Modern Liberalism

Political Studies: Edexcel A Level, topic 6.2.2

Modern liberalism is a newer form of liberalism and believes in regulating the free market in order to prevent high levels of inequality.

Modern liberalism supports capitalism but not free-market distribution of resources alone.
Structural barriers such as poverty, unemployment and low education can lead to an inefficient allocation of resources and market failure.
State intervention is justified to correct these failures and promote fairer distribution of resources and opportunities.

‘New’ liberalism in the early 20th century is one form of modern liberalism.
In the UK, modern liberalism has evolved from the 1906 Liberal government up to the present day.

Modern liberals support the enabling state.
The enabling state is a larger state that provides individuals with the resources that may be necessary to succeed.
This kind of state supports individuals, rather than forcing them to be successful.
As a result, this kind of state accepts more government intervention in society and in the economy.
For example, progressive taxation can be used to raise income for social welfare programs.

In the early 20th century the Liberal government introduced graduated income taxes to fund social reforms, such as some healthcare services and social insurance programs.
The welfare reforms that took place after the Second World War were heavily influenced by the work of Sir William Beveridge, a Liberal peer.
The Beveridge Report outlined ways to support the poorest and worst-off in society and was one of the inspirations for the founding of the National Health Service.

Modern liberals believe in positive freedom rather than negative freedom where state intervention can ensure freedom.
This can be through increasing opportunities for citizens or through policies which reduce poverty in society.

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