Liberalism emphasizes individual rights and equality of opportunity. Within liberalism, there are various streams of thought which compete over the use of the term "liberal" and may propose very different policies, but they are generally united by their support for political liberalism, which encompasses support for: freedom of thought and speech, limitations on the power of governments, the rule of law, an individual's right to private property, and a transparent system of government. All liberals, as well as some adherents of other political ideologies, support some variant of the form of government known as liberal democracy, with open and fair elections, where all citizens have equal rights by law.

According to author and philosophy professor Peter Vallentyne, "Liberalism comes in two broad forms. Classical liberalism emphasizes the importance of individual liberty and contemporary (or welfare) liberalism tends to emphasize some kind of material equality." In Europe, the term "liberalism" is closer to the economic outlook of American economic conservatives. According to Harry Girvetz and Minoque Kenneth "contemporary liberalism has come to represent different things to Americans and Europeans: In the United States it is associated with the welfare-state policies of the New Deal program of Democratic President Franklin D. Roosevelt, whereas in Europe liberals are more commonly conservative in their political and economic outlook". In the United States, "liberalism" is most often used in the sense of social liberalism, which supports some regulation of business and other economic interventionism which they believe to be in the public interest. A philosophy holding a position in accordance with Adam Smith, that laissez-faire economics will bring about a spontaneous order or an invisible hand that benefits the society, is referred to as "classical liberalism.".

Liberalism has its roots in the Age of Enlightenment and rejects many foundational assumptions that dominated most earlier theories of government, such as the Divine Right of Kings, hereditary status, established religion, and economic protectionism. Instead, it founds itself on the assumption of the equal dignity and worth of individuals.

Modern liberal thought originated in and influenced the politics of The Netherlands, the United Kingdom and France. The first modern liberal state was the United States of America, founded on the principle that "all men are created equal; that they are endowed by their creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness; that to insure these rights, governments are instituted among men, deriving their just powers from the consent of the governed."

Liberalism in its broadest sense is arguably the dominant ideology of the Western World, where mainstream political debate is held largely within the realm of accepted liberal principles such as government by consent, rationalism, freedom of speech etc, and these principles being accepted and prized by parties across the political spectrum.