On Liberalism and Neoliberalism

This short note attempts to define (classical) liberalism and neoliberalism and compare and contrast them. Both terms refer to the respective liberal and neoliberal orders and to the corresponding political philosophies. The former require a valid model of early and late capitalism and so I will not address them. My interest here is in the two political philosophies.

Both liberalism and neoliberalism have received many formulations, the former by thinkers as diverse as Hobbes, Locke, Rousseau, Kant, and Mill not to mention contemporaries like Rawls and Sen, and the latter by many twentieth century thinkers such as Hayek and Friedman as well as by its critics such as Harvey and Mirowski.

I will try to identify the common core of these systems of ideas. Both definitions are stated in terms of necessary and jointly sufficient conditions. The “if” captures sufficiency and the “only if” captures necessity.

A system of political philosophy is liberal if and only if

a) It involves a state that supports negative liberties for each individual compatible with the same negative liberty for all other individuals including especially the protection of private property.

b) It optionally provides the same positive liberties for each individual.

The terms “negative” and “positive” liberty were introduced by Berlin and refer to freedoms from various constraints on the one hand and freedoms to do various things on the other. For example, the freedom from constraints on moving about is a negative liberty and the freedom to participate in public life is a positive liberty.

A system of political philosophy is neoliberal if and only if

a) It involves a state that supports negative liberties for each individual compatible with the same negative liberty for all other individuals including especially the protection of private property.

b) It uses a free-market version of neoclassical economics as the model for all human activity.

c) It is global and encompasses the entire system of nation states in the world and conditions (a) and (b) apply to each state in this system as well as to relations between these states.

Condition (a) is shared by both concepts and is the reason for the prefix “neo” in “neoliberalism.” Condition (b) in the first definition is absent in the second because in the latter most positive liberties are left to individuals to realize on their own. On the other hand, the last two conditions from the second definition are missing from the first. Thus, it becomes very easy to see what is shared and what is different in the two terms.

The corresponding historical orders for both political philosophies differ in many ways from these “ideal” intentions.