As was emphasized at length in Section 1, if we are to grasp reality clearly, the units to which our concepts refer need to be differentiated from other units on the basis of objective differences of kind (pp. 1.3:15-47). To lump various interventionists, socialists, and other statists together with adherents of the historical liberal movement would clearly violate this principle. Consequently, the term "liberal" should properly be applied only to true advocates of individual freedom—a usage which avoids the confusions and paradoxes just noted.

The massive social changes associated with the growth of relatively free economies and the Industrial Revolution were frowned upon by many. In Britain, for instance, members of the landowning upper class, who were concentrated in London and the southern part of the country, tended to decry the allegedly "horrible" living conditions in the new northern manufacturing areas. Few of them, of course, had personally observed these conditions, much less the truly oppressive living conditions of the masses prior to these changes. These wealthy landholders, jealous of their own aristocratic privileges, were fearful of any change. Yet many intellectuals of the time, who (for reasons to be explored shortly) were predisposed toward socialism and economic egalitarianism, accepted the accounts of the gentry at face value.