When Liberalism Went Into Retreat
Ralph Raico
Foundation for Economic
Education, Monday, December 26, 2016
As the nineteenth century began, classical liberalism — or just
liberalism as the philosophy of freedom was then known — was the specter
haunting Europe — and the world. In every advanced country the liberal movement
was active.
Drawn mainly from the middle classes, it included people from widely
contrasting religious and philosophical backgrounds. Christians, Jews, deists,
agnostics, utilitarians, believers in natural rights, freethinkers, and
traditionalists all found it possible to work towards one fundamental goal:
expanding the area of the free functioning of society and diminishing the area
of coercion and the state.
Emphases varied with the circumstances of different countries.
Sometimes, as in Central and Eastern Europe, the liberals demanded the rollback
of the absolutist state and even the residues of feudalism. Accordingly, the
struggle centered around full private property rights in land, religious
liberty, and the abolition of serfdom. In Western Europe, the liberals often
had to fight for free trade, full freedom of the press, and the rule of law as
sovereign over state functionaries.
In America, the liberal country par excellence, the chief aim was to
fend off incursions of government power pushed by Alexander Hamilton and his
centralizing successors, and, eventually, somehow, to deal with the great stain
on American freedom — Negro slavery.
From the standpoint of liberalism, the United States was remarkably
lucky from the start. Its founding document, the Declaration of Independence,
was composed by Thomas Jefferson, one of the leading liberal thinkers of his
time. The Declaration radiated the vision of society as consisting of
individuals enjoying their natural rights and pursuing their self-determined
goals. In the Constitution and the Bill of Rights, the Founders created a
system where power would be divided, limited, and hemmed in by multiple
constraints, while individuals went about the quest for fulfillment through
work, family, friends, self-cultivation, and the dense network of voluntary
associations. In this new land, government — as European travelers noted with
awe — could hardly be said to exist at all. This was the America that became a
model to the world.
One perpetuator of the Jeffersonian tradition in the early 19th century
was William Leggett, a New York journalist and antislavery Jacksonian Democrat.
Leggett declared:
“All governments are instituted for the protection of person and
property; and the people only delegate to their rulers such powers as are indispensable
to these objects. The people want no government to regulate their private
concerns, or to prescribe the course and mete out the profits of their
industry. Protect their persons and property, and all the rest they can do for
themselves.”
This laissez-faire philosophy became the bedrock creed of countless
Americans of all classes. In the generations to come, it found an echo in the
work of liberal writers like R L. Godkin, Albert Jay Nock, H. L. Mencken, Frank
Chodorov, and Leonard Read. To the rest of the world, this was the
distinctively, characteristically American outlook.
Meanwhile, the economic advance that had been slowly gaining momentum in
the Western world burst out in a great leap forward. First in Britain, then in
America and Western Europe, the Industrial Revolution transformed the life of
man as nothing had since the neolithic age. Now it became possible for the vast
majority of mankind to escape the immemorial misery they had grown to accept as
their unalterable lot. Now tens of millions who would have perished in the
inefficient economy of the old order were able to survive. As the populations
of Europe and America swelled to unprecedented levels, the new masses gradually
achieved living standards unimaginable for working people before.
The birth of the industrial order was accompanied by economic
dislocations. How could it have been otherwise? The free-market economists
preached the solution: security of property and hard money to encourage capital
formation, free trade to maximize efficiency in production, and a clear field
for entrepreneurs eager to innovate. But conservatives, threatened in their
age-old status, initiated a literary assault on the new system, giving the
Industrial Revolution a bad name from which it never fully recovered. Soon the
attack was gleefully taken up by groups of socialist intellectuals that began to
emerge.
Still, by mid-century the liberals went from one victory to another.
Constitutions with guarantees of basic rights were adopted, legal systems
firmly anchoring the rule of law and property rights were put in place, and
free trade was spreading, giving birth to a world economy based on the gold
standard.
There were advances on the intellectual front as well. After
spearheading the campaign to abolish the English Corn Laws, Richard Cobden
developed the theory of nonintervention in the affairs of other countries as a
foundation for peace. Frederic Bastiat put the case for free trade,
non-intervention, and peace in a classic form. Liberal historians like Thomas
Macaulay and Augustin Thierry uncovered the roots of freedom in the West. Later
in the century, the economic theory of the free market was placed on a secure
scientific footing with the rise of the Austrian School, inaugurated by Carl
Menger.
The relation of liberalism and religion presented a special problem. In
continental Europe and Latin America, freethinking liberals sometimes used the
state power to curtail the influence of the Catholic Church, while some
Catholic leaders clung to obsolete ideas of theocratic control. But liberal
thinkers like Benjamin Constant, Alexis de Tocqueville, and Lord Acton saw
beyond such futile disputes. They stressed the crucial role that religion,
separated from government power, could play in stemming the growth of the
centralized state. In this way, they prepared the ground for the reconciliation
of liberty and religious faith.
Then, for reasons still unclear, the tide began to turn against the
liberals. Part of the reason is surely the rise of the new class of
intellectuals that proliferated everywhere. That they owed their very existence
to the wealth generated by the capitalist system did not prevent most of them
from incessantly gnawing away at capitalism, indicting it for every problem
they could point to in modern society.
At the same time, voluntary solutions to these problems were preempted
by state functionaries anxious to expand their domain. The rise of democracy
may well have contributed to liberalism’s decline by aggravating an age-old
feature of politics: the scramble for special privilege. Businesses, labor
unions, farmers, bureaucrats, and other interest groups vied for state
privileges — and found intellectual demagogues to rationalize their
depredations. The area of state control grew, at the expense, as William Graham
Sumner pointed out, of “the forgotten man” — the quiet, productive individual
who asks no favor of government and, through his work, keeps the whole system
going.
By the end of the century, liberalism was being battered on all sides.
Nationalists and imperialists condemned it for promoting an insipid peace
instead of a virile and bracing belligerency among the nations. Socialists
attacked it for upholding the “anarchical” free-market system instead of
“scientific” central planning. Even church leaders disparaged liberalism for
its alleged egotism and materialism. In America and Britain, social reformers
around the dawn of the century conceived a particularly clever gambit. Anywhere
else the supporters of state intervention and coercive labor-unionism would
have been called “socialists” or “social democrats.” But since the
English-speaking peoples appeared for some reason to have an aversion to those
labels, they hijacked the term “liberal.”
Though they fought on to the end, a mood of despondency settled on the
last of the great authentic liberals. When Herbert Spencer began writing in the
1840s, he had looked forward to an age of universal progress in which the
coercive state apparatus would practically disappear. By 1884, Spencer could
pen an essay entitled, “The Coming Slavery.” In 1898, William Graham Sumner,
American Spencerian, free-trader, and gold-standard advocate, looked with
dismay as America started on the road to imperialism and global entanglement in
the Spanish-American War: he titled his response to that war, grimly, “The
Conquest of the United States by Spain.”
Everywhere in Europe there was a reversion to the policies of the
absolutist state, as government bureaucracies expanded. At the same time,
jealous rivalries among the Great Powers led to a frenzied arms race and
sharpened the threat of war. In 1914, a Serb assassin threw a spark onto the
heaped-up animosity and suspicion, and the result was the most destructive war
in history to that point. In 1917, an American president keen to create a New
World Order led his country into the murderous conflict “War is the health of
the state,” warned the radical writer Randolph Bourne. And so it proved to be.
By the time the butchery ended, many believed that liberalism in its classical
sense was dead.
Excerpted from The Rise, Fall, and Renaissance of Classical Liberalism.
Ralph Raico (1936-2016) was an American libertarian historian of
European liberalism. He was formerly a professor of history at Buffalo State
College.
