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Classical liberalism or progressive liberalism is a political and economic philosophy emerging along with the growth of capitalism. Classical liberalism is also called laissez-faire liberalism. Classical liberalism is a term used to describe the philosophy developed by early liberals from the Enlightenment until John Stuart Mill. The central belief in classical liberalism is that unregulated free markets are the best means to allocate productive resources and distribute goods and services and that government intervention should be minimal.

Behind classical liberalism is an assumption about individuals being rational, self-interested and methodical in the pursuit of their goals. Classical liberalism is a political ideology which advocates civil liberties under the rule of law with an emphasis on economic freedom. The contemporary restatement of classical liberalism is sometimes called Neo-liberalism. By the end of the 19th century, the belief in free market economics became moderated in some versions of liberalism to acknowledge the growing conviction that liberty or freedom for the individual was a hollow promise if the social conditions of society made liberty meaningless.

Classical liberalism philosophy believed that the state must become more involved in managing the economy in order to soften the negative effects of market economy and maximize the well-being of each individual. This new direction for liberalism is often referred to as ‘progressive liberalism’. This newer classical liberalism philosophy supported the growth of the welfare state, but has come under attack in the past two decades. Libertarianism is also synonymous with classical liberalism. People who do not use "libertarianism" as a synonym for anarchism but use it to refer to individualistic free-market philosophy only, refer to free-market anarchism as "libertarian anarchism." The word libertarian is an antonym of authoritarian. Till recently the term "libertarianism" was often used as a synonym for anarchism.

Classical Liberalism and the Modern State - John A. Hall
Daedalus. Vol. 116, No. 3, Futures (Summer, 1987), pp. 95-118
Published by: The MIT Press on behalf of American Academy of Arts & Sciences.
What is the position of classical liberalism in the modern world?