This country will not be a good place for any of us to live in, unless we make it a good place for all of us to live in.


                                                         Theodore Roosevelt, as quoted by John Calder
























Chapter 12






The classical liberal philosophy of individual liberty within a society of law, of effective but limited government, of a market-based economy, a broad middle class, and personal responsibility within a context of family and community has long been the underlying ethos of American life.  It has been subject to much attack, and is bruised and battered, but the outlook of Americans in the past and to a great extent even today has primarily been formed by it.  Certainly it is at the heart of the strongly libertarian ideology of free trade and the global market that has recently been so influential.

          Although classical liberalism is the philosophy I myself most value, in coming chapters we will need to examine critically several of its concepts to spot some unsound features and to see what remains relevant under the world’s new conditions.  I have thought for many years that several of its perceptions and principles are delicious three-quarter-truths, basically correct but not entirely on the mark. The changing conditions have magnified the importance of its flaws.  This makes it essential that we address them. 

          It would be destructive and inappropriate, however, to undertake that analysis without first demonstrating why the "philosophy of a free society," taken as a whole, is both important and valuable.  The philosophy and its adherents deserve that.  And we need to see why it will be vital that the philosophy's outlook and principles permeate the new ideas.  Accordingly, the purpose of this chapter is to provide an understanding of classical liberalism's strengths.   


It has long been the hope of many that the average person, the so-called "common man," be able to rise – as through most of history people could not – to a level of intelligence, freedom and culture.  This aspiration has largely been achieved in modern Europe and America.  And yet one of the surprising facts of history is that few have articulated a viewpoint favorable to the overwhelmingly predominant social "class" – the gigantic "middle class" that is involved in the practical affairs of daily life in a commercial economy – in a society where that aspiration has been met.  Only the classical liberal has championed its cause and understood its relation to mankind's democratic aspiration.

          A reading of literature (ancient, medieval or modern) shows that most points of view have detested the shopkeeper, the "man of trade," and a consumer society.  And yet a classical liberal sees trade and the trading life as the very soul of voluntarism and as certainly far more noble and moral than any of the more structured or command-oriented forms of society.  Ayn Rand may have shocked some when she made the dollar sign her symbol, but that sign represents the moral value of the act of free exchange.  If we seek a society of self-reliant people, and seek this for the population in general, it is to a system of voluntary transactions – and to the resulting "bourgeois" way of life – that the classical liberal has looked.


The central difficulty in human life, as a classical liberal sees it, has been the denial of individual liberty.  A Marxist views history as a struggle of social classes; a Freudian will look upon it psychoanalytically; Robert Ardrey in African Genesis interpreted it in terms of man's animal origins; there are many competing interpretations of history; but the classical liberal sees history as having primarily been a struggle for liberty.

          Of the many definitions of "liberty," the classical liberal holds those to be spurious that deflect attention from the problem of coercion.  As Peter J. Hill has written, "the gravest injustices in the history of mankind have occurred when some people have had excessive power over others."[1]  A theoretical definition of coercion is that it is one person's manipulation of another's circumstances in a way to cause him to act as the first desires, where the effect is detrimental from the point of view of the person manipulated by limiting his other choices.  Though abstract, it points to brutalities, large and small.  It is the state that has primarily exercised coercion historically. So the problem resolves in major part into limiting the power of the state.

          Every philosophy aspires, in the context of its own perspective, to seek human dignity.  To classical liberals, this aspiration has at least two components.  The first is that they look back over history and see all the immense human degradation and oppression that has occurred.  In striving for a society based on voluntary relationships, classical liberals hope to remove this degradation and to allow human beings to live as their own agents rather than as effluvia in the maelstrom of power-lusts.  The second ingredient is that they see the free society as a peaceable, productive plateau from which people can rise to illimitable heights of intellectual, aesthetic, artistic and moral attainment. 

          It is tragic, then, that the voluntaristic society has come to be identified so closely with a mundane, non-heroic way of life.  The averageness of daily existence needs frequently to be transcended.  As we were reminded so powerfully by Ayn Rand in particular, individual liberty's highest fulfillment is in human greatness.  (Often, such greatness exists around us unheralded.  My wife and I had dinner last night with three couples that included two fine artists, and three days ago we heard a program of local talent that could hardly be excelled.  Often we are blind to the attainment around us.  What all these people need is a good publicist – and an intellectual culture that will give them the credit they deserve.  Our friends who are artists have a wonderful eye for beauty, but theirs is not the kind of work that is honored by the "art establishment" or the National Endowment for the Arts.)

          Classical liberals differ among themselves about the religious and metaphysical foundations of their social philosophy.  Many see religious belief as a necessary precondition of a free society.  At the other end of the spectrum, my own formulation is existentialist: I find the primary metaphysical reason for liberty to be in the fact that the cosmos does not give human life an assigned meaning, and that in the absence of a stamp of outside validation values must come from within human beings.  In this state of things, I am struck by the need for humility: I have no ground for insisting that all people march to the same drummer.  Yet, there are immediate difficulties.  What if one person chooses to kill, the other not to be killed?  I answer, without appealing to any cosmic source whatsoever, that as an act of will I prefer life, as most people do – and proceed to formulate a social construct that will permit life, but still with as little interference with people’s value choices as that goal will permit.  This brings us to a view of society as properly being based on voluntary human action within a social order that imposes such constraints as are necessary to preserve a general voluntarism.  Whatever their metaphysical or theological beliefs, all classical liberals share something akin to this "cosmic humility."  When they are willing to admit another person's right to his own pursuits or beliefs, they are in effect saying they do not believe they have a legitimate basis to require him to agree with them.   

          Contrast this with collectivist thought.  There is a passage in the British socialist R. H. Tawney's book The Acquisitive Society in which he wrote that "to say that the end of social institutions is happiness, is to say that they have no common end at all.  For happiness is individual, and to make happiness the object of society is to resolve society itself into the ambitions of numberless individuals, each directed towards the attainment of some personal purpose."[2]  All movements, cultures and philosophies that seek directly to serve a "higher purpose" share this perspective.  For classical liberalism, the higher purposes of life are certainly important, but they are to be realized through individual striving, either separately or in voluntary combination with others.

          Despite this fundamental humility, classical liberals are rationalistic in the sense that they want to think through their social institutions and not take them on faith or simply because they are old.  This is why Burkean traditionalists often think of classical liberalism as not far separated from socialist thought.  But there has been a basic difference between classical liberal and socialist planning: one has planned only in order to establish the prerequisites for a voluntaristic, "unplanned" society (what Ludwig von Mises called, in the title to one of his books, "planning for freedom"); the other has wanted to have a continuing voice in what people do, primarily because that has been seen as serving some larger social purpose.


One of the most important mental characteristics of the classical liberal is what I call "the vitalist perspective."  He has been persuaded that the world can in fact operate successfully if people are left to their own devices (assuming a social order that establishes the preconditions for this).  He does not think that liberty is chaos, and is willing to rely on human vitality.  People are not, to this view, inert matter.  There is enormous creative potential in what people choose to do themselves. 

          Not only does the classical liberal think that most people are capable, but he also believes strongly in a moral imperative that people make themselves capable.  Thus the assertion of human capability has been partly an empirical observation and partly a moral injunction.  The entire classical liberal model of society is built on this assumption of human capability. 

          At the same time, classical liberals have been realists.  They have not dreamt of utopias, but have recognized life as hard and resources as scarce.  Although they assign a directive role to consumers because entrepreneurs act in anticipation of consumer demand, the economic problem has been primarily one of production, motivation, work, not of distribution. Classical liberals have not presumed the ready existence of a “pie” to divide.   They have been ready, in keeping with classical liberal principles generally, to let the distribution be determined by the contractual arrangements people choose to make – which has meant that people receive what others are willing to pay them for what they do or own.  And they have not been ready to declare the acquisitive motive obsolete.

          Classical liberalism is alone among the major philosophies in wholeheartedly endorsing capitalism.  The "act of exchange" is seen as the key relationship – one that is constructive, peaceable and consistent with each person's pursuit of his own ends.  Although considerable emphasis is placed on the market economy's competitive aspect, the classical liberal thinks of it just as much as being cooperative: though sellers compete with sellers and buyers with buyers, each transaction is an example of mutually beneficial cooperation between the contracting parties.  Each party benefits from his own point of view or he wouldn't be willing to agree to it.  The entire system of division of labor is built on this. 


"What ought to be the functions of the state?" is one of the crucial questions for classical liberalism.  If someone asks this question, it is almost a sure sign he is a classical liberal.  Other philosophies scarcely give it any place as a general question, although they often object to specific abuses. Even among classical liberals, there is a fair amount of difference about just how much government can properly do.  "Anarcho-capitalism," not wanting any government, even takes the concern to the point of leaving the main classical liberal philosophy.  There are others who want the "nightwatchman state" that acts only against force and fraud.  Others, of which Lord Robbins is a good example,[3] see a fair amount for government to do in aid of a free society and to establish an institutional and legal framework for it. 

          In any event, to chain the state down, "liberty under law" has been a central part of almost all models of classical liberalism.  The "Rule of Law," as Friedrich Hayek recounted in The Constitution of Liberty, was known to the Greeks as "isonomia."  Historically, the Rule of Law has meant that the actions of the state should conform to certain criteria.  These criteria are designed to make laws impersonal guidelines that people can use as data: that the rules be known, general, unambiguous, equal in their application, prospective rather than retrospective, and applied by an independent judiciary.  A Henry VIII who must rule according to English law is a different sort of king than a Henry VIII who can stretch the rules to behead whomever he pleases with the acquiescence of vest-pocket judges.

          Hayek said that America's main contribution to the Rule of Law was a written Constitution.  A document providing the basis for the courts' enforcement of the Rule of Law criteria is an important tool for restraining government, even though it can't hold back a flood of statist tendencies if a society generally comes to accept them.

          Ever since Montesquieu, classical liberals have wanted to separate the powers of government among its several branches so that no one person or even majority can have all the power needed to be oppressive.  The "checks and balances" limit power, and have often been at least partly effective.

          The decentralization of power through "states rights" has served several classical liberal purposes that history shows are important even though they deal with problems that seem remote in the United States.  By providing a number of governmental centers, a "coup d'etat" becomes much more difficult.  The thought, too, is that government is subject to more effective democratic control at the local level, as can be seen when local voters replace members of a board of education (which they couldn't do with a federal education czar).[4]  And because people can "vote with their feet," a despotism in one of the states couldn't last.  This preference for decentralization has been weakened in the twentieth century because mobility has broken down local ties and because the federal government has become the vehicle favored by those wanting to revamp society (for whom, in their essential elitism, local democracy has then become suspect as reflecting something of a "redneck know-nothingism").    

          Not wanting to rely heavily on government, classical liberalism is caused to rely more on acculturation and ethical suasion (and this is true regardless of the religious orientation of the particular classical liberal).  This is why it depends vitally on a moral order.  Edward Coleson has written that "there is only freedom over time for highly responsible and moral people.  Free markets and free governments must be based on solid ethical foundations."[5]  This ethic is, in fact, to be socially enforced. Hayek wrote that "the chief device which society has developed to assure decent conduct [is] the pressure of opinion making people to observe the rules of the game."[6]  (This is something that people today have been taught to consider "bigoted" if the enforcement is of one of classical liberalism's personal-responsibility expectations.  At the same time, the insistence on "political correctness" severely enforces behavioral and attitudinal expectations that arise out of the Left's program at any given point in time.)            

          Young "libertarians" who have been influenced by the legacy of the 1960s' "cultural revolution" often tend to overlook this feature of classical liberalism, but liberty is not primarily "doing your own thing."  Instead, it involves continuing work and responsibility.  There is considerable difference between a view of liberty as license and a view of it as life within a responsible community.

          Again irrespective of religious doctrine (which is worth noting because many people discount a moral commitment to marriage because they think religion is the only basis for it), the monogamous family has for several reasons been important.  It acts as a supportive unit for the individual, is a source of moral values, and provides (when millions of families are taken into account) a diverse source for the passing on of ideas and values to the new generation.  Where the state nursery is the ideal of a totalitarian state, the family cluster is that of classical liberalism.  In his book on the morality of capitalism, Charles Dykes says "that the family, not the state, is the basic social and economic unit of society."[7]


If in all of these ways this form of "conservatism" is actually quite "liberal" (in the nineteenth century sense of that word), why is it that the American mainstream, which holds fundamentally to it, is given so little credit for being open-handed and progressive in the twentieth century – or actually at any time in American history?  Most young people coming out of school hardly know this body of thinking exists. 

          Part of the answer lies in classical liberalism's being a philosophy for the whole of society.  It isn't geared toward championing the claims of minorities except to the extent that they simply assimilate into the community, which requires considerably more patience than social activists have been willing to show.  "Modern liberalism" since World War II has sought the help of the state on behalf of minorities.  Consider, for example, the classical liberal principle of "freedom of association," a right that Alexis de Tocqueville praised as essential to personal freedom.  It has generally been thought callous to stand by this principle in the face of anti-discrimination legislation that makes it illegal (for the majority at least) to be selective in favor of one’s kind.  Minorities and women can have their own sororities, for example, but not whites or men.  This shows the difference between a "general theory" of liberty and a dual-track system that sets aside the general principles so that it can more immediately address problems that it sees.

          The latter would not have appeared so clearly to occupy "the moral high ground" if the intellectual subculture had not so insistently claimed that it did.  This relates to the broader point that the intellectual subculture has for almost two centuries been deeply alienated against the mainstream “bourgeois” society – not just against the weaknesses but even, or most especially, against the virtues of the classical liberal underlay.  In the literature of the twentieth century, the main culture and its history were painted in the darkest tones.  From Babbitt to The Bridges of Madison County, its everyday life was pictured as mediocre and uninspiring.  Those who stood out against this perception have been ignored.  Their books have difficulty getting published, and, if published, reviewed, all without anybody getting heated about this being "book-banning."

          A society in which the classical liberal "philosophy of a free society" predominates is one in which the average person has fared incredibly better than in any other society, and in which there is more respect for individuals, including minorities, than elsewhere.  The legacy of slavery was an historical "bone in the throat" for the United States, placed there in spite of and not because of its classical liberalism.  It did not describe the essence of the American experience.  In fact, it was precisely the moral outlook of the Enlightenment that led to the revulsion against slavery.

          Now, with the on-rush of non-labor-intensive technology, there is a profound challenge to this expectation that the average person will thrive.  This is a challenge to the basic acceptability of a market economy.  We will examine this crisis for classical liberal legitimacy in Chapter 15.






1. Peter J. Hill, “Markets and Morality,” in Mark W. Hendrickson, ed., The Morality of Capitalism (Irvington-on-Hudson, NY: Foundation for Economic Education, Inc., 1996), p. 101.

[2].. R. H. Tawney, The Acquisitive Society (New York: Harcourt, Brace & World, Inc., 1920, 1948), p. 29.

[3]. See especially Robbins' Politics and Economics: Papers in Political Economy (New York: St. Martin's Press, Inc., 1963).

[4].  Contrary to this is the reality that local government can from time to time come under the control of bosses and cliques, for which an appeal to higher authority is often the only remedy, "going over the head" of the local corruption.  So the point about the democratic efficacy of local government isn't unmixed.

[5].  Edward Coleson, "Capitalism and Morality," in Hendrickson, The Morality of Capitalism, p. 24.

[6].  F. A. Hayek, "The Moral Element in Free Enterprise," in Hendrickson, The Morality of Capitalism, p. 53.

[7]. Charles Dykes, "Is There a Moral Basis for Capitalism?," in Hendrickson, The Morality of Capitalism, p. 156.