The fifth layer of liberalism—which is far more contemporary—dispenses with the unitary view of society promoted by layer four. Sociological transformations and cultural insights have increasingly impinged on liberal thinking. From the early 20th century onwards liberals became aware of the dispersal of power in a society, not as something to be overcome because it set group against group—as in class conflict—but as something to be welcomed. Social and political analysts discovered that society was composed of many disparate interest groups, none of which could monopolize power—a monopoly the state had been assumed to wield by German liberals such as Max Weber. That new kind of spread-out power supplemented and strengthened the legal and constitutional separation of powers. A liberal society had to take on board the interplay not only among individuals, but among such groups, a pluralist perspective that weakened the centralizing role of the state. Liberal politics could be re-conceptualized as a different kind of free market, not an economic one, but one in which a variety of social groups were jostling for positions of influence.
4. The social reforms of the Liberal government in and around 1911 provided limited state health and unemployment insurance and set the basis for the future welfare state.
Later in the 20th century, what was known as the ‘politics of identity’ came to the fore. Just taking account of the plurality of groups competing over the realization of their commercial, financial, or local interests in the public sphere was no longer sufficient for liberals. A more permanent map of human diversity emerged in which the older, problematic categories of race and biology were in part superseded. Alternative categories based on gender, ethnicity, religion, and sexual orientation slowly worked their way into mainstream liberal consciousness, rather than being denied, excluded, or ignored. Liberals in India, for example, prioritize the protection of minorities who are denied fair participation. In the Netherlands the safeguarding of different lifestyles is prioritized over harnessing the state to achieve liberal ends. Those multiple identities—cultural, psychological, and social—are increasingly seen by liberals as normal rather than marginal features of communal life and have been added to the ideational heart of what they profess to hold dear.