Contemporary liberalism, say the Libertarians, has abandoned the tradition and become something that isnít liberalism at all. The phrase "classical liberalism" itself is meant to suggest a division between the tradition and the contemporary. "...we now refer to the philosophy of individual rights, free markets, and limited government--the philosophy of Locke, Smith, and Jefferson--as classical liberalism,Ē writes David Boaz of the Cato Institute.  This division is necessary, says Boaz, because the word liberalism has, today, ďbeen claimed by those who advocate neither society nor liberty." Boaz's agenda here, mirroring that of the other Libertarians who argue this same point, is simply to appropriate the prestige of the real tradition for themselves (and, by extension, to deny it to those to whom it rightly belongs.).
How do the "Libertarian" larcenists make the claim on liberalism?
Their "analysis," if the word can, without losing all meaning, be sufficiently degraded to cover what is essentially a flim-flam show, aims primarily at reading backwards into liberalism the various marginal strains of thought--often blatantly illiberal strains of thought--which make up their own ideology.
One of the ways in which they go about this is by confounding the ends of liberalism with the means; the mechanics by which its principles are affected for the principles themselves. A liberal, using this approach, is reduced to the simple purveyor of a program, someone who advocates Policy A, B, and C, rather than someone who holds to Principle A, B, and C and tries to craft policy based upon said principles. The policy prescriptions used to represent "classical liberalism" are, of course, carefully cherry-picked to reflect contemporary "Libertarian" concerns (the far more numerous ones that would conflict with those concerns are just as carefully avoided). Obviously, a policy prescription designed for a given set of circumstances at a given point in history may not be valid or even relevant under different circumstances, but one of the defining characteristics of "Libertarianism" is its strong preference for ephemeral abstractions over concrete, real-world considerations, and the "Libertarians," in making their claim on liberalism, generally eschew the proper context. The policy is said to be the substance of classical liberal thought, and constructed in place of the eschewed original reasoning for it is the melange of bizarre and marginal strains of thought that make up the ideology of the "Libertarian" larcenists; strains of thought which the early liberals would have found utterly alien and quite disagreeable. By the end of this flim-flam, the views of noxious social Darwinists, "Austrian School" cranks, the Objectivist cult, right-wing economists of the "Chicago School," and the like--the actual forefathers of the American "Libertarian" movement--are said to be the inheritors of the liberal tradition.
The late Jefferson scholar Eyler Robert Coates identified this practice in the attempts by Objectivist "Libertarians" to co-opt Thomas Jefferson into an ideological forefather:
"Orthodox Objectivists--those who adhere strictly to the original teachings of Ayn Rand--do not treat Jefferson's thought as a complete philosophical system. Rather, they treat his writings as a resource from which they can extract a few isolated thoughts and use them to support their own positions. This causes them to ignore other thoughts of Jefferson that do not fit their purposes, and that put those more acceptable statements of Jefferson in a different light."
Coates politely but thoroughly debunked these efforts in a series of essays, "Objectivism and Thomas Jefferson." Similar essays could be written about the efforts of each branch of the "Libertarians" to co-opt the liberals. The liberals, who placed a premium on reason and experience and voraciously consumed history in an effort to uncover its lessons for the present, would be horrified by the wholesale rejection, by the denizens of the "Austrian School," of experience in guiding policy. The Spencerite social Darwinists offered, as rationale for their policy prescriptions, an ideological construct that reinvented exactly the same sort of absolutism against which liberalism originally arose in opposition. And so on.
Amy Sturgis offers a revisionist survey of liberalism  that throws the early liberals under the same "classical liberal" banner as the later "Libertarian" larcenists, purporting to trace the tradition of liberalism from the former to the latter. She applies four criteria "to determine if an idea or individual fits within this intellectual tradition":
"An ethical emphasis on the individual as a rights-bearer prior to the existence of any state, community, or society; the support of the right of property carried to its economic conclusion, a free-market system; the desire for a limited constitutional government to protect individuals' rights from others and from its own expansion; and the universal (global and ahistorical) applicability of these above convictions."
Sturgis doesn't quantify items like "free-market system" or "limited constitutional government," but the "individuals and movements" she identifies as her survey moves through the 19th and into the 20th century certainly did. They're the usual suspects--Austrians, Objectivists, etc.--and though their views are at odds--often violently so--with the legitimate liberal tradition, she manages to include nearly all of them.
Perhaps as telling as these inclusions, though, is an exclusion.
Sturgis wholly excludes the early Utilitarians from the classical liberal tradition because of their utilitarianism; they "accepted limited rights and market economics as long as they provided the greatest happiness for the greatest number. Classical liberal ends thus served as convenient means to them, but the eventual ends they sought betrayed an intellectual collectivism incompatible with the above criteria."
Is it truly incompatible with classical liberalism, though? Hardly. The body of thought rightfully encompassed by the title "liberalism" is vast and varied, but it's born of assumptions that came to prominence in the Enlightenment, the foremost one being that man has intrinsic value . His happiness and welfare matter, and, by extension, form the yardstick against which the institutions of society are to be measured. Those institutions are created to promote his happiness and welfare, and if they fail to do so, it is his right to change them or to dismantle them altogether and erect, in their place, ones that will. This is the utilitarianism for which Sturgis would excommunicate Jeremy Bentham & co. from liberalism, and it appears in the work of the classical liberals from the beginning.
Itís right there in the American Declaration of Independence:
"We hold these truths to be self-evident; 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 secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed; that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying itís foundation on such principles, and organizing itís powers in such form, as to them shall seem most likely to effect their safety and happiness." 
John Trenchard and Thomas Gordon, as "Cato," put the same proposition this way:
"Where the interest of the governors and that of the governed dash, there can be no stated judge between themÖ if they themselves do not amicably determine the dispute between themselves, heaven alone must. In such case, recourse must be had to the first principles of government itself; which being a departure from the state of nature, and a union of many families forming themselves into a political machine for mutual protection and defence, it is evident, that this formed relation can continue no longer than the machine subsists and can act; and when it does not, the individuals must return to their former state again. No constitution can provide against what will happen, when that constitution is dissolved. Government is only an appointment of one or more persons, to do certain actions for the good and emolument of the society; and if the persons thus interested will not act at all, or act contrary to their trust, their power must return of course to those who gave it." 
The assumption is always that, if the institution doesnít serve its proper end--to effect the safety and happiness of the people--it could be torn down and replaced with one that would. "The equal rights of man and the happiness of every individual are the only legitimate objects of government," so says Jefferson. "Cato" put it this way: "All governments, under whatsoever form they are administered, ought to be administered for the good of the society; when they are otherwise administered, they cease to be government, and become usurpation."
If one lacks the freedom to pursue happiness, one isnít likely to ever find it, so inherent in this formulation--the thing which makes it "liberal"--is the belief that liberty is a necessary component of human happiness and welfare. The "natural rights" liberals held to this; their Utilitarian liberal cousins, whom Sturgis would excommunicate, held to it, as well.
The liberalsí advocacy of, broadly, a limited constitutional government came not from the thin air, as Sturgis would have it, but from the analysis just outlined. "We ought to consider what is the end of government, before we determine which is the best form. Upon this point all speculative politicians will agree, that the happiness of society is the end of governmentÖ. From this principle it will follow, that the form of government which communicates ease, comfort, security, or, in one word, happiness, to the greatest number of persons, and in the greatest degree, is the best" . A limited constitutional government was believed to be the best means to serve this end, but always implicit is the idea that, if it didnít, something else could be--indeed, should be--tried.  "Whatever the form or Constitution of Government may be, it ought to have no other object than the general happiness. When instead of this, it operates to create and increase wretchedness, in any of the parts of society, it is on a wrong system and reformation is necessary."
The liberalís argument for a property right, to use Sturgisí other example, was premised on this notion as well, that it was an institution they believed would serve these ends. Indeed, the ability to maintain property, held the liberals of the "natural rights" school, was one of the central reasons man had abandoned the "state of nature" and formed governments. Property, they felt, was insufficiently secure in a "state of nature," but needed to be secured for certain reasons. The most obvious is survival--as Locke says, "men, being once born, have a right to their preservation, and consequently to meat and drink and such other things as Nature affords for their subsistence" . Then there was the matter of "those advantages which flow from agriculture, arts, science and manufactures" , which the liberals held couldnít be maintained in a "state of nature."
In setting aside the question of why liberals supported such things, Sturgis leaves the reader with the impression that liberalism is nothing more than the mechanical espousal of prefabricated prescriptions for government, fixed in time and unresponsive to evolution. Presumably, Sturgisí "liberalism" simply fell from the sky one day, fully grown and never aged thereafter. Containing it in this manner allows it to be employed as an ideological weapon, without any of the potential consequences of allowing its real ideas a fair hearing. This goes a long way toward explaining the popularity of this approach among "Libertarians." Sturgis has been singled out, but her work is typical of Libertarian revisionism in this area. They support a certain form of government. They support a right to a certain form of property. Their mangling of liberal theory is simply an attempt, through an appeal to the reverance in which the classical liberals are rightly held, to remove from the scope of debate any questions about the dimensions and the legitimacy of these things; to create a way to advocate them without having to argue in their favor; to make them ends unto themselves--a form of absolutism, no different than the Divine Right of Kings .
All in the name of liberalism, no less!
 The very word they use to describe themselves today, libertarian, is stolen, cynically appropriated in the 1950s and 60s from the anarchists, who had provided the political meaning of the word for a century prior to that.
 The Cato Institute is a Libertarian think-tank which takes its name from Cato's Letters, a series of essays from the 18th century by John Trenchard and Thomas Gordon.
 In fact, the Utilitarian liberals' perceived disrespect for the lessons of history frequently sent the "natural rights" liberals into conniptions.
 The Rise, Decline, and Reemergence of Classical Liberalism (1994)
 This alone excludes immediately the "pro-capitalist" ideologies that emerged in the Industrial Revolution, claiming to hold the title of liberalism but in reality utterly rejecting this basic premise and substituting in its place the idea that man has only market value. Whether under the title of "social Darwinist" or "Libertarian" or any other, the premise of these ideologies is always the same, and never is it that of liberalism.
 The Utilitarians were attempting to create a practical, applied version of the "natural law" liberals' formulation--that which produces the greatest happiness to the greatest number of individuals is what should be done. The implication of Sturgis' comments, on the other hand, is that the "natural law" liberals would have endorsed institutions that were blatantly destructive to the people's happiness and welfare!
 The Declaration of Indpependence (1776)
 Cato's Letter #59: Liberty proved to be the unalienable Right of all Mankind
 John Adams, Thoughts on Government, 1776. The unanimity on this point canít be overstated. Adams, whose liberal tendencies were fleeting, at best, held to it, as did William Godwin, who represents the opposite (radical) end of the liberal spectrum: "Öthe only regulations which any political authority can be justly entitled to enforce are such as are best adapted to public utilityÖ One form of government is preferable to another in exact proportion to the security it affords that nothing shall be done in the name of the community which is not conducive to the welfare of the whole. The question therefore, What it is which is thus conducive, is upon every account entitled to the first place in our disquisitions." (Godwin, An Enquiry Concerning the Principles of Political Justice, Book II, Ch. 1, 1793)
 Sturgis is quite correct in her comment that the liberals believed that, for government to serve this end, it must protect individual rights.
 Thomas Paine, The Rights Of Man, Book 2, Ch. V, (1792)
 Locke, Second Treatise on Civil Government, Ch. 5 (1690).
 Thomas Paine, Agrarian Justice, 1798.
 The Libertarians, while making "property rights" absolutist in this way, have allowed the category itself to expand exponentially, placing more and more power under the shield of absolutism. Their version of the concept today is a monstrosity the liberals wouldnít have recognized.
Libertarianism and the Classical Liberals