Classical Liberalism

 It is associated with the rise of industrial capitalism in the 18th and 19th centuries. Followers of classical liberalism prized freedom above other values, and believed that freedom could best be achieved by restricting the power of government. In the late 20th century, classical liberalism was reinvented in Britain and the USA as neoliberalism. It was associated with the New Right, an important influence on the British Conservative Party under the leadership of Margaret Thatcher (1975-90) and her successors. 

Classical liberals emphasised a much more laissez-faire or hands-off approach by the government. A key writer here was Adam Smith, whose work The Wealth of Nations (1776) embraced both the free market and what he termed the ‘invisible hand’ of market forces. For Smith and other free-market advocates such as David Ricardo, wealth would ‘trickle down’ from the wealthiest to the rest of the population. Governments therefore should not interfere in trade by, for example, imposing duties and tariffs on imports.

■ Classical liberals were also very keen on self-help and self-reliance. Writers such as Samuel Smiles (who wrote Self Help in 1859) argued that it would be counter- productive of the state to replace the individual in providing the resources to help them. Smiles feared it would lead to a  ‘dependency syndrome’.

Laissez-faire, (French: “allow to do”) policy of minimum governmental interference in the economic affairs of individuals and society. The origin of the term is uncertain, but folklore suggests that it is derived from the answer Jean-Baptiste Colbert, comptroller general of finance under King Louis XIV of France, received when he asked industrialists what the government could do to help business: “Leave us alone.” The policy of laissez-faire received strong support in classical economics as it developed in Great Britain under the influence of the philosopher and economist Adam Smith.

The invisible hand