Liberalism has been undergoing important changes with the passage of time. We can identify its two broad forms: Classical Liberalism and Contemporary Liberalism:
1. Classical Liberalism or Individualism:
Classical Liberalism was the oldest or rather the original form of Liberalism. It was another name for individualisim. It supported a limited government based on the consent of the people. Scholars like John Locke, Adam Smith, Herbert Spencer and some others propounded this doctrine.
The classical liberalists regarded the individual as the centre of the whole system and sought maximum liberty for him. It supported the doctrine of natural rights of individual and considered the society as a mere collection of individuals. It desired minimum control of the State upon individuals. It even advocated : ‘that government is best which governs the least.’ In the economic sphere it supported the idea of “Laisses-Faire’ meaning least amount of state interference in the economic life of the people. It also supported open competition in the sphere of trade.
2. Contemporary Liberalism:
Towards the end of 19th century, there took place several important changes in liberalism. Classical Liberalism had enabled the capitalists to exploit the working classes to the maximum. This had reduced the workers to the level of abject poverty. Due to the policy of open competition in business, money got concentrated in the hands of a few persons.
It had brought severe inequalities in society. Seeing such results, J.S Mill, T.H. Green and some other thinkers began opposing the policy of unregulated open competition and non-interference of the State in economic life of society. They tried to bring about a certain harmony between the individual good and public welfare. They began supporting the idea of the entrusting public welfare functions to the State.
T.H. Green and J.S. Mill both came forward to support that functions of the state should be directed towards the welfare and happiness of all. Both advocated that the State must work to remove hindrances in the way of individual’s development. They, particularly Green rave a positive direction to the activities of the State and made an attempt to move liberalism towards humanism and welfareism.
During the 20th century, scholars like Laski, Barker, G.D.H. Cole, MacIver and Hobhouse tried to bring about more changes in Liberalism. They attempted to associate liberalism with the concept of welfare state. They were of the view that it could only be through an active interference of the state that the social and political conditions could be reformed. They incorporated the idea of social welfare in the ideology of liberalism and gave it a more practical shape. Liberty was defined in its positive dimension as civil liberty or liberty under law and with necessary rational restraints.
The 20th century liberalism made a serious attempt at establishing a world order free from all kinds of repressions and exploitations. Later on, the concepts of Civil Society, Human Rights and liberalisation of polity and economy got incorporated in liberalism. The failure of socialism in all the communist countries tremendously increased the popularity and appeal of liberalism. Liberalism has now got recognition as the best and most productive ideology.