[This is Chapter Six of Murphey’s book Burkean Conservatism and Classical Liberalism.]
BOOK II:
CLASSICAL LIBERALISM
6
THE PHILOSOPHY OF ORDERED LIBERTY
The meanings of the word "liberalism." During the eighteenth century and the first half of the nineteenth, the word "liberal" was most often used to refer to the philosophy of individualism. Someone was a liberal if he advocated capitalism, free trade, limited constitutional government, the Rule of Law, individualism, an essentially bourgeois lay of life, and a rationalist, secular outlook.1
In England after the middle of the nineteenth century, however, this sort of liberalism was overshadowed by something very different - welfare liberalism. This development was opposed by such men as John Bright and Herbert Spencer, who (as the original form of liberal) saw that the new type represented the impact of the newly burgeoning socialist ideas. The welfare liberalism rapidly merged into the Fabian socialist movement when it arose. For the most part, though, in England and on the continent of Europe the word "liberal" continued to mean individualism. It became, with many, a derogatory term as it was sneered at, eventually, by Hitler and Marxists.
In the United States, the incoming welfare liberalism preferred to call itself "progressivism" until the failure of the Progressive movement. In my own reading, I haven't noticed that the word "liberal" began to be used in connection with it until the 1920's or the 1930's. Eventually, however, it did come into use in that way. As a result, it became necessary, for those who are knowledgeable enough in social philosophy to differentiate between the various movements, to come up with a name by which to refer to individualism. Its earlier name had been usurped, although more by acquiescence than by a forcible taking. It has be-
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come common in political writing to speak of it as “classical liberalism,” with the word "classical" denoting that it is the original type.
This explanation is necessary to clarify the competing concepts and the variations in usage. Unfortunately, though, what is clear in one intellectual circle isn't clear in another. There are some authors who are totally oblivious to the history and differentiations I have just given. They have an entirely different semantic. They refer to almost all modern thought as "liberal," using the term to distinguish modern thought, as a broad generic category, from that of the Old Regime of feudalism, faith and monarchy. In this usage, even Rousseau and Marx are “liberals;” in fact, they are among the more important liberals. This is the usage, frustratingly enough, in de Ruggiero’s The History of European Liberalism.2 And in The Rise and Decline of Liberalism, Thomas Neill was even able to say that “today, we know, at least one school of Liberalism has gone totalitarian.”3 This is a paradoxical, self-contradictory statement to anyone who uses the word "liberalism" to refer to the philosophy of a classical liberal free society.
I am by no means inclined to engage in an argument over which meaning is the correct meaning. Debates of that sort are premised on a serious methodological error. Many of the most heated arguments in the history of ideas could have been avoided altogether, with a considerable increase in intellectual civility, if both parties hadn't made that error. I am committed enough to an empirical outlook to say that there is no given meaning for any term, as though it had a Platonic "Idea" behind it or an Aristotelian "essence." It is the assumption that there is such an innate meaning that gives rise to dogmatism over language. Another approach is to try to find out empirically how people actually do use a word, and then to stick with that. There would be much to commend this, since it would lead to far less confusion.
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But there is also a third method, which is to recognize that words are often used as "conventions." This way of using language simply treats words as tools. If someone wants to use the word "liberalism" to denote limited goverrment, he can; if someone else wants to use it to refer to almost all modern thought, though, that is his prerogative. If all thinkers are admitted to have this license, then the main thing that is important is that everybody remain aware that there is nothing magical about a word, that it often refers to different things. The point is to argue over the merits of the concepts themselves, not over the respective claims to the use of the word.
This is purely an intellectual view of the matter, of course. It ignores a certain side of the semantic issue. Words like "liberalism," "liberty," "equality," "Justice," etc., carry strong emotional content. Although intellectually they can mean whatever we assign them to mean, they have a far less neutral dimension as rhetorical, political, ideological stake-outs in the on-going fight for public acceptance of one ideology as against another. In that context, no one is willing to hand over an attractive term to a rival. In that arena (rather than in the purely intellectual one), I certainly join with those who insist that the word "liberalism" not be "abused" by being given meanings that remove its connection with individualism. But the present book is not intended for that arena. It is an exercise in reflective thought, not in ideological polemicizing. I can only hope that the partisans of classical liberalism (of which I am myself one) will forgive me for simply differentiating my meaning from that used by de Ruggiero and Neill and for not beating those men about the head and shoulders for their perversity.
It is enough for our purposes here that the reader know that I will be using the term "classical liberal" with a fairly definite meaning to denote the entire philosophy of an individualist free
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society. Whenever I want to speak of the welfare statist position that has passed under the name "liberal" in the United States since about 1920, I will refer to "modern liberalism.”
The adjective “modern” is helpful to distinguish it from classical liberalism, but I don’t mean to imply - by the suggestion of chronology that arises from the two terms - that I agree with those who say that there has been an historical continuity between the two ideologies. I don't agree that "modern liberalism" arises out of "classical liberalism." We will have to leave our discussion of that notion until my book on modern liberalism. In the meantime, it is enough to realize that the two terms refer to different philosophies.
Liberty in ancient and medieval society. Some authors give ancient an medieval society considerable credit for having developed freedom within Western civilization. M. Stanton Evans argues that Christianity established the dignity and sacredness of the individual, and hence played a pivotal role in the evolution of liberty.
I read the history differently. To me, so laudatory a view seems exaggerated almost beyond recognition. Christianity has been an immensely diverse phenomenon. There are aspects within its history and dogma that support the individual; there are others that degrade him. Taken as a whole, it is hard to agree that its main thrust has been to raise the individual or to relieve him from oppression. We shouldn’t lose sight of the Augustinian "doctrine of human depravity," which is held by most Burkeans even today.
I wouldn't have us sell short the contributions made by earlier ideas and institutions. They deserve whatever credit is due them. But the histories both of the ancients and of the Middle Ages are too overladened with the indignities and oppressions imposed by the powerful state,
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religion and community to justify any unmitigated praise for their having been libertarian. Liberty in the classical liberal sense is far more a modern concept, a new departure, than the picking up of an old one. This is true even though there isn't a total discontinuity with the past.
There were intervals within ancient civilization when the individual did enjoy relatively greater personal freedom. According to Thucydides, the Athenian general Nicias reminded his soldiers “of their country, the freest in the world, and of' how all who lived there had liberty to live their own lives in their own way." Pericles spoke in his Funeral oration of the fact that in Athensl “everyone is equal before the law” and that "we are free and tolerant in our private lives.”4
Friedrich Hayek has stressed that the Athenian concept of isonomy - the doctrine of "equality before the law" - was an extremely significant contribution to the history of liberty.5 A dependable framework of law in which certain criteria about law are met (that the rules apply equally to everybody, are knowable in advance, are as unambiguous as possible, and are applied by an impartial judiciary after a fair procedure) is serviceable to classical liberal values both as a setting for individual action, which it can facilitate, and as a major restraint on the caprice and administrative whim of those who govern. During the Middle Ages, this concept was thought to be inherent in the "feudal contract." The Magna Charta is said to have been, in fact, an insistence by the nobles that a forgetful king observe his legal obligations.
But it was a principle that was honored overwhelmingly in the breach, as we see if we look at the long flow of ancient and medieval history. If I were asked whether these were free societies in which the individual lived within a voluntary nexus or in which the Rule of Law was substantially observed over long periods of time, I would have to
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answer that they were not. Even in Athens, the "Golden Age of Pericles" was quite brief; the Athenians didn't long or consistently carry out the ideals for which Pericles praised them. Henry Hazlitt has pointed out that "in the Greek world the City State was supreme - the individual citizen lived and moved as a member of the State." He said with regard to Rome that "the State was autocratic." This was certainly the case in most of Roman history even though Hayek is right in calling attention to a fair amount of personal freedom in late republican Rome. About the Middle Ages, Hazlitt wrote that "the medieval theory of politics and economics was feudal and paternal.”6
It is not surprising, then, that in his discussion of individualism Hazlitt was able to say, with only slight qualification, that "it is needless to go back further than the seventeenth century.”
The breaking up of the Old Regime: Rationalism and Secularism. The mental hegemony of the Middle Ages couldn't be sustained indefinitely. Just as with the mos maiorum of the Roman Republic, its insularity was bound to shatter, with other ideas flooding in. The gradual improvements in technology and the increase in commerce made Europe more secular. The Renaissance involved the rediscovery of ancient writings. The Reformation saw Christianity split into a host of antagonistic factions; and the secular powers contended more and more with the ecclesiastical. There was the invention of printing, the broadening effects of the Crusades, the contact with Islam, the discovery of the New World and the mind-boggling impact of the new Copernican cosmology.
An enormous gulf opened between the "man of faith and tradition" and the "man of reason." By the time Boswell recorded Samuel Johnson's conversations in the eighteenth century, Johnson wore the aspect of a man besieged from every direction. I mentioned earlier that in one conversation he ar-
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gued with a Mrs. Macaulay, who asserted (hypocritically, it appears) the doctrine that all men are equal; in another, he was opposed by a Mr. Dempster, who argued that men should be judged by their intrinsic merit rather than by hereditary rank; in still another conversation, Johnson argued for authority as against a Mr. Mayo's contention that “every man is entitled to liberty of conscience in religion." He exploded that "the age is running mad over innovation" and he complained that "there is a general relaxation of reverence."7 Johnson defended the Old Regime, but many people around him had begun to question all of the foundations of medieval society.8
The budding classical liberalism embraced this sort of "rationalism" and joined exuberantly in opening the new vistas. It attacked the divine right of kings; it set up the "laws of nature" and the Rule of Law as against the arbitrary power of the monarchy; it favored equality as against hereditary titles of nobility; it pressed for religious tolerance and the separation of Church and State; and, especially in England, it began to remove, one by one, the countless impediments to a person's freedom of movement, vocation and expression. John Locke was its leading thinker in the seventeenth century, and he provided the philosophic rationale for the Revolution of 1688. Locke shared the idea that was so common in the seventeenth and eighteenth centuries that civil society originated in a "social contract." His interpretation of the social contract was that it was the means by which men created government to protect the natural rights that men already had in the “state of nature.” Government, then, was founded on the consent of the governed. The state was to operate through the Rule of Law, and it was to protect the lives, liberty and property of the individual. Locke's philosophy involved a profound questioning of the ideas and institutions of the medieval system. This process of radical questioning - which is anxious to inquire into the purpose and usefulness of social forms - is
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one meaning, at least, of the word "rationalism."
And yet, there are a couple of things I would be quick to point out about classical liberal rationalism. The first is that its rationalism has almost invariably been a “moderate” form of questioning. The second is that there have been important differences among classical liberals. Its rationalism seemed a deadly form of social acid to the adherents of the Old Regime, such as Samuel Johnson (and Burkean conservatives still attack it as a trait held in common by classical liberalism and the Left); but it was anxious to affirm private property, the Rule of Law and limitations on the power of majorities. It almost never resembled the "rationalism" of the extreme Jacobin or of the Russian nihilist who wanted to destroy the world so that he could build it from scratch. Classical liberalism was radical vis a vis medievalism; it has been “conservative” vis a vis socialism.
Classical liberal thinkers have varied on the subject. Some have put a lot of emphasis on the need for an individual judgment that is independent of "authority." Others put more stress on the limitations of reason.
The stress on mental independence stood out in Thomas Paine's insistence that "my own mind is my own church." When he denied that he professed the creed of any established church, he expressed an independence that was heretical from the earlier point of view. He downplayed tradition, and said that "every generation is and must be competent to all the purposes which its occasions require. It is the living and not the dead that are to be accommodated."9 Joseph Hamburger said about the later English Philosophic Radicals that they "had a measure of that abstraction in their theorizing that led them to base their actions on a level of reality which most other political observers did not recognize. They also had a rationalist scepticism about religion and a suspicion of tradition that has attracted the enmity of anti-ideological critics.”1O
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In the twentieth century, the classical liberal economist Lord Robbins has defended the English Utilitarians against the charge that they were guilty of the “rationalist fallacy” of relying too much on idealistic castles-in-the-sky. "I will confess unashamedly that I do not think that the main drift of nineteenth century English Utilitarian thought tends to a liberalism which, in any sense intelligible to me, deserves the appellation 'false.’" Robbins says that Hume's rationalism seems most supportable: "Hume usually seems to me to be about right: he certainly recognizes the limitations of reason in respect to the origins of institutions and morals; yet he never hesitates to use it where it is appropriate in criticizing the extent to which they satisfy the test of public utility."11
In his book about the French classical liberal Frederic Bastiat, George Roche (who wrote as a Burkean conservative) criticized Bastiat on the ground that he "takes a rationalist position when he argues for a society based upon abstract principle, rather than discussing society as an organic growth." Roche reiterated the frequent Burkean argument that the rationalism of such men as Bastiat and Cobden “contained the seeds from which modern democratic socialism would one day grow." 12 Roche's opinion helps to define an issue that can shed some light on the type of rationalism he criticized. I believe that Roche is mistaken in his interpretation of this rationalism. Bastiat no doubt thought things through and formulated principles; and in this we see the essence of his rationalism. But his whole philosophy asserted that there was a "natural order" in the world and sought a humility that would avoid "playing God" with human society. He didn't engage in unbridled castle-building. His comment about socialism is pertinent: "What, then, is the common denominator to which all forms of socialism are reducible, and what is the bond that unites them against natural society, or society as planned by Providence? There is none except this: They do not want natural society. What they do
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want is an artificial society, which has come forth full-grown from the brain of its inventor." What Roche must be taken to mean, I am afraid, is that Bastiat was wrong because he didn't accept the Burkean view of order and of society's proper evolution. There's great injustice in marrying Bastiat's rationalism to that of the socialists he so adamantly criticized. The latter didn't evolve from the former. Instead they were immediate antagonists.
Ayn Rand and Nathaniel Branden have been the thinkers within classical liberalism the most emphatic on the subject of "reason." Branden has written that "an unbreached rationality - i.e., an unbreached determination to use one's mind to the fullest extent of one's ability, and a refusal ever to evade one's knowledge or act against it - it is the only valid criterion of virtue.”l3 As Rand and Branden analyze human nature, they believe that the great watershed is between those who have mental integrity and those who "go out of focus" when faced with an aspect of reality they don't like. I can't help but believe that Rand and Branden have pointed to one of the really vital issues in the area of man's maturity versus his immaturity. They raise a standard for mankind that is elevated but at the same time most truly human: an image of clarity, competency, potency, self-esteem and unlimited creativity.
It may seem paradoxical, then, that I have a great deal to quarrel with about their rationalism. The claims they make for reason are immensely valuable, but their application of it shows how difficult and elusive pure rationality is. They raise reason to the highest pinnacle, but then they abuse it when they claim that all of the precepts of political and social philosophy can be deduced in black and white (without any admitted grays) from the requirements of "man's survival qua man.”14 Such a deduction just isn't possible. There is neither an extrinsic standard nor a man-made consensus for what it means to speak of man
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“as man.” This isn't a given, but an existential quest of the greatest indeterminacy. Even if it were a given, there would immediately be disagreement even among reasonable, fully focused minds about how to accomplish it. Even focused minds will differ in their "systems of interpretation" of social reality; they have to put together its innumerable strands conceptually within their minds. There can be no hope of just one clear, factually and morally irresistible set of constructions.
Because they believe so strongly that their system is infallibly deducible and that each aspect of it has moral certainty, Rand and Branden adopted a harsh authoritarian mentality of their own. This ironically brought them full circle into a denial of something that is extremely important to the ongoing use of the mind: that men do think for themselves, even though they may make mistakes; and that they not cringe in fear lest by a doctrinal slip they fall from grace. Because it insists on such a psychosis, the Randian philosophy is as terrible as it is magnificent.
So far, I have provided a glimpse at the rationalist side of classical liberal thought. We shouldn't leave the subject, though, without noticing the extent to which classical liberals (other than Rand and Branden) have warned against the abuses of unhumbled mind. Classical liberal rationalism has for the most part been an appropriate one, not a conceit of God-like omniscience. No less a figure than Adam Smith expressed the main thrust of their moderation when he said that "Some general, and even systematical, idea of the perfection of policy and law, may no doubt be necessary for directing the views of the statesman. But to insist upon establishing, and upon establishing all at once, and in spite of all opposition, every thing which that idea may seem to require, must often be the highest degree of arrogance. It is to erect his own judgment into the supreme standard of right and wrong. It is to fancy himself the only wise and worthy man in the common-
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wealth, and that his fellow citizens should accommodate themselves to him, and not he to them." Smith shared with Bastiat an appreciation for a much larger natural order, and this was reflected in the following criticism he made of the “man of system:” "The man of system is apt to be very wise in his own conceit . . . (H)e seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board; he does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.”15
Jacob Burckhardt made a similar point when he warned his friends prior to the revolution of 1848 that they couldn't control the revolution they hoped for. His advice was fully at odds with the head-long spirit of the unbridled utopian. He also warned against the use of the state "to put into practice the completely theoretical political programmes which political thinkers periodically draw up.”16 Herbert Spencer (who, with so many others, thought a natural order was fundamental) could add that "if we think that we can rectify the relationships of men at will, we deceive ourselves.”17 Friedrich Hayek distinguished "between two schools of thought, of which one can be shown to be mistaken. They are both commonly referred to as rationalism, but I shall have to distinguish between them as the evolutionary (or, as Sir Karl Popper calls it, 'critical') rationalism on the one hand, and the erroneous constructivist (Popper's 'naive') rationalism on the other." And yet, Hayek didn't deny the need for rational constructs: "It is only by constantly holding up the guiding conception of an internally consistent model which could be realized by the consistent application of the same principles, that anything like an effective framework for a functioning spon-
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taneous order will be achieved." Lord Acton spoke of an "abstract, ideal absolutism, which is equally hostile with the Catholic and with the English spirit." He favored efforts, instead, "to reform mankind by assimilating realities with ideals, and accommodating (oneself) to times and circumstances.”18
In the United States during the past twenty years, the Burkean school that centers around National Review magazine has been considerably more articulate than classical liberalism. This has had a visible impact on some classical liberal thought. I would guess that Hayek's emphasis in The Constitution of Liberty on the organic embodiment of human experience and knowledge in spontaneous culture and in established institutions is due at least in part to the influence of this body of thought. (This is my surmise even though, as we have seen, the idea of spontaneous order isn't new to classical liberalism. What is new is Hayek's emphasis, which credits tradition and custom with an immanent potential wisdom about issues that pertain to the framework of society.) The impact of Burkean thought on the eminent classical liberal economist Wilhelm Ropke was set out explicitly by Ropke himself in A Humane Economy: "Here I am not at all sure that I do not belong to the conservative rather than the liberal camp, in so far as I dissociate myself from certain principles of social philosophy which, over long stretches of the history of thought, rested on common foundations with liberalism and socialism, or at least accompanied them. I have in mind such ‘isms’ as utilitarianism, progressivism, secularism, rationalism, optimism, and what Eric Voegelin aptly calls 'immanentism' or ‘social gnosticism.’” He adds a comment that shows the metaphysical basis for his rejection of classical liberalism's secular rationality: "The ultimate source of our civilization's disease is the spiritual and religious crisis which has overtaken all of us . . . Above all, man is Homo religiosus and yet we have, for the past century, made the des-
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perate attempt to get along without God, and in the place of God we have set up the cult of man, his profane and even ungodly science and art, his technical achievements, and his State.”19
Some classical liberals, however, have rejected the Burkean influence, citing reasons opposite to those that I have just quoted from Ropke. Instead of being resolved, the old issues are smoldering heatedly inside contemporary "conservatism" (which, in current usage, includes classical liberalism).
The breaking up of the Old Regime: The rise of the bourgeoisie. The late Middle Ages saw the rise of the tradesman and the gradual growth of commercial towns. Some important technological advances had occurred despite the prevailing ignorance, superstition and mental authoritarianism. The ancients depended on rudimentary sources of power, mainly muscle power; but wind and water power were developed during the Middle Ages, and inventions made possible a much more efficient use of animals. This led to the agricultural revolution, which laid the foundation for the Industrial Revolution.
The acting man of commerce has almost always been the natural rival of the landed aristocrat. The nobleman has characteristically looked down upon the "money getting trades" of the bourgeoisie as vulgar; the nobleman himself has been able to live a life of leisure and culture, mixed with public service.
When classical liberalism arose, it championed many things that were at odds with the medieval regime. Among other things, it championed the aspiring middle class - and was championed by it. (The relationship wasn't automatic, though. We will see later that the classical liberal intellectual was often disappointed with the middle class. In turn, the middle class often ignored the broader philosophical base that the thinker
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sought.) The tie was expressed by Rose Wilder Lane when in speaking about nineteenth century England she remarked favorably that "a struggle for freedom began again where it always begins, among merchants and traders."20 And Lord Acton saw the relationship of the liberty he favored with the bourgeoisie when he said that "liberty was the watchword of the middle class.”21
Although we may choose to disregard his sneering emphasis, Thomas Neill said about French liberalism that "Royer-Collard, Guizot, and the other Liberals all looked upon the middle class as the group appointed by Providence to usher in the final stage of world history." He hypothesized that classical liberalism didn’t catch on in the other continental countries because they lacked a large middle class. George Roche spoke of Bastiat and said that "he became increasingly convinced that some form of constitutional government, based upon solid bourgeois foundations, was absolutely necessary for France." Roche also referred to the "strong middle class emphasis" shown by Cobden in England: "The group on which he pinned all his hopes for the salvation of society was the emerging middle class." Cobden tried to persuade Robert Peel to govern England through the newly enfranchised middle class. "Do you shrink," he asked Peel in a letter, "from the post of governing through the bona fide representatives of the middle class? . . . The reform Bill decreed it; the passing of the Corn Bill has realized it. Are you afraid of the middle class?”22 Cobden's biographer, John Morley, summarized his view on this: "Political power was to be in the hands of people who had public spirit enough to save the thirty pounds or so that would buy them a qualification . . . These middle and industrious classes would insist on pacific and thrifty administration."
We live more than a century after Marx launched his attack on the bourgeoisie; so, if anything, we are conditioned to think negatively about it as a class; but it can't be surprising that a comer-
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cial middle class (which hopefully becomes so broad that it encompasses virtually the entire population) will be the mainstay of a philosophy that stresses individual liberty. Classical liberalism wants a society in which people live as individuals and as families industriously and self-reliantly; they are not to be oppressed by force, but they are to be held together by certain social cements; they are to be inclined to civic virtue within an orderly system of law and mores that will provide the framework for voluntary life. This is what classical liberalism essentially sees as the good life. Accordingly, Wilhelm Ropke can speak of "the middle class properly so called, that is, an independent class possessed of small or moderate property and income, a sense of responsibility, and those civic virtues without which a free and well-ordered society cannot, in the long run, survive." If we want a society of free individuals, and want it for the population in general, we should look to the system of free trade and the resulting bourgeois culture. This doesn't mean that the proponents of a free society can't seek to raise the intellectual and aesthetic consciousness of the average man within that society, but essentially their identification will be with that man and his culture. Most assuredly they won't indulge themselves negatively in a profound cultural alienation from bourgeois society. And this means that classical liberal intellectuals are significantly different from most other intellectuals.
As a corollary to its identification with the middle class, classical liberalism stood as the main opponent of aristocracy and the "propertied interest." Joseph Hamburger says that "the Whigs and the Tories as the two aristocratic parties" became "the main enemy of reformers" in England in the 1830's. John Stuart Mill spoke of "the two principles which divide the world, the aristocratic principle and the democratic." To the Philosophic Radicals, "the important thing was to achieve total political victory, i.e. to destory aristocratic power." Thomas Macaulay spoke in opposition
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to the aristocratic principle, and argued that "to say that society ought to be governed by the opinion of the wisest and best, though true, is useless. Whose opinion is to decide, who are the wisest and best?”23 In France, though, two of the most prominent classical liberals held opposing views. Roche mentions that Bastiat "criticized Tocqueville's defense of primogeniture and aristocratic privilege as socially useful devices."
The rejection of aristocracy was strongest in England and the United States. On the continent, the picture was mixed. The leading classical liberals in Germany supported "enlightened despotism" in the eighteenth century. This was also true in Russia, where after the failure of the Decembrist uprising in 1825 the classical liberals were anxious to support any Czar whose program was reformist.
In the United States, the Jeffersonians were both classical liberal and democratic. Jefferson said he favored the “natural aristocracy of talents” rather than an "artificial aristocracy" of hereditary rank. He added that "I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom.”24 Later, the Jacksonians fought successfully against the rechartering of the second United States Bank on the ground that it favored the “monied interests.” Theodore Sedgwick was typical of them when he called for "the exclusion from a republican country of a base counterfeit imitation of aristocratic taste." He spoke against the narrow class limitations that existed in England, and struck a popular theme when he favored “republican simplicity.”25 The Jefferson-Jackson school considered simplicity the badge of republicanism. This is well illustrated by a notation in John Bright's diary about James Buchanan before he became president: "Called on Mr. Buchanan, the American minister, on the subject of wearing 'Court dress' and his absence from House of Lords at the opening of the session. Found him a fine old man, tall,
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grave and sensible, very friendly and frank in conversation. He told me he had been connected with the Democratic party all his life and intended to maintain his consistency in all things. 'Gold lace and embroidery' he utterly rejected.”26
Nevertheless, classical liberals weren't unanimous in their support of the middle class. Samuel Tilden, another Jeffersonian, said that "free institutions depend more largely upon the farming class than upon any other.”27 This is a far cry, though, from a support for landed aristocracy; and it is akin to the usual classical liberal support for sturdy, self-reliant individuals.
In Germany, Jacob Burckhardt considered the rise of the bourgeoisie in the second half of the nineteenth century to have had "a disastrous effect on the creative arts, on scholarship and education, on the world of higher culture in general," according to James Nichols. "Burckhardt quite distinctly saw this happening as early as 1870, as more and more of his talented students, who a decade earlier would have gone into the professions, turned instead to business. And in business, due to its all-absorbing requirements, they would have to hire other men to be cultured for them."
Despite the strong desire by classical liberal intellectuals to support the middle class, they were frequently dissatisfied with its spiritual and intellectual level. (This is a fact of the greatest significance, since it is one of the important causes of the turn of Western intellectuality away from bourgeois society and, with it, from classical liberalism.) Neill says - and here we can hardly be surprised in light of Tocqueville's aristocratic bent - that Tocqueville "found bourgeois rule the most revolting imaginable, for the colorless Guizot offended the instincts of this man who had a keen sense of history and a strong remembrance of his country's past." John Stuart Mill yearned for a higher intellectual plane
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and favored an intellectual elite similar to Coleridge's "clerisy." He commented dolefully about America that "all that (their) advantages do for them is that the life of the whole of one sex is devoted to dollar-hunting, and of the other to breeding dollar-hunters.”28 And he spoke of the English middle class's "general indifference to those kinds of knowledge and mental culture which cannot be immediately converted into pounds, shillings and pence." Mrs. Grote was an associate of Mill's, and she spoke of "a stupid middle class who dream only of shop." The result was that the intellebtual withdrew to the world of ideas. The same thing happened at approximately the same time in England and the United States. In England, it was the intellectuals of the Philosophic Radical school; in the United States, it was those of the generation of Emerson and Thoreau. Hamburger tells that "consequently, they (the Philosophic Radicals) withdrew from politics with disillusionment and bitterness and a sense of having wasted their efforts . . . Despairing of politics, they took to scholarship.”
Even so stalwart a supporter of commerce as Richard Cobden was disappointed. Morley says "he had begun life with the idea that the great manufacturers and merchants of England should aspire to that high directing position which had raised the Medici, the Fuggers, and the De Witts to a level with the sovereign princes of the earth." Instead, Cobden found that they "seem only to desire riches that they may be enabled to prostrate themselves at the feet of feudalism.’” He preferred the small manufacturers of Birmingham to "the great capitalists of Manchester," and considered the latter unsuited to a democratic movement.29
The middle class came to power in both England and France in the early 1830's - and in each case classical liberal thinkers were disappointed with their actions. Cobden complained: "How few of those who fought for the repeal of the Corn Law, really understand the full meaning of Free Trade principles! If you
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talk to our Lancashire friends they argue that unless we occupied India there would be no trade with that country." Cobden was defeated at the polls in 1857 because he opposed colonialism. And he had felt virtually alone in 1851 even though in previous years he had given outstanding leadership in behalf of what was supposed to be a middle class electorate.30 It is tragic, too, that Bastiat could feel intellectually isolated even during the bourgeois rule between 1830 and 1848.
A new conception: the "vitalist perspective." Although the rise of classical liberalism involved many factors, one of the most important was the development of a new worldview - a significantly different perspective about man and society .
The regulation and restraints on individual action had become insufferable. The starvation that occurred during the winter before the French Revolution was mostly due to restrictions that blocked the shipment of grain among the various provinces of France. Herbert Spencer said that the popularity of the Whigs in England until about 1850 was due to their removal of restraints. Each deregulation was felt as a benefit.31 Henry Hazlitt writes that "the action of despots, benevolent or otherwise, who introduced innumerable and vexatious regulations to control the business and daily life of their subjects, caused thoughtful men to distrust governmental action." And in addition to the government policies, strong religious attitudes continued (as they had for many centuries) to oppose individual self-aggrandisement, lumping it generally into “pride” and "avarice."
In the early eighteenth century, the new perspective was given startling expression in Bernard Mandeville’s The Fable of the Bees. He argued heretically that it is precisely men's “vices” that lead to progress. He was usually speaking of the so-called vice of self-interest, which he favored as a powerful motivator. His argument was marred, from a later classical liberal point of
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view, by his having occasionally resorted to Mercantilist thinking - as when he said that prostitution in London wasn't entirely bad because, after all, it kept money circulating. But his stress on the fruits of individual motivation was an important contribution to later classical liberal theory. This is true even though Adam Smith - the great economist who later in the eighteenth century wrote the first comprehensive overview of a system based on the harmony of self-interest - found Mandeville's ideas repugnant. Smith felt Mandeville had obliterated "the distinction between vice and virtue" and had knocked down some easy straw men in the "popular ascetic doctrines" that considered self-interest a sin. For my part, I am inclined to think that Smith underestimated the need for a headlong attack against the Augustinian doctrines that had militated for so many centuries against secular, individual concerns.32
When eventually the new perspective was fully elaborated by Smith and his successors, it amounted to a fundamental belief in the value of individual effort. I have called it the "vitalist perspective" because it stresses the creative vitality of countless people acting as individuals or through voluntary associations. "The natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions," Smith wrote in The Wealth of Nations.33 Wilhelm von Humboldt wrote that “whatever man receives externally, is only like the seed. It is his own active energy alone that can turn the most promising seed into a full and precious blessing for himself. It is beneficial only to the extent that it is full of vital power and essentially individual. The highest ideal, therefore, of the coexistence of human beings, seems to me to consist in a union in which each strives to develop himself from his own inmost nature, and for his own sake.”34
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But this perspective went much further into an assertion of the feasibility of an economy and society based on spontaneous individual effort. This denied the Mercantilist notion that chaos would reign in the absence of tight controls. It also denied the "Montaigne dogma," a corollary of the Mercantilist view, that asserted that one person's gain is necessarily another's loss.35 So long as men held such a dogma, there could be no concept of a harmony of interests. It requires that government be an active intermediary in a war of all against all. (In the twentieth century, the Welfare State's "interest group liberalism" renews this struggle to "divide the pie" by again politicizing the process of production and distribution.) Bastiat argued against the Montaigne dogma, and pointed out that "arbitrary and complex systems of government, the negation of liberty and property, the antagonism of classes and nation, all these are logically included in the axiom, that the gain of one is the loss of another." By contrast, he went on to say that "for the same reason, simplicity in government, respect for individual dignity, freedom of labor and exchange, peace among nations, security for person and property, are all contained and shut up in this truth - Interests are harmonious.”36
The corresponding notion that free trade would be chaotic was expressed in the protectionist argument that some people would suffer under a market system because they would be less efficient at everything than their competitors would be. It was as a response to this that David Ricardo formulated his "law of comparative cost," which is also known as the "law of association." He argued that it is more profitable for the more efficient to concentrate on doing the things they do best, leaving the rest to others even though those people may be less efficient even as to them. Ludwig von Mises commented on the significance of Ricardo's point: "The law of association makes us comprehend the tendencies which resulted in the progressive intensification
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of human cooperation. We conceive what incentive induced people not to consider themselves simply as rivals in a struggle. . .” And Lord Robbins spoke to the broader point about the workability of freedom when he said that "however much you may believe in liberty for its own sake, you are unlikely, unless you are mentally unbalanced, to recommend liberty if there is a reason to believe that liberty must necessarily involve chaos. Therefore, before the leaders of eighteenth and nineteenth-century liberalism could recommend liberty in economic relations, it was necessary that there should exist a body of thought which showed, or which purported to show, that, if left uncontrolled save by due process of law, individual initiative in the economic sphere would not lead to economic disaster: that is to say, it was necessary to show that the interplay of spontaneous self-interest would harmonize with public good."
Frank H. Knight is another author on the same point. He wrote that "one of the major 'discoveries' of the revolutionary age, the Enlightenment or Age of Reason . . . was the self-evidence of a harmony of interests in free relationships . . . Previously, the best minds had held the absurd notion that any gain by one trader must mean an equal loss by the other.”37 And Frederic Bastiat put his main emphasis on the vitalist perspective. The very title of his book Harmonies of Political Economy is based on this theme.
Knight has, however, added an observation that is crucial if the vitalist perspective is to be understood. He said that the harmony of interests exists, "excluding force and fraud and presupposing mutual respect for the freedom and competence of the other party." He pointed out that "it is quite false to allege, as is so commonly done, that the new economics of laissez faire rested on the assumption of a 'natural harmony of interests' apart from this condition of mutual respect for one another's rights, and, if this should not be rendered voluntarily, its enforcement
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by whatever legal and political measures might prove to be required." Hayek also speaks of the need for "the security provided by the enforcement of the rules of just conduct." In a passage that relates to the monetary system, Lord Robbins stresses the need for a framework within which the spontaneous order can operate: "There is no guarantee in the nature of things that just any spontaneous development in the sphere of money and credit will give us what we want. In fact I do not think we yet know enough about these matters to be at all sure what are the best possible arrangements. But of one thing we can be fairly certain: whatever be the best institutions they are not the product of spontaneous initiative uninfluenced by the legal system.” There are, of course, classical liberals - especially of Mises' “free banking" school - who disagree with Robbins on this; but the point that the spontaneous order presupposes a framework of ethics, mores, law and institutions is, as Knight suggested, an important corrollary to the vitalist perspective. Except in its anarcho-capitalist heresy, classical liberalism doesn't presume either the total rational self-interest of man or his complete moral goodness. It is necessary to assert at least one of these qualities for someone to be able to imagine that a framework can be dispensed with.
Government plays an essential role in this framework; and yet, the classical liberal mainly relies on the energies of private individuals and abhors the absorption of those energies into the state. In fact, the writings of John Stuart Mill, Jacob Burckhardt, Wilhelm von Humboldt, Ayn Rand and others all argue that freedom is vitally iniportant to the growth and fulfillment of the individual human being. Humboldt said that "the cultivation of the understanding, as of any of man's other faculties, is generally achieved by his own activity, his own ingenuity . . . Now, State measures always imply more or less compulsion; and even where this is not directly the case, they accustom men to look for instruction, guidance,
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and assistance from without, rather than to rely upon their own expedients.” I said much the same thing in Emergent Man when I said that "liberty in all its phases gives expression to mind. The free man uses his mind constantly, in both his small and his large decisions, to answer for himself the basic questions of human existence: Where am I going? What am I? How am I significant?”38 Burckhardt denounced the tendency to rely on the state: "Men are no longer willing to leave the most vital matters to Society, because they want the impossible and imagine that it can only be secured under compulsion from the State." The anti-statist perspective also comes out in Cobden's advice to the working classes: "It is to themselves alone, individually, that they, as well as every other great section of the community, must trust for working out their own regeneration and happiness. Again I say to them, 'Look not to Parliament, look only to yourselves.’”
One of Hayek's statements is especially relevant today. We live at a time when people often argue that such concerns should be ignored, and that we should address'ourselves to each problem “practically.” This pragmatism reflects a couple of things: first, the attitude of a type of acting man who for over a century has had little supportive intellectual culture; and second, the relativism that composes an important part of the ideology of the Left and of modern liberalism. In rebuttal to it, Hayek observed that "when we decide each issue solely on what appear to be its individual merits, we always estimate the advantages of central direction. Our choice will regularly appear to be one between a certain known and tangible gain and the mere probability of the prevention of some unknown beneficial action by unknown persons. If the choice between freedom and coercion is thus treated as a matter of expediency, freedom is bound to be sacrified in almost every instance."
When classical liberals compare themselves
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with socialists and the earlier Mercantilists, they feel that one important difference is in their own adherence to the vitalist perspective. Bastiat observed: "Once we start from this idea, accepted by all our political theorists, and so energetically expressed by M. Louis Blanc in these words: 'The motive force of society is the government;' once men consider themselves as sentient, but passive, incapable of improving themselves morally or materially by their own intelligence and energy, and reduced to expecting everything from the law; in a word, when they admit that their relation to the state is that of a flock of sheep to the shepherd, it is clear that the responsibility of the government is immense." He said socialists "do not want natural society. What they do want is an artificial society, which has come forth full-blown from the brain of its inventor." He added that "their faith is in the legislator, not in mankind. Ours is in mankind, not in the legislator."
From the classical liberal point of view, one of the more ominous developments in the United States since the early 1930's has been the extent to which public opinion has adopted the attitudes of the intellectual community in assuming that almost nothing can take care of itself without being planned by government. This relates closely to the public's having also accepted the theory of exploitation, at least in its milder forms. There is little confidence in the market as such. These attitudes vary sharply from those held by classical liberals.
Another aspect of the vitalist perspective is that classical liberals have often argued that government interventions simply cannot be carried out without causing more harm than good. Government's actions in derogation of freedom are seen to violate an underlying reality that can't be violated with impunity. Ludwig von Mises and Henry Hazlitt have said many times that each intervention leads to undesirable consequences that
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lead on to still more intervention. Herbert Spencer argued that there are laws of social causation that legislators systematically ignore. He added a comment that runs counter to those who place great confidence in the power of the state to improve society: "If we think that we can rectify the relationships of men at will, we deceive ourselves." Theodore Sedgwick warned people not “to expect any great amelioration from caucuses, elections, laws, or political movements, without a corresponding change (in) the moral force of temperance, industry, and righteousness." Each of these statements reflects the view that there is a great corpus of life separate from government.
The value of self-interest. The classical liberal view about self-interest has two sides: First, to affirm its value as the main motive force for human well-being when it is channelled within a system of ordered liberty; and second, (although here there are some complications) to balance it with other values.
The first doesn't require much elaboration, but it does deserve emphasis. The classical liberal isn't at all surprised by the fact that a significant portion of Soviet agricultural output came from the tiny percentage of the land that was permitted for private cultivation. To him, this illustrates a vastly important psychological insight; and it shows that. capitalism can generally be expected to be far more productive than socialism. Bastiat called self-interest "the very mainspring of human action." John Bright concluded that the miserable conditions he saw in Turkey in 1835 were caused by the lack of a "Spirit of emulation amongst them." Leonard Read says that "we should neither overlook nor deprecate the power of a hoped-for profit; it is one of the best mothers invention ever had.”39 And no one has probably ever written a more consistent paean to self-interest than Ayn Rand did in her book The Virtue of Selfishness.
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The second side is more difficult. Many unsympathetic authors have charged that classical liberals, and especially the commercial middle class, stress self-interest to such an extent that other important human values are lost sight of. The impression given by such authors is often that classical liberalism is really the opposite of a well-intentioned, idealistic philosophy. They treat it as the rationalization for a type of “economic man” who relentlessly pursues materialistic values.
This view is a caricature painted by intellectuals who have little overall sympathy for a voluntaristic society. It gains some plausibility, though, from the fact that historically most classical liberal theory centered around classical (and later neoclassical) economics. This stressed the economic aspects and an image of profit-seeking man. Indeed, much economic theory consists of an extrapolation of what would happen in a given situation if men were permitted to maximize their self-interest. It isn't bad to study these things, especially since self-interest is a powerful motivator. But it is worth noticing that there is much more to classical liberal philosophy than that. It would have been better - and it would have reduced the possibility of such a caricature - if the philosophy had not centered so much on economics and had developed through a balanced articulation of all of its aspects simultaneously.
The caricature has also been made more plausible by the fact that some classical liberals have driven self-interest to rhetorical and philosophical excess. A good example is Ayn Rand's The Virtue of Selfishness. Although there is much in it that a classical liberal will consider inspiringly true, Rand has dropped much of the social context from her conception of human life. This leaves her with a philosophy that is thrilling to those who center on certain aspects of it, but that seems arid and deficient to those who become sensitive to her omissions. She adopts a
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semantic that permits her to praise "selfishness" and attack "humility;" but she does this without making the necessary qualifications (which itself is a result of her "black versus white" approach) that would carry her into delineating between a type of constructive selfishness and the offensive sort of personality that most people associate with the word. Instead of attacking humility as such, she could just as well limit herself to opposing the sort of humility that actually does involve the self-deprecation she abhors. But the problem isn't entirely semantic or tied to the absolutist method of her explanation. It is also substantive, since she gives little or no place to the value of human warmth or sympathy. She fails to see that to be a good neighbor, a loyal friend, a caring member of a community are all important ingredients in precisely the rational self-interest she endorses; and that they are most effectually ingredients of it if the individual pursues them as values in themselves even in instances where the calculus of personal self-interest isn't clear. By limiting the dimensions of her philosophy, she abandons an important part of classical liberalism. Bastiat, for example, was opposed to altruistic self-sacrifice: "To impose it upon mankind as a principle is the very height of absurdity, for the abnegation of all is the sacrifice of all;" but he also pointed out that "sympathy . . . is as natural to the heart of man as the principle of self-interest."40 And even though he is often lumped in the caricature himself, Adam Smith strongly emphasized the need for a balance of values. Speaking of avarice, ambition and vainglory, Smith concluded that "none of them can deserve to be pursued with that passionate ardour which drives us to violate the rules either of prudence or of justice."
The Horatio Alger novels do a good job of presenting a balanced classical liberal view. Unfortunately, so few people read these today that they don't see the distortion in including Alger in the caricature. Alger did stress achievement,
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hard work and "getting ahead." But at the same time, his stories were usually about a boy who had the highest moral character and the greatest concern for his family and community. Alger demonstrated his dislike for the type of character whose "self-interest" took the form of a miserly wallowing. It is ironic to have to point out that Alger didn't lose sight of an aspect of classical liberalism that in other ways Rand is the foremost in championing: the heroic nobility of the human being as best conceived.
Advantages of free trade. The classical liberal's conception of man assigns a central role to the market economy. The newly arising science of economics saw the immense potential of the market. Cobden equated free trade with "the division of labor, by which the productive powers of the whole earth are brought into mutual cooperation.”41
The Marxists have attacked free trade as an exploitive instrument of "imperialism" and "bourgeois oppression" for so long that we are by now hardly accustomed to think of the market economy from Cobden's point of view; but it is significant that he saw it as the cornerstone of a productive and peaceful world order: "We would urge that, in the present day, commerce is the grand panacea, which, like a beneficent medical discovery, will serve to inoculate with the healthy and saving taste for civilization all the nations of the world. Not a bale of merchandise leaves our shores, but it bears the seeds of intelligence and fruitful thought to the members of some less enlightened community; not a merchant visits our seats of manufacturing industry, but he returns to his own country the missionary of freedom, peace, and good government." Such an observation seems naive at a time when ideological division has been moving the world away from the free market for over a century, but Cobden's view of the beneficial potential that is inherent in freedom is shared by all classical liberals.
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Until almost the middle of the nineteenth century, classical liberalism saw Protectionism and Aristocracy as its main opponents. Socialism hadn't come upon the scene sufficiently to take their place. The advantages of free trade were given considerable attention during that first phase.
The mid-nineteenth century: the high-point of classical liberalism. There is an analogy to the Age of Pericles in Athens that is helpful with regard to classical liberalism. Both held center stage for only a brief time; but each had an impact on civilization that was far out of proportion to the length of its ascendancy. The influence of each of them depended mainly on a vast movement of ideas and on cultural, political developments that were present even in the absence of a long period of consensus.
It is a matter of opinion, of course; but I would say that the high point of classical liberalism came between 1800 and 1860 in the United States and 1830 and 1865 in Europe. My reading of American history has impressed me with the fact that classical liberal thought was much more explicitly present in the theory and practice of the Jeffersonian-Jacksonian years before the Civil War than it was during the years that followed the war. This contradicts the usual idea that the late nineteenth century was the heyday of laissez-faire capitalism. The writings of the American presidents during the nineteenth century show that classical liberal ideas were extensively articulated in them until 1860. After that, they were almost totally absent. The Republican Party wasn't an extension of the classical liberalism of Jackson. Instead, it was far more the successor of the Federalists and the Whigs. It is true that the Republican Party soon disappointed such anti-bourgeois intellectuals as Henry Adams, but the result wasn't to return the country to classical liberalism; rather, it was to leave it without a strong philosophical direction of any sort. The
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Supreme Court was a major exception to this during the closing years of the nineteenth century and the early twentieth, since it more or less consistently adhered to a classical liberal interpretation of the Constitution. And fundamentally, existentially, the American public held to classical liberal perceptions and values during those years. But it slowly lost its grip on them. Meanwhile, the intellectual community was allowed to slip away - and this was a development of the utmost importance. It drained classical liberalism of continuing leadership and theory, and gave rise to a strong ideological push to the left.
The middle class received the vote in England in 1832; in France, it became ascendant in 1830. Neither enjoyed a very satisfactory ascendancy, as we will see; and even that was soon undermined by the socialistic tenor of the revolutions in 1848 and by the advent of universal male suffrage and of welfare liberalism. In 1884 in Man Versus the State, Herbert Spencer complained that the process had become reversed and was no longer taking restraints off the individual. "Popular good has come to be sought by Liberals, not as an end to be indirectly gained by relaxations of restraints, but as the end to be directly gained." He referred to a growing assumption "that Government should step in whenever anything is not going right." Journalists had begun to "speak of laissez-faire as an exploded doctrine." From all of this, we see that the high-point of classical liberalism was so brief as hardly to have existed at all.
What strikes me most about it as a classical liberal is that the world sped on to other concepts and values so quickly that classical liberalism had no real chance to mature or even to know its own mind. (Those who oppose it will say that this is a proof of its lack of merit; but those of us who see it as an exceedingly valuable value-system and perception of man will regret the civilizational tragedy that is inherent in the shift away from it. We will be correct, I think, in attributing its
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demise primarily to the alienation of the intellectual, and not to substantive grounds. It was hardly given a chance.) The weakness even during the high point was apparent in several ways:
. The philosophy failed to round itself out into a total view of man and society and to jell into an overall philosophical system that would attract and hold modern intellectuals. Hayek has pointed out, for example, that "the concept of liberty with which the liberals of the nineteenth century operated was in many respects so vague that it did not provide clear guidance." Later on, Herbert Hoover was able to say in the United States that "it is rather a remarkable fact that while the alternative systems of society which are proposed to us have organized exponents who expound their philosophy, their ideals, their patterns, their methods, their promises, and their superiorities, we have little definite exposition of the philosophy, purpose, attainments, and the objectives of true American liberalism."42
William Grampp has said about the Manchester School in England that "its members spent less time in reasoning and writing about their purposes than in winning the country over to them . . . It did not have a relatively complete or consistent doctrine nor is there an authoritative statement of its ideas about particular issues." He said that "the free trade movement had no intellectual leadership." The two leaders of the school, Richard Cobden and John Bright, were intelligent and articulate; but I would have to agree with Grampp in the sense that he means it. Cobden and Bright devoted their lives to political action and not primarily to laying down a literature and a foundation of theory.
. Classical liberalism wasn't a unified movement. It was splintered among several factions. In England again, the Philosophic Radicals and the Manchester School were both classical liberal, but they hardly seemed on the same track. It is said
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that the Philosophic Radicals "did not eagerly endorse the Anti-Corn Law League's agitation organized by Cobden," since they thought it hampered the success of their political measures.
In Democracy in America, Alexis de Tocqueville expressed an unfavorable opinion of Andrew Jackson.43 This might simply have reflected a difference in personality, but I suspect that it shows the antagonism between a democratic and an aristocratic classical liberalism. From a distance, we might think they shared so much common ground that they would have been allies; but Tocqueville didn't see it that way.
It is interesting to read Lord Acton's criticism of the liberalism in Italy and Spain. He thought it was more concerned with equality and nationalism than with liberty. These and countless other illustrations show that classical liberalism wasn't homogeneous.
. It didn't automatically follow from the middle class's having had the vote in England and France in the 1830’s and 1840's that it dominated the politics of those decades. Nor did the middle class immediately set about carrying out the philosophical principles of classical liberalism. I have already mentioned how disappointed Toequeville, John Stuart Mill and Cobden were with the spiritual and intellectual qualities of the middle class during those years. Tocqueville complained bitterly about the middle class in France that "it entrenched itself behind its power, and before long, in their egoism, each of its members thought much more of his private business than of public affairs; of his personal enjoyment than of the greatness of the nation." Despite Bastiat's free trade principles we are told of "the protectionist lobbyists who exercised so much influence in the French government of the 1840's." If we now think of those days as having been the age of laissez-faire, we should remember Bastiat's observation that "competition in modern society is
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far from playing its natural role. Our laws inhibit it as much as they encourage it."
In England even in the 1840s, the electoral reform of 1832 hadn't produced middle class control over the House of Commons. Trevelyan pointed out that in the 1840's the Prime Minister, Robert Peel, "has realized that under the existing franchise the House of Commons did not represent the lower classes at all, or the middle classes more than a little." He said that "the Reform Act of 1832 had left half the middle class unenfranchised and the rest insufficiently represented under the arbitrary system by which the seats were distributed in favour of the landed interest."
. It is worth reiterating that classical liberal values swept over much of the nineteenth century and had a profound impact; but it is also true that even at its high-point it received surprisingly little acceptance as a coherent philosophical system from either the government, the public or the intellectual community. (I have already commented that it lacked completeness anyway; but the public acted upon it in an even less complete way.) In England and France there was never a time when the leading classical liberal thinkers and politicians didn't feel almost hopelessly outnumbered. In the United States the intellectual community never really built on the basis of Jeffersonian classical liberalism, but instead moved very early into its "ferment of dissent." The exponents of the Jeffersonian-Jacksonian faith such as Martin Van Buren don't hint at a sense of isolation the way Bastiat did in France or either Cobden or John Stuart Mill did in England, but we know that there was no developing intellectual base to give them continuing support.
Classical liberalism was weak in Europe outside of France, England and Belgium. Neill says that "it can be said that Liberalism was strongest in western, weaker in central, and almost unknown in Eastern Europe. Liberalism was not permanently
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triumphant anywhere on the Continent east of the Rhine. For a few months in 1848 it was in power in Germany, and at various times parties nominally associated with Liberalism controlled Spain, Portugal, and Italy. But in none of these countries were Liberals in a position to impose their concept of society on the nation. They themselves seemed not to have understood the basic assumptions of Liberalism, and they never enjoyed the support of a large middle class which has been the bearer of the Liberal tradition . . . "
The isolation of Bastiat during the bourgeois ascendancy from 1830 to 1848 is amazing, since he and Tocqueville were the leading classical liberal thinkers in France at that time. Bastiat complained that the first volume of his Harmonies Economiques "has been nearly unnoticed by the learned world." It doesn't sound as though classical liberalism was dominant when he exclaimed that "liberty would seem not to be wanted in our days. In France, the privileged land of fashion, freedom appears to be no longer in repute." Roche said about Bastiat that "in every sense, (he) was indeed the man alone, standing against the tide of socialism and against the corrupt and demogogic politics of his times." He went on to say that "if Frederic Bastiat had few allies abroad, he had even fewer at home." The frailty of the classical liberal intellectual movement is apparent in John Morley's account of the following pitiful fact about Bastiat: "By chance he fell on an English newspaper. He was amazed to find that a body of practical men in England were at the moment actually engaged, and engaged with the reasonable prospect of success, in pressing for that Free Trade of which he had only dared to dream as a triumph of reason possible in some distant future." Morley referred to the year 1846 (which was before the revolutionary year of 1848) and said that "worse than all this, the popular interest was at that epoch turned away from the received doctrines of political economy in the direction of Communism and Fourierism. These sys-
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tems spoke a language infinitely more attractive to the imagination of the common people. Bastiat, fired by Cobden's example, set bravely to work to make converts among men of mark . . . At Bordeaux, indeed, where the producers of wine were eager for fresh markets, a free trade association was formed, and it throve. Elsewhere the cause made little way." This was during the high-point, so to speak, of classical liberalism! What is remarkable is not that Western civilization has shifted to the left during the intervening century and a half, but that it has as much of a classical liberal residual as it has.
Modern society's shift to the left. During the middle of the nineteenth century, Europe moved quickly from the age of aristocracy to the age of welfare liberalism and socialism. Until that time, classical liberalism had been on the attack as a reformist creed; now it found itself on the defensive for the first time. Several factors contributed to this change: classical liberalism lacked an overriding philosophical consensus and program, even within its own ranks; it was undercut by the enormous alienation developing within the intellectual community; it enjoyed only the most shallow hold on the middle class, which should have been its natural home; and these things kept it from being prepared to make a powerful appeal to the newly emerging masses of voters who were becoming enfranchised.
In England in the second half of the nineteenth century, classical liberalism was quickly displaced by “welfare liberalism.” It is important to note that this did not arise out of classical liberalism; instead, it was opposed by the classical liberals of the time. "Dicey sees the beginning of the English 'collectivist' - we prefer to call it welfare - legislation in the decade of the 1860's," Neill says. He reports that "in England classical liberalism found itself on the defensive after 1867. Liberals like Spencer were labeled 'Conservative' as the Liberals came to adopt new programs and a
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new doctrine. The old Liberalism . . . melted into the new, as changes usually occur in England." In 1884 in Man Versus the State, Herbert Spencer described the extent of the shift and voiced his dissatisfaction about it. To Lord Acton it appeared that "liberty has lost its spell; and democracy maintains itself by the promise of substantial gifts to the masses of the people." Walling says that John Bright saw "alien theories cutting athwart his own conception of the evolution of a sturdy and independent society by means of free competition in industry and commerce conducted in an atmosphere of political and intellectual liberty and material peace."
Referring to France, Neill says that "liberal control . . . ended with the revolution of 1848 when the middle class was sharply cut away from the masses below it and engulfed in the flood of universal manhood suffrage. Liberals, with a distinctly classical Liberal outlook continued to be influential in French political and social life, and classical Liberalism lived on as the doctrine of this group; but the Liberal day of control had passed with Guizot." Tocqueville stood pretty much alone after Bastiat's death. Morley says that under Louis Napoleon a majority of the Chambers was opposed to free trade.
I have already mentioned the developments in the United States. The Jacksonian party went into permanent eclipse as a result of the Civil War. The intellectual culture was profoundly redirected by alienation and by the eventual influence, in the late nineteenth century, of the German Historical School; the result was a welfare statist, anti-classical liberal position.
These developments in England, France and the United States all coincided to shift society to the left. Neill adds that "Bismarck in Germany, Schwarzenberg in Austria, Napoleon III in France, T.R. Roosevelt and Wilson in America, even Disraeli and Gladstone in England were all statesmen who superintended the interment of classical Liberalism
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in the interest of promoting the common welfare through positive State action." It is worth noting, though, that this welfarism wasn't really akin to the later classical liberalism of such a man as Herbert Hoover. He acknowledged that considerable state activity was needed and that a pure laissez-faire policy had to be abandoned, but he didn’t join the new welfarism in attacking classical liberal values and perceptions in general.
One of the unfortunate consequences of the shift away from classical liberalism a century ago was that it was forced into a defensive posture. This made it apologetic and doctrinaire rather than reformist. A philosophy often is articulated best when it is challenged, and this has been true with classical liberalism; but on the whole it has suffered in its maturation and extension. Frank Knight was correct, in my opinion, when he said that "in essential ways the liberal movement went wrong" and that "the graver moral and intellectual problems of a free society have not been faced or even stated." A similar observation was made by Leonard Read when he wrote that "to qualify as a spokesman for freedom - judging by the thousands who speak 'authoritatively' on the subject - apparently requires little more than to be out of favor with some aspect of socialistic practice. As a consequence, many of the utterances we hear 'on behalf of freedom' range all the way from nonsense to a potpourri of inconsistencies. So awful is much of it that, were I a beginner in political economy sitting on the fence while deciding which way to jump, most of the voices from 'the right' would turn my head to 'the left.' and I would have justification enough to hurl such disparagements as 'old hat,' 'reactionary,' and the like."
I attended the classes of the great Austrian economist Ludwig von Mises for a short time before I went to law school, and I have the greatest respect for his leadership and thought; but it has to be observed, as an important example of the doctrinaire aspect I have just mentioned, that much
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of what Mises said was weakened by exaggeration. This didn't weaken his influence with his disciples, but it did with other thoughtful men. This is reflected in Frank Knight's statement (which has a lot of implicit tragedy in it) that "Professor von Mises would hardly be generally accepted as 'the leader of contemporary Economic Liberalism,' unless this means the academic opponent of socialism most conspicuous for the extremism of his position."
My reverence for Dr. Mises is so great that I hesitate to discuss the exaggeration in his writings without first having laid a foundation that makes the extent of his contributions abundantly clear. I think, though, that I can assume that most of the readers of this book are already familiar with his place. Ludwig von Mises' reputation is such that it can hardly be improved by some extra polishing by me; it would even be presumptuous for me to consider that necessary.
When I have acquainted classes with the thesis expressed by Mises in The Anti-Capitalist Mentality, I have explained that I couldn’t see my way clear to ascribe the alienation of the intellectual in modern society almost entirely to envy, as Mises did. His book is valuable, but when he expressed so narrow and potentially unfair a view he limited himself to a partial truth.
His theory about “economlc calculation” in Human Action contains a valuable insight, but it is seriously weakened by the exaggeration that is inherent in his attempt to make it a definite knockout blow against socialism. He argued that “no method of economic calculation is possible other than one based on money prices as determined by the market;” and later he said about sooialism that "the paradox of 'planning' is that it cannot plan, because of the absence of economic calculation." I will discuss this exaggeration more extensively in the next section of this chapter.
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Another exaggeration is found in his insistence that interventionism "cannot lead to a permanent system of social organization," since it has to move on to socialism. This made it possible for him to assert a clear dichotomy: "Men must choose between the market economy and socialism." To dichotomize between two clear poles is desirable from a doctrinaire point of view, but I can't be satisfied with it intellectually even though I share Mises' opposition to a mixed economy. I see no inevitability in anything that is so dependent on human volition, even though I agree that there is a dynamic by which interventionism seduces the public away from a free market.
A similar criticism has been made of F. A. Hayek's main argument in The Road to Serfdom that democratic socialism necessarily results in arbitrary power. Lord Robbins says that "professor Hayek is somewhat too apt to extrapolate his apprehensions of evil and to assume that deviations from his norm lead cumulatively to disaster. I say this with reserve for I think that some of the criticisms which were made on this score of his Road to Serfdom were both ill informed and unfair; there certainly have been tendencies in history which have led to catastrophe . . . Whatever may be the case in particular instances, any absolute scepticism regarding the stability of all mixed economies seems to me to have little basis in either logic or history . . . Rejecting, as we do in others, historicism with its bogus apparatus of inevitable trends and improbable cycles, we are under a special obligation to see that we do not fall into the same error ourselves when we have a case to argue.”44 I would be quick to add, of course, that Lord Robbins' criticism, with which I agree, doesn't in the least lessen the seriousness of the dangers inherent even in democratic socialism.
A similar observation must be mad e about another of the giants of classical liberal thought in the twentieth century, Ayn Rand. Her philosophy
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exalts humanity as best conceived and her epistemology is valuable when it insists on the importance of focused mind. But her insistence that laissez-faire capitalism is the only rational viewpoint - thus knocking out the arguments of her opponents with one all-inclusive blow - is another example of the sharp dichotomizing of a doctrinaire. When she says that "the principle of trade is the only rational ethical principle for all human relationships, personal and social, private and public, spiritual and material," she is making an intellectual preemptive strike.45 I agree that trade is the most satisfactory basis for human relationships, but I couldn't choose a rhetoric that by its dogmatism precludes further discussion and turns away people of moderate inclination who prefer to reach their conclusions after hearing everyone out. And, despite her assertions to the contrary, I have to disagree with her when she holds that all of the more important value judgments can be arrived at deductively through reason rather than being essentially judgmental and preferential. There are many difficult issues raised by social philosophy. Reason doesn't resolve them all by pointing clearly and conclusively to a single social system that constitutes "life fitted to a rational being." There are too many problems of assessment, judgment and selection for that to be possible. And the category of "life fitted to a rational being" is itself unavoidably preferential. It is never subject to validation by anything but ultimate preference. To say otherwise requires a belief in a religious or metaphysical validating stamp of some sort, going beyond the multiplicity of individual human decisions. She is seeking, unsuccessfully, the basis for a claim of absolute truth. I affirm many of the same values she does; but I see strength, not weakness, in doing it on a far less dogmatic basis.
Some additional unsound concepts. I have just mentioned both the philosophical incompleteness and the doctrinaire defensiveness that have hampered classical liberalism since the shift of
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the world's intellectual community to the left. This would seem an appropriate time for me to mention some additional criticisms I have of some of the concepts that have been advanced in the past. It isn't surprising, of course, that I should disagree with several of the ideas that have been proposed during the history of a long and complicated movement, even though I identify strongly with that movement. I imagine it would be impossible for anyone who is exercising independent judgment within any philosophy to find himself in total agreement with the way it has been formulated.
. As surprising as it may seem, I am bothered by flaws in the concept of "consumer sovereignty" which was applied by Mises to the market economy. Mises said that "neither the entrepreneurs nor the farmers nor the capitalists determine what has to be produced. The consumers do that." Producers "are bound to comply in their operations with the orders of the buying public . . . With every penny spent the consumers determine the direction of all production processes and the minutest details of the organization of all business activities." The economist John Van Sickle made the same point when he said that "the consumer calls the tune. He is the king, exacting and frequently capricious . . . In a market economy every income receiver is a voter. His dollars are his ballots.”46
Statements such as these express a juridical analogy applied to market actions. Mises is quick to point out that the situation is even more favorable to the market than the analogy suggests. In political democracy the voter just votes, for example, every two years and his vote has no effect if he is on the losing side. In the market, a person spends money continually and influences the productive decisions of entrepreneurs even if the person is one of only a small minority of people who like a certain good or service.
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So far, so good. I have no quarrel with this analogy as an elucidation of how the market operates, if the concept stops there. But it is taken at least two steps further. The first is intellectually unsound, although it may be innocuous in its consequences. The second leads to a substntial weakening of the rationale for the market.
The first of these extensions occurs when the value judgment is made about consumer sovereignty that it creates the best (i.e., "optimum") allocation of resources and even the most desirable assignment of social position to those who succeed or fail. This is expressed by Mises when he says that "the social function of catallactic [market] competition . . . is to safeguard the best satisfaction of the consumers which they can attain under the given state of the economic data" and when he adds that "to assign to everybody his proper place in society is the task of the consumers." The value judgment is picked up by other authors as the rationale for the allocation of resources made by a market economy.
To avoid misunderstanding, I should point out that I, too, favor an allocation of resources and of social position on the basis of consumer choices. I don't base this conclusion on the ground that that allocation is necessarily best. Whether it is the best or not, I support it because it is the allocation that arises out of freedom; and I favor freedom. I don't favor freedom because it produces the optimum allocation of resources; instead, I favor the allocation of resources because it is the product of freedom.
When we say that the sovereignty of the consumers makes the optimum allocation of resources, we are making a holistic argument. Mises elsewhere argues powerfully against such an approach on methodological grounds. There is no such entity, actually, as "the consumers" - not in the sense, anyway, of a consciousness that is capable
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of making a value judgment. To say that the allocation is best "from the point of view of the consumers" is to attribute a collective consciousness and point of view to a collection of disparate individuals. It is strange that Mises didn't realize that this is what he was doing. What actually exists is that there are a great many individual people. From the perspective of each one of them as a consumer, the person may or may not think the allocation of resources is optimal. Almost certainly he would prefer an allocation that would bestow more largess on him and the things he cares about. And from his perspective as a social observer, he again may or may not think, as he looks out on the society and what its people do, that what he sees is to his liking. Probably no one, including Mises himself, would be completely satisfied from that perspective. There are many things consumed, such as excessive alcohol, dope, pornography, and the like, that hardly meet anyone's approbation. The consequence is that from the point of view of "methodological individualism," which I agree with Mises in thinking extremely important, there is no basis for saying that consumer sovereignty makes the optimum allocation of resources.
I do believe that the free market is the most productive. Adam Smith was right when he made his famous statement that "by pursuing his own interest" each man "frequently promotes that of the society more effectually than when he really intends to promote it." But my agreement is based on my assessment of what motivates people and on my preference for the rich diversity of freedom. I am willing to abide the allocation made through a free process - but not because I set up a collectiv point of reference as the standard of judgment.
The second extension of the consumer sovereignty concept isn't just intelledtually unsound. It is also dangerous from the classical liberal point of view. It arises when someone argues that the
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“efficient allocation of resources is the only justification for a free market.” Charles F. Phillips, Jr., has written that a "business leader's major responsibility is to manage as efficiently as possible the allocation of that portion of society's resources that come within the corporation's control. Is this not, after all, the only economic, legal, and social justification for a business enterprise in a free society?" (My emphasis)47
If the only justification for economic freedom is its efficiency, we are on very weak ground (despite the classical liberal’s overall confidence that freedom is ultimately much more productive than any alternative). If it is the only justification and if efficiency is judged by the consumer sovereignty concept, all that an opponent of the market needs to do is to attack the "efficient allocation of resources" concept in order to have the whole edifice of the free society come tumbling down. And we have already seen that the concept is not really tenable. There is no need to base the whole argument for the free market on a spurious concept; economic freedom is justified both as freedom and as exceedingly productive. These are enough.
In fact, the Left does attack the allocation made by the market. It considers the allocation "irrational" and calls for central planning. In so doing, it seeks to substitute the decision of the social observer for the decisions of countless individuals as they live their lives. And it is precisely on the issue of dictated choice versus free choice that the matter should be decided.
It is significant that before arriving at the dangerous second extension of the consumer sovereignty analogy, Phillips adopted with favor a statement by Eugene V. Rostow that expresses the logically fallacious first extension: "The economist has demonstrated with all the apparent precision of plane geometry and the calculus that the
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quest for maximum revenue in a competitive market leads to a system of prices and an allocation of resources and rewards, superior to any alternative, in its contributions to the economic welfare of the community as a whole." Anything other than profit.maximization will "sabotage the market and systematically distort the allocation of resources." George Steiner has argued that the “profit maximization” school of thought articulated by Milton Friedman bases its view on a desire not to see "the allocative mechanism of the market-place . . . distorted.”48
The latter part of this ties in with the view, which was also i