Freeman

ARTICLE

The Strange Death of Liberalism

SEPTEMBER 01, 1964 by WILLIAM HENRY CHAMBERLAIN

Mr. Chamberlin is a skilled observer and reporter of economic and political conditions at home and abroad. In addition to writing a number of books, he has lectured widely and is a contributor to The Wall Street Journal and numerous magazines.

Among the world’s obituary no­tices some attention should be paid to the strange death of that respectable political and economic doctrine known as liberalism. Throughout the nineteenth cen­tury the Liberal Party was one of the two principal contenders for power in Great Britain. And, what was more important, liberal ideas, especially in economics, predomi­nated in the entire Western world.

Franklin D. Roosevelt’s hastily improvised Four Freedoms had not been heard of. But three free­doms, rooted in the principles of historic liberalism, as expressed in the writings of Adam Smith and Locke and Bentham and Mill, were widely observed and contrib­uted much to the possibilities of economic growth and adjustment of population strains. These were all freedoms of movement, for men, for capital, for ideas. The millions of immigrants who came to the United States required no visas. In the best liberal tradition surplus manpower went to lands of growth, where there was a de­mand for labor in factories, in transportation, on farms, not only to the United States, but to other developing countries, such as Can­ada, Australia, Brazil, and Argen­tina. All the dreary business of currency control was unknown at a time when the gold standard act­ed as an automatic regulator, as­suring the parity of the world’s leading money systems.

Again in line with liberal prin­ciples, capital could freely seek the sources of largest return, which were the lands and enter­prises in greatest need of capital. It would be hard to find a better example of the principles of economic liberalism in action than the financial and trade policies of Great Britain. The return of Brit­ish capital in many cases took the form of supplies of foodstuffs and raw materials which, under the British free trade policy, were ad­mitted, usually without any pay­ment of duty at all, at most with nominal tariffs. It is remarkable how many problems that are now posed in economic reports and threshed out in conferences took care of themselves when the gold standard and the authority of the free market were unquestioned.

The third freedom, of the trans­mission of ideas, was also un­hampered by any Iron Curtain, any deliberate policy on the part of the rulers of a large part of the world to mold the thinking of their subjects. Even in Russia, the country looked on in the nine­teenth century as a bastion of dark reaction, there was no diffi­culty in obtaining The London Times or other leading newspa­pers of Western Europe in Mos­cow or St. Petersburg, and there was nothing like the present So­viet deliberate insulation of the people against thoughts which were dangerous from the stand­point of communism.

Locke and Natural Rights

What was this historic liberal faith that was strongest in Great Britain and the United States, but which was shared, in large degree, by educated men throughout the European continent and which shaped the economic policies of the time? This faith is perhaps best understood by a survey of the ideas of some of its leading ad­vocates. One of these is John Locke, whose eminently lucid mind contributed much to formulate in theory the practical compromises between the extreme positions of royalism and puritanism which found expression in England’s "Glorious Revolution" of 1688. (And it deserved the name "Glori­ous," if only because it inaugu­rated a long period of civil peace and averted the futile bloodshed and bitterness that have always at­tended violent revolutions bent on the pursuit of utopian aims.)

Locke enunciated the principle of "natural rights" which influ­enced so much the Founding Fa­thers of the American Revolution. High among these natural rights, in his opinion, were "life, liberty, and property." It may have been an accident that this formula of Locke was not incorporated in our Declaration of Independence, the less meaningful "pursuit of hap­piness" being substituted for "property." Locke affirmed the position that the state was made for man, not man for the state, and brushed away such mythical nonsense as the divine right of kings. His definition of the state is that of an arrangement for general convenience and well-be­ing, strictly enjoined against practices that lead to tyranny. As property is the outcome of labor, it is entitled to security and Locke describes it as "the great and chief end, therefore, of men’s uniting into commonwealths."

Smith Rejects Mercantilism

Equally influential in the eco­nomic sphere was the viewpoint of Adam Smith, who dealt a se­ries of powerful blows, in Wealth of Nations and other writings, to the already decaying system of licenses and regulations. (The planners and collectivists who be­lieve that tinkering with prices and wages, exports, imports, and conditions of production is some­thing new and advanced should read up on their history; Euro­pean economic systems up to the nineteenth century were full of minute regulations and attempts to interfere with the natural oper­ation of the free market.)

"Every man," writes Adam Smith in Moral Sentiments, "is by nature first and principally recommended to his own care." Not for Smith the modern fads about "national goals" and pro­moting the "public sector" of the economy at the expense of the private. He strongly emphasizes the point that the public good is best served by the action of in­numerable private individuals, each pursuing his own good. He would limit what he calls "that insidious and crafty animal vul­garly called the statesman or poli­tician" to the tasks of providing for external peace and internal order. A hostile commentator, the late Harold J. Laski, in his one-sided but brilliant work, The Rise of Liberalism, gives a fair summary of Smith’s basic posi­tion as follows:

Adam Smith is the determined critic of most of the industrial regu­lations in vogue in his time. He is against protective tariffs, trade com­binations, whether of capital or of labor, bounties, labor legislation, monopolies. He sees industry as a mass of interrelated actions by in­dividuals who will do well enough so long as promises are kept and vio­lence prohibited; and the fuller the competition between them the great­er will be the public advantage. Where the system of liberty obtains, each man has the maximum induce­ment to labor, since he has then the certainty of reaping the maximum reward from it…. There is an iden­tity of interest between classes in society which is the more fully real­ized the more they are left alone.

Another contributor to the ide­ology of historic liberalism is Edmund Burke. Although Burke is the intellectual patron saint of modern conservatives, he took his stand not with the Tories, but with a branch of the Whig party of his time. And, although his views on authority, tradition, and prescription are suffused with a conservative outlook, his negative conception of the proper role of the state is quite in the liberal tradition. In his essay, "Thoughts on Scarcity," Burke wrote as follows:

To provide for us in our necessi­ties is not in the power of govern­ment. It would be a vain presump­tion in statesmen to think they can do it…. It is in the power of gov­ernment to prevent much evil; it can do very little positive good in this, or perhaps in anything else.

Nineteenth Century Liberals

Political systems in nineteenth century Europe varied, becoming more authoritarian as one went further to the East. But economic liberalism, before World War I, was scarcely questioned. And, as a doctrine it justified itself by its works. It transformed Great Britain, where it seemed to have struck deepest root and found its most convincing advocates, into the workshop of the world. With its institutions of the free mar­ket, stable currencies, easy trans­fer of capital it made possible the expansion of world trade on an unprecedented scale and brought into practical use for the general benefit resources in the most remote parts of the world that would otherwise have con­tinued to waste for lack of tech­nical know-how, managerial en­terprise, and investment capital. Its lessons are still valid; it was by the application of liberal eco­nomic principles that Europe out­side the Iron Curtain was saved from the bleak and dreary morass of rationing, allocations, price controls, and bilateral trade in which the old continent threatened to bog down after the end of World War II.

On the continent of Europe liberalism, although nowhere a dominant political force (the big European mass parties are al­most all Catholic or social demo­cratic in inspiration), possesses substantial influence, because it still means what it meant in what, as we can see in retrospect, was the golden age of liberalism, be­tween the fall of Napoleon and the outbreak of World War I. Most of the leading newspapers in European countries, large and small, are edited in the spirit of classical liberalism.

But a strange fate, a kind of euthanasia has befallen liberal­ism in two countries where it was once most powerful, in the United States and in Great Brit­ain. The British Liberal Party which produced many prime min­isters before World War I has shrunk to a tiny remnant, able to elect to Parliament only a small handful of members, unable to hold the balance between the Conservatives and the Laborites. And this tiny remnant is not agreed as to philosophy and tac­tics, program and direction.

British and American Reversals

Some look back a little wist­fully to the time when liberalism was the creed of economic indi­vidualism, favoring private as against state initiative, rejecting the idea that government should be a grab bag into which every special interest group should reach for favors. Other modern British liberals bow before the new gods of state planning. So the British voter is left in doubt as to what he is voting for if he supports the Liberal cause at the polls. And the prospect of a sig­nificant revival of the historic party of Gladstone and Asquith is dim.

In the United States the good ship Liberalism has suffered a still sadder fate. It has been successfully boarded by a pirate crew of state interventionists and near-socialists who have forgot­ten, if indeed they ever under­stood, the principles of historic liberalism, who regard Marx and Keynes as more relevant to mod­ern conditions than Adam Smith.

Two illustrations will show how liberalism, in its twentieth cen­tury American meaning, has com­pletely departed from the original liberal philosophy. Economy and retrenchment in government spending were two constant watchwords of the Grand Old Man of British liberalism, Wil­liam E. Gladstone. On principle, Gladstone was a sworn enemy of the personal income tax, which he tried to abolish altogether at one time and succeeded in keep­ing at a level which now seems incredibly low.

By contrast the "liberal," mod­ern American style, is a profli­gate spender of public funds for any and all purposes, and some­times merely for the sake of spending. If he is free from the cynicism of a Harry Hopkins ("Tax, tax, tax; spend, spend, spend; elect, elect, elect") with his patent formula for bribing the people with their own money, he is likely to be a strong Keynesian, convinced that the sure cure for all social and economic difficulties is for the government, the sup­posed horn of plenty, to write a bigger check. I recently met a professor of economics in a large public institution of learning who was sure unemployment could be abolished — if the government would only run a big enough deficit.

There has also been a note­worthy and significant shift in attitude toward the state since the early period of the American Republic. At that time it was the Federalists, the more conserva­tive of the two principal parties, who favored a relatively strong central government, although a government well provided with checks and balances against the danger of tyranny. It was the Jeffersonian Republicans, the Leftists of their time, who were most jealous of the powers grant­ed to the central government. It was Jefferson, for whom today’s statist "liberals" still profess ad­miration, who repeatedly stressed the idea that the government which governs least is best. As Jefferson wrote to James C. Cabell in 1816:

The way to have good and safe government is not to trust it all to one, but to divide it among the many, distributing to everyone ex­actly the functions he is competent to… What has destroyed liberty and the rights of man in every gov­ernment which has existed under the sun? The generalizing and concen­trating all cares into one body, no matter whether of the autocrats of Russia or France, or of the aristo­crats of a Venetian senate.

A Tendency to Wink at Stalin’s Worst Crimes

As American self-styled lib­erals departed entirely from his­toric liberalism in exalting and striving to make more powerful a strong centralized state, so they lost touch with such a character­istic of traditional liberalism as resenting acts of cruelty and tyr­anny, under whatever pretexts these might be committed. The attitude of many intellectuals who considered themselves liber­als toward the Soviet dictatorship in the thirties, the period when some of Stalin’s most terrible crimes were being committed, was a disgrace to reason, humanity, and commonsense — all presum­ably liberal values.

One of the more bizarre occu­pations of these phony "liberals" was drawing up and signing "Hooray for Murder" manifes­toes, approving Stalin’s slaughter of many of his most prominent colleagues, following trials of which the genuineness would scarcely be asserted now, even in Moscow. A convincing test of the objectivity of the American "liberal" mind in regard to the Soviet Union would be to go through the files of any typical magazine with this point of view in the thirties and forties and find out how much space was de­voted to such events as:

·         The liquidation of the Russian kulaks as a class.

·         The state-engineered famine of 1932-33.

·         The Soviet slave labor system.

·         The deportations to forced labor from Eastern Poland and the Baltic States.

·         The massacre of many thou­sands of Polish war prisoners in 1940 in the Katyn Forest and elsewhere.

The amount of space would be negligible and mainly devoted to denying that such mass atrocities occurred. Such fanatical partisan commitment to the whitewashing of a foreign dictatorship, such complete departure from the qualities of humanity, objectivity, and open-mindedness which have always been considered character­istic of the liberal spirit, suggest an infatuation that calls for ex­amination. And examination shows that many Americans who regarded themselves as liberals were so blinded by utopian hopes or so frightened by the depres­sion of 1929-33 that they cast overboard basic liberal ideals and were willing to overlook or ex­plain away any crime, however monstrous, committed by a regime professing to stand for the aboli­tion of capitalism and a state-planned economy.

A Semantic Dilemma for Those Who Believe in Liberty

This capture and appropriation of the honorable word, liberalism, by theorists whose reliance on omnicompetent statism would hor­rify the Founding Fathers of the liberal faith creates an embar­rassing semantic dilemma for those who believe in integral liberty, on a foundation of eco­nomic liberty, who may have some reservations about calling them­selves conservatives. Friedrich Hayek, unwilling to call himself a conservative while conscious of the perversion of liberalism in the United States, chooses to call him­self an Old Whig, recalling that Edmund Burke, intellectual hero of most modern conservatives, be­longed not to the Tories, but to a wing of the Whig Party.

However this semantic dilemma may be solved (by the use of the term libertarian, for instance), it is important to remember that the piratical seizure of the term lib­eralism in the United States by statists and near-socialists draws a strong line of distinction be­tween classical liberalism and what passes by that name in America today and also between continental European liberalism and "liberalism" on this side of the Atlantic. 

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September 1964

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