Classical Liberalism vs Modern LiberalismWatch
I used to have a preference for classical liberalism, but I have come to see severe problems with it. Classical liberals generally tend to see an individual's worth as being determined by his/her utility to the free market, an idea which I find abhorrent, as history gives us countless examples of intelligent and valuable individuals whose talents were not necessarily acknowledged by market forces. The fact that an individual benefits from more popularity among consumers does not make him innately superior to his fellow. The Social Darwinian belief that the best in society will naturally rise to the top if the free market is allowed to operate untrammelled is false, as there are plenty of individuals who unfairly benefit from large fortunes left to them by others and are able to live in comfort and prosperity with minimum effort and hard work of their own. They are unlikely to lose said fortunes unless they are staggeringly incompetent or wasteful, and are likely to hand them intact down the generations. Meanwhile, it is perfectly possible for someone to be born into a poor family and be capable of greatness, but be unfairly constrained by the workings of a free market which rewards to a large extent the already prosperous and established. Furthermore, seeing freedom in merely negative terms is highly problematic, as a lack of government intervention can easily give free rein to unscrupulous employers to exploit their labourers and even hire child labour (as happened during the Industrial Revolution) so as to keep wages as low as possible and maximise profits. Negative liberty also ignores the fact that freedom from being interfered with is not a satisfactorily comprehensive idea of freedom, as freedom also involves the ability to do something with that freedom - to better oneself, to explore one's interests and potential, to experiment with different ideas and careers, rather than be subjected to the rigid specialisation of a free-market system, which can be alienating and entrapping. Someone born into a poor neighbourhood with no libraries or educational facilities of any kind can hardly be expected to improve himself through constant study and intellectual exploration.
When one looks at history, one can see that classical liberal ideas have, on the whole, failed to guarantee consistent prosperity and well-being for all. When one reads about the Industrial Revolution, one reads about the great "progress" that was made at the expense of many in society who were forced to become factory workers on pittance pay in dangerous conditions, among them women and children. Such people generally lived in slums around the city as there was no proper housing for them. The idea of strikes was out of the question since the government had not guaranteed the freedom to strike, and so the workers would remain in their miserable position. Of course, a classical liberal would argue that they were "free" to quit their jobs, but that way starvation lay, so they weren't "free" at all. And employers could collude with each other to keep wages down, leaving workers with very little choice. It was only with government intervention that conditions for the broad mass of the people got better. Reforms were passed to ensure the clearage of slums and the building of proper housing so that the workers could live in healthier conditions, which meant that they would be better and more efficient workers, something overlooked by the free-market system with its emphasis on short-term gain. The Liberal reforms of the early 20th century saw the foundation for the British welfare state being put into place. In America, Theodore Roosevelt championed Progressive Republicanism, which involved government intervention to prevent unfair competition and monopolies by capitalists and improve conditions for the people. Later, FDR extended this with his New Deal program. The Labour government, elected in 1945, established the welfare state as we know it today, including the NHS, which meant that people were truly free as working families no longer had to choose between paying through the nose for healthcare or saving the money for other things like food. Now they were free to do other things like go on holiday. Free education gave more opportunities to more people, equipping them with the skills needed to be successful in the marketplace.
And that is my summary of how modern liberalism proved classical liberalism obsolete.