The purpose of this paper is to treat the similarly and differences of liberalism. I
will use John Locke and Adam Smith to represent classical liberals. John Stuart Mill and
John Maynard Keynes will be used to show contemporary liberals.
In John Locke's Second Treatise of Government he develops a theory of
government as a product of a social contract, which when broken justifies the creation of
a new government for the protection of life, liberty and property. He begins his argument
by developing a theory of the state of nature which is
...what state all men are naturally in, and that is, a state of perfect freedom
to order their actions and dispose of their possessions and persons as they
think fit, within the bounds of the law of nature, without asking leave or
depending upon the will of any other man.1
The state of nature includes the "...law of nature to govern it, which obliges everyone;
and reason, which is that law, teaches all mankind who will but consult it..."2 The state
of nature also includes inequality
...since gold and silver, being little useful to the life of a man in proportion
to food, raiment, and carriage, has its value only from the consent of men,
whereof labour yet makes, in great part, the measure, it is plain that men
have agreed to a disproportional and unequal possession of the earth.3
In Locke's state on nature there are also three distinct problems.
First there is no established settled known law. As each man consults his own law of
nature he receives a slightly different interpretation.
Secondly there no known and indifferent judge. Which creates the problem of trying to
decide which is the correct law of nature which will be followed in an impartial manor.
Thirdly there is insufficient force of execution. This is the problem of how to carry out
the decision of the law of nature on another when he has a different interpretation or
doesn't consult the law of nature.
Locke states that the three problems in the state of nature would be best solved by
coming together to form a new government to protect there property.
The great and chief end therefore, of men's coming into commonwealths,
and putting themselves under government, is the preservation of their
And goes further into what this new government should be empowered to do
firstly...established, settled known law, received and allowed by common
consent to be the standard of right and wrong, and the common measure to
decide all controversies between them...secondly...there wants a known
and indifferent judge, with authority to determine all differences according to
the established law...thirdly...There often wants power to back and support
the sentence when right, and to give it due execution. They who by any
injustice offend, will seldom fail, where they are able, by force to make good
In Locke's government men only give up the right to the above mentioned things,
to create the law for themselves, to judge the law for themselves, and to execute the law
for themselves. These are the only rights that the government has the right to interfere in
as it is the only reason that people entered into a commonwealth. Locke also explains the
new social contract that the new government should operate under. The first point of the
contract is that the people agree to form a body politic, in which the majority rule.
Second the body politic selects a government of the day. (elects people on a regular basis
to the government to legislate the law)
Locke laid out who should be allowed the right to vote, who shouldn't be allowed
to vote and gives his reason why.
...all men as members for the purposes of being ruled and only men of estate
as members for the prepossess of ruling. The right to rule (more accurately,
the right to control any government) is given to the men of estate only: it is
they who are given the decisive voice about taxation, without which no
government can subsist. On the other hand, the obligation to be bound by law
and subject to the lawful government is fixed on all men whether or not they
have property in the sense of estate, and indeed whether or not they have made
an express compact.6
Johns Stuart Mill
There is no difficulty in showing that the ideally best form of government is that
in which the sovereignty, or supreme controlling power in the last resort, is
vested in the entire aggregate of the community.7
It is with this statement that Mill begins his augment in The Ideally Best Polity
showing his believe in Locke's democracy but saying that all people could be best served
by the government if everyone could vote. As this is the only way the government learns
what it needs to know in order to govern. He comes to this concussion by saying that
participatory democracy is the best answer to the two questions that he poses as to what
makes a good government.
...namely how far it promotes the good management of the affairs of society
by means of the existing faculties, moral, intellectual, and active, of its various
members, and what effect in improving or deteriorating those faculties.8
Mill believes that it is necessary to expand the role of government not only to
protect the people from the government but to promote liberty by putting limits on what
can be expressed as public opinion against a minority, and to involve people in the
government so as to give them stimulation and help them develop.
In Mill's writings he also discuses the idea of liberty and what limits government
and public opinion should have on interfering with a individuals liberty.
...the only purpose for which power can be rightfully exercised over any
member of a civilized community, against his will, is to prevent harm to
others. His own good, either physical or moral, is not a sufficient warrant.9
Differences Between Locke and Mill
Although Locke and Mill both believe in government by and for the governed
there chief difference is in the idea of who the government is for. Where Locke believes
that the purpose of government is to protect property, there for if you did not have
property you didn't have anything to protect and shouldn't have a voice in the
government. Mill believes in an participatory democracy in which everyone should have
the right to vote as it is a way of bettering society as a whole and making sure that
everyone's interests are consulted. They also differ on the role the government should
play in the lives of the governed. Locke advocates a government which doesn't have any
power to interfere in the lives of the governed out side of protecting their property.
Where Mill would like to see a government which attempts to better the lives that it
governs and protect them form the tyranny of the majority.
In 1776 Adam Smith published a book titled The Wealth of Nations in which he
recorded his ideas on the way the money and the economy worked. He had came to
some important concussions about how the market worked which went hand in hand with
why the government shouldn't interfere in its workings.
There are three main points in his idea of capitalism the first was self interest
...a drive to maximize income...by concluding the best possible bargain on
the marketplace into which everyone ventured, either to sell his or her labor
power or other resources, or to purchase goods.10
Second competition would act as a regulator
For each man, out to do the best for himself with no thought of others, is
faced with a host of similarly motivated individuals who are in exactly the
same position. Each is only too eager to take advantage of his competitor's
greed if it urges him to raise his price above the level "set" by the market.11
Thirdly the idea of supply and demand would automatically regulate what is produced,
the quantity produced, quality of goods, and increase efficiency in the production
process. "...the changing desires of society lead producers to increase production of
wanted goods and to diminish the production of goods that are no longer as highly
John Maynard Keynes
While Keynes agreed with Adam Smith on the way the market place works he
noted that the wealth of an economy depends on the amount of money flowing and the
rate at which it flows. This means that the market place was prone to certain types of
macro economic illness. These illesses are
First, that an economy in depression might well stay there; there was nothing
inherent in the situation to pull it out. Second, that prosperity depended on
investment; for if savings were not put to use, the dread spiral of contraction
began. And third, that investment was an undependable drive wheel for the
economy threated with satiety, and satiety spelled economic shrinkage.13
Keynes reasoned that
...if investment could not be directly stimulated, why then, at least
consumption could. For while investment was the capricious element
in the system, consumption provided the great floor of economic activity...14
He looked to the government to maintain the macro economy. Saying that if
consumption could be controlled in a way to heat up the economy when it is running cold
and cool it down when it is running hot. This was to be done through the policies of
...monetary control, mainly centered in the Federal Reserve banking system.
By easing or tightening the reserve requirements that all banks had to maintain
behind their deposits, the Federal Reserve was able to encourage or
discourage lending, the source of much economic activity. In addition, by
buying or selling government bonds, the Federal Reserve was able to make
the whole banking system relatively flush with funds when these were needed,
or relatively short of funds when money seemed in excess supply.
...second was tax adjustment...By raising or lowering taxes, particularly
income taxes, the government could quickly increase or diminish this broad
flow of purchasing power.
...third was the federal budget...In inflationary times, a budget surplus would
sere to mop up part of the inflationary purchasing flow. In depressed times,
a budget deficit (covered by borrowing) was a mechanism for generating a
desired increase in that flow.15
Similarities common to liberals
Classical liberals held the believes that the government should be for thoughts
who were governed and held property. Inaddision that the governments only role should
be to protect peoples property and shouldn't interfere in any other part of peoples lives.
Contemporary liberals believe that the government should take a much more
active role in the lives of the governed both to better society and to protect it form
fluctuations of the business cycle.
All liberals believe that government should be held responsible to the governed to
serve there secular purposes. That capitalism is the corner stone of the free market
society and that the government should not directly interfere in the micro economy. And
lastly in individualism that we are all free, rational, equal, act only according to our own
consent, and have a right to voluntary association.
In drawing this brief account of the liberal-democratic analysis of equality to
a concussion we are properly struck by the significant distance which separates
the contemporary, revisioist idea from that of its classical predecessors.16
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