Britain’s New Liberalism came into being when British Liberal Party elites essentially sided with Mill over Ricardo. They sought to develop the role of the state as both the defender of capitalism and as a tool for social reform in an era of class conflict and incipient mass democracy. In short, if the primacy of private initiative and of liberal market institutions were to be maintained, then the poverty and inequality Ricardo regarded as natural and inevitable could no longer be tolerated. Moreover, the British New Liberals did not see this embrace of the state as a necessary evil, as a papering over the cracks to avoid revolution. Rather, the New Liberalism acknowledged the state’s responsibility for the ongoing management and reform of capitalist institutions.

Mark Blyth, Austerity, loc. 313