Using the words left and right to describe political persuasions was originally done after the French Revolution.
The Historical origin of the terms (left and right wing politics):
The terms Right and Left refer to political affiliations which originated early in the French Revolutionary era of 1789–1799, and referred originally to the seating arrangements in the various legislative bodies of France. The aristocracy sat on the right of the Speaker (traditionally the seat of honor) and the commoners sat on the Left, hence the terms Right-wing politics and Left-wing politics.The words used to describe politics are important because without a common language and common meanings for terms we spend time merely deciding the language that we will converse in. I expect that in past times there may have been political debates about which speaking language treaties would have been conversed in. If France and Prussia were going to negotiate, then the Prussians would have lost face if the common language used was French.
Originally, the defining point on the ideological spectrum was the ancien régime ("old order"). "The Right" thus implied support for aristocratic or royal interests, and the church, while "The Left" implied support for republicanism, secularism, and civil liberties.
Because the political franchise at the start of the revolution was relatively narrow, the original "Left" represented mainly the interests of the bourgeoisie, the rising capitalist class (with notable exceptions such as the proto-communist Gracchus Babeuf). Support for laissez-faire capitalism and Free markets were expressed by politicians sitting on the left, because these represented policies favorable to capitalists rather than to the aristocracy; but outside of parliamentary politics, these views are often characterized as being on the Right.
The reason for this apparent contradiction lies in the fact that those 'to the left' of the parliamentary left, outside of official parliamentary structures (such as the sans-culottes of the French Revolution), typically represent much of the working class, poor peasantry, and the unemployed. Their political interests in the French Revolution lay with opposition to the aristocracy, and so they found themselves allied with the early capitalists. However, this did not mean that their economic interests lay with the 'laissez-faire' policies of those representing them politically.
As capitalist economies developed, the aristocracy became less relevant and were mostly replaced by capitalist representatives. The size of the working class increased as capitalism expanded, and began to find expression partly through trade unionist, socialist, anarchist, and communist politics, rather than being confined to the capitalist policies expressed by the original 'left'. This evolution has often pulled parliamentary politicians away from laissez-faire economic policies, although this has happened to different degrees in different countries.
Thus, the word 'left' in American political parlance may refer to 'liberalism' and be identified with the Democratic Party, whereas in a country such as France these positions would be regarded as relatively more right-wing, and 'left' is more likely to refer to 'socialist' positions rather than 'liberal' ones.
Today we spend lots of time politically defining our words. Those on the "left" and those on the "right" cannot, for example agree if President Obama has overseen spending cuts, or if he has been willing to negotiate with congressional republicans. We keep hearing a debate about what the words mean and what the facts are; its no wonder that so little time seems to be spent solving the actual issues.
When the left and right were first used to describe political orientation the right meant monarchists and the left meant the new ideas of capitalism and meritocracy. No one would suggest that modern republicans want to return America into a monarchy. The right and left terms don't mean what they did.
How many times have you heard that historical politician X would not recognize his political party today? This is always quite likely because the politics of any era are different from the politics of any other era.
The political issues of today cannot be as easily compared to the issues of the past as they are in contemporary debate.
Words like progressive, liberal, conservative, and libertarian are better words that right and left to describe the political beliefs of people are.
For future reference:
Incorrect: The American left does not understand history or basic economics.