Political and economic doctrine that emphasizes the rights and freedoms of the individual and the need to limit the powers of government. Liberalism originated as a defensive reaction to the horrors of the European wars of religion of the 16th century (see Thirty Years' War). Its basic ideas were given formal expression in works by Thomas Hobbes and John Locke, both of whom argued that the power of the sovereign is ultimately justified by the consent of the governed, given in a hypothetical social contract rather than by divine right (see divine kingship). In the economic realm, liberals in the 19th century urged the end of state interference in the economic life of society. Following Adam Smith, they argued that economic systems based on free markets are more efficient and generate more prosperity than those that are partly state-controlled. In response to the great inequalities of wealth and other social problems created by the Industrial Revolution in Europe and North America, liberals in the late 19th and early 20th centuries advocated limited state intervention in the market and the creation of state-funded social services, such as free public education and health insurance. In the U.S. the New Deal program undertaken by Pres. Franklin D. Roosevelt typified modern liberalism in its vast expansion of the scope of governmental activities and its increased regulation of business. After World War II a further expansion of social welfare programs occurred in Britain, Scandinavia, and the U.S. Economic stagnation beginning in the late 1970s led to a revival of classical liberal positions favouring free markets, especially among political conservatives in Britain and the U.S. Contemporary liberalism remains committed to social reform, including reducing inequality and expanding individual rights. See also conservatism; individualism.

Neither individualism nor the belief that freedom is a primary political good are immutable laws of history. Only in the Western world in the last several centuries have they assumed such importance as social factors that they could be blended into a political creed. Although Christianity had long taught the worth of the individual soul and the Renaissance had placed a value upon individualism in limited circles, it was not until the Reformation that the importance of independent individual thought and action were expressed in the teachings of Protestantism. At the same time, centralizing monarchs were destroying feudalism and alongside the nobility arose the bourgeoisie, a new social class that demanded the right to function in society, especially commercially, without restriction. This process took several centuries, and it may be said that the first philosopher to offer a complete liberal doctrine of individual freedom was the Englishman John Locke (1689). From this period on the doctrines of classical liberalism were evolved.