Liberalism developed from the Enlightenment's critique of eighteenth-century absolutism as both a political and economic theory. Government power was now to be kept to a minimum in order to promote and protect individual freedom. The idea that that government is best which governs least is an expression of liberal orthodoxy. Liberals wanted to impose constitutional limits on government and to remove restrictions on individual enterprise, specifically to remove state regulation of the economy. In the economic realm, this was manifested as a belief in laissez-faire policies. Liberalism was influenced by the romantic movement of the early nineteenth century, which also placed great emphasis on individual freedom and on the drive for the human personality to develop to its full potential. The nationalist movement was another influence (Noble, Strauss, Osheim, Neuschel, Cohen, and Roberts 528).
In the economic realm Adam Smith stated the liberal position in writings such as An Inquiry into the Nature and Causes of the Wealth of Nations. Smith recommended freeing the economy from the control of the state. At the time, the mercantilist system prevailed by which the state regulated prices and the conditions of manufacture for goods. Smith argued that the free forces of the marketplace should shape economic decisions, and Smith was the primary advocate of the French view of laissez faire, or letting the economy run on its own. Thomas Malthus suggested that wages and employment were also subject to the laws of supply and demand, and he expressed this idea in his An Essay on the Principle of Population. Malthus suggested that if employers paid their workers higher salaries, the workers who were better off would marry earlier and have more children. This would mean more workers in the marketplace, which would drive wages down. malthus thus blamed the workers for their own poverty. A third important economist of the time was David...