Classical Becomes Modern

Introduction

Some laissez-faire economists supported the Factory Acts and changes to the terrible conditions during the Industrial Revolution but not all as it will mean more government involvement, something many are opposed to.

All the ‘liberals’ agree on the importance of individual liberty, but differ on the role of the state:

• Neo-classical liberals said Locke was right and that we needed minimum government involvement
• Social Liberals supported government regulation and a welfare state

During the Industrial Revolution, Laissez-faire capitalism had a negative impact on many workers. Factories were terrible places to work (unsafe, overcrowded, limited ventilation, long hours, and low pay). Workers' standard of living did not improve (cost of living went up, standard of living went down). Labour standards and unions started to form, along with voting rights and the welfare state.

Key ideas that contributed to the growth of modern liberalism

Labour Unions

During the late 1800s and early 1900s, some believed labour unions were necessary to protect workers from the negative impacts of laissez-faire capitalism. Strikes started to occur when workers refused to do work. A general strike is when workers in all or most industries and jobs strike together. This usually happened after labour unions and employers failed to reach an agreement on what working conditions should look like.

Winnipeg General Strike of 1919

• In 1913, the cost of living rose 64%
• Several factories shut down after WWI, leading to high unemployment
• People felt factory owners profited during the war at the expense of workers
• The first to strike, on May 1, was the “Hello Girls”, the telephone operators in Winnipeg
• By 11:00 am 30,000 people had walked off the job

Voting Rights

• in the early 1800s, very few countries were liberal democracies
• where people could vote, the vote was usually restricted to land-owning white men
• this slowly starts to change as suffrage is extended to more people
• to attract more people to vote for them, governments started promising programs and policies that would support many different groups (employment insurance, old-age pensions) resulting in the eventual creation of the Welfare State
• supporters of the Welfare State argued that when people are healthy, safe, and economically secure they are better able to contribute to society
• many classical liberals argued against the welfare state as they believed it creates a dependence on government and discourages innovation and motivation

Expanding suffrage

Expanding the right to vote led to improved working conditions. More governments came to believe that they should ensure a basic standard of living for all people. People started to focus on the idea of extending rights to all citizens. The expansion of voting happened at different times for different groups, and some groups are still fighting for equal access and voting rights in various countries.

Welfare State

A society in which government plays a large role in providing for the needs of its citizens through social programs, based on the principles of equality of opportunity and equitable distribution of wealth. Ie. old age pension, employment insurance, health care, and education.

Summary

Classical liberalism was not able to provide the average person with a reasonable standard of living. Industrialization led to poor working conditions, child labour, poverty, and illness for many people. Eventually, there was a shift in thought, and it was recognized that the government had to deal with these social consequences. Classical liberalism began to evolve.

The abuses of capitalism led to increased government involvement and policies that supported the needs of the middle and lower classes. Modern liberalism has evolved out of classical liberalism to protect the common good as well as individual rights and freedoms.