ibertarians advocated for individual freedom on both economic and personal or social issues. Many liberals espouse the libertarian view on personal or social issues. Most liberals oppose individual freedom on economic issues. While liberals may campaign on a stance that aligns with the libertarian view on personal or social issues, they seldom act on those views once they get elected.
Libertarianism is based on what is known as classical liberalism. Classical liberalism is a political ideology, a branch of liberalism which advocates civil liberties and political freedom with representative democracy under the rule of law and emphasizes economic freedom.
Classical liberalism developed in the 19th century in Europe and the United States. Although classical liberalism built on ideas that had already developed by the end of the 18th century, it advocated a specific kind of society, government and public policy as a response to the Industrial Revolution and urbanization. Notable individuals whose ideas have contributed to classical liberalism include John Locke, Jean-Baptiste Say, Thomas Malthus, and David Ricardo. It drew on the economics of Adam Smith and on a belief in natural law, utilitarianism, and progress. In this way classic liberals are also progressives.
Classic liberalism is based on free market capitalism. Libertarians often support what is known as the Austrian School of Economics. The Austrian School is a school of economic thought that is based on methodological individualism. It originated in late-19th and early-20th century Vienna with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others. It was methodologically opposed to (Methodenstreit) the Prussian Historical School. Current-day economists working in this tradition are located in many different countries, but their work is referred to as Austrian economics. Austrian economics calls for a largely unregulated economy.
Although liberal socialism unequivocally favors a mixed market economy, it identifies legalistic and artificial monopolies to be the fault of capitalism and opposes an entirely unregulated economy. It considers both liberty and equality to be compatible and mutually dependent on each other. Principles that can be described as "liberal socialist" have been based upon or developed by the following philosophers: John Stuart Mill, Eduard Bernstein, John Dewey, Carlo Rosselli, Norberto Bobbio, and Chantal Mouffe. Other important liberal socialist figures include Guido Calogero, Piero Gobetti, Leonard Trelawny Hobhouse, John Maynard Keynes, and R. H. Tawney.
Since the 1930s liberal socialism has taken over the “liberal” label. In their opposition to all forms of collectivism libertarians disagree with many of the economic views held by liberal socialists. Today, the term liberal, most often refers to ‘liberal socialism” rather than “classical liberalism.” Liberal socialism advocates the uses of force to accomplish socialist goals. In a libertarian society, individuals would be free to establish whatever sort of voluntary economic system they wanted. Libertarians oppose the use of force for any purpose, besides defending life, liberty, and property. While libertarians are in fact classical liberals, they are not modern liberal or liberal socialists. As most understand the term today, Libertarians are not liberals.