Chapter 3 – Liberalism, Pt 3

Welfare Liberalism Keynesians articulated a response to the excesses of laissez-faire capitalism in the Anglo-Saxon countries. Keynesians were (are) a type of welfare liberal who advanced fiscal policy as a way of managing economic cycles. On the continent, Socialism gained widespread appeal to deal with sub-standard working conditions, worker exploitation, and economic depression.

Welfare Liberalism vs Neo-Classical Liberalism Welfare Liberal Tradition – Key 20th Century Thinkers TH Green (first introduced the notion in 1870) Franklin Roosevelt (FDR) & the New Deal Wins US Presidency 1932, 1936, 1940, and 1944 Consensus on the Welfare State 1930s-1960s John Maynard Keynes (1936) Gov’t can help manage economic recessions & depressions John Rawls (1971, Theory of Justice – see last slide below) Neo-Classical Liberal Tradition: 1st Key 20th Century Thinker Friedrich Hayek (1944, Road to Serfdom) Just be able to identify him on the Midterm as key Neo-Classical Liberal After the midterm, we’ll see Hayek’s influence on Margaret Thatcher’s Conservative Party in the UK & on Reagan Republicanism in the U.S.

Liberalism In popular discourse, “liberal” tends to refer to liberalism on the left after 1932 Post World War II liberalism: Civil Rights Positive Liberty Left Liberal Movement The New Left (Students for a Democratic Society) Argued for active, participatory democracy

John Rawls and the Liberal Tradition A Theory of Justice, 1971 A philosophical defense of the welfare state: how can we maintain liberty while still providing for the maximization of everyone’s well-being, including society’s worst-off members? If unequal distribution of resources and wealth can be shown to increase everyone’s well-being, we can philosophically tolerate inequalities of wealth. This is a philosophical refutation of socialism and communism A philosophical defense of liberalism, welfare liberalism.

Reminder: As discussed in class May 2, the last 3 slides are not on the Midterm Exam! We’ll treat them in the Conservatism unit after the Midterm.

The Response from the Right: Neoclassical Liberalism Robert Nozick, and Milton Friedman were late twentieth century Neo-Classical Liberals who argued that Welfare Liberalism’s redistribution of wealth reduced incentives & economic growth After 1980, shift to Neo-Classical Liberalism & Libertarianism under Margaret Thatcher & Ronald Reagan in UK & US

Libertarianism After 1980, many supporters of Reagan and Thatcher (and by extension Hayek, Nozick, and Friedman) call themselves civil-libertarians. React to what they perceive as the excesses of welfare liberalism

Liberalism after 1992 The Third Way: By 1996, the Democratic Party and the Labour Party jettisoned much of their welfare liberalism and moved to a compromise with modern conservatism (neo-classical liberalism). Since the mid 1990s, an uneasy third way consensus has been achieved – between welfare liberals and classical liberals.