Although classical liberals were more libertarian than modern day liberals it is playing ‘no true scottsman’ to claim that modern liberals and Progressives are not descendents from classical liberalism which is, itself, largely descendended from dissenters and republicans of earlier centuries. Just because they disagree with libertarians does not mean that modern liberals do not embody many elements present in classical liberalism, to claim classical liberalism as though we are the only ‘true’ heirs is disingenuous in the extreme and displays an ignorance of intellectual history.
The French Revolutionaries were, yes, classical liberals - as were the American ‘founding fathers’. As has been pointed out by many sources, including a recent Lew Rockwell podcast, the ‘founding fathers’ were quite simply not libertarian; even the most libertarian among them had a streak of what we would recognize as ‘modern’ liberalism.
As upsetting as it may be that modern liberals have the same origin as libertarians it is the truth and to deny it is nonsense. The moralizing, managerial, statist, popular government element has been present in classical liberalism since before it was classical liberalism.
Logan Ferree’s ‘The Constitution as Libertarian Myth’ is excellent on this point:
To equate libertarianism with the classical liberalism that influenced our Founding Fathers is a philosophical error. While no doubt many classical liberals call themselves libertarians today, the modern movement has been heavily influenced by Austrian economics and Murray Rothard and takes a far more negative view of the state than the old men with wigs who wrote the Constitution. Even the minarchists who stop short of outright anarchism and the abolition of the state would have been seen as the most radical of radicals in the early Republic; they would have made the Locofocos look mainstream. John Locke, Adam Smith and the rest of the classical liberal gang did express a mistrust of state power and its granting of monopolistic privilege, but they also supported a state for the maintenance of law and order in the face of natural anarchy. A quick glance at the Constitution reveals that the Founding Fathers, far from consistently favoring a system that viewed the state as a necessary evil, saw a role for government to “establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”
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Libertarianism is something new, there is nothing classical about it. As I illustrated above, the classically liberal constitution granted Congress the explicit ability to grant patents and lay tariffs, two of the four cornerstones of privilege and statism according to Benjamin Tucker. And it left unchallenged the system of privilege in the land and money monopolies, although the period of free banking in the antebellum republic probably did come close to breaking the latter. By opposing the statist status quo, the libertarian movement no doubt appeals to those that still have a classically liberal view of politics. But the libertarian movement is larger than just that, it holds a radically skeptical view of government’s ability to promote the general welfare without creating privilege and inequality. Following through this critique of government to its natural ends arguable will result in anarchist conclusions, but libertarianism still has the perception of being minarchist. I don’t think it matters if libertarianism advertises itself as explicitly minarchist or anarchist, the critique of government is the founding principle and it is what distinguishes it from classical liberalism.
Much as modern day Christianity and Rabbinical Judaism developed out of radically different Temple Judaism over two millennium ago, modern day liberalism and libertarianism share a similar ancestry. But ancestry does not mean that they are one and the same, libertarianism has expanded on classical liberalism’s critique of government while modern liberalism has instead focused on classical liberalism’s belief in democracy and the ability to govern with a mind toward the common good. Classical liberalism held both of these seemingly paradoxical principles, with some followers leaning more toward one or the other. Following the abortive attempt by Hamilton and the Federalists to establish a truly conservative society in the Americas, most of our political debate has been within the range of liberalism. While adopting some of the programs of Hamilton, the American System of Clay was designed to encourage broad economic growth and intensification, not a new aristocratic elite. This is illustrated by Clay and the Whigs favoring high tariffs, which would have a widespread impact in benefiting all domestic manufacturers of the protected good, in contrast to Hamilton’s support for subsidies and bounties that, like today’s agricultural subsidies, would benefit larger producers at the expense of the small independent artisan.