The term 'liberal' has to be one of the most confusing words ever! Its meaning varies both temporally and spatially. It varies temporally in that its original meaning stems from the French Revolution, with its connotations of liberty, greater freedom for the individual and an opposition to conservatism (the latter being in those days the idea of maintenance of the status quo, and greater democracy. In continental Europe, inspired by its revolutionary birth, liberalism became associated with nationalism and the right of self-determination. Thus the largely failed Revolutions of 1848-9 were both liberal and national in nature (especially in what became Italy and Germany). In Britain, in contrast, liberalism became characterised by an alliance of the odd bedfellows of free market laissez-faire capitalism and other hallmarks of what Americans would today call libertarianism on the one hand, and progressive reform (widening of the electoral franchise, factory and mines regulation and, later, social legislation such as Old Age Pensions (=US Social Security) in 1908) on the other hand stemming from its opposition to the conservative position of maintenance of the status quo. This libertarian-progressive tension still characterises British liberalism today by and large and is represented officially by our Liberal Democrat Party (doubtless a tautology bu US standards!), although its agenda was also largely adopted by Tony Blair's 'New' Labour Party and to an extent our Conservative Party. The mainland European model, shorn of its discredited nationalist associations (after the debacle of Naziism) is similar but with more of an emphasis on the progressive 'wing' (think European Social Democrat parties) and I think it is that version which has largely been exported to the US in the 20th century. Possibly because 'socialist' has historically been such a dirty word in US politics and therefore a distinctively socialist party has never really taken off there, various socialist elements have crept in under the umbrella of 'liberalism', which leads to a degree of conflation of the terms although compared to Europe, socialism remains pretty weak in the US.
(am joking, but ... 
