In the political domain, modern liberalism is driven by internal tensions between those who think that underlying liberal values will best be served if market systems flourish as fully and freely as possible and those who, mindful of the gross inequalities to which relatively pure market systems lead, favor a robust regulatory state (Johnston 1994). It is also divided by a tension between these two schools of thought, both of which grew out of the optimistic rationalism of the Enlightenment, and the earlier liberalism that focused more narrowly on avoiding or combating tyranny (Laski 1962). The Enlightenment faith in the capacity of human beings to comprehend the social world and to design institutions that will overcome its most serious imperfections has not been borne out as fully as its early proponents hoped. Yet, where constitutional democracies have taken root, they have reduced the potential for tyrannical rule dramatically. Where market systems have flourished in concert with at least moderate regulatory regimes and institutions for welfare, they have significantly alleviated the social and economic pathologies that in earlier periods resulted in severe immiseration (Clinton 2007).
In social theory, liberalism has continued its long-standing pattern of growth into new territory while being checked from time to time by social forces that have resisted the conversion of virtually all social relations into contractual relations. The feminist movement, which originated with the campaigns for women's suffrage and for widespread acceptance of birth control, gathered force in the last third of the twentieth century largely on the strength of a conception of marital relations as contractual relations between equal partners (Waltz 1979). At the same time, the family has been a major locus of backlash against the advance of liberal social ideals. At least in the United States, one of the countries in which the feminist movement has advanced the furthest, the idea of the traditional family based on predefined gender roles has enjoyed a significant resurgence in popularity for the past generation, at least. The popularity of the idea of freedom of contract probably peaked in the nineteenth century. Again and again, governments have pushed back against the growth of the regulatory state, with some success, but the age of laissez-faire and caveat emptor, to the extent to which it ever existed, seems now to be relegated to a distant, almost-forgotten era (Rose 1998).
In the early twenty-first century, liberals face challenges that go well beyond these long-standing tensions. It is not clear how extensive the liberal tradition's resources are for facing some of the major problems on the horizon, including the problems posed by an international state system that remains relatively anarchical and is composed of states spanning a broad spectrum, from the very strong to those that have failed altogether; the difficulties created by a rapidly evolving world economic system in which crucial decisions are made by leaders whose lines of responsibility to those whose interests they ostensibly serve are tenuous at best; and the dilemmas ...