Contemporary social liberalism has its origins in the New Liberalism of the early 20th century. The leading exponent of this strand of liberal thinking, whose influence was discernible in the welfare legislation passed by the Liberal government of 1906-14, was L T Hobhouse (1864-1929).

Hobhouse worked as a leader writer on the Manchester Guardian in the late 19th century, before taking up a newly created chair in sociology at the University of London in 1907.

It was there, in 1911, that he wrote Liberalism, the book for which he is best remembered and in which he laid out the fundamental principles of New Liberalism. Hobhouse saw his task as consisting in the elaboration of a "positive" conception of liberalism, where previously - and here he had in mind thinkers such as Cobden and Mill - it had been an essentially "negative" creed, concerned merely with removing the obstacles to human freedom and progress.

Hobhouse attempted to reconstruct the basic principles of liberalism so as to show that they are in fact compatible with the notion of an active "civic state". Central to this attempt is the view that the struggle for "liberty", by which liberalism of whatever stripe is defined, is at the same time a struggle for "equality".

The role of the state, according to Hobhouse, is to "secure [the] conditions upon which its citizens are able to win by their own efforts all that is necessary to a full civic efficiency". To this end, he proposed a special tax on income derived from financial speculation, and other measures designed to "quench the antisocial ardour for unmeasured wealth, for social power, and the vanity of display".

Hobhouse's account was animated by a vision of "economic justice", though he took care to distinguish his view of the state from the socialist one, which he saw as little more than a "scheme for the organisation of life by the superior person".