So at one stage of history, liberty merely was understood to be ‘absence of restraint’ in the free competition of men with being law being as ‘silent’ as possible and ‘state interference’ at its least. Soon it was realized after the experience of a century or so, that liberty needs to be ‘attained’ by all and can not merely be left to the lack of impediments. The state and social institutions need to actively help in that process of attainment it was left. So while the earlier concept of liberty which was in the nature of bar on the state was a sort of a ‘negative liberty’ the latter conception asking for the involvement of the state and society in helping people get achieving liberty was ‘positive liberty’.
Liberal thinking on liberty changed from negative liberty to positive liberty over a century and a half, from Adam Smith to Hobhouse and Laski, from the notion of ‘silence of laws’ as liberty to ‘the presence of socio-economic conditions and political conditions’ to ensure true freedom.
The development of the initial concept of negative liberty happened over a century or so as a result of the contribution of thinkers like Adam Smith (1723-90), John Locke, David Hume, Thomas Paine, Herbert Spencer, Bentham and John Stuart Mill (1806-73). Later in the second half of the last century, mainly among some economists, advocating maximised free markets and free international trade, the early concepts of liberty made a comeback. Thinkers like economists like F.A. Hayek, Milton Friedman and Robert Nozic etc and Sir Isaiah Berlin, also sometimes referred to as neo-liberals, are the principal advocates of this latest trend in liberal thought.
The most eloquent of the early liberals who advocated what we now call Negative Liberalism was John Stuart Mill (1806-73) whose essay On Liberty (1859) went beyond mere liberty from the interference of the state. It also talked of liberty for the individual from the pressures of society, public opinion and social customs and conventions. He really saw liberty as the means to an end, the end being self-development. (This was also the concern of the classical Green thinkers like Socrates and Plato.) As long as an individual did not harm others or interfere with others interests he should be free to pursue his own development and interests the way he wanted or deemed good. So even if a person wanted to smoke, drink, gamble, take drugs, watch pornographic films all day and even decide to commit suicide, he should be free to do so because these are his personal individual decisions and he needs to have full liberty to pursue his own path of growth.
(It is safe to assume Mill would had no problem with many of the modern debates of the day like marriage between homosexuals or allowing full freedom for abortion or allowing euthanasia. He would have heartily supported all of them. Quite something for a man of that long ago clearly.)
Mill also of course, like other early liberals, extended his theme of personal liberty to the economic sphere to advocate what Adam Smith had advocated a hundred or so years back – that is the capitalist model of classical economics, which saw maximum economic benefit for all in allowing and promoting maximum economic licence and freedom for operations in trade and commerce.