Politics Defined - Source for Political Termonolgy Analysis and Defintions

Liberalism

Liberalism may be used to describe one of several ideologies that claims individual liberty as one of the highest values in social life. It typically favors the right to dissent from orthodox tenets or established authorities in political or religious matters, in contrast to institutional conservatism and/or despotism.

One broad usage of the term is for a tradition of thought that tries to circumscribe the limits of political power, and to define and support individual rights. We can call this "political liberalism".
What can be called "economic liberalism" insists upon the necessity of free trade, is outraged by cartels and monopolies, and sees no merit in a government that meddles unnecessarily in the marketplace.

Another, common usage, is used as a shorthand for the ideology of social-democracy or "new" or "modern" liberalism.
Neoliberalism borrows from some of the ideas of classic liberalism, but departs significantly in other ways.
Another, less common usage, is to denote the tradition of various liberal parties. However, though said liberal parties were originally founded on the Enlightenment tradition, they significantly diverged from it since they came to power in the 19th century, and "liberal" parties around the world are now based on a variety of loosely related ideologies. Some would therefore claim that the ideological content of the word depends on the geographical context.

In addition to the political usages above, the term "liberal" is also used in theology to refer to people who hold to views which depart from their religion's orthodoxy.

The term liberalism is also used for a major theory of international relations, typically to support international bodies like the United Nations and multilateral action.

Political liberalism
It emphasizes the role and power of the individual in social life, and tends to argue for democracy and the separation of church and state. This is the most common usage, both historically and popularly outside of the United States. Some examples of proponents of this variety of liberalism are Enlightenment authors John Locke and John Stuart Mill. In sharp contrast to despotism, and mercantilism.

Economic liberalism
There are three recognized forms of economic liberalism.

The first, classic liberalism, can be read about in more detail under the heading of fiscal conservatism and libertarianism.

The second, known as social democracy or modern liberalism, is the variety that advocates a form of mixed economy in order to reach the goals of social justice. The roots of it can be found historically in the Liberal Party in Britain, particularly since Lloyd George's People's Budget. It is with this background that Keynes, though influenced by Fabianism, claimed to be liberal in the 1930s. One example of a document that represents this form of liberalism is The Oxford Liberal Manifesto of 1947. The influence of Keynesianism on the New Deal has led liberalism to be identified with the welfare state in the United States.
See: new liberalism or modern liberalism.

The third, known as neoliberalism or corporate liberalism, can be read about by following the link provided.

Use of the term around the world

Australia
In Australia the situation is complicated by the fact that the Liberal Party of Australia is a right-of-centre party, encompassing thought from both conservative and classical liberal traditions (although currently the conservative wing, represented by John Howard, is dominant). The special term "small-l liberal" has evolved; its meaning is not clearly defined but is generally closest to sense 1 (in that it champions civil liberties, and progressive causes such as the Republic and Aboriginal reconciliation, while maintaining a non-interventionist approach in economics). Some "small-l liberals", such as Malcolm Turnbull, may find a home among the Liberal Party, but many, such as Greg Barns, have moved to the Democrats.

New Zealand
In New Zealand the term liberalism is used almost exclusively according to sense 1. It is normal to find the term used with a reference to a particular policy area, such as "market liberalism" or "social liberalism". Unqualified liberalism is less common and in its extreme form is described as libertarianism.

United Kingdom
In the UK, meanings 1, 2, 3 coexist, since liberalism as an ideology will be understood by scholars as classical liberalism, whereas there is an active political party named the Liberal Democratic Party, and meaning 3 is imported from the US, including the derogatory usage by conservatives. However, the derogatory connotation is weak, and social liberals from both the left- and right-wing continue to use "liberal" and "illiberal" to describe themselves and their opponents.

United States
The common meaning of terms evolve: whereas the word "liberal" was clearly associated to meaning 1 (classical liberalism) in the 19th century, it has come to commonly have meaning 3 (new liberalism) in the US after World War II, and particularly as McCarthyism made the word socialism difficult to bear, and left-wingers massively adopted the name "liberal". For this reason, US classical liberals adopted the name "libertarian".

Recently, the word "liberal" has been so much used as a derogatory term by US conservatives that some US liberals (meaning 3) prefer to shun the word "liberal" and call themselves "progressive".

Liberals are sometimes referred to as Methodological Individualists