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Broadly speaking, liberalism emphasizes individual rights and equality of opportunity. Different forms of liberalism may propose very different policies, but they are generally united by their support for a number of principles, including extensive freedom of thought and speech, limitations on the power of governments, the rule of law, the free exchange of ideas, a market or mixed economy, and a transparentsystem of government. All liberals — as well as some adherents of other political ideologies — support some variant of the form of government known as liberal democracy, with open and fair elections, where all citizens have equal rights by law.

Liberalism rejected many foundational assumptions that dominated most earlier theories of government, such as the Divine Right of Kings, hereditary status, and established religion. Social progressivism, the belief that traditions do not carry any inherent value and social practices ought to be continuously adjusted for the greater benefit of humanity, is a common component of liberal ideology. Liberalism is also strongly associated with the belief that human society should be organized in accordance with certain unchangeable and inviolable rights. Different schools of liberalism are based on different conceptions of human rights, but there are some rights that all liberals support to some extent, including rights to life, liberty, and property.

Within liberalism, there are two major currents of thought. which often compete over the use of the term "liberal" and have been known to clash on many issues, as they differ on their understanding of what constitutes freedom. Classical liberals, believe that the only real freedom is freedom from coercion. As a result they see state intervention in the economy as a coercive power that restricts the economic freedom of individuals and favor laissez-faire economic policy. They oppose the welfare state. Social liberals argue that governments must take an active role in promoting the freedom of citizens. They believe that real freedom can only exist when citizens are healthy, educated, and free from dire poverty. They generally favor the right to an education, the right to health care, and the right to a minimum wage. Some also favor laws against discrimination in housing and employment, laws against pollution of the environment, and the provision of welfare, including unemployment benefit andhousing for the homeless, all supported by progressive taxation.

The American War of Independence established the first nation to craft a constitution based on the concept of liberal government, especially the idea that governments rule by the consent of the governed. The more moderate bourgeois elements of the French Revolution tried to establish a government based on liberal principles. Economists such as Adam Smith, in The Wealth of Nations (1776), enunciated the liberal principles of free trade. The editors of the Spanish Constitution of 1812, drafted inCádiz, may have been the first to use the word liberal in a political sense as a noun. They named themselves the Liberales, to express their opposition to the absolutist power of the Spanish monarchy.

Beginning in the late 18th century, liberalism became a major ideology in virtually all developed countries.

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