When is a liberal not a liberal? According to many it is when they reside in America. The 'liberals' in America are correct to label themselves this as they are diametrically opposed to the conservatives. The conservatism we see in America (or did see) was one that stood for the protection of the Constitution and the freedom of the individual that it enshrined. The liberals sought to change this by side-stepping the constitution and expanding the government. They would 'liberate' the masses from the tyranny that is the constitution and cradle them in the warm safe bosom of federal government.
When we look at the history of the word, liberal, it's first usage as a political term was one of abuse. It wasn't until a group of Spaniards established the political group Liberales that it became associated with change. A change that on continental Europe was one that sought to overthrow the entrenched monarchies and free man from his role as a feudal serf. A change that had gradually been taking place in Britain in a more natural way from 1688 onwards in association with the Enlightened thought of the day. Throughout the 19th century the waters of liberty were darkened as new so-called liberal authors developed the idea of utilising government to act to free sections of society. There was little thought given to the unintended consequences of this resulting in many people actually losing their freedom as government expanded. Modern liberalism took on a new political form that had little to do with classically liberal thinking, and limited governmental powers over the individual.
It was not until Hayek, Friedman et al. began fighting back against the rising tide of government intervention that classical liberalism was revived and the idea of man being free was once again mooted. The Conservatives were doing little to stem the tide of the liberals here and in America (a situation we still find ourselves in today). The liberals of today are only liberal with other people's money. They have no regard for the idea of man being liberated, they desire everyone to live towards a 'general will'. The crux is that they hold the correct political party term 'liberals', yet are fundamentally illiberal.