Liberalism and Capitalism: Shaping Modern Society

Political Liberalism: 18th-19th Century Foundations

Political philosophy associated with fundamental principles that laid the foundation for modern liberties of the 19th century and the evolution towards democracy. It distinguished the 'political' from the 'economic' (especially concerning wealth expressed as money).

Core Principles of Political Liberalism

• Freedom of the individual
• Civil liberties
• Representative constitutional government
• Parliamentarism

Initially revolutionary and progressive, political liberalism fought against feudal aristocracy, absolute monarchy, and church doctrine.

Economic Liberalism: Principles and Challenges

Economic liberalism brought significant shifts in societal values and economic practices:

• Change in the perception of wealth.
• Change in the valuation of property: it legitimizes private ownership.
• It also legitimizes individual selfishness, stating that it produces for the sake of extending the community's eagerness to accumulate wealth, leading to a productivist mentality.
• Capital protectionism leads to increasing social injustice, which fosters the emergence of alternatives promoted by other social groups, such as Utopian and Scientific Socialists.
• Liberalism, when implemented daily, highlights serious flaws: freedom is often only for those with resources.
• Economic and political liberalism began to diverge, with politicians becoming more conservative.

Understanding Capitalism: Core Characteristics

Capitalism is an economic and social system characterized by private ownership of the means of production, the liberal orientation of its economy, and the existence of wage labor. It is further characterized by:

• Production for the market.
• Predominance of capital over labor.
• Motivation based on cost-benefit calculation.
• Exchange economy based on the market.
• Freedom of trade.
• Commodity prices and wages determined by market forces.

Implications of New Ideas: Societal Transformation

The transition from the Old Regime (or early modern period) to the New (or Modern Age) signified an acceleration of historical time and profound societal changes:

Key Societal Shifts

• Divorce of Economy and Morality: Leading to secularization.
• Unbundling of Family and Work: Separating private life from professional life.
• Predominance of Production over Reproduction: Contributing to the reduction of the traditional family unit.

Emergence of a New Society

This era saw the birth of a labor society, characterized by:

• Equality of all people.
• Free and autonomous individuals.
• Nature increasingly seen as being in the service of human beings.
• The rise of social misery due to labor exploitation.
• Periodic economic crises.
• The advent of imperialism.

Shift in Valued Activities

The previous activities of privileged classes were no longer considered useful. From the 18th century onwards, only those activities performed in the public space of the economy (the market), which are made in exchange for payment, gained value.

The Paradox of Individualism

The autonomous individual was born, but often at the cost of security. Individualism and emancipation came with a purpose: to liberate the individual from the constraints of absolutist and clerical types. However, by raising the profile of individual needs, desires, and satisfactions as opposed to the community, it inadvertently created problems of social cohesion.