The History of Classical Liberalism in 1730 words (and one picture)

Eugène Delacroix, “Liberty leading the People on the Barricade” (1830)

[Revised: 12 Apr. 2022]

[Note: This post is part of a series on the History of the Classical Liberal Tradition]

In a nutshell (1730 w) this is my view of how the Classical Liberal (CL) movement and ideas have evolved over the past 400 years:

CLs did not call themselves “liberals” until the early 19thC. However, before this time we can identify many individuals in the ancient Greek and Roman world, as well as in the medieval period, who developed what we would now call “liberal ideas”. These people I call “proto-liberals” and their relevant ideas “proto-liberal” ideas.

Proto-liberal ideas first began to come together into a more coherent worldview as a reaction to the growing power of the absolutist state and the established church in Europe in the 16th and 17th centuries (the Protestant Reformation after 1517 and the English Revolution of the 1640s). This is why I begin by examining what CLs were “against” before turning to a discussion of what they were “for”.

Through a series of rebellions and revolutions the power of the state (Throne) and the church (Altar) was challenged based upon a combination of

  1. a desire by people to retain their traditional rights and privileges which the state and the church were trying to undermine or even destroy, such as taxation, land usage, and religious practices (this is the “conservative” side of CL), and
  2. the emergence of new ideas about the nature of individual, political, and economic liberty which many individuals thought should be used
  3. to shape the structure of institutions of the societies in which they lived (such as limited constitutional government, the rule of (just) law, and the free market), and
  4. should apply to other groups of individuals who had previously been excluded from the benefits of liberal reform/emancipation, such as serfs, slaves, women, people of colour, and gays (this is the “revolutionary” and “emancipatory” side of CL).

These new ideas slowly evolved into more coherent and sophisticated theories of how societies, markets, and political institutions worked or should work. This more coherent theory came to be known as “liberalism.”

I believe the there were 4 major periods of CL intellectual and political activity during which new theoretical ideas were developed, spread among the public in a more popular form, acted upon by reformers, and resulted in significant liberal reforms:

  1. 1640s-1680s: the English Civil War/Revolution and the “Glorious” Revolution of 1688
  2. 1750s-1790s: the American and French Revolutions
  3. the long liberal 19th century 1815/30-1914
  4. the post-WW2 liberal renaissance

The period from about 1750 to 1850 was crucial in the development of CL ideas as a result of the Enlightenment in Europe and America, the development of economic theory by the Physiocrats and Adam Smith, and the emergence of political theories of limited constitutional government during the American and French revolutions and their immediate aftermath.

At this time CL evolved into two separate streams based upon how limited they wanted the powers of the state to be: a “radical” and a “moderate” form of liberalism; the former which advocated an ultra-minimal state (or even no state at all), and the latter a limited government (which would provide defence, police, courts of law, and some public goods).

The heyday of CL (its true “classical” period) was the 19th century (approximately 1830-1914) before CL ideas and institutions were weakened and in many instances destroyed by the events of WW1, the Great Depression, and WW2 and its aftermath. It was during the 19th century that liberal, democratic, and constitutional societies emerged in Western Europe, North America, and some of the colonies of the British Empire (like Canada and Australia). These societies were the product of two of the most important historical movements of human history: firstly, what I have called the “Great Emancipation” and then, as a result of this emancipation, what McCloskey has called the “Great Enrichment”.

The “Great Emancipation” liberated millions of people from the shackles of serfdom, slavery, mercantilist regulations and privileges, authoritarian even despotic government, and the devastation of war. The liberal societies which were beginning to emerge in the early 19th century introduced policies which allowed the growth of free trade, industrialisation, the free movement of people, freedom of speech, and the protection of property rights and the rule of law.

These emancipations in turn lead to what McCloskey has called the “Great Enrichment” where for the first time in human history ordinary people were able to escape the abject poverty and misery of traditional peasant life and thus have much longer, more productive, and more fulfilling lives.

However, towards the end of the 19th century CL suffered an intellectual “crisis”. On the one hand, many of its adherents seem to lose the inspiring “vision” they had had in the late 18th and early 19th centuries of the kind of future free society they wanted to create. This was the result of the movement away from basing CL on the notion of “natural rights” and a vision of justice based on these rights, and a movement towards the theory of utilitarianism as mediated by utility-minded bureaucrats and politicians.

On the other hand, CL suffered an internal split with the rise of a third variant of liberalism, namely a so-called “new” liberalism which broke away from the “radical” and “moderate” forms of CL which had predominated up until then and which had made possible the “great emancipation” and the “great enrichment”. The “new liberals” wanted to incorporate aspects of “socialism” or “social democracy” into their theory, which would justify a much greater role for the state to intervene in the economy. It is this third form of liberalism which has come to dominate “liberal” thinking in the late 20th and 21st centuries

Unfortunately this experiment in “liberal” emancipation of the pre-1914 period was all too brief before WW1 brought the experiment to an abrupt end. It became clear in the late 19th century that the liberal movement had petered out and its program of emancipation had been left unfinished. CL was thus vulnerable to the charge that its adherents had become complacent with the successes they had already achieved and were not willing to extend emancipation to others (women, subjects of the empire, and people with different sexual preferences).

WW1 brought rampant statism, militarism, war socialism, fascism, and bolshevism/communism. The Great Depression, caused by government meddling in banking, interest rates, and the money supply, was used to justify a raft of interventionist measures, many of which we still have today. WW2 brought another round of massive government intervention in the economy, not to mention the conscription of millions of men into the armed services and the rationing of consumer goods for those left behind. CL voices went silent.

CL was very weak in the second half of the 20th century in the face of the events of the Thirty Years War of the 20th Century (1914-1945) and its aftermath: the Cold War (and its many “warm” proxy wars) and the threat of nuclear annihilation, the steady growth of welfare-statism, Keynesian economic management, and crony-capitalism.

There was a slow rediscovery of CL ideas in the post-WW2 period which has taken place within the “conservative” and “neo-liberal” movements in the Anglo-world as well as in a new form of radical CL known as “libertarianism” which has emerged since the 1970s, especially in the US. The “neo-liberalism” which first appeared in 1937 and developed in earnest after 1947 was really a “new, new liberalism” which again tried to find an accommodation of some liberal ideas with the welfare-state, highly regulated capitalism, and Keynesian management of interest rates and the money supply.

A smaller number of “classical liberals” rejected the “neo-liberal” compromise and sought to rebuild a more radical CL alternative (called by some “libertarianism”) based upon ideas drawn from Austrian economic theory (Mises, Hayek, Rothbard), the Public Choice school of economic thought (Buchanan, Tullock, Boettke), and Aristotelian natural law theory (Rand, Rothbard, Rasmussen and Den Uyl, and Mack)

We have now reached a contradictory moment in history where we are living in a “hybrid society” which combines aspects of liberty (what I call our “legacy liberties” which are some of the fruits of the “great emancipation” of the 18th and 19th centuries) as well as massive state intervention and control which is the inheritance of 20th century war and statism. On the one hand, we have never been as prosperous, educated, healthy, and “free” (in some important areas such as discrimination against people of colour, women, and homosexuals), and yet at the same time, popular belief in CL values is very weak and the burden of the state in terms of taxation levels, inflation, debt, economic regulation, and the surveillance and regulation many aspects of our personal lives have never been greater.

In conclusion I would argue that:

  • CLT has a long and rich history going back over 400 years
  • in the face of considerable odds the CLT has achieved some very significant victories which can be summarised as the “Great Emancipation” and the “Great Enrichment” which we continue to enjoy today
  • unfortunately, the “Great Emancipation” which began in the late 18th century was left unfinished and so present day CLs still have a lot that needs to be done if we wish to see all groups fully emancipated
  • in the face of the expansion of state power in recent decades the wealth generating capacity of the “Great Enrichment” has been slowed and hampered; if we wish to see more of humanity enjoy its benefits these shackles have to be removed unless these excluded groups seek some other political ideology to achieve their goals
  • there are at present some very serious threats to liberty and prosperity which CLs need to address and overcome. I have listed about 12 of these threats elsewhere

But what seems to be the greatest problem today for CLs is the lack of support for CL ideas among both the general public and academics/intellectuals; until this problem has been rectified there seems little chance that either emancipation or enrichment will be able to achieve their fullest potential. The ideas which I think are most important for CLs to promote are the following:

  1. the immorality of initiating the use of coercion against others
  2. the lack of understanding about and exaggeration of “market failure” which is a major reason people call for government intervention in the first place
  3. the lack of understanding about and the seriousness of “government failure” which is a major reason people continue to call for government intervention in spite of its repeated failures
  4. the public’s profound ignorance of many basic economic insights