As an important liberal thinker of the 19th Century, John Stuart Mill focused on the conflict between liberal democracy and democratic political equality by looking at capitalism with a human face and positing that the political process can subdue the excesses of capitalism. His vision was one of progress through capitalism controlled by democratic politics.
Mill argued that achieving a capitalist consensus takes time and that four things are needed for this consensus. First, we must develop improvements in the standard of living overall; there should be no huge gaps between classes. Second there must be a perception of upward mobility for enough people so as not to develop a caste system. Third, liberal democratic nation-states should grant a minimum amount of reforms to be legitimate and not be considered elitist. Finally, the old goals must be destroyed and replaced with a vision of a different and future life that provides betterment for everyone.
These `old goals' he wanted replaced was the utilitarian notion of happiness through the accumulation of stuff. Mill opposed this notion and began to reject the utilitarian rational thinking after his nervous breakdown that was brought about when Mill asked himself, `What would happen when all my goals are realized?'
From this, Mill plunged himself into the writings of the German Idealists and the French political thinkers. He began to reject egoism and then looked at the lower class' plight, the problem of democracy and the question of socialism. From this he began to see the human face of capitalism, which he thought to be the most productive and, thus, best and inevitable, system of economy. However, he saw that the distribution of the product was the problem. He countered this problem by positing that an interventionist popular democracy can control hardships through programs such as social security pensions, equal opportunity, public education, and better roads and housing all made possible by taxation of the wealthy which would also bring political stability. This almost utopian vision held that the free contract system of the time was unfair and that it was not so much `free contract' as it was slavery. The worker's remuneration was simply not proportional to their exertion thus he thought the system needed alterations to provide equitable proportions.
Mill was also interested in such life betterment reforms as profit sharing and producer owned cooperatives. However, he did not think of socialism as a viable solution because of the egoism inherent in mankind.
Mill proved insensitive to the inequalities of capitalism in that he thought the lower classes could be made smaller through population control. His theory of `trickle down' economics did prove to a higher standard of living for all, but as it pushed the GNP outward, it widened the gap between the working class and the elite. Furthermore, while an idea of upward mobility may have been perceived, the actual problem of inequality never actually went away.