The Liberal Theory of State

Introduction
In today’s times with increasing importance granted to the interventionist
measures of the states, the study of the origins and role of the state
becomes necessary in order to facilitate the understanding of the reasons
and of the consequences of such measures through the opinions of some
of the most important philosophers and economists about the formation
and the role of the state in the life of individuals.

Concept of the state comprises the core of political thought.

Political thought has been defined as 'thought about the state, its structure,
its nature, and its purpose'. Several political thinkers and schools of thought
have developed ideas about the nature and purpose of the state according
to different points of view. When new ideas appeared, old ideas were
criticized or modified. In the realm of political philosophy, it is not necessary
that old ideas be dead before the new ideas become acceptable. Unlike the
principles of natural sciences, the old and new principles of political theory
exist simultaneously, claiming their rightful place.

Liberalism
Liberalism is ‘an ideology based on a commitment to individualism,
freedom, toleration and consent’.

The liberal theory of the role, its functions and the nature of state power
would invariably focus on:

 Ensuring, protecting and enlarging individual freedom

 Limiting the role and functions of the State
 Allowing state interference only when it helps an individual gain
more liberty and freedom
 Making individuals the source of State and governmental power
 Advocating a doctrine of a limited political obligation
Liberal Conception of State
The liberal state focuses on individual rights and freedom. It also argues for
a neutral and minimal state. It replaces the divine right theory* of the state
and argues that a legitimate rule must be based on the consent of the
people.
*the doctrine that the right of rule derives directly from God, not from the consent of the people.

States work for the common good of the society and its major activity is
understood as to be maintaining law and order and ensuring that everyone
is treated with equality without any discrimination. In other words, a liberal
state regards individuals as moral and rational agents. State’s role is seen
as providing them with the conducive conditions for growth and prosperity.

Its origin and growth can be traced back to the political struggles that took
place in England and France with the rise and growth of capitalism which
had led to a free market economy. These struggles focused on individual
dignity, self-respect, private property and, power and status particularly of
the emerging middle class of the society.

With the coming of the liberal state, there were some significant changes
occurring in the political organisation of the society like representative and
constitutional forms of government, rule of law, and governments based on
the consent of the ruled. It stressed on a new discourse on rights, to uphold
the natural and basic human-like rights - to life, property, freedom, justice
and so on. For example, Adam Smith, a liberal thinker, emphasized on the
individual urge to maximise economic interest or to achieve material gains
and thereby improve their living standards or fortunes.

Smith argued that if a state provides the condition of freedom to individuals

to make material and moral decisions concerning his/her life, the resulting
society would be a free and prosperous society. He talks about a free
market economy and less interference by the state. He said that the role of
the state should be like an ‘invisible hand’. For liberals in general,
commerce and trade would create a good and welfare-oriented
government.

For liberals, the role of the state is to carry out a legal framework under
which the market can function well. And, it should also maximise the
opportunity and prosperity of everyone. State should thus focus more on
adjudicative and legal roles. Liberals also argue that citizens have the right
to overthrow a government if it does not fulfil the desired roles and
functions such as creating conditions for human happiness and well-being.

Liberals wanted to ensure maximum freedom to individuals and therefore

regard the state as a necessary evil. As per them, without legal authority
in the form of state, individual lives and property would be under constant
threat. And that would be detrimental to peace and prosperity of the
society. Thus, State in a liberal framework should perform the minimum
role of maintaining law and order and enforcing a contract.

Within this broad focus, however, along with the changing notion of
individual liberty and freedom, the liberal tradition has journeyed through
changing notions of the State and its role.

Three distinct phases or streams of liberal tradition can be identified. These

are:

1. Negative liberalism or theory of laissez-faire individualism which is also known

as classical liberalism
2. Positive liberalism or welfare liberalism, and
3. Neo-liberalism or libertarianism

Negative Liberalism or Theory of Laissez-faire

Philosophical and political roots of negative liberalism can be traced in the
social contract theory of Hobbes and Locke. Subsequently, it was
developed, revised and amplified by Bentham and J. S. Mill's utilitarianism,
Spencer's ‘survival of the fittest’ doctrine, Paine's doctrine of State as a
‘necessary evil’ and others. On the economic front, the Physiocrats, Adam
Smith, David Ricardo, Thomas Robert Malthus and others provided the
ground and arguments for economic liberty. The two—negative liberty and
economic liberty—combined were destined to give birth to what we call
classical liberalism or laissez-faire individualism.

Features of negative liberalism include the following:

 Inalienable natural rights of individuals’ life, liberty and property.

 Sphere of individual action defined and demarcated in political
and economic activity.
 Individual liberty as the absence of interference from the State or
external regulation—negative liberty.
 Concept of an atomic or possessive individual—individual as a
proprietor of their persons and capacity, self-sufficient and owe
nothing to anyone or society (Hobbes, Locke and Smith).
 State as ‘necessary evil’ (Paine), utility provider for happiness of
the greatest number (Bentham) with a minimal and limited role.
 Laissez-faire or economic liberalism—self-regulated economic
activity by individuals as the best guarantee of general prosperity.
 Capitalist-market economy and liberal democratic political system.
Positive Liberalism
Nineteenth-century, however, ruefully confessed the inherent shortcomings
of free economy and the limited state. The conflict of interest between the
landed or the aristocratic class and the rising capitalist class was already
won in favour of the latter. Now, the growing problem of inequality and
economic hardship in terms of working conditions, poor sanitation, health
and habitation and other attendant problems were staring in the eyes of the
labour class. While negative liberalism dealt with the issue of liberty, it
neither thought of nor required to deal with the issue of equality. The latter
was to get its due when the ‘self-interested individual’ has come to face a
class of its own creed having neither the same psychology nor capacity to
use it. The condition and plight of the proletariat, the working class, was in
no way an expression of their self-interest. They had neither economic
freedom nor political liberty. Thus came positive liberalism, remorseful,
espousing the cause of equality, morality and self-development of the
individual and ready to compensate for the wretchedness that its earlier
avatar, negative individualism, has created. The features of positive
liberalism include the following:

 Individual liberty not merely absence of interference and external

regulation but the condition of self-development and moral
development—positive liberty.
 Relationship between liberty and equality and economic freedom
to be balanced.
 State not a necessary evil but an agency of common or public
good and welfare.
 Interventionist government and social and economic regulation.
 More emphasis on ‘moral freedom’, ‘distributive justice’, Public
Good and expansion of capabilities.
Neoliberalism
As a reaction to the growing thickness of the state as a welfare flag-bearer
and interventionist mechanism in the economic sphere, a new stream of
critique emerged. This is led by the neo-liberals or the Libertarians, chiefly
amongst them are Friedrich A. Hayek, Milton Friedman, Isaiah Berlin and
Robert Nozick. Their main opposition to the growing intervention of the
state emerges from their concern for liberty and freedom. All of them
support the negative view of liberty and argue for non-interference in the
economic liberty of the individual. In short, they take the debate back to a
possessive individual and laissez-faire state.

The features of Neoliberalism include the following:

 Minimalist and night watchman state

 Priority to economic liberty - economic liberty includes political
liberty (Friedman, Nozick)
 Liberty as absence of coercion
 No relationship between liberty and equality or justice
 No welfare state
India’s Liberalism
India's liberalism has evolved through stages that first emphasised earthly
life and materialism, then social reforms and political independence, and
now economic and social freedom:

 Ancient Liberalism of Materialism: A culture as old as India's

would obviously have a strand of thought that is labelled today as
liberalism or libertarianism. Liberalism is a philosophy for living life
on this earth; it does not directly concern itself or rather leaves
individuals free to choose their beliefs about after-life. The major
focus of much of Indian philosophy has been on the life before
and after the one on earth and their interconnections: To explain
the status in the current life by considering what was done in the
previous lives and to predict the future life by evaluating the
conduct in this life. Nevertheless, many thinkers brought in earthly
enjoyments and material aspects to articulate a philosophy of
living this life, Charvak being the most prominent of these
thinkers. Their focus on the good and virtuous life to be lived on
this earth could be seen as the first stage of liberalism in India.
 Modern Liberalism of Social Reforms: Modern liberalism in
India took roots during the social reform movements of the middle
and late nineteenth century. Raja Ram Mohan Roy, Gopal
Krishna Gokhle and others launched a systemic attack on anti-life
social practices like sati and ban on widow remarriage through
Arya Samaj and Brahmo Samaj movements. These movements
influenced a large section of the population, particularly in eastern
and western parts of India, where they still have a following.
Despite the early start much remains to be done in this area of
 social reforms.

o With the rise of demands for independence from the British,

the social reform liberalism gave way to the liberalism of
political independence.
 Liberalism of Political Freedom: Under the banner of Congress
Party, all activists were engaged in discussion about the political
and economic system that India should adopt after independence.
The socialist Sect formed a separate Congress Socialist Party
and the liberal group formed the liberal group but they all worked
under the umbrella of the Congress Party. ? India started with a
Soviet like welfare state with the five year plans and a planning
Commission, however non essential things were left to the private
trade and industry.

o With the war against Pakistan and formation of Bangladesh,

the political system went through a drastic change. The
Swatantra Party tried to bring collectivisation of agriculture
which turned out to be a big failure.
 Liberalism of economic freedom: After the reforms in the
1990s, the role of the state reversed, from a welfare state India
transformed into a liberal state with minimum intervention. This
marks the start of India’s exponential growth in terms of its
economy.
Conclusion
To conclude, liberal theory of the state overestimates the individual and
conversely underestimates the potentials of the state. Its zeal to protect
and promote the individual in his rights, liberties and autonomy, it seeks to
build a capitalistic system where the state is reduced to the position of an
instrument serving the exploitative tendencies. The focus of liberal
theorizing concerns the definition of individual rights and the state's role in
protecting those rights, analysing such issues depends not only on how
one views the source of individual rights but also on how one conceives the
state itself.