argues that:

Although still partially informed by older Liberal concerns for character, self-reliance, and the capitalist market, this legislation nevertheless, marked a significant shift in Liberal approaches to the state and social reform, approaches that later governments would slowly expand and that would grow into the welfare state after the Second World War. What was new in these reforms was the underlying assumption that the state could be a positive force, that the measure of individual freedom... was not how much the state left people alone, but whether he gave them the capacity to fill themselves as individuals.

Germany

In 1860s Germany, "left-liberal" politicians like Max Hirsch, Franz Duncker and Hermann Schulze-Delitzsch established trade unions—modeled on their British counterparts—in order to help workers improve working and economic conditions by means of reconciliation of interests and cooperation with their employers rather than class struggle. Schulze-Delitzsch is also known as the founding father of the German cooperative movement and is credited as the organiser of the world's first credit unions. Some liberal economists, such as Lujo Brentano or Gerhart von Schulze-Gävernitz, established the Verein für Socialpolitik ("Social Policy Association") in 1873 to promote social reform based on the historical school of economics (and therefore rejecting classical economics), proposing a third way between Manchester Liberalism and socialist revolution.

But their ideas found relatively few supporters among the liberal politicians. The main objectives of the "left-liberal" parties—the German Progress Party and its successors—were free speech, freedom of assembly, representative government, equal and secret suffrage, free trade, and protection of private property; while they were strongly opposed to the creation of a welfare state, which they called "State Socialism".

One of the first German authors to propose the term and concept of "social liberalism" (Sozialliberalismus) was the historian and economist Ignaz Jastrow. He published the manifesto "'Social-liberal': Tasks for Liberalism in Prussia" ("Sozialliberal": die Aufgaben des Liberalismus in Preußen) in 1893. Jastrow, who was a member of the Verein für Socialpolitik, and his supporters tried to found a social-liberal party, aimed at bringing together liberals who supported social reform and the reformist/revisionist wing of the Social Democrats, which should be a "workers' reform party" and "action group for people's right and people's welfare" (Waffenbund für Volksrecht und Volkswohlfahrt). This project was however rejected by Social Democrats and failed.

A similar project was the National-Social Association founded and led by the Protestant pastor Friedrich Naumann, who maintained close contacts with Brentano and Schulze-Gävernitz as well as Max Weber who supported the party that was influenced by his political theories. It tried to draw workers away from Marxism by proposing a mix of (social) liberalism, nationalism, a non-Marxist variant of "socialism" and Protestant Christian values to overcome class antagonisms by non-revolutionary means. Naumann called this a "proletarian-bourgeois integral liberalism". The new group advocated, among other things, increased social welfare legislation, the right to strike, and profit-sharing in industry. Although the party was unable to win any seats and soon dissolved, the theories it developed would remain influential in German liberalism.

The "left-liberal" German Democratic Party during the Weimar Republic (1919–33) included both classically and economically liberal and social-liberal currents.

France

In France, social liberal theory was developed in the Third Republic by solidarist thinkers, including Alfred Fouillée and Émile Durkheim, who were inspired by sociology and influenced radical politicians like Léon Bourgeois. They explained that a greater division of labor caused greater opportunity and individualism, but it also inspired a more complex interdependence. They argued that the individual had a debt to society, promoting progressive taxation to support public works and welfare schemes. However, they wanted the state to coordinate rather than to manage, and they encouraged cooperative insurance schemes among individuals. Their main objective was to remove barriers to social mobility rather than create a welfare state.

United States

In the 1870s and the 1880s, the American economists Richard Ely, John Bates Clark, and Henry Carter Adams—influenced both by socialism and the Evangelical Protestant movement—castigated the conditions caused by industrial factories and expressed sympathy towards labor unions. None, however, developed a systematic political philosophy, and they later abandoned their flirtations with socialist thinking. In 1883, Lester Frank Ward published the two-volume Dynamic Sociology and formalized the basic tenets of social liberalism while at the same time attacking the laissez-faire policies advocated by Herbert Spencer and William Graham Sumner. The historian Henry Steele Commager ranked Ward alongside William James, John Dewey, and Oliver Wendell Holmes, Jr., and called him the father of the modern welfare state. Writing from 1884 until the 1930s, John Dewey—an educator influenced by Hobhouse, Green, and Ward—advocated socialist methods to achieve liberal goals. Some social liberal ideas were later incorporated into the New Deal, which developed as a response to the Great Depression, when Franklin Delano Roosevelt came into office.

Implementation

The welfare state grew gradually and unevenly from the late nineteenth century, but became fully developed following the Second World War, along with the mixed market economy. Also called "embedded liberalism", social liberal policies gained broad support across the political spectrum, because they reduced the disruptive and polarizing tendencies in society, without challenging the capitalist economic system. Business accepted social liberalism in the face of widespread dissatisfaction with the boom and bust cycle of the earlier economic system as it seemed to them to be a lesser evil than more left-wing modes of government. Social liberalism was characterized by cooperation between big business, government and labor unions. Government was able to assume a strong role because its power had been strengthened by the wartime economy. However, the extent to which this occurred varied considerably among Western democracies.

United Kingdom

The first notable implementation of social liberal policies occurred under the Liberal Party in Britain from 1906 until 1914. These initiatives became known as the Liberal reforms. The main elements included pensions for poor elderly people, health, sickness, and unemployment insurance based on earlier programs in Germany, and the establishment of labour exchanges. These changes were accompanied by progressive taxation, particularly in the People's Budget of 1909. The old system of charity—relying on the Poor laws and supplemented by private charity, public co-operatives, and private insurance companies—was in crisis, giving the state added impetus for reform. The Liberal Party caucus elected in 1906 also contained more professionals, including academics and journalists, sympathetic to social liberalism. The large business owners had mostly deserted the Liberals for the Conservatives, the latter becoming the favorite party for commercial interests. The reforms were regularly opposed by both business interests and trade unions. Liberals most identified with these reforms were Prime Minister H. H. Asquith, John Maynard Keynes, David Lloyd George (especially as Chancellor of the Exchequer), Winston Churchill (as President of the Board of Trade) in addition to the civil servant William Beveridge.

Most of the social democratic parties in Europe (notably including the British Labour Party) have taken on strong influences of social liberal ideology. Despite Britain's two major parties coming from the traditions of socialism and conservatism, most substantive political and economic debates of recent times were between social liberal and classical liberal concepts.

Germany

Alexander Rüstow, a German economist, first proposed the German variant of economic social liberalism. In 1932, speaking at the Social Policy Association, he applied the label "neoliberalism" to this kind of social liberalism, although that term now carries a meaning different from the one proposed by Rüstow. Rüstow wanted an alternative to socialism and to the classical liberal economics developed in the German Empire. In 1938, Rüstow met with a variety of economic thinkers—including the likes of Ludwig von Mises, Friedrich von Hayek, and William Roepke—to determine how liberalism could be renewed. Rüstow advocated a strong state to enforce free markets and state intervention to correct market failures. However, Mises argued that monopolies and cartels operated because of state intervention and protectionism, and claimed that the only legitimate role for the state was to abolish barriers to market entry. He viewed Rüstow's proposals as negating market freedom and saw them as similar to socialism.

Following the Second World War, Rüstow's "neoliberalism", now usually called ordoliberalism or the social market economy, was adopted by the West German government under Ludwig Erhard, who was the Minister of Economics and later became Chancellor. Price controls were lifted and free markets were introduced. While these policies are credited with Germany's post-war economic recovery, the welfare state—which had been established under Bismarck—became increasingly costly.

Rest of Europe

The post-war governments of other countries in Western Europe also followed social liberal policies. These policies were implemented primarily by Christian Democrats and Social Democrats, as liberal parties in Europe declined in strength from their peak in the nineteenth century.

United States

American political discourse resisted this social turn in European liberalism. While the economic policies of the New Deal appeared Keynesian, there was no revision of liberal theory in favor of greater state initiative. Even though America lacked an effective socialist movement, New Deal policies often appeared radical and were attacked by the right. The separate development of modern liberalism in the United States is often attributed to American exceptionalism, which kept mainstream American ideology within a narrow range.

John Rawls' principal work A Theory of Justice (1971) can be considered a flagship exposition of social liberal thinking, advocating the combination of individual freedom and a fairer distribution of resources. According to Rawls, every individual should be allowed to choose and pursue his or her own conception of what is desirable in life, while a socially just distribution of goods must be maintained. Rawls argued that differences in material wealth are tolerable if general economic growth and wealth also benefit the poorest. A Theory of Justice countered utilitarian thinking in the tradition of Jeremy Bentham, instead following the Kantian concept of a social contract, picturing society as a mutual agreement between rational citizens, producing rights and duties as well as establishing and defining roles and tasks of the state. Rawls put the "equal liberty principle" in the first place, providing every person with equal access to the same set of fundamental (political) liberties; followed by the "fair equality of opportunity" and "difference principle" allowing social and economic inequalities under the precondition that privileged positions are accessible to everyone, that everyone has equal opportunities, and that even the least advantaged members of society benefit from this framework. This was later restated in the equation of Justice as Fairness. Rawls proposed these principles not just to adherents of liberalism, but as a basis for all democratic politics, regardless of ideology. The work advanced social liberal ideas immensely within 1970s' political and philosophic academia. Rawls may therefore be seen as a "patron saint" of social liberalism.7

Decline

Following economic problems in the 1970s, liberal thought underwent some transformation. Keynesian economic management was seen as interfering with the free market, while increased welfare spending that had been funded by higher taxes prompted fears of lower investment, lower consumer spending, and the creation of a "dependency culture." Trade unions often caused high wages and industrial disruption, while full employment was regarded as unsustainable. Writers such as Milton Friedman and Samuel Brittan, who were influenced by Friedrich Hayek, advocated a reversal of social liberalism. Their policies, which are often called neoliberalism, had a significant influence on Western politics, most notably on the governments of UK Prime Minister Margaret Thatcher and US President Ronald Reagan, who pursued policies of deregulation of the economy and reduction in spending on social services.

Part of the reason for the collapse of the social liberal coalition was a challenge in the 1970s from financial interests that could operate independently of national governments. Another cause was the decline of organized labor which had formed part of the coalition but was also a support for left-wing ideologies challenging the liberal consensus. Related to this was the decline of working class consciousness and the growth of the middle class. The push by the United States, which had been least accepting of social liberalism, for trade liberalization further eroded support.

Active social liberal parties and organizations

In Europe, social liberal parties tend to be small or medium-sized centrist and centre-left parties. Examples of successful European social liberal parties, which have participated in government coalitions at national or regional levels, are the Liberal Democrats in the United Kingdom, Democrats 66 in the Netherlands, and the Danish Social Liberal Party. In continental European politics, social liberal parties are integrated in the Alliance of Liberals and Democrats for Europe (ALDE) group in the European Parliament, which is the fourth biggest group at the parliament and includes both social liberal parties and market liberal parties.

Giving an exhaustive list of social liberal parties worldwide is difficult, largely because political organisations are not always ideologically pure. Party ideologies often change over time. However, the following parties and organisations are usually accepted by peers or scholars as following social liberalism as a core ideology.

Notable social liberal thinkers

This list presents some notable scholars and politicians who are generally considered as having made significant contributions to the evolution of social liberalism as a political ideology: