Inside the chamber where the National Assembly met, members of the Third Estate sat on the left side and members of the First Estate sat on the right. The Third Estate consisted of revolutionaries, while the First Estate were nobles. Thus, the left wing of the room was more liberal, and the right wing was more conservative.
The right is always the party sector associated with the interests of the upper or dominant classes, the left the sector expressive of the lower economic or social classes, and the center that of the middle classes. Historically this criterion seems acceptable. The conservative right has defended entrenched prerogatives, privileges and powers; the left has attacked them. The right has been more favorable to the aristocratic position, to the hierarchy of birth or of wealth; the left has fought for the equalization of advantage or of opportunity, for the claims of the less advantaged. Defense and attack have met, under democratic conditions, not in the name of class but in the name of principle; but the opposing principles have broadly corresponded to the interests of the different classes.
Which brings us to the current two main political parties in the US. What is interesting is that neither has been around in its current form for the entire existence of the US, although both try to claim a legacy that dates back to the formation.
The political conflicts in the US, dating back to the first Federalist Papers and earlier, boil down to a few issues, which encapsulate all others:
- Federalist vs. Anti-Federalist: what is the allocation of power between the states and the federal government?
- Industrial vs. Agricultural: the heart of the Civil War, and still one of the biggest issues as to how the federal government should allocate money; can also be framed as Urban vs. Rural, since industry generally needs a densely populated workforce whereas agriculture needs lots and lots of land
- Individual Rights: what can the government say you can and can't do?
The funny thing is that the current two major parties have different answers to these questions, depending on the context. For example, Republicans tend to favor low taxes and small federal government... except when it comes to defense and energy spending. Democrats tend to favor individual freedoms, but often want to regulate almost everything. Both sides are in favor of subsidies that help their district, whether that's subsidies for "small farmers" (read: huge agribusiness conglomerates) or "American workers" (read: failing American businesses that are being outcompeted on the global market), so depending on where a Republican or Democrat is from, we'll see different behavior on the Urban vs. Rural edge.
Finally, there's the relatively recent alliance between Republicans and social conservatives, which lets them have the nifty hypocrisy of saying the government has no right to say what you can do with a gun, but every right to say what you can do in the bedroom (see also: pro-death penalty but anti-abortion). Democrats are in a similar boat when it comes to supporting unions but wanting to do a lot of international aid (protectionist trade policies help our unions but hurt workers in developing nations), and with demanding money for education but refusing to consider options like school vouchers.
The terms "liberal" and "conservative" are names for political philosophies that go back to the 18th century or so. People who hold conservative philosophies aggregate in the Republican party, and people with liberal philosophies flock with Democrats.
Or at least, that's the rough gist of it. But there are conservative Democrats and liberal Republicans, and what we mean by "liberal" and "conservative" are very different from the original meanings, and from the way people in other countries use the same words.
The idea of conservatism being identical to Evangelistic Christianity is a very recent invention, beginning in the 1970s as a way to help the Republican party recover from the Nixon debacle.
Actually, it's reflecting an even deeper shift, a realignment of both parties in the 1950s as Democrats tried to attract more minorities during the era of Civil Rights legislation, and the southern conservative Democrats left to join the Republican party. Originally that brought a libertarian bent to the Republicans, but the influx of evangelical Christians formed a new base, which helped lead to our notion of "conservative" = "Republican" = "religious right".
Liberal and moderate Republican are uneasy about that, preferring a more fiscally responsible libertarian attitude, what they call "fiscal conservatism" even though that's called "liberal" in Europe, much closer to the original meaning of the term!
Meantime, the Democrats were undergoing another shift, from "classic" liberal (free-market) to "modern" liberal (interested in individual rights). In some ways those are opposites: modern liberals believe in using the power of government to help ensure rights for individuals, which "classic" liberals see as a restriction of the right to choose freely and operate without government interference.