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

Introduction

When it comes to identifying what Classical Liberals were FOR, as opposed to what they were AGAINST (see the previous post), I have divided them into three main categories: foundations (or grounds for belief), processes (or actions which people take when they live in a society), and specific liberties (or freedoms) which I have depicted in this “concept map”.

It is designed to provide an overview of what I think are the essential features of the classical liberal tradition as it has evolved over the past 400 years. It is what I think has been common to both the radical and moderate branches of classical liberalism. The “new liberals” of the late 19thC and the LINOs of the late 20th and early 21st centuries are a different kettle of fish and would require their own concept map to do justice to their political philosophy.

The Foundations of CL Ideas

The foundations or grounds for these beliefs are based upon the following:

a set of basic principles or “rights” which all individuals have or should have, to
– life
– liberty
– property

which are based upon certain philosophical grounds, either
– natural law (God’s Law) and natural rights, or
– utility

During the 19thC the split between the classical liberals who argued for liberty on the grounds of natural law and natural rights and those who grounded it on the principle of utility (“the greatest happiness of the greatest number”) grew wider until the utilitarian position became the dominant version. It would be safe to say that most of the radical liberals were in the “natural rights” camp, while most of the moderates were in the utilitarian camp. The radical liberals thought that the utilitarians were prepared to sacrifice individual liberty if it could be shown that a utilitarian “happiness calculation” justified this (usually by politicians and bureaucrats who worked for the government). The radicals thought on the contrary that individual liberty was non-negotiable, and that once one began doing these calculations one had entered onto a slippery slope which would ultimately lead to complete socialism, which is what many of them thought the “new liberalism” had done.

The Processes or Actions Needed to Build and Sustain a Free Society

By “processes” I mean the actions people take or the ways in which people interact with each other in a social setting which will protect these rights from being violated (by other individuals and by states) and thereby allow societies, s well as individuals, to prosper and flourish.

For most radical liberals and modern-day libertarians the “non-aggression principle” (NAP) is the most important one and is “foundational”. According to Roderick Long in the EoL:

The non‐ aggression axiom is an ethical principle often appealed to as a basis for libertarian rights theory. The principle forbids “aggression,” which is understood to be any and all forcible interference with any individual’s person or property except in response to the initiation (including, for most proponents of the principle, the *threatening* of initiation) of similar forcible interference on the part of that individual.

The axiom has various formulations, but two especially influential 20th‐ century formulations are those of Ayn Rand and Murray Rothbard, who appear to have originated the term. Ayn Rand maintained that “no man may *initiate* the use of physical force against others.… Men have the right to use physical force *only* in retaliation and *only* against those who initiate its use.” This quote is similar to Murray Rothbard’s thesis that “no man or group of men may aggress against the person or property of anyone else.”

[See Rothbard and Roderick Long Non-aggression Principle: A Libertarianism.org Guide.]

Interestingly, in the Workers Party Platform (1975) the statement of this “fundamental principle” was included at the foot of every page, that:
“No man or group of men has the right to initiate the use of force, fraud or coercion against another man or group of men”. Online.

It should be noted that it is not a “non-coercion principle” as radical liberals believe that coercion may sometimes be used to prevent someone from violating a person’s rights to life, liberty, and property. What it forbids is the “initiation” of force or coercion against someone who is rightfully going about their business.

It should also be noted that radical liberals believe that this principle is universal and should apply to everyone equally, including (especially) the government and those who work for the government or are its agents. This is what makes “radical liberalism” truly “radical” as it in one stroke forbids most government activity as it has evolved over the past 400 years.

If aggression or the initiation of the use of coercion is forbidden by this principle, the kinds of activity which are permitted in a liberal society are only those that are voluntary and which are undertaken with the consent of the parties involved. Thus this includes all market activities where people voluntarily cooperate with each other, by means of the division of labour, the exchange of goods and services, and the non-violent “haggling” over prices and the terms of exchange.

It also means that if you do not wish to cooperate with other people because you might disagree with their views, the way they live their lives, or even just how they look, then the very least you must do is tolerate them by acknowledging their (equal) right to go about their peaceful business as they see fit. In other words, in a society of individuals with equal rights to enjoy their life, liberty, and property there must be “peaceful coexistence” between different groups so all might benefit from the prosperity made possible by the free market. When disputes do arise about infringement of rights they need to be arbitrated by trusted legal authorities and experts.

Classical liberals have come to realise that not all “orders”, whether economic, legal, or social, have been created by the use of (government) coercion and command. Rather these orders have arisen “spontaneously” over centuries in order to satisfy the needs of those involved and not the preconceived plans of those who rule. Once this important social fact is recognised, the rule for liberals is to allow as much voluntary cooperation as possible and to let freedom take its own course.

To summarise, the processes or actions liberals believe will allow people to interact with each other in a social setting to make both individual and social flourishing and prosperity possible are:

• adherence to the non-aggression principle
• voluntary cooperation between people
• toleration of other’s beliefs and non-violent behaviour
• the free movement of people, goods, & ideas
• peaceful coexistence with others both domestically and internationally
• the arbitration of disputes
• allowing spontaneous orders to emerge and flourish

Liberty as “the sum of all freedoms”

[The Bundles of Freedoms which make up Liberty]

Liberty should be seen as a “bundle” or “cluster” of freedoms which together make up what is “Liberty”. The following quote comes from Frédéric Bastiat’s essay “The Law” (June 1850) online of the OLL. It should be noted that English has two word for “freedom” – a Germanic one “freedom” and a Latin one (via the French) “liberty”. I have used both to make the point I think Bastiat is trying to make clearer:

> And what is liberty, this word that has the power of making all hearts beat faster and causing agitation around the world, if it is not the sum of all freedoms: freedom of conscience, teaching, and association; freedom of the press; freedom to travel, work, and trade; in other words, the free exercise of all inoffensive faculties by all men and, in still other terms, the destruction of all despotic regimes, even legal despotism, and the reduction of the law to its sole rational attribution, which is to regulate the individual law of legitimate defense or to punish injustice.

And what is “Liberty,” this word that has the power of making all hearts beat faster and of moving the (entire) world, if it is not the sum of all freedoms? — freedom of conscience, teaching, and association, freedom of the press, freedom to travel, work, and trade, in other words, the free exercise by all people of all their non-aggressive abilities (les facultés inoffensives). And, in still other terms, isn’t (freedom) the destruction of all despotic regimes, even legal despotism, and the limiting of the law (la réduction de la Loi) to its sole rational function which is to regulate the individual’s right of legitimate (self) defense and to prevent (réprimer) injustice?

Et qu’est-ce que la Liberté, ce mot qui a la puissance de faire battre tous les cœurs et d’agiter le monde, si ce n’est l’ensemble de toutes les libertés, liberté de conscience, d’enseignement, d’association, de presse, de locomotion, de travail, d’échange ; d’autres termes, le franc exercice, pour tous, de toutes les facultés inoffensives ; en d’autres termes encore, la destruction de tous les despotismes, même le despotisme légal, et la réduction de la Loi à sa seule attribution rationnelle, qui est de régulariser le Droit individuel de légitime défense ou de réprimer l’injustice.

Traditionally for classical liberals, LIBERTY is made up of three main “bundles of freedoms” – political, economic, and social freedoms.

By “political freedoms” one also would include in this category “legal” freedoms. These freedoms were

• governments which were very limited in their powers (usually limited by a written constitution and bill of rights); some radical liberals thought government should be so strictly “limited” that it virtually disappeared and would be replaced by purely voluntary, market-based private protection companies (Molinari, Rothbard); some moderate liberals like Bastiat advocated an “ultra-minimal” government, while the mainstream followed Adam Smith’s views on a “minimal government” (which permitted some provision of public goods)
• the rule of law administered by an independent judiciary;
• the right to own, sell/exchange, and gift/bequeath property
• strong protection for the contracts between individuals which regulated/or specified this transfer of property
• protection of the freedom of speech, print, and association, especially that of religion (a key issue for liberals in the 16th, 17th, and 18th centuries)
• the right to vote out a bad government and to vote in a new government in regularly held, free and open elections; liberals debated how extensive the franchise should be, with radicals calling for the broadest possible franchise (including women), while moderate liberals usually called for some property or wealth limitation; liberals were also divided on the form which a limited government might take; one division was between those liberals who favoured the English model of a constitutionally limited monarch, while others followed the American and French model of a republic

The “bundle” of economic freedoms which CLs have advocated include the following fairly standard and well known ones, such as

• free and open markets in the domestic or “home” market, where there is minimal or no regulation by governments (also known as “laissez faire”), no barriers to entry for new providers/sellers, no special privileges given to some some producers (subsidies, tariff protection), no price controls
• similarly for “foreign” or external markets, where there is so special protection for domestic producers, there are open borders for the import and export of all goods and services (i.e. “free trade”), and if there are tariffs imposed on imported goods they should be as low as possible and for “revenue purposes” only (before the introduction of income taxes, tariffs were the primary means of raising revenue for governments)
• the right to “make a profit” (and to keep this profit) made by individuals and corporations who engage in the voluntary and mutually consensual exchange of goods and services in the market
• the right to make loans to others and to charge interest on those those
• to right to choose one’s occupation or business without restriction and to enter the market to offer one’s services to others

The “bundle” of freedoms known as “social freedoms” are more recent than the political and economic ones and possibly reflect the greater size, complexity, and diversity of modern societies. I think most of what are known as “social freedoms” are actually already covered by the standard political and economic freedoms listed above but many liberals thought that they needed to be emphasised and made explicit by having their own category. They include such things as:

• equality under the law – this freedom took on extra meaning as women, people of African descent (i.e. ex-slaves), gays, and drug producers, sellers, and users (whether alcoholic or other types) demanded the equal rights that others had to live their lives as they saw fit, engage in peaceful economic activity, and generally to be left alone by those with political power
• toleration of different ideas and behaviour – this was extended to include the different ways individuals wanted to organise their own “households”, i.e. to live with whomever they pleased, in whatever relationships were voluntarily entered into and mutually agreeable and beneficial, and to be free to dissolve these relationship when they were no longer so (mutually agreeable and beneficial)
• in other words, the legal and social recognition of the legitimacy of all “acts between consenting adults”

From this rather long list of “bundles” of freedoms I have selected 12 key concepts which I believe are most important for understanding what CLs have believed in over the past 400 odd years. A more detailed discussion of these “Twelve Key Concepts”, along with some recommended readings, will the subject of a future post.

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

It is often the case that you do not articulate clearly what you are “FOR” until you are forced to, by being challenged by something you know you are “AGAINST”. I think this can be said about the CLT so I will begin by discussing what CL were against.

These things of course varied over time and place and CLs reacted accordingly, emphasising different things at different times (such as religion in the 16th and 17th centuries, taxation and trade policies in the 18th, and constitutional limits on the power of the state in the late 18th and 19th centuries). In spite of this variability, it is nevertheless possible to draw up a list of “key ideas” which CLs kept turning to in their struggle to oppose or restrain the power of the state. This will be the subject of another post.

Part I – The Early Modern Period (17th and 18th Centuries)

[Hobbes’ famous depiction of the “Leviathan” state, which consisted of “Throne” (and Barracks) to the left, and “Altar” to the right. See my illustrated essay on Thomas Hobbes’ Iconography of the Leviathan State (18 December, 2020) and a longer version on this topic.]

CL (or rather what one might call “proto-liberalism” or “early liberalism” as no-one called themselves “liberal” at the time, – this would only occur for the first time in the early 19thC) first emerged as a reaction to the growing power of the absolutist state and church in early modern Europe in the 16th and 17th centuries. The Catholic Church had its religious monopoly challenged by the rise of “protestant” churches during the Reformation. Increasing rivalry between dynastic states led to more wars and the need to fund and supply much larger permanent (standing) armies which in turn required a larger and better organised state (the fiscal-military state) with much greater taxing powers and a more sophisticated system of “public finance” (or state debt).

The first rumblings of dissent appeared in the mid-17th century with a series of tax revolts during the Thirty Years War (1618-48) and the so-called “general crisis of the 17thC”. These revolts against increased taxation and repression by the state and the Church reached a climax in the Revolutions in America and France in the 18thC which overthrew the old order and introduced new regimes largely based upon liberal principles.

[On “early” or “proto” liberalism see Annabel Patterson, Early Modern Liberalism (Cambridge University Press, 1997) and Quentin Skinner, Liberty before Liberalism (Cambridge University Press, 1998, 2003).]

The issues which prompted many people to rethink their traditional relationship to the state and the church in the 17th and 18th centuries was a result of numerous factors including:

• the growing power of the monarchy as the state grew and centralised its powers vis-à-vis other traditional power holders such as the landed aristocracy and the church (“Throne” – the monarchy)
• the repression of religious and other forms of dissent following the Reformation (which produced “competitors” in the “religious market” for consumers of religion) and the scientific revolution which seriously challenged Church doctrine (“Altar” – the established Church)
• increasing taxation and debt to fund wars led to a clash between parliaments and the crown over the granting of new tax money, especially during the crisis of the 17thC (the Thirty Years War) (“Barracks” – the military and large standing armies)
• the regulation of trade and the economy in favour of powerful vested interests including members of the aristocracy and preferred industrial and commercial groups (Mercantilism)
• periodic crises of agricultural production caused by poor harvests, the chronic poor productivity of agriculture (Serfdom), and restrictions on trade in agricultural products (tariffs and protectionism)

Part II – The 19th Century

Even after the American and French Revolutions changed the face of Europe and North America CLs had to face other challenges throughout the 19th century because of the incomplete nature of the revolutions in which they had participated:

• the French Revolution and Napoleonic Wars had changed the nature of warfare with the emergence of ideologically motivated, mass armies of citizens which required massive taxation, requisition of supplies, conscription of citizens, the use of economic warfare (blocades) to weaken the enemy, and the creation of more powerful central banks to fund the state’s activities
• the continued existence of slavery in the newly formed United States as well as in the European colonies; the expansion of slavery in the US before 1861 led to bitter debates about its legitimacy and its economic efficiency
• the restoration of the conservative monarchies after 1815 and the struggle for constitutional limits on their powers and the protection of civil liberties (especially freedom of speech, and representation in parliament)
• the rise of economic nationalism (F. List in the German states) and the return protectionism (especially in the US – the so-called “American system of Hamilton) in the late 19thC
• the rise of Nationalism and Wars of Nation Building in Germany (the German Wars of Unification) and the US (the Civil War), and also in Japan) ; this raised the problem for liberals of how to deal with the new force of “nationalism” (the German “National Liberal” movement)
• the expansion of colonialism and imperialism in Asia and Africa
• the rise of socialism, labour parties, Marxism in the late 19th century
• the return of protectionism in the decades leading up to WW1
• the arms race prior to WW1

These developments meant that CLs had to confront several well-organised groups opposed to liberal ideas. These included conservatism (which had a political as well as religious aspect), militarism, protectionism, imperialism, and socialism.

Part III – The 20th Century to the Present

The WW1 was a disaster for CL and saw the collapse of many liberal institutions which had been created in the 19thC and the near abandonment of CL ideas among many people. The “Thirty Years War of the 20thC( WW1 and WW2 1914-1945) was the nadir of the CL movement until its slow revival in the post-WW2 period and the creation of modern libertarian movement in the US in the 1970s.

This graph shows the steady growth of local, state, and the federal government during the 20thC and similar graphs can be drawn up for European countries as well as Australia. What should be noted is what the economic historian Robert Higgs has called “the ratchet effect” where the size and scope of government activity and expenditure increases dramatically during times of “crisis” (war, economic depressions, and now terrorist attacks, banking crises, and epidemics) but does not completely return to the base line after the crisis has passed. Thus there has been a steady “ratcheting up” of the size of the state throughout the 20thC which continues unchecked in the 21stC with no end in sight.

[Growth in Total US Government Spending in the 20thC]

Sidenote: It would be an interesting question to ask socialists and other advocates of government intervention in the economy “how much is enough” to satisfy them? Do they see an end point which, when reached, their demands for increased state spending and intervention and regulation would cease? At 50% of GDP, 60%, 70%, or is it 100%?

CLs have therefore directed their opposition during this period to things like:

• the general phenomenon of the growth of Statism throughout the century
• World War 1 – War Socialism
• post-war hyperinflations and the Great Depression
• the rise of Bolshevism and Fascism post WW1
• the ideas of J.M. Keynes and the use of monetary and banking policy to fund both the warfare state and the welfare state;
• the total mobilisation of the economy in WW2; the emergence duriong WW2 and after of the Military-Industrial Complex
• the post-war welfare state, regulatory state, welfare/warfare state in the US
• surveillance state after 9/11

The developments meant that, even though CL was experiencing a veritable “dark ages” during most of the 20thC, they had to confront both intellectually and politically socialism, Bolshevism/communism, fascism, Keynesianism, the Welfare/Warfare/Surveillance State, and in the 21stC the rise of “Green Socialism” (and now “hygiene socialism”)

A Summary of What CLs were AGAINST

One can summarise what CLs were “against” over this long period of some 400 years because, even though the specific form of coercion, repression, and the violation of individual rights to life, liberty, and property took varied considerably, there were some common features, such as the opposition to:

1. arbitrary political power
2. arbitrary religious power
3. slavery & serfdom
4. war & conscription
5. taxation
6. national debt
7. tariffs & other trade protection
8. subsidies & monopolies to favoured industries
9. central banks & fiat money
10. empire & colonies
11. censorship
12. torture, arbitrary arrest & imprisonment, execution

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

The “Two Faced” Nature of CL

[The revolutionary Marianne with a sword in her hand vs. the conservative Marianne with a torch and constitution in her hands.]

There are two different “faces” or “aspects” to CL which it has shown us over the centuries. This first face is a conservative one, where individuals resist changes that are imposed on them by the state such as changes to their traditional religious, social, political beliefs and practices which these individuals regard as their historical or traditional “rights” and “privileges.” The second face is a “revolutionary” one, where individuals see the possibilities of extending their traditional liberties by going further in new directions which their thinking has revealed to them as consistent, possible, and desirable. Sometimes this is not the intention of those who wish to protect their existing liberties from encroachment, but they use language (often about universal “natural rights”) which initially is intended to protect the liberties of a small and select group but which the excluded groups later come to believe can and should apply equally to them as well. This might be called an example of “the unintended consequences of ideas.”

The Conservative Face of CL

Some examples of the “conservative” face of CL where individuals are trying to “conserve” or protect traditional liberties and privileges which they already have from encroachment by the state include:

• a state acquires new territory, though dynastic marriage or war, or when a ruler converts to another religion, and then tries to ban or repress the different religious ideas and practices of his subjects. This was a common problem during the Reformation but it also was serious problem much earlier when the state would undertake “crusades” against unorthodox and dissident religions, as the Albigensians
• a state introduces new taxes to pay for a war, or imposes conscription to get troops for the army, and people resent paying these new burdens, thus triggering tax revolts, such as happened during the 17th century
• a king might sign an agreement to limit the imposition of taxes, or make promises not to engage in certain activities and then reneges on these agreements, thus forcing the people involved to demand redress (e.g. Magna Carta and the various versions which came after it)
• a very good example were the North American colonists in mid-18thC who, after having enjoyed a lengthy period of “salutary neglect” from Imperial England, reacted adversely to the new taxes or the more stringently enforced existing taxation to pay for the French-Indian Wars, thus triggering the American Revolution

The Revolutionary Face of CL

Some examples of the “revolutionary” face of CL, where individuals see the possibilities of extending the range of liberty by applying liberal ideas in new and possibly unexpected, but consistent ways. For example:

• some strong believers in individual liberty might want to see others who have traditionally been excluded from enjoying such freedom brought “into the fold” (as it were). The best example of this are the Quakers and other religious radicals who strove to abolish slavery in the late 18th and early 19th centuries. Another example might the bureaucrats and government officials in the states of central and eastern Europe who, under the influence of the writings of Adam Smith and his followers, strove to abolish serfdom “from the top down”, which they largely achieved in 1848.
• those who act to defend their own liberties and privileges sometimes use language which they did not intend to apply to other groups but who later find that these other groups read this language in an “unintended”manner and think it applies to the as well and equally. I am thinking here of the “Founding Fathers” of the American Declaration of Independence and Constitution (many of whom were slave owners) and black slaves or ex-slaves like Frederick Douglass who had a very different but logical and consistent reading of the Declaration of Independence. One might also think of women and gays as other excluded groups who thought the principles of the Declaration were universal and valid to all individuals, in all places, and at all times. They then of course took action to realise this liberal goal.
• another example might be when someone inspired by liberal ideas applies them in a completely new, radically pro-freedom direction which has never existed before. This might include the idea of universal free trade (Adam Smith, Frédéric Bastiat) and the voluntary or private provision of all public goods, such as roads, police, and national defence (Gustave de Molinari).

The conclusion one should draw from this is that CL draws upon both “conservative” and “revolutionary” motives in its struggle to create or re-create a free society. It all depends on the historical context and the people involved.

On the different depictions of “Marianne” (Liberty) see, Maurice Agulhon, Marianne into Battle: Republican imagery and symbolism in France, 1789–1880 (Cambridge University Press, 1981).

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

Updated: 25 Apr. 2022

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

[See a larger version of this image.]
A key factor in distinguishing the differences between the various strains of liberalism is their attitude towards the state (not just between liberalism and other political philosophies like socialism, communism, fascism, etc – see my post on “The Spectrum of State Power: or a New Way of Looking at the Political Spectrum” (10 Aug., 2021) online.

Radical Liberals

For radical liberals and libertarians the state was thought to be a threat to, or even an enemy of, liberty since it was “the organisation of the political means of acquiring wealth” (Franz Oppenheimer) . Historically, this had certainly been the case where the state had been controlled by particular groups who used it to get benefits and privileges at the expence of ordinary citizens and tax-payers (slave owners, aristocratic landowners, favoured and privileged manufacturers, bankers who lent money to the state). In the present (i.e. the 18th and 19thC), even with written constitutions designed to limit the power of the state to very specific activities, and an electorate which had been opened up to previously excluded and exploited classes, the state was still an entity with a monopoly on the use of coercion. Its very existence meant that it was a tool which could be seized by vested interests and classes and used to benefit themselves and which could be exercised behind the legal shield of constitutional and legal propriety. In their view, plunder was still plunder, even it had been approved by a democratically elected body and conducted along proper constitutional and legal procedures. [See Bastiat’s notion of “la spoliation légale” (legal plunder).]

Whether or not the power of the state would be used that way was a matter for conjecture in the late 18th and 19th centuries as attempts to strictly limit the power of the state had never been tried before. That is why the American experiment in drafting a Constitution and Bill of Rights was so important for CLs of the period. If the Americans could succeed in permanently reducing and limiting the power of state and keeping it limited, then the case for limited government would be made.

However, even when this experiment was in its early days, there were sceptics who thought that, although a noble one, this experiment would eventually fail because the state provided too attractive a tool for unscrupulous “rent seekers” (I prefer the term “privilege seekers”) to use for their own benefit, as well as creating a vested interest to maintain or expand the power of state by professional politicians and bureaucrats (the “public choice” argument). This fear was expressed by the so-called “anti-federalists” (who were actually the true “federalists” not Madison and Hamilton who believed in a strong central state) in the 1780s , and then even more forcefully by radical liberals like Herbert Spencer in England in the 1870s and 1880s and Bastiat and Molinari in France in the late 1840s and later.

The radical liberal and libertarian hostility towards the state, on the grounds that its initiation of the use of coercion in everything it does is immoral and unjust, was summed up by Rothbard. In an essay in 1977 he asked the question of his readers, “Do you hate the state?” His answer was “There runs through For a New Liberty (and most of the rest of my work as well) a deep and pervasive hatred of the State and all of its works, based on the conviction that the State is the enemy of mankind. “ “Do you hate the state?”, Libertarian Forum (Vol. 10, No. 7, July 1977) online .

Moderate Liberals

More optimistic were the moderate liberals who thought the state could be limited to a small number of very specific and “ennumerated” powers (to use the terminology of the American constitution). The economic argument for a limited state was made by Adam Smith who provided the “classic” formulation of this view, that the state should be limited to providing police, courts, national defence, some minimal welfare for the poor, and some public works (roads, post office, and possibly education).

By protecting property rights and upholding contracts the limited state provided the general legal framework for markets to operate. Once this had been achieved the state should not interfere in the private activities of men and women going about their lives and conducting their business activities. The assumption behind this was that an educated public would make sure the state did not step outside its proper bounds and that an independent judiciary and court system would ensure the protection of liberty and property rights, as well as a means by which citizens could protect their liberties by suing the state and its officials in the independent courts if they did not carry out their proper duties.

In other words, the moderate liberal position could be summed up by saying that, even thought he state could at times be dangerous and a threat to liberty (hence one had to be very wary), it was a “necessary evil” which was required to protect the “ liberal order.”

One of these assumptions, that an educated public would behave properly by respecting the rights of others and would make sure the state did not step outside its proper bounds (via the pressure of public opinion and frequent elections), led to the conclusion that the state should provide a minimal of free, state funded education to ensure that this happened. The debate about state funded, compulsory education tore apart the classical liberal movement during the 19thC. For example, in England, one of the leading radical liberals, Richard Cobden, was a strong supporter of state-funded education, whereas Herbert Spencer was not, as he believed it provided a “foot in the door” for the state to tax and regulate and compel the population (which might serve as a model for other attempts to “improve the lot of the people, something which the “new” liberals in the late 19thC certainly did), as well as a means for the state to indoctrinate children in pro-state beliefs. In France, liberals and liberal conservatives (like Guizot) used state funded education as a means to break the control the Catholic Church had over education and to propagate secular and republican political ideas. Even a very radical liberal like Gustave de Molinari, who was the first advocate and theorist of what later became known as “anarcho-capitalism”, believed that education should be made compulsory for all children but that it should not be provided or funded by the state. Even in 19thC America, where the state was much more limited than practically anywhere else, education was provided by the state (via local property taxes), albeit at a a very decentralised, local level. Even here, the state education system was used as a tool in the late 19thC to “Americanise” and “republicanise” immigrants from central and eastern Europe who tended to be Catholic and have other “bad” European habits and beliefs (such as drinking wine and beer) which were thought to be harmful to white, Protestant America.

“New” Liberals

For the growing number of “new” liberals in the late 19thC the state provision of education was just the first of many similar “services” the state should be providing to improve the lives of its citizens in a “positive” rather than “negative” way. The same reasons used by supporters of state education were used to justify the state provision of unemployment insurance, the regulation of factories and other forms of labour, public hygiene, as well as local utilities such as street lighting, gas supplies, and public transport. The Fabian socialists who were also emerging at this time called this activity by the state “municipal socialism”, and it was something that also strongly appealed to the “new” liberals.

In general, the new liberals rejected the great suspicion felt by radical and many moderate liberals of state action. They preferred to see the state as the protector and provider of greater liberty and opportunity, as a friend and benefactor (like a parent, or father) of the ordinary person, and not as their enemy.

In Australia, where the state had always played a greater role in people’s lives from the beginning of the penal colony run by the military (creating a kind of “military socialism”), by the late 19thC there was a opportunity to take the idea of “municipal socialism” even further, to create what was called at the time “colonial socialism.” The state (in the name the Crown) was the largest landowner in the country, infrastructure projects like ports and railways were thought to be impossible to finance via private capital and run by private companies (as they were done in the US) so it was argued that the colonial states had to step in to ensure economic development, and tariff protection for domestic industry was also thought to be essential (except in the state of NSW which was largely free trade). Even most Australian “liberals” were in favour of these measures, except for a handful of radical liberals like William Hearn at the University of Melbourne (a follower of the economic thought of Frédéric Bastiat) and the NSW MP Bruce Smith (who was a follower of Herbert Spencer). Thus, by the time of Federation in 1901 there was a broad consensus among the socialists in the Labor Party and the “liberals” in the Protectionist Party and the Free Trade Party about the need for a large role for the state in the new Commonwealth of Australia.

Radical liberalism was practically non-existent in Australia because of its later political development. Radical liberals in Britain had drawn upon the natural rights tradition as expressed in the writings of the Levellers (1640s), John Locke (16890s), and the Commonwealthmen (1720s and 1730s), which had also spread to the north American colonies on the eve of the Revolution, and were the guiding principles of the “classical liberalism” which emerged there (although not called that at the time). [See Rothbard’s chapter on “The American Revolution and Classical Liberalism” from For a New Liberty (1974) online at Mises Wire.] When Australians were thinking about independent colonial government in the 1850s this radical strain of liberalism was dying out in Britain (except for a few individuals such as Thomas Hodgskin – see his The Natural and Artificial Right to Property Contrasted (1832)) and was rapidly being replaced by the less radical utilitarian strain of liberalism whose main theorists were Jeremy Bentham and John Stuart Mill. One might say that if there were a guiding light for Australian liberalism it was Bentham and not Locke who held the torch aloft. Thus on the eve of Federation the ideas of JS Mill (moderate and rather weak as they were) and those of Thomas Green (a staunch advocate of the “new” much more interventionist strain of liberalism) had the greatest impact on the development of Australian liberalism. [See David Llewellyn , AUSTRALIA FELIX: Jeremy Bentham and Australian colonial democracy (PhD. thesis, University of Melbourne, July 2016).]

A sure indicator of the “moderate” even “compromised” nature of Australian liberalism was the widespread support for protectionism in the colonies and then for the first 70 odd years of the new Commonwealth. Belief in free trade was an absolute precondition for being a liberal (even a moderate liberal) at the time of Cobden and Gladstone. Not so in Australia. [Side note: The alliance between the Australian Liberal Party and the Country Party defended the policy of protection until it was gradually overturned ironically enough by the Labor Party under Hawke and Keating.]