The Origin of 'Liberalism'

When Adam Smith and a group of fellow Scots first used the word in a political sense, it meant something very different than it does today.

It's easy to feel lost in information today, but “big data” can also help us understand the formulations we use in interpreting information, including politics. Google has scanned millions of books published over centuries. Can billions upon billions of words in digital form help us understand our history and character?

Thanks to digitization, we can now establish when the word “liberal” first took on a political meaning. For centuries it had had what scholars have called pre-political meanings, such as generous, tolerant, or suitable to one of noble or superior status—as in “liberal arts” and “liberal education.”  But now using Google’s Ngram Viewer we can see what the word “liberal”—as an adjective—was used to modify. Up to 1769 the word was used only in pre-political ways, but in and around 1769 such terms as “liberal policy,” “liberal plan,” “liberal system,” “liberal views,” “liberal ideas,” and “liberal principles” begin sprouting like flowers.

My research with Will Fleming finds that the Scottish historian William Robertson appears to be the most significant innovator, repeatedly using “liberal” in a political way, notably in a book published in 1769. (I presented more details in a lecture at the Ratio Institute, viewable here.) Of the Hanseatic League, for example, Robertson spoke of “the spirit and zeal with which they contended for those liberties and rights,” and how a society of merchants, “attentive only to commercial objects, could not fail of diffusing over Europe new and more liberal ideas concerning justice and order.”

Robertson’s friend and fellow Scot Adam Smith used “liberal” in a similar sense in The Wealth of Nations, published in 1776. If all nations, Smith says, were to follow “the liberal system of free exportation and free importation,” then they would be like one great cosmopolitan empire, and famines would be prevented. Then he repeats the phrase: “But very few countries have entirely adopted this liberal system.”

Smith’s “liberal system” was not concerned solely with international trade. He used “liberal” to describe application of the same principles to domestic policy issues. Smith was a great opponent of restrictions in the labor market, favoring freedom of contract, and wished to see labor markets “resting on such liberal principles.”

Elsewhere, Smith draws an important contrast between regulating “the industry and commerce of a great country … upon the same model as the departments of a publick office”—that is, to direct the economy as though it were an organization—versus “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice.” In drawing such a contrast, Smith again is signaling the label “liberal” for the latter, which he favors.

Smith also compliments a school of French economists: “In representing perfect liberty as the only effectual expedient” for making national wealth as great as possible, “its doctrine seems to be in every respect as just as it is generous and liberal.” At the core of Smith’s idea of liberal principles is the idea of natural liberty:

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.

For Smith, natural liberty was not an axiom. He made exceptions to it and acknowledged that he was doing so. Still, it is his main principle, and the burden of proof is on those who would contravene it. In an open letter to Smith in 1787, Jeremy Bentham saluted him for having taught society the presumption of liberty. Bentham then proceeded to challenge Smith on one of his exceptions, saying that Smith had failed to meet the burden of proof when he made an exception to natural liberty by endorsing an existing law setting a maximum interest rate.

Shortly after The Wealth of Nations was published, Robertson wrote to Smith, saluting it as an antidote to "illiberal arrangements" and saying, “Your Book must necessarily become a Political or Commercial Code to all Europe, which must be often consulted by men both of Practice and Speculation.” Robertson’s expectation, widely shared at the time, proved accurate. And as Smith’s system spread, so did his term for it. The term became familiar in British officialdom, popping up occasionally in Parliamentary debate and even in King George III’s address at the opening of Parliament in 1782.

The term was exported to Europe and the United States as well. Some scholars have argued that the modern usage of “liberal” originated on the European continent before spreading to Britain. But using Google’s scans of books in French, Spanish, Italian, and German, we can see that usage in these countries trails Britain. I wouldn’t go so far as Arthur Herman does in the title of his splendid 2001 book, How the Scots Invented the Modern World, but it was Scots who originated the use of “liberal” in a political sense.

On the Continent, “liberal” was used, as compared to in Britain, more to denote constitutional reform and political participation, as opposed to natural liberty. Britain’s exceptional history of stable government and islandhood helped to make Smith’s focus on natural liberty possible. In his recent book Inventing Freedom: How the English-Speaking Peoples Made the Modern World, Daniel Hannan quotes Smith in a 1763 lecture. After the 1707 union of England and Scotland the “dominions were then entirely surrounded by the sea … No foreign invasion was therefore much to be dreaded ...They were therefore,” Smith continued, “under no necessity of keeping up a standing army.” The Parliament shared power with the Crown, under a rule of law. “In this manner,” Smith said, “a system of liberty has been established in England before the standing army was introduced; which as it was not the case in other countries, so it has not been ever established in them.”

After Smith’s death in 1790, his peers and students, such as Dugald Stewart and then Stewart’s flock of influential students, including those of the Edinburgh Review, reinforced “liberal” discourse and guaranteed that the term’s usage continued to spread. In the 1820s the suffix “-ism” was attached to create “liberalism.” and later in the century the Liberal Party rose in British politics.

William Gladstone, the party’s leader, served four terms as prime minister of the United Kingdom. To Gladstone and Liberal Party associates such as Richard Cobden and John Bright, “liberal” was understood largely as Adam Smith first used the term in a political sense. Gladstone advanced free trade abroad, reduced government expenditures, and reduced taxation. Joseph Schumpeter put it this way: “Gladstonian finance was the finance of the system of 'natural liberty,' laissez-faire, and free trade.” As for domestic deregulation, the Liberal Party’s record was mixed, but it has to be understood in the context of pressure toward interventionism. In his book The Rise and Fall of Liberal Government in Victorian Britain, Jonathan Parry writes, “Politicians were faced with the need to respond to the mass electorate, and they compromised accordingly … Liberals were committed to using the powers of central and local government pragmatically and constructively, so as to secure order, economy, free-market conditions and self-improvement.”

It was especially after 1880 that the Smithian sense of “liberal” began to lose traction to other, often contrary, meanings. The principal presumption of today’s “liberalism” often lies with the status quo, or even with the idea that the government should “do something” to solve perceived problems.

Google’s work enables us to establish who first used “liberal” in a political sense, what it meant, and how it spread. By knowing about the inception of “liberal” principles, we better understand the confusing semantics of politics today. Today, many of those who admire Adam Smith call themselves “classical liberals.” Maybe someday they will again be able to say simply “liberal.”