Duncan Brack and Ed Randall, authors of the Dictionary of Liberal Thought, have kindly agreed to let us publish extracts on Lib Dem Voice. This month we continue our trilogy of postings on liberalism – classical, economic and social. Last month it was classical; this month, it’s economic. You can read other previous extracts on LDV here. The entire book is available on Amazon here and can also be bought at the Westminster Bookshop.
In political terms, economic liberals proclaim their belief in individual freedom and free markets; they support a reduction in the role of the state, particularly in the spheres of economic management and social welfare. The term is often used interchangeably with classical liberalism and that entry should be referred to for a summary of the economic liberal position.
The term ‘classical liberalism’ itself tends to be associated with nineteenth-century approaches to political and economic questions, such as that of the Manchester School. The label ‘economic liberal’ has been more commonly used in modern times, in particular to contrast such individuals’ views with those of social liberals, who are more willing to accept the case for state intervention as a means of promoting freedom. Economic liberals point to the dangers inherent in such state action, including the growth in bureaucratic power, the threat to civil liberties from an overweening state, and the potential reduction in economic competitiveness.
Although the British Liberal Party/Liberal Democrats are in general viewed as a social liberal party, there have been and remain some tensions between social and economic liberals, explored in the entry on social liberalism. That entry also explores why continental European liberal parties tend to be more likely to identify themselves as ‘economic liberal’, although several European countries possess both social liberal and economic liberal parties.
The term ‘economic liberal’ – or ‘neo-liberal’ – has also been used to describe the economic and trade liberalisation policies of the ‘Washington consensus’ promoted in particular by the International Monetary Fund, involving a withdrawal of state involvement in the economy and a reduction in trade barriers.
The Dictionary of Liberal Thought is one of the many titles available from the Liberal Democrat History Group. Find out more about them on their website.