Category: Free Society

By Richard Ebeling

Originally published on August 14, 2018 for the American Institute for Economic Research

The world has always been an uncertain place, and this is no less true today. After the collapse of communism in the 1990s, there was confidence that democracy had won and the market economy had shown its superiority to government planning. This is no longer the case, with the rise of populism, a rebirth of nationalism, and a reawakened interest in socialism. Many seem to think liberalism has failed again and needs to be replaced.

But what is liberalism, and has it failed? With its August 4, 2018, issue, The Economist magazine is beginning a series of articles that will run over the coming weeks on the continuing relevancy of a variety of liberal thinkers. It prefaces the series by saying that what stands out about liberalism is that it is “pragmatic.” That is, it is a “big tent” political philosophy that can include both Austrian economist F. A. Hayek and John Maynard Keynes, libertarian Robert Nozick and a progressive philosopher such as John Rawls, and older liberal voices such as John Stuart Mill.

Sorting Out the Meaning of Liberalism

Liberalism can emphasize the efficacy of competitive markets, The Economist says, but incorporate the interventionist-welfare state. So what binds all these diverse “liberal” thinkers together, asks The Economist? Liberalism is basically defined in negative terms: first, against any concentration of power that threatens control and domination over the many by a few, whether in the marketplace, in the political arena, or in the media; second, against the “tyranny of the majority,” which would restrain the free thoughts or actions of minorities, including the individual; and, third, lack of confidence in “progress,” the idea that tomorrow can be better than both yesterday and today, which opens the door to demagogues and political opportunists pursuing power by promising to solve people’s problems if they get in control.

The Economist asks liberals not to despair, but to roll up their sleeves and find alternatives to the appeal of nationalism, authoritarianism, and populism, the challenges facing the existing market liberal order.

Liberalism’s Eclipse in the Shadow of Totalitarianism

The question of what liberalism means in the face of collectivist and statist challenges in the world is not new. One of the greatest of these challenges certainly arose in the 1920s and the 1930s, with the rise of communism in Soviet Russia, fascism in Italy, and National Socialism (Nazism) in Germany. All trends at that time seemed to suggest that supporters of these variations on the totalitarian theme were on “the right side of history.”

It appeared that the liberalism of personal freedom, limited government and rule of law, and private property with competitive free markets was in its eclipse. Freedom’s advocates were out-of-step voices from an irrelevant past. By the late 1930s, the intellectual remnants of the classical liberal tradition were attempting to understand both how this turn away from human liberty and fairly limited government had come about, and what their response should be to stem the rising tide of collectivism and to bring about a liberal revival. (See my article “The Danger of Totalitarian Planning, Past and Present.”)

Walter Lippmann’s The Good Society

One of the most notable events in that liberal quest at the time was a conference held in Paris, France, 80 years ago during August 26–30, 1938. It brought together some of the notable proponents of market-oriented liberalism in that era. It had been inspired by the publication in 1937 of Walter Lippmann’s An Inquiry Into the Principles of the Good Society.

Walter Lippmann (1889–1974) was one of the most well-known political and social commentators in the United States, through a long list of books and essays in some of America’s leading journals and magazines of opinion. While his political views had moved in a variety of directions in earlier years, The Good Society was an eloquent and persuasive restatement of the liberal case for a free society in the context of the dangers of political totalitarianism and economic collectivism in its various existing forms.

In addition, he proposed an agenda for reviving the appeal of and communicating the relevancy of the liberal tradition in the face of these threats to human liberty around the world, including the United States. He set aside the laissez-faire tradition of unregulated markets, and in its place called for interventionist policies to tame reckless and antisocial capitalism, and for introducing tempered welfare-statist policies to mitigate the type of human hardship experienced during the Great Depression.

The central idea was to resist collectivist central planning, which Lippmann said, following the arguments of such Austrian economists as Ludwig von Mises and Friedrich A. Hayek, would only bring economic chaos and the destruction of human liberty. Rational economic decision-making and complex social coordination of multitudes of people was only possible through competitive market prices to balance supply and demand and direct enterprises into the manufacture of the goods and services the consuming public desired as expressed in their demands for products, while producing them in the most cost-efficient manner.    

Totalitarian Collectivism Meant the End to Liberty

Wide or total control of the economic affairs of any society by its government threatened the loss of liberty in virtually every corner of human life. When government commanded and controlled all economic activity, as was essential in a centrally planned society, every individual’s fate was in the hands of that government: where and at what you worked; access to everyday goods and services dependent upon government production decisions, and how and to whom to allocate them; political determination under the plan as to what books and newspapers to print, and what movies to produce and artistic performances to support and allow to be put on; where, when, and for what purpose to be allowed to travel domestically or abroad; and what forms of recreation and entertainment to be supplied to members of the collectivist society.

All of these things and almost everything else a human being would want to live and be happy depended upon what those in political power deemed socially useful and necessary as reflected in the content of the central plan. The collectivist economy was the ultimate monopoly, with no escape from its tight and terrible grip. The government was master; the individual was the servant and even the slave. The comprehensively planned society was a prison society with the citizens as the inmates.

Nor was any of this an exaggeration when the centrally planned society in practice was observed every day in Soviet Russia, Nazi Germany, and fascist Italy. This was the reality that horrified these market-oriented liberals of the 1930s.

The Walter Lippmann Colloquium

So in those final days of August 1938, a group of friends of freedom gathered in Paris to discuss the failures and future of the open and free liberal society in the shadow of totalitarianism over much of Europe east of the Rhine.  The French liberal economist and social philosopher Louis Rougier organized the conference. (On Louis Rougier’s contributions to liberal political and economic thought, see my article “The Political and Economic Mystiques of State Power.”)

Among the attendees were Raymond Aron, Louis Baudin, John B. Condliffe, Friedrich Hayek, Michael Heilperin, Walter Lippmann, Etienne Mantoux, Ludwig von Mises, Michael Polanyi, Stefan Possony, Wilhelm Röpke, Jacque Rueff, Alexander Rüstow, and Alfred Schutz.  While some of their names may no longer be well-known today, in the 1930s they were among the leading advocates of market-oriented liberalism in Europe.

The proceedings of their discussions and debates at the various sessions of the conference were published later in the autumn of 1938 in French under the title Colloquium Walter Lippmann. The conference has often been referred to as an intellectual watershed that helped inspire the post–World War II revival of political and economic liberalism as seen in the formation of the Mont Pelerin Society in April 1947 under the leadership of Friedrich A. Hayek.

But only now, 80 years after these political and economic liberals met, have the proceedings in English appeared. In fact, two translations of the conference, translated and edited by different scholars, have now been published under the title Walter Lippmann Colloquium. (A notable difference is that one sells for $119 and the other for $12.)

The sessions asked: Was the decline of liberalism due to problems within the philosophy itself? How did the decline in liberalism relate to the war economy, to economic nationalism, and to the “social question” of welfare-state safety nets? What were the psychological, sociological, political, and ideological causes of liberalism’s eclipse? What should a new agenda for liberalism be? And finally, what were the political and practical problems facing a revival of liberalism?

Monopoly: Caused by Markets or Government?

On the first question, as to whether liberalism’s decline was due to factors relating to liberalism’s own response to economic developments, there was a wide consensus that modern industrial society had seen a tendency for a concentration of manufacturing and economic control that was unconducive to a more open and competitive economy.

But what was the cause of the concentration? Here opinions differed. Some attendees considered this was often due to “natural” forces at work not harmful to economic freedom; others reasoned that this called for government intervention to limit it; and still others saw any tendency for monopolization or cartelization as being due to government interventions that fostered it or even forced businesses in this direction.

In this instance, Ludwig von Mises was among those most vocal in finding the hand of government intervention in any such tendencies, the answer for which was getting government out of this intervening business and letting markets operate freely, including in the international arena with freedom of trade.

The War Economy: Markets or Planning?

In everyone’s mind at the conference was the coming of a new world war started by Nazi Germany. This new war was not a matter of if, but only of when. Did a war economy with the needed economic mobilization mean the end to a liberal market economy? Interestingly, many of the discussants argued, it need not. Central planning for war would end economic freedom and weaken the efficiency of fighting a war. But if governments raised the needed funds through taxation and borrowing, but primarily left the reallocation of resources and manpower for the war effort to market prices and profit opportunities, a successful war could be fought against the totalitarian nations and preserve the vibrancy of private sector incentives and productivity.

Economic Nationalism: Cultural Tendency or Political Opportunism?

The rise of economic nationalism confused the participants. The harmful consequences of it — trade barriers, foreign exchange controls, subsidies to stimulate domestic production of goods that could be bought less expensively from abroad, sacrifices of personal freedom and standards of living — were all agreed upon. But why it emerged was controversial. Was it fears about foreign influences, was it the presumed negative effects of foreign competition on domestic industry and employment, or was it misguided rationales for domestic protectionism and interventionism due to wrongheaded thinking and special interest pandering?  The session ended with no answer, but only agreement on economic nationalism’s harmful effects.

Social Problems and the Interventionist State

The experience of the Great Depression had already left its mark on people’s thinking by the end of the 1930s. Two issues arose in this session’s discussion: the instability the business cycle imposed on people’s lives and livelihood; and whether even a liberal society needs to ensure minimal standards of living for all under some forms of social welfare programs.

Here the fear was that “the masses” would no longer tolerate the insecurity of unemployment and uncertain income that a relatively laissez-faire economy threatened them with. Ludwig von Mises and the French economists Jacques Rueff and Louis Baudin, especially, emphasized that any such instabilities and uncertainty were due to monetary mismanagement that set in motion the business cycle, and various government interventions that prevented or delayed readjustment of prices and wages needed for re-coordinating production and employment in the post-boom period.

But other participants, including the noted international trade economist John B. Condliffe and Walter Lippmann, were more concerned that these problems were inherent in the market and believed some activist government policies were needed to alleviate the hardships of economy-wide fluctuations. There was also a general consensus that in a modern liberal society, a minimal standard of living could and should be ensured to all. Friedrich Hayek’s concern was that any such government-guaranteed income floor should be less than could be earned from gainful employment, so as not to create perverse incentives concerning work versus welfare dependency.

The Free Market Society vs. Traditional Community

One of the most heated sessions concerned the psychological, sociological, political, and ideological factors behind the decline in the traditional (classical) liberalism. Alexander Rüstow presented a detailed argument that people are more than economic animals; they are social and cultural beings who need more than material comfort, which is all that classical liberalism offered in the 19th century.

Rüstow argued that people need cultural roots as well as meaning derived from communities and hierarchies providing order and security. Classical liberalism challenged and undermined this all with the development of urban industrialized life. The balance and harmony of rural small communities that cradled people and provided orientation and meaning had been undermined.

For Rüstow, this was a primary reason for the appeal of German National Socialism, with its harking back to and offering of “blood and soil,” a rootedness in place for the disoriented and socially detached individual under laissez-faire capitalism. Either liberalism would find a substitute for what Nazism offered to frightened proletarians through interventionist checks on liberalism’s secular materialism, or totalitarianism would be the future for Europe.

Michael Polanyi and Ludwig von Mises challenged Rüstow in this interpretation. Polanyi argued that the populist and totalitarian movements that were destroying liberalism and its humanistic values were due to ignorance of economic principles about how markets actually worked, which created the false impression that capitalism was causing a societal decay.

What Nazism represented, Polanyi said, was a repudiation of reason and the surrender of the mind to ideas inculcated with “barbaric violence”: “We are living in a state of mental derangement.”

The Invisible Hand, Economic Freedom, and Democracy

The economic ignorance emerged from the fact that the invisible hand guiding the market is, well, invisible, Polanyi stated. Individuals only see their own actions in market surroundings of which they are a part but about which they have little understanding. They lack a fuller appreciation of their connectedness and role in the society and the division of labor in the market order. This, Polanyi reasoned, highlighted the essential importance of economic education for people to have a greater sense that life in the market system does have wider meaning for individuals and their place in society, and for undermining the appeal of totalitarianism’s call for collectivist community. Said Polanyi:

The totalitarians have given their people economic conscience by destroying their liberty. Liberalism should ensure economic conscience by enlightenment. The people must understand the functioning of economic life [in the market economy]. Economic education would create a popular force.… But above all, economic education would dispel the cloud that at present is hiding the ‘invisible hand’ and would open to the eyes of the people the great cooperation represented by the life of the market, where they participate without any moral conscience of the role they play there.

Mises responded to Rüstow’s analysis by insisting that it was necessary to dispel the myth of an idyllic and happy life in the pre-industrial countryside. Life was harsh, work was from sunrise to sunset in all weather, and poverty and potential famine confronted almost everyone:

One cannot see anything other than a simple romantic prejudice in the claim that men had more joy in their work in the pre-capitalist era than do the workers in the age of modern industry. I believe that Mr. Rüstow himself gives in to the romantic spirit when he claims that the peasant is more satisfied than the [industrial] worker. It is an undeniable fact that in the last one hundred years millions of men have abandoned agricultural occupations for industrial work, which certainly cannot be considered a proof of the greater satisfaction that agricultural activity has given them.

In his reply, Rüstow said:

Let me add that when Mr. von Hayek doubts that the scale of life values defended by me is reconcilable with the position of traditional liberalism, he is certainly correct… Consequently we look for the way out in a fundamental renewal of liberalism” among the lines of greater government interventionism proposed by Walter Lippmann in his, The Good Society. After all, if those in the communist, fascist and Nazi camps “haven’t listened to Moses and the prophets – Adam Smith and Ricardo – how will they believe Mr. von Mises”?

Clearly, discourse was heated at times in these sessions, peppered with bitter sarcasm.

In this particular session, there also arose the question of the meaning and place of democracy in a free, liberal society. Louis Rougier insisted on the distinction between, on the one hand, “liberal democracy founded on the limitation of the powers of the State, respect for the rights of the individual and the citizen, subordination of legislative and executive power to a higher judicial authority,” just as encapsulated in the principles of the American Declaration of Independence, and, on the other hand, “socialized democracy, fatally bound to result in demagoguery and, through demagoguery to the totalitarian state.… The masses.… replace the problem of the production of wealth by a demand for its immediate redistribution.… The best purveyors of totalitarian states are the socialist demagogues.”

A Neoliberal Agenda: Markets Plus the Interventionist-Welfare State

Finally, the issue arose of what any new liberal agenda should incorporate. This was summarized by Walter Lippmann, who, while emphasizing again the essential role of the market-price mechanism, said that added to the maintenance of competitive markets and national defense should be “social insurance programs (Social Security), social services (healthcare and related programs), wider government financial support for public education, and government-funded and government-partnered scientific research. Plus, there needed to be greater government regulation of banking and finance and prevention of the concentration of industries in monopolists’ hands.

Most of the participants whose comments are recorded in this session said they “completely support without reservation [Lippmann’s] economic declaration”: “Mr. Lippmann’s plan allows us to take into account what is arguable and what may correspond to practical necessities.” “It seems that we are holding to the central point: the intervention of the State in social life.… A liberal system with State intervention … is possible … if that intervention seems absolutely necessary.” “I congratulate Mr. Lippmann on his agenda. His prescriptions are most apt.”

The Walter Lippmann Colloquium and Modern Liberalism

What, then, was the upshot of the Walter Lippmann Colloquium, and how does it relate to the controversies of today and the meaning of liberalism in our own time? What is clear is that virtually all of the participants considered a private-property-based competitive market economy the essence and heart of a functioning liberal social order. Free market capitalism secured both individual liberty and wide and growing economic prosperity for more and more members of society.

But here near unanimity broke down. There were confusion and differences of opinion as to why political and economic liberalism was in eclipse. Was its cause in deeper psychological and cultural needs for collectivist community, or was it due to economic ignorance and misunderstanding? Were market insecurities inherent under capitalism, or were they primarily due to government interventions of various sorts that prevented markets from functioning more smoothly and predictably? Were various redistributive programs and regulatory interventions compatible with a free market competitive system, or were they threats to the longer-run sustainability of a financially sound and economically stable and dynamic free society?

In a real sense, the Walter Lippmann Colloquium represents the prologue to the entire post–World War II political-economic debate over what makes up the policies and institutions of a free and liberal society. There were the defenders of the traditional liberalism of individual liberty, including those advocating widely open and unregulated free markets, with narrowly limited government not responsible for social welfare. Ludwig von Mises was the most pronounced among the latter advocates, though other participants such as Jacques Rueff seemed as sympathetic.

But it was equally clear that for most of these defenders of market-based liberalism, there was a general agreement that classical liberalism needed to be reframed with a new agenda, one that was called during the colloquium “Neo-Liberalism.”

While it is often considered today, especially by many on the political left, that neoliberalism was an unapologetic attempt to create the case for laissez-faire markets, it was actually just the opposite. The colloquium participants, with the exception of a few like Ludwig von Mises, were all searching for a “third way,” as Wilhelm Röpke later called it, a way to combine the competitive market economy with wide elements of the interventionist-welfare state as the alternative to the attractions of and dangers from totalitarian collectivism. (See my article “Neo-Liberalism: From Laissez-Faire to the Interventionist State.”)

The “crisis of liberalism” pointed to today — for instance, in the series of articles in The Economist magazine — is not the crisis of the case for the efficacy of classical liberalism and laissez-faire capitalism. Today’s “liberal” crisis is about the political corruptions and abuses, the fiscal irresponsibility of interventionist and welfare-statist spending, and the rigidities and restrictions on markets imposed by a prevailing neoliberalism that has ended up combining elements of both the politically active left and right. That is the system under which we live today.

Therefore, the real debate that needs to be undertaken is not between what is called “liberalism” in The Economist magazine and many other places, and its socialist, nationalist, and populist competitors. The vital debate needs to be over why neoliberalism cannot do otherwise than tend to create those problems of corruption and abuse, fiscal irresponsibilities, and rigidities and restrictions because they are made likely, if not inevitable, once politics is introduced into the free market system through regulatory, interventionist, and redistributive policies.

We are nearly back full circle to the types of general issues raised by those participants at the Walter Lippmann Colloquium. We need a restatement and defense of the nature and workings and desirability of a truly laissez-faire society, and the dangers of continuing with a politicized and unstable economy under interventionist-welfare statism, which might slide into an even heavier-handed collectivist government system of control and command.

By Richard Ebeling

Originally published on August 10, 2020 for the American Institute for Economic Research

The political atmosphere in the United States today is one of the most divisive and polarized in a very long time. In my lifetime, the only period with which I can compare it is the 1960s and early 1970s during the Vietnam War and the Civil Rights Movement, when there were demonstrations on the streets of many cities throughout the country and episodes of destructive violence, along with calls for radical change. One difference between then and now is the increasing degree nowadays of self-censorship concerning politics and social issues. 

Recently, the Cato Institute (July 22, 2020) released the results of a detailed survey on how people across the political spectrum are more and more fearful of sharing their political beliefs with others. Whether the respondents labelled themselves as “strongly liberal” or “liberal” or “moderate” or “conservative” or “strongly conservative,” noticeable numbers of them replied that they withheld telling about their political views for fear of “offending” someone and getting into some type of trouble, and therefore practicing forms of self-censorship.

Of those categorizing themselves as “strongly liberal,” which in the American political lexicon really means someone who views themselves as or sympathetic to “progressivism” or “democratic” socialism, 42 percent said they self-censor their political ideas in various public arenas; 64 percent of political “moderates” said they censor themselves; while 77 percent of those considering themselves as “conservatives” or “strong conservatives” said they feared to publicly express their political opinions for fear of negative consequences. 

At the same time, the Cato Institute reported that among those classified as “strongly liberal,” 50 percent said that they would support the firing of anyone who was a Trump supporter, while 36 percent of those labelling themselves as “strongly conservative” would be happy to see Biden supporters let go from their job. Both of these groups clearly believe in punishing those who hold political views and support candidates they disagree with, with the weapon of taking away their means of earning a livelihood. 

The survey says that upwards of 60 percent of Republicans, especially those with higher educations, are especially fearful of losing their jobs because of their politics, while about 25 percent of Democrats have these concerns. These concerns were expressed in all working age groups, though not evenly among the demographic groupings. 

Common Courtesy Self-Censorship as a Decent Person

Of course, all of us practice forms of self-censorship all the time in our verbal and written interactions with others. We usually avoid intentionally saying something rude, crude and offensive in our exchanges with others. It’s part of good manners, polite behavior, and common courtesy. While we all have, unfortunately, breached these at various times, we all know that it is “just not the right thing” to say or do something that will offend, hurt, shame or humiliate someone. 

When I was a small boy, one would often hear, “Sticks and stones can break my bones, but words can never harm me.” This is, of course, true in the literal sense. The nasty and cruel speaker who goes out of his way to belittle or embarrass or psychologically abuse someone else shows more about himself than the person to whom he is addressing his remarks. It used to be said that such a person was “vulgar,” or showing that his “mind is in the gutter,” or demonstrating that he has “a filthy mouth” and had clearly grown up without being taught “good manners.”  

And, so, the person who was the target of such verbal or written treatment was expected to “rise above” those who would resort to such means and methods of criticizing or trying to ill-treat another. “You don’t sink to that level and you remember its source.” “It’s not worth allowing it to get under your skin.” These were common rebuttals to the words of the boorish insulter.  

It became a laughable joke at one point if someone said, “Your mother wears army boots,” meaning that she might not have the fashion sense or the financial means to buy a proper pair of shoes, as a put down about “where you came from.” However, we all know that words can and do hurt. It is hard not to take it personally when it touches something important to ourselves, including and especially our own sense of self-worth, our deepest beliefs and values, or those who we love and care about. 

It is interesting and amusing to peruse books written in the 19^th and early 20^th centuries for the edification of young adults on the development and cultivating of good manners. A proper conduct and choice of words was always considered the mark of a polite and ethical person. For instance, in one of the more widely used such volumes in America, first published in 1844, Gentle Manners, A Guide to Good Morals, the young were told:

“If we should be abused by anyone, our courage should prompt us to act the manly part, and prefer to be called cowardly, rather than to disgrace ourselves by a quarrel. We must resign ourselves to this course, to be thoroughly civil and honorable. 

“This discipline will perfect the habit of self-government, and render us strong under trials, and master of our nervous energies and passions. We will in the turmoil of life, present such a character; nor will madness or uncivil language ruffle our serene, peaceful deportment. Such a spirit will be sure to be seen and appreciated, even by those who, for want of reflection, have not at first rewarded and honored it. If we are cultivating true civility, we shall never be meanly inquisitive respecting the concerns of others. This honorable spirit will ever prompt us to attend strictly to our own business . . .

“Avoid the use of vulgar language, and slang phrases. Such manner of speech is the distinguishing mark of a bad education. We should study to speak and to write in the best language we can command, that we may not be forced to blush at our own crudeness, when we are in company.” (pp. 22 & 28)

Slipping Benchmarks Did Enable Taboo Subjects to be Discussed

Of course, such rules of good manners and polite language have rarely ever been fully followed. But it was considered the benchmark on the basis of which one should judge one’s own words and deeds as well as those of others. Insulting and denigrating language was used widely enough. But it was not sanctioned in “polite company” and in the general community, and was supposed to be a reproach against oneself. 

In the midst of those earlier crises of the 1960s, decorum in language began to fall by the wayside, symbolized by the “Free Speech” movement centered on the Berkeley campus of the University of California, in which all words, phrases, and verbal depictions of persons, events, and things were equally legitimate no matter how offense or disturbing to others. The response was “If you are offended by anything I say or do, well, man, that’s ‘your hang-up,’ not mine.” 

Freedom of the mind and action, while offensive to some and even too many at the time, did enable “forbidden” subjects to be discussed and expressed openly, including human sexuality, race relations, and personal desires. Leonard E. Read, founder and longtime first president of the Foundation for Economic Education (FEE) was certainly not considered a cultural revolutionary, but he captured some of the better aspects of “anything goes” with the title of his 1964 volume, Anything That’s Peaceful. 

A large majority of Americans, in principle, have considered it “fair game” in a free society for a near absolute freedom of speech and the press when it concerns political, economic, and many if not all social and religious matters. How else could a free people be self-governing over their own life and in their participation in the political processes of the country if there cannot be a free exchange of ideas among the citizenry?

Were there attempts and successes in suppressing forms and topics of speech in American history? Yes. But they always went against the grain of the founding principles of the country and the idea of personal liberty in the Bill of Rights, so sooner or later such stumbling blocks to the free exchange of practically any idea was removed from the arena of freedom of speech. Unlike far too many other parts of the world in the past and in the present, American custom, culture and the courts have persistently tended to secure the right of free people to freely speak their minds, even when the words and the ideas expressed by them offered degrees of offense to some or even many.  

New Tyrants of the Mind Wanting to Banish Certain Ideas

In today’s America, however, a new movement has arisen that is working hard to discard and delegitimize such freedom of speech. This movement now increasingly dominates the American “left” made up of those who often label themselves as “progressives” or “democratic” socialists, or simply “liberals” in the American sense of the term. It is not simply their call for a Green New Deal that would impose a system of government central planning in the name of fighting “climate change” and impose tribalist conceptions of race, gender and “social” justice on the country. 

The problem is that if their vision were to prevail, no corner of life would be left free from the intrusive and paternalistic hands of those in political authority determining how we all shall live, work, interact, speak, and write. We are told by the cancel culture and identity politics warriors that our employments and incomes must be redistributed, our minds just be washed clean of racist and sexist thoughts (as the “politically correct” define them), and our behavior will have to be monitored, surveilled and corrected to assure the needed homogeneity in our thinking and actions so the new notions of human diversity through ideological conformity may produce their desired results of a collectivist future to come. 

In a free society, virtually all policy issues are open for debate and are fair game in the arena of deliberation and disagreement. But there is more to their agenda. What they are propagandizing and pushing for is a new totalitarian straitjacket that already confines many thoughts, words, and deeds that are part of the intellectual life of America’s colleges and universities; it increasingly fills the curriculum of K-12 public (government-mandated) education; and it permeates much of the news and social media, while also dominating the world of entertainment. 

These would-be tyrants of the mind insist that the use of certain words or particular phrases, the espousal of entire sets of ideas, and the defense of certain institutions or meanings of liberty are to be considered outside of and banished from political and social debate. To even raise them, support them, or argue for the reasonableness of discussing them, immediately brands you as a “racist,” a “sexist,” an “enemy of the people,” or a “fascist.” Since any idea or person labelled as such is unfit for consideration, since they are inherently “hurtful” and “hateful,” they must be banned under any and all circumstances. The very use of the word, the idea, or the person’s name must be erased from society. (See my articles, “Tyrants of the Mind and the New Collectivism” and “The New Totalitarians” and “Save America from Cancel Culture” and “Systemic Racism Theory is the New Political Tribalism”.)

The Long Liberal Campaign for Freedom of the Mind

It must be recalled again and again that such a view is what most friends of liberty rejected and opposed in the 1700s and 1800s, when for centuries speech was oppressed by kings and churches that possessed the political power to punish those who attempted to speak their minds against those in authority. Heretics were burned at the stake, blasphemers had their tongues cut out, and enemies of absolute monarchies could be tortured and imprisoned in wretched conditions for the remainder of their lives. 

The classical liberals of the 18^th and 19^th centuries fought to free the human mind from such governmental and social restraints and punishments. For instance, the French liberal, Benjamin Constant (1767-1830) in, Principles of Politics Applicable to All Governments (1815):

“To confer the management of Enlightenment on government, one must suppose either that men cannot from their own resources arrive at truths the knowledge of which is salutary to them, or that there are certain truths whose discovery would be dangerous and that consequently there are certain errors which it is useful to maintain . . .

“Very well someone will say, since error is always fatal, government must keep men from it and lead them to truth. But what means has government for finding it? But . . . those who govern are as prone to error as the governed . . . The natural road to truth is via reasoning, comparison, analysis . . . The abnegation of our intelligence will have rendered us wretchedly passive creatures. Our mental resilience will be broken . . . 

“Government mistakes are a serious nuisance in three ways. First of all, they create positive ill just by their wrongness in principle. In the second place, however, men, being forced to resign themselves to them, adjust their interests and behavior to them. Then, when the error is recognized, it is almost as dangerous to destroy it as to let it continue . . . Finally, when the erroneous policy collapses, new troubles result from the upset of people’s calculations and the slighting of their practices . . .

“The right I guard most jealously, said some philosopher or other, is to be wrong. He spoke truly. If men let governments take this right away, they will no longer have any individual freedom, and this sacrifice will not protect them from mistakes, since government will merely substitute its own for those of individuals.” (pp. 55-56 & 301-302)

John Stuart Mill and the Tyranny of the Few or the Many

The culmination of the liberal idea of a freedom of the human mind to think, reason, speak, write and debate in the 19^th century was, of course, in John Stuart Mill’s (1806-1873) Essay on Liberty (1859). Mill defended freedom of thought on several grounds. First, we should accept the fact that none of us can claim an infallibility of knowledge or a final and definite insight into ultimate truth. Thus, we should value and defend liberty of thought and argument because a dissenter or a critic of conventional and generally accepted views may offer reasons for disagreeing that correct our own errors of knowledge and mistakes in judgment about the truth of things. 

Second, sometimes the truth about things exists as half-truths held by different people, and through controversy the truth in the parts can be made into a great unified truth of the whole. 

And, third, even if we are really certain that we have the truth and a correct understanding of things, unless we are open to challenging and rethinking that which we take for granted, our ideas and beliefs can easily become atrophied dogmas. The people in each generation must be taught to think and reason for themselves. If ideas and beliefs are to remain living and meaningful, people must arrive at their own conclusions through reflection and thought. 

This, then, brought Mill to the issue of what can stifle or prevent an individual from exercising his personal freedom in the manner he wants. Mill argued that there were, historically, three forms of tyranny that have endangered liberty through the ages. 

The oldest was the tyranny of the one or the few over the many. A single dictator or an oligarchy imposed prohibitions on or commands for certain forms of behavior over the majority of the society. The spontaneous individualism and individuality of each person is denied. The one or the few determine how others may live and what they might say and do and, therefore, in what forms their human potential would be allowed to develop. 

The newer form of tyranny, Mill said, was the rule of the many over the one. The revolt against the tyranny of the one or the few resulted in the growing idea that the people should rule themselves. And since the people, surely, could not tyrannize themselves, the unrestrained will of the people became the ideal of those who advocated unlimited democracy. 

But in practice this inevitably became the rule of the majority over the minority. Individual freedom was denied purely on the basis of numbers; that is, on the basis of which group or coalition of groups formed that larger number of people dominating the political process. Their ideas, ideals, and values were to be imposed on all those representing less than 50 percent of the electorate. 

But whether it was the tyranny of the few over the many or the many over the few, the source of their tyrannical power was the control and use of political coercion. State power is what enabled some to deny liberty to others. The threat or the use of force by government is what enabled freedom to be taken away from individuals who believed in ideas, ideals, or values different from those holding the reins of political power.

The Tyranny of Custom and Tradition

Mill also said that there was a third source of tyranny over the individual in society, and this was the tyranny of custom and tradition. He argued: 

“The despotism of custom is everywhere the standing hindrance to human advancement, being in unceasing antagonism to that disposition to aim at something better than the customary, which is called, according to circumstances, the spirit of liberty, or that of progress or improvement…. Custom is there, in all things, the final appeal; justice and right mean conformity to custom…. All deviations … come to be considered impious, immoral, even monstrous and contrary to nature.” 

Mill argued with great passion that societal customs and traditions could, indeed, very often be the worst tyranny of all. They were binding rules on conduct and belief that owed their force not to coercion but to their being the shared ideas of the right and proper held by the vast majority in the society. They represent what the ancient Greek Pericles referred to as “that code which, although unwritten, yet cannot be broken without acknowledged disgrace.” 

Customs and traditions weigh down on the individual, they stifle his sense and desire to be different, to experiment with the new, to creatively design ways of doing things that have not been tried before, and to break out of the confinement of conformity. Custom and tradition can be the straitjacket that restricts a person’s cry for his peaceful and nonviolent individuality. 

But while customs and traditions may hold such power over men, because of their fear of disgrace and ostracism by family, friends, and neighbors, they are still not coercion. No matter how strong a hold custom and tradition may have over men’s minds and therefore their conduct in society, an individual can still choose to go his own way and be the eccentric and outcast, if he is willing to pay the price in terms of the disapproval of others in his community. Political force is not the weapon that ensures obedience. The power of custom and tradition comes from social and psychological pressure and the human desire to avoid being shunned by those whose association is wanted. 

The New Conformity of Race and Gender Consciousness

What our new totalitarians of the mind have been doing – successfully – is to use their vocal and physical “activism” to impose social pressures on education, the workplace, and the general institutions of civil society to create a uniformity of thought and action. Social intimidations press the individual to keep his dissenting views to himself, to be shamed and threatened in the various arenas of social life to confess his thought and action “crimes” due to his maleness, or the whiteness of his skin, or the “invisible privileges” he receives at the expense of others that he has not deserved and which he must beg to be taken away. 

This is matched by a social indoctrination that if you are a woman you must be a victim, if you are a “person of color” you are inescapably oppressed, if you are in a lower socio-economic category you are being exploited by the white, male, wealthy “one-percent.” It does not matter how you think about yourself, or manage and direct your own life, you are the bearer of unjust burdens that a new political order must lift from your shoulders because you are not an individual but a member of a tribal group. An enlightened government will give you what you really deserve, whether you want it or not. 

Anyone who has had to sit through and participate in one of those “consciousness raising” sessions in which you are told that you are the beneficiary or victim of “systemic racism,” gender bias, or social inequity, knows the atmosphere of unspoken self-censorship. To disagree or speak out, while most others may remain silent, makes you the protruding nail to be hammered down. 

You are implicitly “noticed” for “denying” the racism or sexism that you are either too misguided to really understand, or which you wish to “defend” to preserve the “privileges” you want at others’ expense. You are the “problem” rather than the “solution.” And problems, at some point, need to be gotten rid of. 

Right now, it is still predominantly the force of social pressures that the cancel culture and identity politics warriors are successfully using in the arenas of education, the arts and entertainment, the media, and industry. But the next logical step will be to move from social pressures to the use of the full political power of the government. 

At that point, self-censorship will be transformed into politically enforced censorship. Our mouths will be shut and our minds will be constrained not only by the psychological fears of social intimidation to conform, like in Mill’s third tyranny of custom and tradition. No, then it will shift to his other two forms of tyranny over the mind, the tyrannies of the many over the few and then the few over the many. At that point, darkness descends, and the free society comes to a close.

By Richard Ebeling

Originally published on December 5, 2022 for The Future of Freedom Foundation

On September 16, 1939, barely more than two weeks after the beginning of the Second World War in Europe with the German invasion of Poland on September 1, the “Austrian”-oriented British economist Lionel Robbins finished the preface to his short book, The Economic Causes of War. The five chapters making up the 125-page volume had originally been delivered as a series of lectures at the Graduate Institute of International Studies in Geneva, Switzerland, in the spring of 1939.

With a new world war now threatening to once again place political and military barriers in the way of relatively easy travel for the exchange of goods and ideas across the European continent, Robbins wistfully paid homage to that institution and what he considered its significance in the interwar period:

How much of all that was most stimulating and inspiring in the period between the two wars is typified in their lovely college by the lake. Long may it flourish, an oasis of sanity in a mad world, to preserve and advance the great principles of international citizenship for which it conspicuously stands. (Robbins, 1939, p. 9)

In the face of the rising tide of Italian fascism and German national socialism (Nazism) in the Europe of the 1920s and 1930s, (classical) liberal refugee scholars escaping from Benito Mussolini’s and Adolph Hitler’s totalitarian tyrannies searched for any safe place where their lives would not be in danger and they could continue their intellectual pursuits of the ideals of political, economic, and social liberty. The Graduate Institute of International Studies in Geneva, Switzerland, became such a refuge for a number of such individuals, an oasis of liberal sanity in an increasingly totalitarian Europe.

The Graduate Institute’s Purpose and Mission

Yet, insufficient attention has been paid, in my opinion, to the significance of the Graduate Institute in the history of liberal ideas in the first half of the twentieth century. The classical liberal economist and political scientist William E. Rappard (1883–1958) and the economic historian Paul Mantoux (1877–1956) founded the institute in 1927. Its mission was to offer a center for scholarly research into the interrelated problems of international politics, economics, and law and offer an advanced education to a cosmopolitan selection of students interested in the public affairs of the world in which they would be living.

During the decade of the 1930s, the Graduate Institute, especially under Rappard’s daily administrative direction, brought together a fairly unique faculty. It was international in makeup, including both Europeans and Americans. Some of the most prominent members, particularly as the decade progressed, were refugee intellectuals from countries in Central and Eastern Europe escaping from or threatened by Italian fascism and German Nazism.

What the Graduate Institute ended up creating during the period was that “oasis of sanity,” as Robbins called it, in a Europe that seemed to be falling more and more under the grip of totalitarianism. In the 1930s, European liberals were shocked, horrified, and fearful of the rise of totalitarian collectivism. Understanding this is, in my view, essential for appreciating the significance of the institute and those affiliated with it at that time.

The Liberal World Before the First World War

It needs to be recalled how very much the First World War had been a hurricane-like storm that seemed to shatter the liberal institutional structures and order of the nineteenth century. Nineteenth-century liberalism had ended human slavery in most of the world; it had widened democratic government through expanding voter franchises; it had become more inclusive in extending civil liberties to religious and other minorities; it had abolished many if not most of the earlier mercantilist restrictions on domestic and foreign freedom of trade and occupation; it had attempted to limit the human costs of international conflicts through agreements concerning the “rules of war,” the treatment of prisoners of war, and respect for the life and property of noncombatants in occupied territories during times of war; and it had cultivated the idea of arbitration of international disputes in place of the taking up of arms.

The world was becoming an increasingly global community of commerce, culture, and cooperative market competition. Standards of living, especially in parts of Europe and North America, had increased significantly for a growing number of people, and the same process was also, slowly but surely, happening in other parts of the world. The quality of life in terms of longevity, health, and material comfort was improving, seemingly on a day-by-day basis.

Equality of rights before the law, even when not fully incorporating all in society, was considered the ideal and the norm that was expected to serve as the benchmark to judge all future grievances and improvements. Of course, the realities of these ideals were far from being completely practiced even in the most enlightened and advanced nations of the “civilized world.” Discrimination, prejudice, and bigotry against various peoples and minorities abounded. Subject peoples in the far-flung empires of the Western “great powers” too frequently experienced arrogance and cruelties at the hands of their administrative representatives and European colonists. It was for this reason that the British laissez-faire liberal Herbert Spencer (1820–1903) acidly summarized the course of empire when rationalized as a means of bringing the Christian gospel to the heathen: “The policy is simple and uniform — bibles first, and then bombshells.”

But at the same time, it would be a misplaced exaggeration when pointing out these contradictions, inconsistencies, and hypocrisies to then conclude that the stated values and beliefs were all a sham, a cover for baser and less praiseworthy motives in both domestic and global affairs. Ideas do have consequences, and these liberal ideas of personal freedom, representative government, impartial rule of law, freedom of association, and market-based voluntary exchange required, indeed, compelled those who espoused them to adjust their practices and policies as the years went by.

The Postwar, Antiliberal Counter-Revolution

Then came the First World War and the rising European tyrannies in the postwar period that seemed to classical liberals to be a cataclysm of ideological, political, and economic destruction threatening the end to all that liberalism had achieved in the earlier century.

There was the victory of Lenin and the Bolsheviks in Russia following the 1917 revolution and a three-year bloody civil war, which by the end of the 1920s became Stalin’s dictatorship, with its forced collectivization of the land that resulting in millions starving to death in the name of “building socialism”; there was the rise of Italian fascism in 1922 with Mussolini’s “march on Rome,” with Ill Duce’s coining of the term “totalitarianism” that was meant to capture the new collectivist vision of the individual as nothing and the state as everything; and then there was the coming to power of Hitler’s national socialism in Germany in 1933, with its swift removal of Weimar democracy and the imposition of a brutal race-based tyranny enforced by Nazi street thugs and the building of concentration camps.

Said the internationally famous Italian liberal philosopher Benedetto Croce (1866–1952) in 1932:

We remember the old [prewar] Europe with its riches, its flourishing trade, its abundance of goods, its ease of life, its bold sense of security; we see today the new Europe – impoverished, discouraged, crisscrossed with high tariff walls, each nation occupied with its own affairs, too distraught to pay heed to the things of the spirit and tormented by the fear of worse to come…. Impatience with free institutions, has led to open dictatorships, and, where dictatorships do not exist, to the desire for them. Liberty, which before the war was a faith, or at least a routine acceptance, has now departed from the hearts of men even if it survives in certain institutions.

Guglielmo Ferrero, Italian Historian of Liberty

The Graduate Institute was to serve, in its modest way, as an intellectual defense against these collectivist and totalitarian trends. The first internationally noteworthy scholar to find refuge and residence at the institute in Geneva was the Italian historian Guglielmo Ferrero (1971–1942). Almost forgotten today, in the first half of the twentieth century, Ferrero was one of the most well-known and respected historians in both Europe and America. He had published a widely regarded five-volume history of The Greatness and Decline of Rome (1909), as well as works on The Ruin of Ancient Civilization and the Triumph of Christianity (1921) and a comparison of Ancient Rome and Modern America (1914).

Ferrero was also a strongly antiwar liberal, having penned a work on Militarism (1902) devoted to this theme. In the immediate aftermath of the First World War, he pondered The Problems of Peace, from the Holy Alliance to the League of Nations (1919). Its theme was that Europe’s conflicts and instabilities had their roots in the search for political legitimacy and stability since the demise of belief in monarchy, symbolized by the beheading of Louis the XVI during the French Revolution; in its place had arisen competing political alternatives (despotism, democracy, nationalism, and socialism), with the rivalries between them as bases for political legitimacy helping plant the seeds that culminated in the Great War of 1914–1918.

Strongly anti-fascist, Ferrero had been placed under house arrest by Mussolini’s government and was prohibited from teaching or lecturing in Italy. In 1930, he was given permission to leave for Switzerland to take up a chair in history at the Graduate Institute, which he held until his death in 1942. In that tranquil environment, he wrote a series of books on understanding the antiliberal ideas of the time in their historical context, including Peace and War (1933); The Reconstruction of Europe: Talleyrand and the Congress of Vienna, 1814–1815 (1941); The Principles of Power: Great Political Crises of History (1942); and his posthumously published lectures from his time at the Graduate Institute on, The Two French Revolutions, 1789–1796 (1968).

An underlying theme in these works was the growing threats of total war with unimaginably destructive weapons due to the unbalancing of the delicate relationship between increasing human liberty and traditional institutional order that somehow prevailed in various ways in the nineteenth century as conservatism grudging gave way under the pressures of liberalism.

Ferrero captured part of the idea behind the Graduate Institute. He offered the sweep of history for understanding man’s long struggle for social order, economic liberty, and political legitimacy. He linked the intellectual currents of the liberal nineteenth century with the rise of the collectivist state in the twentieth century that included that new ideology of total war and total state control of humanity. Ferrero expressed its impact on ordinary people in a volume offering Words to the Deaf (1926), written while he was still living in fascist Italy:

Little by little, states become monstrous and all-powerful divinities. They force people to work, to fight. They no longer let them sleep; they grind them down and fleece them mercilessly, in the name of liberty, of progress, of country, of king, of emperor, of the republic, of socialism, of the people, of the proletariat. Multiple names of one and the same duty: to obey, to work, to pay.

And the more demanding the States become, the more complete is the surrender of the people. They coalesce in homogeneous masses; races, nations, classes, parties, professions; they learn to work without rest, like soldiers; they allow themselves to be indoctrinated by the teacher, oppressed by the treasury; maltreated by the magistrate; manhandled by the sergeant; they go to the school, the factory, the barracks; and in this age … they wear the uniform of three disciplines: labor, state, and army.

Hans Kelsen and Ludwig von Mises, the “Austrian” Contingent

The year 1934 saw two significant additions to the Graduate Institute’s faculty: the Austrian jurist Hans Kelsen (1881–1973) and the internationally renowned Austrian economist Ludwig von Mises (1881–1973). Kelsen had been a primary author of the 1920 constitution of the postwar new Austrian Republic, following the breakup of the old Austro-Hungarian Empire, a generally liberal constitution that remained in effect until 1933, when a fascist-type dictatorship was established in Austria. He left Austria in 1930 for a professorship in Germany but was removed from his position by the Nazis in 1933 with the purging of those with Jewish ancestry from the German university system. He accepted a professorship in international law at the Graduate Institute beginning in the autumn of 1934 and remained there until he moved to the United States in 1940, where he accepted a position at the University of California at Berkeley. 

Ludwig von Mises was recognized in the 1920s and 1930s as one of the leading figures of the Austrian School of Economics, having developed the “Austrian” theory of money and the business cycle and having also challenged the viability of a centrally planned economic system by questioning the ability for rational economic calculation in a socialist society that has abolished private property in the means of production and ended a functioning competitive price system.

Mises was also widely known as a critic of both communism and Nazism. Indeed, already in 1925, he had analyzed the emerging anti-Marxist ideology of “national socialism” in Germany. He warned that many Germans were “setting their hopes on the coming of the ‘strong man’ — the tyrant who will think for them and care for them.” He asked, if such a German national socialism came to power and if it wished to militarily strike out in revenge for Germany’s defeat in the First World War, which country might be its logical ally? Mises’s answer was Soviet Russia, the other pariah and outsider of European politics. After all, he said, “German Anti-Marxism and Russian Super-Marxism are not too far apart.” In other words, Mises anticipated the Nazi-Soviet Pact of August 1939, almost 15 years before the Hitler-Stalin alliance that set the stage for the beginning of the Second World War in Europe.

When William Rappard wrote to Mises in March 1934 with an offer of a visiting position at the Graduate Institute as a Professor of International Economic Relations, Mises almost immediately accepted the invitation and moved to Geneva for the autumn 1934 term. This visiting professorship ended up being renewed each year, and Mises remained at the Graduate Institute until the summer of 1940, when he moved to the United States, where he lived until his death in 1973.

Wilhelm Röpke, Outspoken Enemy of National Socialism

Adolph Hitler’s coming to power in Germany in January of 1933 opened a floodgate of refugees looking for a new resting place in the face of Nazi brutality, terror, and anti-Semitism. In the weeks following Hitler’s appointment as German chancellor, the liberal, free-market economist Wilhelm Röpke (1899–1966) publicly warned his fellow Germans of the evil that was being set lose on their country. Nazism represented a new “illiberal barbarism” based on: “servilism,” with the state “the subject of unparalleled idolatry”; “irrationalism,” with its call back to “blood,” “soil,” and a “storm of destructive and unruly emotions”; and “brutalism,” under which “every immoral and brutal act is justified by the sanctity of the political end.” If the German people actively or passively accepted this, then “a nation that yields to brutalism thereby excludes itself from the community of Western civilization.”

Röpke’s public criticisms and scorn for the new Nazi epoch in Germany, which included his protests against the expelling of Jewish professors from German universities, resulted in his own dismissal from the University of Marburg and a visit from two Nazi thugs who warned him of the consequences of being out of step with the “new order.” For the safety of his family, Röpke went into exile with an appointment at the University of Istanbul in Turkey in 1934. He accepted a professorship at the Graduate Institute in Geneva in 1937, a position that he held until his death in 1966. Three times during the war years, he had offers of teaching positions in the United States. Each time, he politely declined, saying that his duty was to remain in neutral Switzerland and to be a voice of market-oriented liberal reason for the reconstruction of a postwar Europe, including a post-Nazi Germany.

Röpke spent the war years at the Graduate Institute writing a trilogy: The Social Crisis of Our Time (1942), Civitas Humana (1944), and International Order (1945), in which he insightfully analyzed the philosophical, social, cultural, and economic ideas and ideologies that had brought about the demise of the older liberal world order. Copies of his books were smuggled into Nazi Germany during the war years, and they greatly influenced and inspired the surviving liberal-oriented German economists, who used his ideas and policy views to help bring about free-market reforms in postwar West Germany after 1945.

Michael Heilperin and the Dangers of Economic Nationalism

One other member of the Graduate Institute’s faculty is worth mentioning, Michael A. Heilperin (1909–1971). Originally from Warsaw, Poland, Heilperin joined the faculty in 1937, around the same time as Wilhelm Röpke. His writings included International Monetary Economics (1939), Economic Policy and Democracy (1943), The Trade of Nations (1952), Studies in Economic Nationalism (1962), and Aspects of the Pathology of Money (1968). A continuing theme in these works was the political and economic danger of collectivist planning, the neomercantilism in Keynesian economics, and the instabilities arising from paper monies in undermining economic prosperity through monetary inflations. For a time during the war, he worked in New York City for Bristol-Myers Company, for which he wrote free-market pamphlets, including one on “How Full is ‘Full Employment?’” (1944) challenging Keynesian “stimulus” policies in the United States.

William Rappard, An International Man Against Totalitarianism 

But the guiding figure at the Graduate Institute was its director, William E. Rappard. Born in New York City of Swiss parents while his father was working in the United States, he completed his graduate studies in economics at Harvard University (1906–1908) and then spent the following academic year (1908–1909) at the University of Vienna attending, among other courses, Eugen von Böhm-Bawerk’s graduate seminar. He taught political economy at Harvard University (1911–1913), following which he was appointed a professor of economic history and public finance at the University of Geneva in Switzerland.

Besides bringing together a high-caliber faculty of international scholars at the Graduate Institute, Rappard initiated an annual series of guest lectures on a wide variety of topics concerning political, economic, social, and legal issues surrounding international peace, prosperity, and order. The lectures were published in an annual series under the general title, Problems of Peace, which appeared in print from 1928 through 1939. In addition, in 1938, a volume of essays, The World Crisis, was published marking the tenth anniversary of the Graduate Institute written by members of the Institute’s faculty; the contributions to the volume, especially those by Mises, Röpke, Heilperin, and Ferrero analyzed and refuted the collectivist ideologies and policies engulfing Europe.

Every year, individual guest scholars were invited to the institute, usually in the spring, to deliver a series of weeklong lectures on some chosen theme relating to international political and economic relations, with a good number of them later published as books; among these latter lecturers and authors were F. A. Hayek, Lionel Robbins, Louis Rougier, Quincy Wright, Mortiz J. Bonn, and Wilhelm Röpke (before his appointment at the Graduate Institute).

Rappard himself was a prolific writer. If an underlying concern might be assigned to virtually all of Rappard’s writings, especially in the 1930s, it would be the threats to a peaceful, prosperous, and free world brought about by the rise and spread of totalitarian and nationalist regimes. In Rappard’s eyes, the great achievement of the nineteenth-century liberal movement had been the freeing of the individual from the often harsh and unjustifiable constraints of oppressive governments in the areas of personal, social, political, and economic life. The twentieth century, however, had seen a return to a dominating political order in the form of communist, fascist, and Nazi regimes.

All of these alternatives on the collectivist theme claimed to be imposing rigid and all-encompassing political-economic systems on society in the name of “the people” and their well-being; unfortunately, too many, especially in European societies, were enraptured by the ideas of the rise of paternalistic governments promising to take care of them and provide for all their needs and desires. Or as he expressed his concern: “The individual has increasingly demanded of the state services which the state is willing to render. Thereby, however, he has been led to return to the state an authority over himself which it was the main purpose of the revolutions in the beginning of the nineteenth century to shake and break.” This had created what Rappard called, The Crisis of Democracy (1938), in which the free society was facing the challenge of being totally undermined and overthrown in all of its political, economic, and social facets.

Central to the free and liberal world community, Rappard argued in a number of insightful essays, was the ideal of an international order in which countries respected the individual rights of their own citizens and mutually those of the citizens of other nations through a regime of free and open commerce and exchange. These noticeable achievements of the pre-World War I era were being supplanted by economic nationalism and protectionism in the form of dangerous economic and military armaments. All the best efforts of friends of a peaceful and prosperous world had failed, and finally lead to the disaster of the Second World War.

In the post–World War II period, Rappard continued to warn of the dangers from superpowers attempting to plan and “police” the world, and he articulated the premises and principles behind Swiss neutrality and nonintervention as a guide for international politics in general.

The Geneva Graduate Institute’s Lasting Legacies

By serving as that European oasis of liberal sanity in the interwar period of the 1920s and 1930s, Rappard and the Graduate Institute not only most likely saved the lives of some scholars who might otherwise have been imprisoned, tortured, or even murdered by the Nazis, especially those like Ludwig von Mises, Hans Kelsen, and Michael Heilperin, who were Jewish. They also provided the safe and peaceful intellectual environment for some of the surviving classical liberals in Europe to preserve and advance the ideas of liberty in a surrounding ocean of totalitarianism.

In the memoirs Mises wrote after coming to the United States in 1940, he looked back at his six years at the Graduate Institute and said: “There was a friendly atmosphere between teachers and students, and the spirit of genuine liberalism flourished in that unique institution. All round us the barbarian flood was rising and we all knew we were fighting with nothing but forlorn hope.” But as Mises also expressed it in the foreword to the first edition of his 1949 treatise Human Action, in the “serene atmosphere of this seat of learning,” he was able to write the original German version of his great work on economics and the social philosophy of the free society.

The Geneva Graduate Institute of International Studies’ lasting legacies from that period between the world wars are the ideas of some of the great European classical liberals of the twentieth century who found a tranquil place of safety to reside or visit in that rising tide of tyranny, terror, and war. Let us hope that such oases always exist somewhere to help preserve the spirit of classical liberalism during times of ideological and philosophical crisis.

By Richard Ebeling

Originally published on November 23, 2020 for the American Institute for Economic Research

Thanksgiving is normally a time of family festivities, when relatives and good friends come together for a fine meal, catching up with what has been happening in everyone’s life, and a general good cheer. A month later Christmas and New Year’s brings an end to the old year and the start of another. But things are very different this time around because of the coronavirus and the government response.

Government regulations restrict or ban other than minimal sized groups gathering in one place. Everyone is cautioned or commanded to wear face masks and stay at least six feet apart. And the Centers for Disease Control (CDC) strongly recommends that people not travel for Thanksgiving, and instead isolate at home with no one else or only with the smallest number of others. 

The idea that people should be free and at liberty to make their own best judgments on such matters without the heavy-handed control and command of the government seems to be a thing of the past – at least for now. We far too willingly and easily allow our self-responsibilities and our self-governance to be taken away and transferred to the decision-making of political paternalists who presume to know how we should act, with whom, and for what purposes. 

Political Paternalism Thwarts Self-Responsibility

But don’t we need government to take on these duties and responsibilities for us, since we oftentimes seem irresponsible and thoughtless in our actions in general, and certainly in the company of others? But even if this may sometimes be so, how shall people be expected to learn how to act more wisely in terms of themselves and others, if the need and opportunity to act in more thoughtful and responsible ways are increasingly narrowed or taken away by government agents telling us, instead, what to do and not do, and where and when?

In one of his famous essays, the 19^th century British social philosopher, John Stuart Mill (1806-1873), suggested that less responsible people can only hope for a benevolent dictator to guide them until they have matured enough for self-rule. His British contemporary, the historian, Thomas B. Macaulay (1800-1859), replied that such a prescription reminded him of the fool in the old story who said that he would not go into the water until he knew how to swim. If you wait under paternalism until you are ready for self-responsibility, you will never have learned the lessons through the necessities of everyday life by which the ability for more mature and thoughtful decision-making are acquired. 

Now we are facing an acceleration of such paternalism with a new incoming presidential administration in Washington, D.C. starting in January 2021 that proposes and promises even more political paternalism at ever-increasing costs. These increasing costs will come not only in the form, perhaps, of higher taxes and increased business regulation and more income redistribution, but in the rising cost of less personal liberty of choice and decision-making in more corners of our lives. 

Embracing or Avoiding the Word, “Socialism”

The use of the word “socialism” is being bandied about in the face of these prospective political changes in the United States. There are some more radical “progressives” who say that we should embrace it and not be afraid. Others are afraid of it, not because they don’t support a more and bigger government, but due to the fact that it carries a negative connotation that some of those holding or running for political office do not want as an ideological albatross around their neck when facing the voters.

Others use “socialism” as a word of criticism and condemnation. But sometimes some of those using it in this fashion, it turns out, are conscious or unwitting advocates, themselves, for a larger orbit of activist government policies without thinking a bit that some of what they take for granted or propose are also aspects or variations on the socialist theme. 

Few are the voices, I would suggest, who really understand that a free society is one with a lot less, indeed, a far more minimal, government than most people realize or can conceive as feasible because they have lived so long under forms of political paternalism that they cannot imagine life without it. (See my book, For a New Liberalism [2019].)

The Plymouth Colonists Practiced Plato’s Communism

It is not surprising, then, how few Americans really know and appreciate the meaning and relevance of Thanksgiving in terms of its origin in the history of the Puritans – the “Pilgrim Fathers” – who came 400 years in November 1620 to the New World, landing at what today we know as Plymouth, Massachusetts. Desiring to turn their back on what they saw and considered as the material corruption of the Old World, they wanted to erect a New Jerusalem that would not only be religiously devout but be built on a new foundation of communal sharing and social altruism.

Their goal was the communism of Plato’s Republic, in which all would work and share in common, knowing neither private property nor self-interested acquisitiveness. What resulted is recorded in the diary of Governor William Bradford, the head of the colony. The colonists collectively cleared and worked the land, but they brought forth neither the bountiful harvest they hoped for, nor did it create a spirit of shared and cheerful brotherhood.

The less industrious members of the colony came late to their work in the fields, and were slow and easy in their labors. Knowing that they and their families were to receive an equal share of whatever the group produced, they saw little reason to be more diligent in their efforts. The harder working among the colonists became resentful that their efforts would be redistributed to the more malingering members of the colony. Soon they, too, were coming late to work and were less energetic in the fields.

Collective Work Equaled Individual Resentment

As Governor Bradford of the Plymouth Colony explained in his old English (though with the spelling modernized):

“For the young men that were able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without recompense. The strong, or men of parts, had no more division of food, clothes, etc. then he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labor, and food, clothes, etc. with the meaner and younger sort, thought it some indignant and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc. they deemed it a kind of slavery, neither could husbands brook it.”

Because of the disincentives and resentments that spread among the population, crops were sparse and the rationed equal shares from the collective harvest were not enough to ward off starvation and death. Two years of communism in practice had left alive only a fraction of the original number of the Plymouth colonists.

Private Property as Incentive to Industry

Realizing that another season like those that had just passed would mean the extinction of the entire community, the elders of the colony decided to try something radically different: the introduction of private property rights and the right of the individual families to keep the fruits of their own labor.

As Governor Bradford put it:

“And so assigned to every family a parcel of land, according to the proportion of their number for that end . . . This had a very good success; for it made all hands very industrious, so as much more corn was planted then otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would a ledge weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.”

The Plymouth Colony experienced a great bounty of food. Private ownership meant that there was now a close link between work and reward. Industry became the order of the day as the men and women in each family went to the fields on their separate private farms. When the harvest time came, not only did many families produce enough for their own needs, but also they had surpluses that they could freely exchange with their neighbors for mutual benefit and improvement.

In Governor Bradford’s words:

“By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God. And the effect of their planting was well seen, for all had, one way or other, pretty well to bring the year about, and some of the abler sort and more industrious had to spare, and sell to others, so as any general want or famine hath not been amongst them since to this day.”

Rejecting Collectivism for Individualism

Hard experience had taught the Plymouth colonists the fallacy and error in the ideas that since the time of the ancient Greeks had promised paradise through collectivism rather than individualism. As Governor Bradford expressed it:

“The experience that was had in this common course and condition, tried sundry years, and that amongst the Godly and sober men, may well convince of the vanity and conceit of Plato’s and other ancients; — that the taking away of property, and bringing into a common wealth, would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed confusion and discontent, and retard much employment that would have been to their benefit and comfort.”

Was this realization that communism was incompatible with human nature and the prosperity of humanity to be despaired or be a cause for guilt? Not in Governor Bradford’s eyes. It was simply a matter of accepting that altruism and collectivism were inconsistent with the nature of man, and that human institutions should reflect the reality of man’s nature if he is to prosper. Said Governor Bradford:

“Let none object this is man’s corruption, and nothing to the curse itself. I answer, seeing all men have this corruption in them, God in his wisdom saw another course fitter for them.”

The desire to “spread the wealth” and for government to plan and regulate people’s lives is as old as the utopian fantasy in Plato’s Republic. The Pilgrim Fathers tried and soon realized its bankruptcy and failure as a way for men to live together in society.

They, instead, accepted man as he is: hardworking, productive, and innovative when allowed the liberty to follow his own interests in improving his own circumstances and that of his family. And even more, out of his industry result the quantities of useful goods that enable men to trade to their mutual benefit.

Giving Thanks for the Triumph of Freedom

In the wilderness of the New World, the Plymouth Pilgrims had progressed from the false dream of communism to the sound realism of capitalism. Whether our family gatherings this Thanksgiving be small or almost nonexistent due to the regulations and intimidations of government, we need to recall and remember the lesson to be learned from that first Thanksgiving.

Too many in the halls of higher education, from the bully pulpits of social and mass media, or from those newly elected in 2020 or already running for the elections in 2022, are making calls for the collectivism that those first Plymouth colonists learned to reject. It is 400 years, this year, since those Pilgrims arrived in America in November 1620 and began that failed “experiment” in socialism within the Plymouth colony.

It is time to take their experience to heart and celebrate not the collectivism with which they began their start in the New World, but the spirit of liberty, private property, self-responsibility, and freedom of enterprise which they and those who came to America in the following centuries left to us as a legacy of individual freedom, limited government, and the prosperity that only can come from the competitive liberty of the free and voluntary marketplace. 

By Richard Ebeling

Originally published on March 4, 2020 for the American Institute for Economic Research

Dislike for the personality and disagreement with the policies of Donald Trump have helped to revive a seemingly dead idea: socialism. This has placed friends and defenders of a free society on the defensive in having to make the positive case for free market liberalism. 

The economic and psychological shocks from the financial crisis of 2008-2009, and the emotional distaste on the part of many in the country for Donald Trump’s words and deeds have opened the door for the more radical and “progressive” elements in the Democratic Party and among the “left-leaning” intellectual elite to call for an almost root and branch overhaul of the entire American political and economic system. 

The call is not for a bit more regulation of businessmen or a modest extension of existing social welfare programs. No, the demand is for a transformation of American society in the direction of far, far greater direct government command and control of finance and industry, near-full funding of health and medical care, the end to tuition-based higher education, and the imposition of central planning in all but name with a Green New Deal to “save the planet.” 

In addition, freedom of speech and association would be subject to a dramatic narrowing of the permissible in the name of political correctness and identity politics. Arbitrary and personal feelings of “hurtfulness” are becoming, already, the basis of claims of “harmfulness” leading to restrictions on what may be said or done by being labelled as instances of “hatefulness.” 

Progressives Come Out of the Closet as the Socialists They Are

The decades-old “social liberalism” of the progressives has finally “come out of the closet” to, now, boastfully declare what it has always been – a form of socialism but made milder in sound with the modifier “democratic” in front of it. “Democratic” simply refers to the political means by which these proponents of socialism say they wish to be elected and remain in power. “Socialism” refers to what those put into political office through the ballet box would proceed to impose through the power of the state. 

Advocates of “democratic socialism” like Bernie Sanders or Alexandria Ocasio-Cortez insist that what they want has nothing to do with the “bad” socialism of the 20^th century that went under the title of communism in the Soviet Union. Theirs is a kinder and gentler socialism with none of the authoritarian and brutal aspects experienced in or in places aligned with the Iron Curtain countries of the Cold War era. 

Socialists and Communists Differed Over Means, Not Ends

The fact is that through a good part of the 19^th century, socialism and communism were often used as synonyms meaning, basically, the same thing: the abolition of private property in the means of production, a centralized planning of economic activity, and an equalization of incomes in the collectivist society of the future. 

Socialists may have differed concerning a variety of the features, qualities, and characteristics of the post-capitalist society-to-come, but they all agreed on the need to end private enterprise, the profit motive, and market competition through radical institutional change. 

As the 19^th century progressed, another difference emerged among socialists, that being whether socialism could come to power peacefully through democratic elections or required violent revolution to unseat the capitalist exploiters of the downtrodden workers. The German Social Democrats generally were confident that the ballot box could serve as the effective means for the achievement of a socialist society. Others, especially many of the Russian socialists such as Vladimir Lenin, were insistent that power could only come through the barrel of a gun, followed by a “dictatorship of the proletariat.”

But, at this time, while they may have argued over the appropriate means, they all agreed on the desired end: the end to the private ownership of the means of production and the instituting of a centralized system of government planning in the name of the interests and well-being of the society as a whole. 

Many democratic socialists in countries such as France and Germany sincerely believed in the preservation of civil liberties and for that reason opposed the Soviet Union. It remains a fact, though, that from their ranks a good number of recruits could be found to serve as spies, infiltrators, and “fellow travelers” for the Marxist masters in Moscow, both in the interwar period and during the Second World War, as well as in the early Cold War decades. These were people who spied for the “better world” of socialism and not for money; and there were a lot of them, as the partially opened Soviet archives and the Venona documents demonstrated in the 1990s, with a good number of them in the higher reaches or in crucial departments of Western governments.

It was only in the 1960s and 1970s that Social Democratic parties in the Western Europe “gave up the ghost” and eliminated from their party platforms calls for total or wide nationalization of industry and central planning. In its place, the policy goals became a heavily regulated economy and a greatly enlarged redistributive state.

Sweden: A Free Market Society or a Social Democracy?

This became the new “social democracy” in place of the older, traditional democratic socialist call for pervasive central planning. It is what is still being called for instead of Bernie Sanders’ brand of socialism by some contemporary self-styled “social democrats” such as MIT economist, Daron Acemoglu, who said in a recent article, “Social Democracy Beats Democratic Socialism” (Project Syndicate, February 17, 2020) that this is the real Swedish model that America should follow: 

“Social democracy refers to the policy framework that emerged and took hold in Europe, especially in the Nordic countries, over the course of the twentieth century. It, too, is focused on reining in the excesses of the market economy, reducing inequality, and improving living standards for the less fortunate.  . . . Simply put, European social democracy is a system for regulating the market economy, not for supplanting it . . . What is needed, then, is not market fundamentalism or democratic socialism, but social democracy . . . The market must be regulated, not sidelined.”

In other words, Sweden is neither a “fundamentalist” free market economy, nor a heavily top-down “democratic socialist” system of central planning, according to Acemoglu. It is a “social democracy,” the interventionist-welfare state. 

But is it? Well, not according to some others. For instance, the Swedish classical liberal, Johan Norberg, has said that Sweden does not have democratic socialism because, it is, in fact, a free market economy: 

“I don’t think the American Left knows that Sweden is the country of pension reform, school vouchers, free trade, low corporate taxes and no taxes on property, gifts and inheritance. Sweden affords its big welfare state because it is more free-market and free trade than other countries. So, if they want to redistribute wealth, they also have to deregulate the economy drastically to create that wealth . . .

“We do have a bigger welfare state than the U.S., higher taxes than the U.S., but in other areas, when it comes to free markets, when it comes to competition, when it comes to free trade, Sweden is actually more free market.”

This has been reiterated by libertarian commentator, John Stossel, who said in one of his columns, “Next time you hear democratic socialists talk about how socialist Sweden is, remind them that the big welfare state is funded by Swedes’ free market practices, not their socialist ones.”

So, is Sweden a free market economy that has an expensive social welfare system, or is it a “social democracy” with a regulated economy to successfully fund an extensive welfare state? And in either case, is a free market classical liberal society compatible with such an extensive and pervasive welfare state?

Johan Norberg and other market-oriented liberals in Sweden have emphasized that the welfare state there has reformed into allowing wide degrees of personal choice and freedom in how one selects health care and in the schooling of children. So, it is not a traditional notion of a government-only and monopolistically providing system of social welfare care and redistribution. 

Neo-Liberalism as the “Middle Way” Between Laissez-faire and Planning

Is this the new classical liberal ideal, a fairly free and competitive market with a costly welfare state that permits degrees of choice, while still funding through taxation expensive social safety nets? By omission, that easily can be interpreted as the message.

Since arguments about this can too frequently end up being a contentious contest over who is the “real” or “true” classical liberal and who is not, let me phrase this as merely saying that this “Swedish” model of free markets with a welfare state is not my understanding or ideal of a free and liberal society. The following, therefore, are my objections to and differences with this “Neo-liberalism” that is implicitly being presented and defended as the free market society against the likes of Bernie Sanders and AOC, who otherwise point to places like Sweden or Denmark as their vision of “democratic socialism.” 

My representation of this Swedish model as a Neo-liberal one might, itself, seem objectionable since the “progressive” left paints the United States and similar “capitalist” countries as instances of Neo-liberal “market fundamentalism,” which Daron Acemoglu rejected in the earlier quote in which he defended Sweden as a model of “social democracy.” 

The fact is, this “middle way” between laissez-faire liberalism and totalitarian socialism (of either the Soviet or Nazi sort) was the alternative that a noticeable number of free market-oriented liberals were groping for in the interwar years of the 1930s. It was crystallized in the August 1938 “Colloquium Walter Lippmann,” held in Paris to discuss the fate and future of liberalism in the context of the recent publication of Walter Lippmann’s The Good Society (1937). 

Lippmann’s book is a clearly written and insightful critique of socialist central planning of either the totalitarian sort or a softer “creeping” socialism being introduced on a piecemeal basis in the Western democracies. But he also makes the argument that if liberalism is to survive it must be “reconstructed” in a direction of greater government regulation and welfare redistribution if it was to compete against the totalitarian collectivist temptations.

The colloquium in Paris brought together in that summer of 1938 many of the leading liberal economists and political scientists of that time from around Europe and a few from the United States. Many, if not most, of the participants concluded on the basis of either principle or pragmatism that if a market economy operating on the basis of a competitive price system was to be saved, then some form of the interventionist-welfare state was essential to implement as a complement to it.

A consensus of the attendees was comfortable with referring to such a reformed and “reconstructed” society as Neo-liberalism. A few objected to the analysis and the conclusions reached by a majority of the participants; the leading such critic was the Austrian economist, Ludwig von Mises. But, nonetheless, a general outline for a new market-based liberalism was offered that now incorporated aspects of the welfare state. (See my articles, “Neo-Liberalism: From Laissez-faire to the Interventionist State” and “The Walter Lippmann Colloquium and the Meaning of Liberalism”.)

Many Advocates of Free Markets Have Accepted the Welfare State

Since the end of the Second World War, there have been many able and compelling arguments by free market proponents against socialist central planning and the dangers and abuses from an overextended political paternalism through the unending growth of the welfare state. But very few of these defenders of a market-based liberalism have called for a return to a laissez-faire liberalism under which government would be limited to protecting each individual’s life, liberty and honestly acquired property under a system of impartial rule of law. Period. Full stop. 

This is still the case today. I will not go down a list of those well-known and otherwise able and insightful advocates of the free market who for seven decades, now, have at the same time made the case for one or several types of “necessary” interventions and social safety nets that, they say, cannot be left up to the free market. So, for all the insistences that what is wanted is a “return” to a free market society, a good number of them are really variations on the “Neo-liberal” theme those attendees discussed and debated at the Walter Lippmann Colloquium in August 1938. 

Individual Rights and the Immorality of the Welfare State

So, for whatever they are worth, what are some of my objections to any incorporation of the interventionist-welfare state into the agenda and implementation of a classical liberal, free market institutional order? 

First, I consider any and all such interventions and coerced redistributions to be immoral. It is using the force of the government to restrict or command associations or exchanges on terms different from the ones the individual market participants would have chosen if left free to make their own decisions. 

I am from that older 20^th century libertarian generation that was still weaned on the intellectual mother’s milk of John Locke and the American Founding Fathers in the Declaration of Independence, of Frederic Bastiat’s The Law (1850), and Ayn Rand’s notion that your life is your own by reasoned natural right that no other may compel you to live in any way other than according to your own vision and values of what would peacefully and honestly make a good and happy life for you. 

Many in society, including some classical liberals and libertarians scoff at the idea of “natural rights.” How do you prove they exist and how or who gave them to people? In an increasingly non-religious age (in which I include myself as a member) “gifts” from God carry little weight in many intellectual circles. 

But, as someone who is not a trained and professional philosopher, I have always understood it that when Locke or the Founding Fathers or Frederic Bastiat explained the content and meaning of an individual’s “natural right” to his life, liberty and honestly acquired property, they were saying that all men of good will might use their reason to introspectively reflect on the general nature of man, the circumstances in which human beings find themselves, and what would be needed for people to peacefully and mutually prosper using their mind and talents in a world of other men.

Natural Rights and the Introspective Reflection on Man

Over the years, I have sometimes asked my students if any of them ended their day disappointed that no one had killed them, or enslaved them, or stolen from or defrauded them? Amazingly, not one has raised their hand in the affirmative. All of us, common sensically, wish to be left peacefully alone, not violated in any of these fundamental ways as a conscious and thinking human being. And a bit more introspective reflection easily leads to the conclusion that if you want others to respect your life, liberty and property, you are called upon to reciprocate and respect theirs. 

I realize that far more thoroughly trained philosophers, even some who are classical liberal in their views, will pooh-pooh such an approach. But I would remind those philosophers that in the 1850s, when Frederick Douglass spoke in the Northern states for an end to slavery he called upon his listeners to practice what almost all of them preached, that every free man has a “natural right” to his liberty, and for them to act accordingly in supporting the end to slavery. He moved the conscience of many who heard his words because in themselves they believed in the natural right of every human being to be free. 

Should we retrospectively say, “Sorry, Fred, but that isa philosophically poorly grounded argument with little demonstrable cogency. So, back to your former slave master you must go. Get back to us when you have a better philosophically developed argument for your freedom. Have a nice day.” 

The intuitive and common-sense insight that each person can have, in my view, when reasonably reasoned with, that every person as a human being has a right to his life, liberty and honestly acquired property, remains a powerful one for making the case for a free society. Indeed, it seems hard to imagine how a society of relatively wide personal, social and economic freedoms that came into existence in the West would have been possible, if not for the idea of natural rights and the influence that it had on people’s minds. 

And for me, the idea that each of us have such natural rights also makes “legalized plunder,” to use Bastiat’s term for compulsory redistribution and command, to be immoral in all its various forms, even when couched in the rhetoric and rationale of social welfare functions, the utilitarian majoritarian good, or tribal notions of social justice and identity politics. But, that’s just me. 

The Welfare State Eats Away at Personal Worth and Responsibility

Second, I believe that it undermines essential elements of a good society that can only be cultivated and fostered when all such “social problems” that almost all people today assume is the duty of government to deal with are, instead, left in the hands of individuals and the voluntary associations of civil society. This is undermined when such “social responsibilities” are transferred from individuals to those in political authority. I have always found persuasive the argument along these lines offered by the French social philosopher, Bertrand de Jouvenel (1903-1987), in his book, The Ethics of Redistribution (1951). 

Income is not merely a means for physical maintenance of oneself and one’s family, plus a few dollars for leisure activities. What we do with our income is an expression of ourselves, a statement about what we value, how we see ourselves, and what we wish and hope to be. In addition, the way we use our income enables us to teach future generations about those things which are considered worthwhile in life. Income earned above some minimum of our defined necessities is also the way individuals have had the means to perform many activities “for free” that are considered the foundation of the social order, from community and church work, to support for the arts and humanities, and charities to assist those less well off than ourselves. 

Deny an individual the honest income he has earned, even when it is above some claimed, “reasonable maximum,” and you deny him the ability to formulate and give expression to his own purpose as a human being. And you deny him the capacity to make his voluntary contribution to the civilization and society in which he lives, as he sees best. De Jouvenel argued that such personal and voluntary contributions have been and remain essential to a healthy and good society. 

He also pointed to another vital aspect to governmental redistribution. What is redistributed is not wealth from “the rich” to “the poor,” but power from the people to the state. Individuals no longer plan their own lives and use their own money to fulfill those plans. Individuals no longer care for their own children, teach them how to live as human beings or guide them as to what to value or pursue in life. 

In terms of time, income and talent, individuals increasingly lack the means and the motive to contribute to the society in which they live. The welfare state all but dehumanized and depersonalized these things by transforming them into “affairs of state” rather than the mutual concerns and interests of actual people in society to consider and solve as the common matters of their shared human existence. 

The Welfare State is an Insatiable Leviathan 

And, third, once the premise is accepted that it is the duty and responsibility of the government to undertake and fulfill these welfare state activities, there is no limit to what and how far it will be extended and encroach upon what remains of the private domain in society. 

The German free market economist, Wilhelm Röpke (1899-1966), was one of the attendees of the Walter Lippmann Colloquium in 1938, and who both between the two World Wars and after attempted to find that “middle way” between laissez-faire and the all-encompassing totalitarian planned society. He sincerely believed in the creative power of the market economy and its importance for preserving human liberty, but he also believed that the state had to provide a variety of social safety nets for a proper and humane balance in society. 

Yet, by the end of the 1950s, Röpke bemoaned the seemingly insatiable appetite of the government to consume more and more of the productive wealth created by the private sector, as well as sapping away the character of a free people:

“If it is accepted that the modern welfare State is nothing but an ever-expanding system of publicly organized compulsory provision, then it follows that it enters into competition with other forms of provision in a free society: person provision, by saving and insurance, or voluntary collective provision by family and groups. 

“The more compulsory provision encroaches upon the other forms, the less room will be left for individual and family provision, as it absorbs resources which might be devoted to this purpose and at the same time threatens to paralyze the will toward individual provision and for voluntary mutual assistance. 

“Worse still, it is impossible to stop or turn back on this road once one has advanced beyond a certain point, because the weakening of self-reliance and mutual assistance automatically gives rise to increasing pressure for further public provision of the masses, which, in turn, still further paralyzes individual provision and voluntary mutual assistance.”

As Röpke concluded, “What remains is the pumping engine of Leviathan, the insatiable modern state.” Its only limit being the absorption of everything off which it can feed. And when taxes are no longer sufficient to serve this purpose, government resorts to deficit spending and growing national debt, and when necessary the printing of money is turned to cover all of the welfare expenditures it undertakes. 

Liberal Principles vs. Welfare State Expediencies

Possibly Johan Norberg or one of his colleagues might reply, but in Sweden they tamed the welfare state and while it is large, they have kept it in bounds and left the market free enough to feed the redistributive schemes Sweden has in place. But this depends on the historical luck of the draw of people and policies at a moment in time. Two election rounds from now a Swedish Bernie Sanders or a Jeremy Corbyn may reemerge and persuade enough voters that it is necessary to reverse course once more and return to a far more aggressive welfare state and an accompanying higher tax structure to cover more redistributive expenses while also serving a greater social justice in terms of income equality. 

The free market classical liberal ideal must, as a matter of principle, insist that it is not and cannot be the role and responsibility of the government to play political paternalist in overseeing, guiding and dictating the choice of individuals in the areas now considered by far too many as the domain of the welfare state. 

This was emphasized, in particular, by Friedrich A. Hayek (1899-1992), in spite of the fact that he, also, believed in a variety of government duties far greater than the classical liberal limited state that I have suggested. In his last major work, Law, Legislation and Liberty, vol. 1 (1973), Hayek insisted: 

“When we decide each issue solely on what appears to be its individual merits, we always overestimate the advantages of central direction . . . If the choice between freedom and coercion is thus treated as a matter of expediency, freedom is bound to be sacrificed in almost every instance . . . To make the decision in each instance depend on the foreseeable particular results must lead to the progressive destruction of freedom . . .

“That freedom can be preserved only if it is treated as a supreme principle which must not be sacrificed for particular advantages was fully understood by the leading liberal thinkers of the nineteenth century, one of whom even described liberalism as ‘the system of principles’ . . .” 

A free society, including its competitive free market, in my view, cannot be maintained and sustained in the long run when, at the same time, the rhetoric and rationale for the welfare state is either left unchallenged or acquiesced in as a de facto set of institutions believed to be irreversible or considered to be the lesser evil to bear to prevent the loss of any market economy to more extreme collectivist forces in society. 

Both as a matter of moral principle in defense of personal freedom in all peaceful facets of life, and as a pragmatic matter of not leaving standing a set of regulatory and redistributive institutions that always threaten the civil health of the society and looms as the Leviathan always ready to eat away and consume the remainder of what remains of people’s liberty, the Neo-liberal and social democratic variations on the welfare state themes must be opposed and eliminated root and branch. 

Only that can lay the groundwork for the truly free society of material prosperity and social and ethical virtue that can come from individuals at liberty to live their lives as they choose in association with the fellow free men in the arena of the market and in the voluntary institutions of civil society.

By Richard Ebeling

Originally published on October 18, 2022 for The Future of Freedom Foundation

The death of liberalism has been hailed or feared for well over a century now. In the United States, the tribal collectivists of identity politics and critical race theory insist that America has never been about freedom. It has always been a racist society born with the institution of slavery. The idea of liberal individualism is a ruse to hide the oppression and exploitation of women and “people of color” by capitalist white males.

Among conservatives, liberalism is rejected for not fostering a proper moral sense in people and creating a group loyalty of something outside of and better than “merely” the autonomy of the narrowly self-interested individual, both inside and outside of the marketplace. The role of a properly led political order is to inculcate and instill such views and values in the American citizenry. A renewed sense of national identity and purpose is necessary to save the “soul” of America.

Both on “the left” and among conservatives, there is an intolerance and vehement dislike for many, if not all, forms of intellectual and cultural diversity (the latter having nothing to do with the scam notions of “diversity” among the “politically correct”). There is a deep desire among both these political groups for a far greater homogenization of humanity in thought, deed, and societal identity.

“Progressives” and Conservatives Want to Plan Your Life

This is reflected in their respective willingness to turn to those in political power to use the coercive authority of government to impose their dogmas on the general population. Those on “the left,” in the name of “racial and gender justice” and saving the world from “climate change,” wish to use the government to control, regulate, and plan the economic and social activities of everyone in society. Their ideal is the centrally planned economy under which “right-thinking” people in government (that is, people like ‘them”) would determine and dictate the wages we could earn and the prices we might pay, the types of employment and workplace environments we would be required to accept, and the variety of goods and services and the means of production to provide them.

Our use of words is to be circumscribed to fit their ideological lexicon of race and gender. But if someone is looking for a revised dictionary of clearly defined new terms and meanings that can serve as a “safe space” to assure one does not offend any in society, they will not find it. Male and female and all imaginable things in-between are now amorphous concepts that have no linguistically certain meanings. What else are we to think when a president of the United States says that his selection for a new appointment to the U.S. Supreme Court had to be a “black woman,” but when that nominee was asked during the Senate confirmation hearings if she could define a “woman,” she declined, saying that she was not a biologist. So, a “black woman” accepts being nominated for the highest court of the land, but she cannot explain what makes her eligible for that appointment under the declared criteria.

Among a good number of conservatives, the continuing desire is to control, regulate, or prohibit the personal and interactive choices and decisions of their fellow Americans and many others around the world. Most conservatives are still determined to ban or severely restrain a wide variety of actions among “consenting adults.” For well over a century, now, the U.S. government has been fighting a “war on drugs.” The idea that individuals should be at liberty to peacefully ingest whatever substances they choose without interference of others, while, of course, being legally liable for any rights-violating actions on their part while under the influence of such substances, is unacceptable to those who want to force others to be morally “good people.”

Many conservatives want to restrict what we might read or watch, the social media forms and content we choose to use, or the “life styles” some might wish to follow. In other words, they want to impose a good number of things on others in society, with simply a different content and purpose than those on “the left.”

The idea of just leaving people alone, as long as they are peaceful and honest in whatever they freely choose to do on their own or in voluntary association with others is just unacceptable to those determined to mold society in their preferred image. That is why so many on “the left” and among conservatives reject and condemn “liberalism.”

The Importance of Principled Liberalism

But what is liberalism? We can get both clarity and confusion from a little book published in 1919 called Is Liberalism Dead? by Elliot Dodds. It is indicative of the trends in liberal thinking over the last 100 years or more. Many people thought that in the wake of the First World War and the vast government controls and regulations that had accompanied the conflict, much of the personal and economic liberty of the prewar period would now be gone, a thing of the past, in the face of war-created paternalistic and planned economies.

The book contained a preface by Charles F. G. Masterson (1873–1927), a relatively well-known British liberal politician of the time who served nearly 10 years as a member of Parliament. He forthrightly declared:

Only by the Liberal outlook and the Liberal spirit can the world be saved…. Liberalism can never die unless the world is to turn back its history of progress in emancipation, and man’s soul to abase itself before new tyrannies as ruthless as the old. The death of Liberalism would mean the suicide of the hope for man…. Liberalism … finds Socialism and Conservatism — both upholding the principle of Authority, and both careless of individual Freedom — in many respects more allied to each other than each allied to itself.

The author, Elliot Dodds (1889–1977), was a journalist who was active in liberal political causes for a good part of his life. He tells the reader that, “Its purpose is to rediscover the fundamental principles of the Liberal faith and to restate them in the terms of modern needs.” He insists, however, that, “Policies may change but principles remain.” Too many in politics have “thought too much in terms of expediency and too little in terms of principles….Playing for safety never yet won a vote, and (more important) playing for safety never yet established a principle.” His primary justification for writing the book was, “I claim only the enthusiasm of one who has been born and bred a Liberal, and believes that in Liberal principles lies the best hope for the peaceful and orderly development” of modern society.

In a series of chapters, Dodds summarizes the history and ideas of liberalism. Fundamental to the British political experience was the “insistence on law against prerogative … the attempt to curb the law-making power of an irresponsible and autocratic monarch.” As part of this centuries-long fight for freedom was John Milton’s “magnificent appeal for freedom of thought, of speech, of press … and his political tracts may be taken as the textbooks of modern Liberalism.”

Natural Rights as the Idea Underlying Individual Liberty

Equal to this was John Locke’s “all important thesis of government by consent” the goal of which was “the realization of individual liberty within the commonwealth.” Dodds said that John Locke and others following him introduced the concept of rights: “The high explosive which destroyed the old order was, philosophically, the doctrine of ‘Natural Rights’.” Quoting from the original French declaration of the Rights of Man, Dodds says, “the end of every political association is the conservation of the natural and imprescriptible rights of man, which rights being the rights to liberty, property, security, and resistance to oppression.” Added Dodds:

The first object of [liberal] reformers became the limitation on the functions of government to their minimum, and the extension to every citizen of the fullest opportunity to exercise the ‘rights’ of which he had been deprived…. The limit which was set upon the exercise of “Natural Rights” is that no man, by his free action, shall impair the rights of another. Beyond that, let us have done with government: the individual is supreme.

Not too surprisingly, in his brief overview of the history of liberal ideas and policies, Dodds devotes a chapter to the “Manchester School,” the British proponents of freedom of trade at home and abroad that was led by the likes of Richard Cobden and John Bright. They campaigned for and helped bring about the unilateral end to, especially, agricultural protectionism in the mid-1840s. Behind the fight for free markets, Dodds explains, was a particular philosophy of man and society:

“Enlightened self-interest” was the guiding star of its philosophy….This attitude was based on a legitimate and necessary respect for individual liberty. Its object was the freedom of each citizen to work out his or her own salvation…. It’s ideal was that of “self-help,” and its purpose was to encourage individual initiative and enterprise.

Up to this point in his narrative and analysis, Dodds laid out a fairly clear and readable case for the classical-liberal ideal of a society of free individuals, secure in their respective rights to life, liberty, and honestly acquired property, with human relationships based on mutually advantageous voluntary associations and exchange both inside and outside of the marketplace. The role of government in a classical-liberal social order, therefore, is limited to the narrow, though essential, duty and responsibility for the legal recognition and securing of such individual’s liberty and interpersonal freedom from the use of force or fraud by others in society.

The “New” Liberalism of State Compulsion for “Right Living”

But after this, Dodds’ exposition demonstrates the tragic and dangerous turn that too many of those who continued to declare their loyalty and devotion to the ideals of liberalism made in the twentieth century. He now informs the reader that for all of the important, even “majestic,” work that the older liberals had undertaken with great success to free the individual from the oppressions and abuses of arbitrary governments in the past, this was not enough. Following the lead of nineteenth-century British philosopher Thomas Hill Green (1836–1882), especially in his posthumously published Lectures on the Principles of Political Obligation (1885), it is not enough to be free from the threat or use of force and fraud by others if each is to be “truly free.”

He quotes Green saying, “True rights are powers which it is for the general well-being that the individual (or association) should possess, and that well-being is essentially a moral well-being,” which meant that true “rights” mean “a positive power of doing or enjoying something worth doing or enjoying.” In Green’s view, it is not enough for the state to protect each individual’s “negative” rights from the aggressions of others. Freedom means having a sense of a purpose beyond and outside of yourself in the form of a moral obligation and commitment to the greater society in which an individual lives and within which he is permitted degrees of personal liberty. Educating members for a good society means ensuring that they have an awareness of a wider “common good” and that their “rights” depend upon such a shared allegiance to a “common good.”

Green, therefore, advocates government-provided compulsory schooling given that parents or other societal associations fail to inculcate the proper sense of a common good in the young. When first imposed, the generation forced to send their children to government schools may consider it an infringement on their liberty to educate their offspring as they think best, but Green was confident that by the next generation, it would be taken for granted and not even viewed as an inappropriate abridgment of liberty. Or as Green put it, “in the second generation, though the law with its penal sanctions still continues, it is not felt as a law, as an enforcement of action by penalties, at all.” Over time, in other words, a loss of liberty is no longer seen as a loss of liberty even though it remains so.

In the same way, Green’s conception of real freedom requires the government to restrict urban life to the forms determined and defined as ensuring health and proper types of living, including limiting how many people may be employed and clustered in particular industries in various geographical locations.

From Natural Rights to Social Conventions as a Basis of Liberty

On what basis might a government interfere in such ways with the free choices of individuals and the uses they make of the property they may own, and the associations into which they may enter with others? Green rejects Locke’s notion of property as a “natural right” as the basis of which people enter into a “social contract” for mutual protection of their life, liberty and property. Instead, Green argues that rights, including rights to property, are social conventions that have arisen historically. This includes the right to our own life, “since the right to free life rests on the common will of the society.” Thus, what property you may own and its use is equally a matter of consensus and custom.

Green further argues that in modern society, land and material wealth have been appropriated and concentrated in a few hands compared to the many who lack such means. This created a situation in which many do not possess the material means without which “in fact they have not the chance of providing means for a free moral life.” Worse, “A man who possesses nothing but his powers of labor and who has to sell these to a capitalist for bare daily maintenance, might as well, in respect of the ethical purposes which possession of property should serve, be denied rights of property altogether.”

In a “Lecture on Liberal Legislation and Freedom of Contract” (1880), Green endorsed the state’s takeover of schooling and education from parents; supported restrictions on child labor and the employment of women in various occupations and work hours; and hailed regulatory controls on housing and workplace conditions. More generally, Green declared:

When we speak of freedom as something to be so highly prized, we mean a positive power or capacity of doing or enjoying something worth doing or enjoying, and that, too, something that we do or enjoy in common with others. We mean by it a power which each man exercises through the help or security given him by his fellowmen, and which he in turn helps to secure for them….

When we measure the progress of a society by its growth in freedom … the mere removal of compulsion, the mere enabling a man to do as he likes is in itself no contribution to true freedom…. We rightly refuse to recognize the highest development on the part of an exceptional individual or exceptional class, as an advance toward the true freedom of man, if it is founded on a refusal of the same opportunity to other men….

The institution of property being only justified as a means to the free exercise of the social capabilities of all, there can be no true right to property of a kind which debars one class of men from some such free exercise.

Liberalism Converted Into Compulsory Paternalism for a Common Good 

Not surprisingly, since Green considered the role of the state to assure a “common good” of “moral” men, “There is no right of freedom in the purchase or sale of a particular commodity, if the general result of allowing such freedom is to detract from freedom in the higher sense, from the general power of men to make the best of themselves.” Thus, Green had no hesitation to support governmental means to oppose drunkenness. “We know that, however decently carried on, the excessive drinking of one man means an injury to others in health, purse and capability to which no limits can be placed….Here, then, is a wide-spread social evil, of which society may, if it will, by restraining law, to a great extent, rid itself, to the infinite enhancement of the positive freedom enjoyed by its members.” As for waiting for voluntary efforts to work on people to learn to live better lives, Green had no patience. “We reply,” he said, “that it is dangerous to wait.” The state had to act as the agent for “everyone,” in the here and now, to make each of us better persons in all that we do or do not do.

Though little talked about today, Thomas Hill Green, who taught philosophy at Oxford University, was an important intellectual force in the late nineteenth century for moving liberalism away from its classical basis in strictly restrained government for the securing and protecting of individual rights and liberty to, instead, a “new liberalism” that increasingly advocated “positive” rights of guaranteed conditions of life beyond protection from the violent acts of others. So, when presenting a case for “liberalism” in the post–World War I era, Elliot Dodds adopted all of Green’s presumptions, saying:

The Liberal State must provide for all its members the opportunity for a humane and useful life. It must secure to them such a minimum as shall prevent them from falling beneath the level of subsistence, and must protect from the fluctuations of trade. It must offer to all a career ‘open to the talents’…. In ‘the removal of encumbrances,’ it must include … the provision of conditions conducive to a healthy and moral existence.

This “new” liberalism was and is, in fact, a false liberalism. How are some in society to be assured an access to what others have unless those who have that greater material means at their disposal are compelled to “share” it through forced redistribution of wealth? And who decides, in the name of the “common good,” how much some are to be taxed and how much others are to receive to bring about the minimally needed capacity for a “moral” existence as defined by those like Green?

What is the meaning of personal liberty and property rights, if it is now claimed that all such notions are merely arbitrary outcomes of customs and traditions that are the result of the accidents of history in different times and places? And that may fundamentally change in changing circumstances? Government regulations and controls over the marketplace become based upon what seems “fair” and ethically “right” at particular times. But are we not, then, back to the imposing and arbitrary government against which the older, classical liberalism had so long fought? This is no longer the liberalism of John Locke or Adam Smith or the economic liberty of the Manchester School advocates of freedom of enterprise and trade.

Modern American Liberalism the Wrong Type of Paternalism

Let us return to where we started from. This modern American liberalism is, in reality, a blend of the socialist critique of “capitalist” society and the conservative insistence on the moral molding of all those in society into good citizens. The “progressive” and “politically correct” in American society reject this twentieth-century “liberalism” because it is not radically “leftist” enough, that is, it does not do away with enough of the remaining remnants of the older liberalism in that it still does not redistribute and regulate and centrally plan the society enough, particularly in the face of just how “racist” and “sexist” it has now been discovered America has always been.

A variety of conservatives reject modern American liberalism because they disagree with the morality (or “immorality”) it cultivates and fosters in schools and society at large. They want less of condom-use training and gender reassignment prodding in grammar schools, and, instead, more pledges of allegiances to the flag and more emphasis on sexual abstinence, along with inculcating a need for individual sacrifice for a higher “national purpose.”

In other words, “the left” and these conservatives reject modern American liberalism not because they disagree with the means chosen — the use of governmental power to control, regulate, redistribute, and indoctrinate — but because they object, respectively, for what ends compulsory and coercive means are to be applied. With moral arrogance and lustful desire for power, they all want to remake people and society into the image they want, respectively, to see created. What is wrong with the American liberalism of the last 100 years or so is that it is the wrong kind and intensity of paternalism in the eyes of those more radically on “the left” or more “traditionalist” among conservatives.

Classical Liberalism the Rejected Alternative By All

Lost in all this is that older, classical liberalism, which all of them (“leftists,” conservatives, and “new” liberals) reject from their own ideological perspectives. The older, classical liberalism said that each human being should be recognized and respected in his personal liberty so he could plan and direct his own life as he saw fit, guided by his own ideas of the good and happy life — even if others did not share or always approve of the path he had chosen for himself. The older liberalism insisted that there was no moral good outside of or greater than the individual’s good. All that was expected from each person was his respect for the equal rights of others to freely go about their own peaceful and honest business.

That some were materially better off than others was not a secret to the older, classical liberals. Their defense of freedom and free enterprise was not only that it was morally right but that it has shown itself as the great engine for wealth creation and rising prosperity for an ever-increasing number of people, bringing about the end to poverty and want nearly everywhere around the world.

Furthermore, the classical liberals considered that charity and philanthropy were meritorious sentiments reflecting an appropriate benevolence toward others not as well-off as ourselves. But an ethics of liberty required the decision to offer helping hands to be left with free individuals, and that competition among voluntary charities was as important in finding the best ways of helping those less well-off as it is in the profit-oriented marketplace in the service of consumer demands.

There was an underlying humility in the older classical liberalism that assumed that each person could better find his own way than to presume that political paternalists could make better decisions for them. There was a tolerance for recognizing that there was no “right fit” for society as a whole, since society did not exist separate from the individuals comprising it. A “higher morality” of the “common good” was considered a smoke-screen for those who did not like the patterns created by a society of free people, and instead wanted to force everyone into the patterns considered better by those who wished to compel people’s submission to a politically engineered design.

So, to give our own answer to Elliot Dodds’ question, “Is liberalism dead?” Not for as long as there are any who cherish the liberty and autonomy of every human being, along with their own freedom. Not as long as it remains the inescapable truth that free markets deliver the goods and offer the widest opportunities for the improvement of all without the false illusions of paternalism and planning. Not as long as there remains in any of us the desire to say “No” to those who want to force us into the role of pawns on their compulsory chessboard of social engineering. Not as long as there remains you and me.

By Richard Ebeling

Originally published on September 28, 2022 for The Future of Freedom Foundation

Suppose that one evening as the sun was setting and dusk was settling in, a strange mist fell over the United States that resulted in the entire population of the country, from the Atlantic to the Pacific, falling into a deep and restful sleep. Similarly, as evening settled in across the Russian Federation, the same type of mist enveloped the entire country from the Pacific to the Baltic Sea, with the Russian people falling into an equivalent restful and deep sleep.

When the people of the two countries awoke from their night’s slumber, they found themselves, respectively, living under two radically different political regimes from the ones that they had been under the day before. In Russia, the country was still physically the same. There still were the deep forests, the rich soil of the steppes, the mountains of the Urals, and the stark, frigid terrain of the Siberian north.

But the Russian political system had been transformed into a constitutional, strictly limited government, with every citizen secure in his personal and civil liberties under an impartially enforced rule of law. In their economic affairs, the Russians found themselves living under a laissez-faire, free-market order in which every individual was free to peacefully live his life as he personally chose, with all interpersonal relationships based on honest and voluntary associations inside and outside of the marketplace.

In the United States, the Rocky Mountains still stretched southward from the Canadian border, the central plains still had miles upon miles of corn and wheat fields, the wide Mississippi River continued to flow from Minnesota south into the Gulf of Mexico, and New York and Chicago still had their majestic skylines. On the other hand, however, the country had been transformed into a fully totalitarian political regime.

The American people possessed no individual rights, no constitutional guarantees of their civil liberties, and no legal recourse if abused or imprisoned by those in dictatorial control through a one-party political system. In economic affairs, everything was now owned and controlled by the government, with a central planning agency determining and dictating what, how, and where all production would occur, with that government the single employer of all in the society. Standards and qualities of life for each and every citizen were decided by those in political power. There existed no corners in the society, no interstices in which to hide and live outside of the controlling and commanding power of the state.

Young Americans know little about the past

Over the years, I have sometimes posited this “dream” in some of my classes in which I have taught the principles of economics and the political institutions underlying a free society. I have asked the students, if this were the world into which they woke up one morning in America, in which of these two countries would they prefer to live and to give their support and loyalty?

Most of the students found the question very disconcerting. But, of course, many of them said America. I then followed up with the simple question, why? What makes America the place you would want to live? Is it merely the physical landscape that you are used to? Is it the flag to which you gave a pledge of allegiance at the start of every day in grammar school? Is it your family or friends whom you have known all your life, or the convenience of speaking the language you learned as a child?

I’ve looked around the classroom and usually found that a large majority of those in the class were the children, or grandchildren, or great-grandchildren of earlier generations who chose to leave the “old country,” the native lands in which they had been born. They had left places in many other parts of the world to travel to America and make it their new home and start a new life.

I’ve asked them why they would have done that. It is amazing how many of these students know little or nothing about how, why, when, or even from where an earlier generation of their families had made the journey to America. Some know some things about their family’s histories, but many do not, and equally amazing, some of them don’t care.

Many chose America to escape from tyranny

I explain that, historically speaking, many in those earlier generations of immigrants were escaping from political oppression, or religious persecution, or the destruction and agonies of war and civil wars, or the lack of economic opportunities due to the controls and corruptions of the political systems under which they had been living in their countries of origin. And that the current waves of immigrants coming to America today, legally or illegally, are usually motivated by the same factors that influenced their own ancestors.

What these waves and generations of immigrants arriving in America wanted and were searching for was freedom in some or all of its facets that they were denied in the places from which they had come. Making a choice to emigrate, to leave the country of one’s birth, is never an easy matter for most of those who do so. You leave behind your family and friends, the customs and traditions under which you have grown up, the familiar surroundings that psychologically feel like “home.” You lose, usually, the comfortableness of speaking the language you learned from childhood and, instead, have to master a new language with which you may have no starting knowledge. The migrant often finds himself or herself in a social environment in which he or she knows no one or only a small number compared to “back home.” At first, it can be lonely and scary.

And, yet, tens of millions have made that choice and undertaken that journey from the “old country” to America. Since many of my students, as I said, seem to know little or nothing about the reasons and circumstances behind their own earlier family members coming to the United States, I remind them of what often guided their decision.

An imperfect America offered freedom and opportunity

At the end of the nineteenth century, the Italian classical-liberal historian Guglielmo Ferrero (1871–1942) visited America. In several of his writings over the years before the First World War, he wrote about the social and economic uniqueness of the United States and its appeal for so many who made the journey to make America their new home. For instance, in his work on Militarism (1899), he contrasted European life and circumstance with that in the United States. Ferrero did not presume that America was some perfect and pure utopia of liberty and opportunity. For example, he said:

How can one give an unreserved opinion on a nation that possesses the most perfect penitentiary institutions in the world for the shelter and education of criminals, and which at the same time tolerates the arbitrary punishment of crime by infuriated mobs? A nation which protects the rights of inventive genius so rigorously and wisely by the law of patents, a society which has thus reached a most perfect comprehension of this last and subtlest ideal of property, but which countenances also the public organization of those associations of malefactors which are allowed to impose the most monstrous levies on the populations of entire cities by means of intrigue and fraud [government-bestowed municipal monopolies]…. A nation whose Government retains so much of the wolf nature inherent in the worst European Governments, which allows the most colossal squandering of public moneys … such as that most ingenious of all, protectionism?” (p. 15)

In spite of all this, in America, the immigrant, the new arrival in this new land, usually had chances for work and wealth-making not open to him or her wherever they may have come from. Though Ferrero noted that “brutal and degrading works devolve upon negros, Chinese, and Italian immigrants” (p. 18), nonetheless, when looking over American society as a whole, Ferrero continued:

In the United States … the extreme freedom and ease of the individual, not handicapped as we are [in Europe] in changing occupations, habits, social caste, received ideals, and social axioms by a social tradition, become almost sacred; the innumerable opportunities in the midst of such constant material and intellectual change for the association of individual talents and energies; the prodigious rapidity with which these combinations can be formed and dissolved; the frequent return of opportunities brought about by the rapidity of revolving wheel of fortune; the instability of all things — of good but no less bad; the purely temporary nature of all conditions; the almost complete want of any definite solutions; — of necessity imply that there is no defeat without reconquest, nor decay without rebirth.

These conditions prevailing in America, render it easy for any ordinary intelligent and energetic man to obtain for his work remuneration which errs rather on the side of being beyond than beneath his deserts … Thanks to the almost complete lack of Intellectual protectionism — thanks, in consequence, to the lack of government curriculum of unprofitable and obligatory studies, America is exempt from an intellectual proletariat and the declasses, the chronic disease of the middle classes in Europe. Let him who can do a thing well step forward and do it, no one will question where he learnt it; such is the degree required of an American engineer, barrister, clerk or employee. And as the opportunities to do well are innumerable, everyone can develop the talents with which Nature has endowed him, changing his occupation according to circumstances and opportunity…. An American is always ready to see the particular stream at which he has been drinking dried up, and be prepared to pack up his belongings and set off in search of another.” (pp. 17, 19)

Liberty and dignity in a freer America

Finally, in Ferrero’s view, the basis for these never-ending opportunities and chances for prosperity for most in the late-nineteenth-century United States arose from the moral foundations that guided the thinking and acting of the vast majority of Americans, including a belief in individual rights and responsibilities and the accompanying principle of respect for the equal rights of others and yourself. Once more, as Guglielmo Ferrero expressed it:

The greatness of a nation depends on a high standard of moral solidarity, and this is high only where each respects in others the rights he himself claims, and admits for himself the same duties which he would impose upon others under similar circumstances; it arises from the recognition of the fact that if men differ from one another in talent, culture, and wealth, they are nevertheless morally equal, and that no one of them is morally bound to serve his fellow without receiving just and equivalent remuneration. Where this sentiment of the moral equality of men is most deeply felt, everyone resents the injustice done to others, and in thought and action aims at social justice.

But the conditions most favorable to the development of this sentiment are those under which no one depends for his livelihood on the capricious benevolence of others, but like the Americans and the Englishmen, only on his own capacities to serve in some way his fellows, receiving their services in exchange, and these not measured arbitrarily by some power outside himself, but governed by his own judgement. This liberty develops in him the sense of moral dignity, which is the backbone of the human character and of the sentiment of moral equality…. In short, what has made American society appear to Europeans in the light of an enchanted world, is … the freedom of the individual from those oppressive historical, political, moral, and intellectual tyrannies which the State accumulates and imposes on all our anciently civilized countries.” (pp. 24–25)

Space does not permit Ferrero to continue to directly speak for himself, but in summary, and in the context of the then-recent Spanish-American War of 1898, he juxtaposes this description of America with the domestic policies of the Spain of that time: a society of hierarchical power and privilege in which civil liberties were not recognized and honest labor of free men was neither fully permitted nor socially respected, since status and social positions were based on the plunders and corruptions of the past kept in their static place by a government dedicated to limiting or even preventing any liberal market freedoms as were widely present in America. Innovation and change, whether societal or economic, were frowned upon and resisted as threats to the government-secured monopolies, subsidies, privileges, and protections assured for a few at the expense of the rest.

Wanting freedom and risking your life to have it

This now gets us back to the students in my classes, to whom I have asked those questions. Clearly, I explain to them, many of their ancestors were looking for a land of freedom and opportunity to which to come and give their energies and loyalties. The country in which accident of birth had first placed them did not permanently dictate where they had to make their home The Italian, or Irishman, or German, or Swede, or Pole may still have had personal roots and memories and cultural nostalgias that gave psychological connectedness to the places from which they had come. But for most of them, they chose to become “Americans” because what America stood for and offered was a better place to call their home than the homes from which they had departed.

So, again, if you were to wake up one morning, I say to them, and America was now a totalitarian state and Russia was a completely free country of personal liberty and economic freedom, where would you want to live? What makes a place worth living in, defending, and fighting for? Is it an accident of birth and the familiar things around you as you grow up, or is it the ideas and ideals that a country stands for and at least seriously attempts to practice?

A few of the students sometimes respond that they would want to stay to fight and try to make America a free country once again. I often have responded that that is, of course, a meritorious position, to want to restore freedom to your homeland if it has been lost or, perhaps, never experienced. But suppose some of your fellow Americans decided that for their own wellbeing and that of their families it was desirable, even necessary, to make a new life in a now-free Russia compared to a totalitarian America.

I have asked, would you view them as traitors to their homeland, or as individuals deciding their own futures and that of their loved ones rather than be prisoners with no liberty in a totalitarian state? I have reminded them that in the actual totalitarian states of the twentieth century, their governments did all in their power to prevent their citizens from leaving their respective countries. Since it all happened before they were born, I tell them about how the Soviet government constructed the Berlin Wall to deter attempts to escape from the communist regime in East Germany. In spite of this, many hundreds of people between 1961 and 1989 devised ways to make their way out of that socialist paradise, and many of them not merely risked but lost their lives in the attempt to make it to a freer West Berlin.

But isn’t America still free today?

Other students have sometimes replied that they understand the point I’m trying to make, but that, luckily, it is a moot point since America still remains a free country, far better than many, many other places around the world. If America is so bad, how come so many people still want to come to the United States by legal and illegal means? I usually have responded that, yes, in comparison to many other places around the globe, America still offers greater freedom and opportunity.

But I suggest that that is not the only basis of comparison: for example, America versus places like North Korea or Afghanistan today. An equally relevant benchmark of comparison is America today versus the America of the late nineteenth century, the period that Italian Guglielmo Ferrero described earlier in this article. I emphasize that Ferrero did not claim that the United States was some kind of heaven on earth. I highlight the fairly large number of instances of hypocrisy and inconsistency in the practice of liberty and lack of protected equal rights before the law that Ferrero enumerated for his European readers, as well as how governmental corruption and interest group politics were scars on the American landscape.

But what he saw in the United States of that time was a country in which the individual, either born in America or newly arrived, was almost unrestricted in peacefully and honestly pursuing virtually any profession or occupation without government approval or license. He was able to freely and voluntarily associate and negotiate the terms of trade on the basis of which he might be hired or at which he might sell the product or service he had brought to market. Regulations over the methods of production and trade were scarcely known in the America of that time.

The American government spent and squandered what Ferrero considered too much of the citizen’s money, with politicians buying votes and interest groups acquiring favors and privileges, including a variety of trade protections against foreign competitors and domestic subsidies and contracts from the political authorities. But when Ferrero visited the United States, all levels of government siphoned off  barely 7 percent of all the wealth produced by those earning a living in the private sector. There was no federal income tax and no presumption that government had a lien on all that was earned by the citizens, with those income earners being permitted to keep the residual not claimed by those in political power.

It was not considered the government’s business where you lived, how you earned a living, when and for what purpose you traveled, either inside the United States, or between America and the rest of the world. The students are astonished when I tell them that for most of the years before the First World War, almost anyone could travel to the United States without a passport or a visa. Freedom of movement was considered a natural accompaniment to freedom of association and freedom of trade. (The embarrassing and immoral blemish on the American principle of free entry and residence were the anti-immigration laws passed in the last decades of the nineteenth century against Chinese and Japanese due to racial prejudice.)

The narrower range of liberty in modern America

I compare that earlier America with the United States of today. Yes, there are many things better in the United States now than back then. Racial and religious prejudices are far less than in the 1890s. The Southern segregation laws are a thing of the past, and social acceptance of interracial relationships is practically universal in modern America. Women have the vote and greater marketplace opportunities and freedoms of choice. And due to the extent that market openness and competition have persisted, all Americans of today have standards and qualities of life that were almost unimaginable in the last decade of the nineteenth century.

Yet, in spite of all this, government interferes, regulates, controls, prohibits, and compels far more corners of our everyday lives than anyone could have imagined during the time of Guglielmo Ferrero’s visit to the United States. Government siphons off a percentage of people’s earned income and wealth that would have been considered confiscatory and oppressive by the ordinary and average American of the 1890s. The government operated back then with a modest and limited budget, with an almost nonexistent national debt. Today, government gorges on trillions of dollars of tax money every year, and still has to borrow a trillion dollars a year on top of all that, which has created a huge national debt.

Back when Ferrero wrote about his impressions of America, the Spanish-American War was a recent event, with the United States having acquired its first war-based overseas imperial territories in the form of Puerto Rico, the Virgin Islands, a protectorate over Cuba, and the annexation of the Philippine Islands in East Asia. But this fledgling American empire seemed almost trivial compared to, say, the global-encompassing British and French empires of that time.

Today, the America taxpayer covers the cost of a worldwide network of foreign bases and alliances that at any time can drag the United States into overseas wars. The Americans of the 1890s would have never imagined the United States in a 20-year war in Afghanistan or Iraq, with the accompanying abridgments of freedom and loss of wealth and lives that such foreign adventures have entailed.

I ask my students, at the end of such discussions, how free is America, really, today? What is the direction toward which we seem to be continuing to head? And if this road were at some time to lead to a far more comprehensive government control-and-command society in the United States, and if there was some place at that time that was closer to the freer society that America was in the late nineteenth century, where would you want to live, and to which society would you want to give your loyalty and support?

By Richard Ebeling

Originally published on July 8, 2018 for the American Institute for Economic Research

There has been a great paradox in the modern world. On the one hand, freedom and prosperity have replaced tyranny and poverty for tens, indeed for hundreds of millions of people around the world over the last two centuries. Yet the political and economic system that historically has made this possible has been criticized and condemned. That political and economic system is liberalism.

By liberalism, I do not mean American “progressive” liberalism, historically a modified and reduced form of what used to be called socialism — that is, central planning of all economic affairs. In its modern “progressive” form, it has been watered down to mean extensive and intrusive government regulation of private enterprise with wide redistribution of wealth based on a prior conception of social justice. (See my article “Barack Obama and the Meaning of Socialism.”)

Nor do I mean what in many other parts of the world is often referred to as neoliberalism. While it is frequently claimed that neoliberalism favors a wild and unrestricted capitalism, in fact it is institutionally far closer to American progressive liberalism, under which private enterprise and profit seeking are permitted, but, again, an extensive interventionist welfare state combined with government–business crony favoritism and corruption hampers the functioning of a truly free and competitive market. (See my article “Neo-Liberalism: From Laissez-Faire to the Interventionist State.”)

What is lost in all the labeling is the original meaning and significance of political and economic classical liberalism, which has nothing to do with what passes for American progressive liberalism or neoliberalism in other countries around the globe.

The Real Liberalism

Classical liberalism, the liberalism that began in the 18th and 19th centuries and transformed the world in ways that have bettered the material and social circumstances of humankind, has been going down an Orwellian memory hole. Yet it was this older liberalism that began the liberation of humanity from tyranny and poverty, and wherever remnants of this original form of liberalism still exist, prosperity continues to grow.    

Natural rights are today often ridiculed or discounted by philosophers who frequently find it easier to speak about ethical nihilism and political relativism. And yet the modern world of freedom had its origin in them. These are rights that reside in people by their nature as human beings and that logically precede governments and any man-made laws that may or may not respect and enforce these rights.

Political philosophers such as John Locke articulated the meaning of these rights in the 1600s and 1700s. “Though the earth and all inferior creatures be common to all men, yet every man has a ‘property’ in his own ‘person,’” insisted Locke. “This nobody has any right to but himself. The ‘labor’ of his body and the ‘work’ of his hands, we may say, are properly his.”

While all people have a natural right to protect their lives and their peacefully produced or acquired property, they form political associations among themselves to better protect their rights. After all, people may not be strong enough to protect themselves from aggressors; and they cannot always be trusted when in the passion of the moment they use defensive force against others that may not be proportional to the offense against themselves.

Here in a nutshell is the origin of the ideas that germinated for nearly a century after John Locke and then inspired the Founding Fathers in the words of the Declaration of Independence in 1776, when they spoke of the self-evident truths that all men are created equal with certain unalienable rights, among which are life, liberty, and the pursuit of happiness, and for the preservation of which men form governments among themselves. (See my article “John Locke and American Individualism.”)

While every American schoolchild knows, or used to know, by heart those stirring words, what most Americans know less well is the remainder of the text of that document. Here the Founding Fathers enumerated their grievances against the British crown: taxation without representation; restrictions on the development of trade and industry within the British colonies, and regulations on foreign commerce; a swarm of government bureaucrats intruding into the personal and daily affairs of the colonists; and violations of basic civil liberties and freedoms.

What aroused their anger and resentment is that a large majority of these American colonists considered themselves British by birth or ancestry. And here was the British king and his Parliament denying or infringing upon what they considered their birthright: the customary and hard-won “rights of an Englishman,” gained over several centuries of successful opposition against arbitrary monarchical power.

Freedom is the common intellectual inheritance left to us by the great thinkers of the West. But it is nonetheless the case that much that we consider and call individual rights and liberty had their impetus in Great Britain, in the writings of political philosophers like John Locke and David Hume, legal scholars like William Blackstone and Edward Coke, and moral philosophers and political economists like Adam Smith.

What their combined writings and those of many others gave the West and the world over the last three or four centuries was the philosophy of political and economic liberalism. What began as the “rights of an Englishman” became by the late 18th and early 19th centuries a universal political philosophy of the individual rights of all human beings everywhere and at all times.

The Classical-Liberal Crusade Against Slavery

What were the vision and agenda of 18th- and 19th-century classical liberalism? They may be understood under five headings.

First was the freedom of the individual as possessing a right of self-ownership. The great British classical-liberal crusade in the second half of the 18th and the early decades of the 19th century was for the abolition of slavery. The words of the British poet William Cowper in 1785 became the rallying cry of the anti-slavery movement: “We have no slaves at home – Then why aboard? Slaves cannot breathe in England; if their lungs receive our air, that moment they are free. They touch our country, and their shackles fall.”

The British Slave Trade Act of 1807 banned the slave trade, and British warships patrolled the West Coast of Africa to interdict slave ships heading for the Americas. This culminated in the Slavery Abolition Act of 1833, which formally abolished slavery throughout the British Empire on August 1, 1834.

Though not overnight, the British example heralded the legal end to slavery by the close of the 19th century through most of the world touched by the Western nations. The end to slavery in the United States took the form of a tragic and costly civil war that left a deep scar on the country. But the unimaginable dream of a handful of people over thousands of years of human history, that no one should be the slave of another, finally became the reality for all under the inspiration and efforts of the 19th-century classical-liberal advocates of individual freedom.

The Classical-Liberal Crusade for Civil Liberties

The second great classical-liberal crusade was for the recognition of and legal respect for civil liberties. Since the Magna Carta in 1215, Englishmen had fought for monarchical recognition of and respect for certain essential rights, including no unwarranted or arbitrary arrest and imprisonment. These came to include freedom of thought and religion, freedom of speech and the press, and freedom of association. Above it all was the wider idea of the rule of law: that justice was to be equal and impartial, and that all were answerable and accountable before the law, even those representing and enforcing the law in the name of the king.

In the United States, many of these civil liberties were incorporated into the Constitution in the first 10 amendments, which specified that there were some human freedoms so profoundly fundamental and essential to a free and good society — freedom of speech and the press, freedom of religion, a right to armed self-defense, freedom of association, protections against self-incrimination and unwarranted search and seizure of private papers and property, and speedy trials along with impartial justice — that no government should presume to abridge or deny them.

The Classical-Liberal Crusade for Economic Freedom

The third great classical-liberal crusade was for freedom of enterprise and free trade. Throughout the 17th and 18th centuries, governments in Europe controlled, regulated, and planned all the economic activities of their subjects and citizens as far as the arms of their political agents could reach.

Adam Smith and his Scottish and French allies demolished the assumptions and logic of mercantilism, as the system of government planning was then called. They demonstrated that government planners and regulators have neither the wisdom, nor the knowledge, nor the ability to direct the complex, interdependent activities of humanity.

Furthermore, Adam Smith and his economist colleagues argued that social order was possible without political design. Indeed, “as if guided by an invisible hand,” when people are left free to direct their own affairs within an institutional setting of individual liberty, private property, voluntary exchange, and unrestricted competition, a “system of natural liberty” spontaneously forms that generates more wealth and coordinated activity than any governmental guiding hand could ever provide.

The benefits of such economic liberty made Great Britain and then the United States the industrial powerhouses of the world by the end of the 19th century; classical-liberal economic policy rapidly did the same, though at different rates, in other parts of Europe, and then, slowly, in other parts of the world as well. Population sizes in the West grew far above anything known or imagined in the past, yet increased production and rising productivity were giving those hundreds of millions of more people an increasing standard and quality of living. Indeed, if enough economic freedom and open competition continue to prevail, it is possible that by the end of the 21st century, abject poverty will be a thing of the past everywhere around the world.

The Classical-Liberal Crusade for Political Freedom

The fourth classical-liberal crusade was for greater political liberty. It was argued that if liberty meant that people were to be self-governing over their own lives, that should also mean they participate in the governing of the society in which they live, in the form of an enlarged voting franchise through which the governed select those who hold political office on their behalf.

Liberals condemned the corrupt and manipulated electoral process in Great Britain that gave office in Parliament to handpicked voices defending the narrow interests of the landed aristocracy at the expense of many others in society. So as the 19th and early 20th centuries progressed, the right to vote moved more and more in the direction of universal suffrage in a growing number of countries around the world, including the United States.

It was not that these earlier liberals were unconcerned about the potential abuses from democratic majorities. In fact, John Stuart Mill, in his Considerations on Representative Government (1861), proposed that all those who received any form of financial subsidy or support from the government should be denied the voting franchise for as long as they were dependent in such a manner upon the taxpayers. There was too much of a possible conflict of interest when those who received such redistributive benefits could vote to pick the pockets of their fellow citizens. Alas, his wise advice has never been followed. (See my article “Thinking the Unthinkable: No Voting Right for Those Living at the Taxpayer’s Expense.”)

The Classical-Liberal Crusade for International Peace

Finally, the fifth of the classical-liberal crusades of the 19th century was for, if not abolishing war, then at least reducing the frequency of international conflicts among nations and the severity of damage that came with military combat.

In fact, during the century that separated the defeat of Napoleon in 1815 and the commencement of the First World War in 1914, wars at least among the European powers were infrequent, relatively short in duration, and limited in their physical destruction and taking of human life.

Classical liberals argued that war was counterproductive to the interests of all nations and peoples. It prevented and disrupted the natural benefits that can and did improve the conditions of all people through peaceful production and trade based on an international division of labor in which all gained from the specializations of others in industry, agriculture, and the arts.

Because of the classical-liberal spirit of the time, there were some successful attempts to arrange formal rules of war among governments under which the lives and property of innocent noncombatants would be respected even by conquering armies. There were treaties detailing how prisoners of war were to be humanely treated and cared for, as well as banishing certain forms of warfare deemed immoral and ungentlemanly.

It would, of course, be an exaggeration and an absurdity to claim that 19th-century classical liberalism fully triumphed in its ideals or its goals of political and economic reform and change. The counter-revolutionary forces of socialism and nationalism gained momentum and influence before classical-liberal policies could be fully followed and implemented in the years leading up to the First World War in 1914.

However, if there is any meaning to the notion of a prevailing spirit of the age that sets the tone and direction of a period of history, then it cannot be denied that classical liberalism was the predominate ideal in the early and middle decades of the 19th century and that it changed the world in a truly transformative way. Whatever (properly understood) political, economic, and personal liberty we still possess today is because of that earlier classical-liberal epoch of human history.

America the Beacon of Individual Liberty

In the new nation of the United States of America at the end of the 18th century, there was a written constitution that in principle and a significant degree of practice recognized the rights of individuals to their life, liberty, and honestly acquired property.

In America, most individuals could say and do virtually anything they wanted, as long as it was peaceful and not an infringement on other citizens’ similar individual rights. In America, trade across this new and growing country was generally free from government regulations and controls or oppressive taxes, so people could live, work, and invest wherever they wanted, for any purpose that took their fancy or offered them attractive gains and profit.

It may seem to many a cliché, but in those decades of the 19th and early 20th centuries, when few migration restrictions barred the door, America stood out as a beacon of hope and promise. Here people could have a “second chance.” They could leave behind the political tyranny, religious oppression, and economic privileges of the “old country” to have a new start for themselves and their families. Between 1840 and 1914, nearly 60 million people left the Old World to make their new beginnings in other parts of the world, and almost 35 million of them came to America. Many of us are the lucky descendants of those earlier generations who came to “breathe free” in the United States.

Today, in America and around much of the world, these classical-liberal ideas and ideals of individual liberty, unhampered free markets and free enterprise, and constitutionally limited government, the purpose of which is to secure and protect each person’s life and property rather than abridge them, are being lost.  

They are disappearing from high school and college and university curricula, or when referred to are condemned or ridiculed as outdated or irrelevant or wrong-headed. The self-appointed social critics and intellectual trendsetters of ideas have turned to new collectivist versions of race, gender, and social group. This can only end badly for the future of freedom. (See my articles “Campus Collectivism and the Counter-Revolution Against Liberty” and “Collectivism’s Progress: From Marxism to Race and Gender Intersectionality.”)

The ideas and spirit of classical liberalism, the original and true liberalism, need to be fully reborn, restated, and reintroduced as the guiding ideas for an America and a world of liberty, prosperity, and peace. 

By Richard Ebeling

Originally published on August 29, 2022 for The Future of Freedom Foundation

It is very difficult to be a classical liberal or libertarian and not experience bouts of disappointment, frustration, and outright pessimism. The world around us seems to be going to hell in a handbasket. Government continues to grow and, apparently, is out of control.

For example, the Congressional Budget Office (CBO) released its semiannual Budget and Economic Outlook, 2022-2032 in late May 2022. The CBO expects that when the federal government’s current fiscal year ends on September 30, 2022, Uncle Sam will have spent $5.874 trillion. Tax revenues from all sources will be $4.890 trillion, leaving a budget deficit for the fiscal year of $1.036 trillion. Total national debt held by the public will come in at $24.173 trillion, while the gross national debt (which includes Treasury securities held by other government agencies) will be more than $30.621 trillion.

Gross Domestic Product (GDP) is expected to equal $24.694 trillion in 2022. So, this means that federal spending will be 23.8 percent of GDP, while taxes will absorb 19.6 percent of GDP. The more than $1 trillion deficit will amount to 4.2 percent of GDP.

Bigger government in the years ahead

Things do not get better looking over the coming decade, the CBO anticipates. In 2032, federal expenditures are expected to total $8.469 trillion, for a 51.8 percent increase over 2022. Federal taxes are projected to amount to $6.662 trillion in 2032, or a 36.2 percent increase over a decade earlier. The budget deficit is predicted to be $2.252 trillion in 2032, representing a 217 percent increase over the deficit in 2022. Gross Domestic Product will be $36.680 in 2032, says the CBO, and will be 48.5 percent larger than in 2022.

The government’s share of the GDP pie, in other words, will be increasing noticeably faster than the national economy is projected to grow over the next 10 years. Also, the share of government borrowing to simply pay the interest on the existing accumulated national debt will be increasing as well. In fiscal 2022, the federal government will borrow $1.036 trillion, as we saw. Out of this, nearly $400 billion will be used to pay interest owed on the national debt, or about 39 percent of total borrowing. In 2032, when the deficit is expected to be $2.253 trillion, $1.193 trillion will be used just to pay interest on the, then, accumulated national debt, or 52 percent of all government borrowing in that year. So more than half of all the money the federal government will have to borrow 10 years from now will be used just to stay current on the interest payments due from all the earlier decades of annual deficit spending.

Of course, all of this has to be taken with a grain of salt. Ten years ago, the CBO did not anticipate the great economic contraction of 2020 caused by the federal and state government’s draconian response to the coronavirus crisis, that commanded the shutdown and lockdown of much of the U.S. economy for several months. And just two or three years ago, the CBO was still projecting that price inflation, as measured by the Consumer Price Index, would still be rising at a “modest” 2 percent a year in 2022.

Entitlement programs are heading for disaster

What is driving a huge portion of government spending and growing deficits and debt are the “entitlement” programs, that is, the welfare state, especially Social Security and Medicare/Medicaid. In 1970 (in 2022 inflation-adjusted dollars), Social Security and Medicare spending came to a little over $300 billion out of $1.5 trillion (again, in 2022 inflation-adjusted dollars) of federal government spending, or a little less than 21 percent of the total budget that year. In fiscal year 2022, Social Security and Medicare spending will come to about $1.8 trillion, or 31 percent of all federal expenditures.

But an additional component to this is that these entitlement programs are heading for bankruptcy. Already, in 2021, the Social Security Trust Fund spent $147 billion more than was taken in by the designated taxes for the government pension program. Over the next 10 years, Social Security will run a cumulative deficit of $2.4 trillion. Where is the money coming from to fill this gap? In past decades, the Social Security Trust Fund ran surpluses, that is, it collected more of those designated taxes than it paid out to eligible retirees.

The trust fund “invested” those surpluses in U.S. government securities. In other words, these surpluses were covering part of the federal government’s overall annual deficits. But by around 2034, the trust fund will have “cashed in” all of those securities. Under current legislation, the Social Security Trust Fund may pay out only what it collects in taxes or holds in the form of those Treasury securities. So, around a decade from now, Social Security taxes collected will permit retirees to receive only about 77 percent of what is currently redistributed to them from the working-age population. In other words, if you were receiving a Social Security check from Uncle Sam every month in the amount of, say, $1,000, you would find at some point that the check in the mail would be only $770.

The same applies to Medicare. In 2021, Medicare-related taxes came to $337.4 billion, with expenditures of $328.9 billion, or a modest surplus of $8.5 billion. But according to the Medicare Trust Fund report for 2022, by 2031, taxes collected will equal around $594 billion, with outlays totaling $684 billion, or a deficit of $90 billion. The problem will be that the Medicare Trust Fund will have cashed in all the Treasury securities in its “asset” portfolio in 2028. It, too, is facing bankruptcy under current federal legislation.

Bigger military budgets due to foreign interventionism

Added to this is government military spending, as well. In inflation-adjusted 2022 dollars, the U.S. defense budget was about $600 billion in 1970, when the Vietnam War had not yet come to an end. In fiscal year 2021, defense spending came to over $800 billion. So, in spite of the end of the Cold War with the demise of the Soviet Union in 1991, the United States government spends 33 percent more on the military than over half a century ago. Foreign military interventions in Somalia, Afghanistan, Iraq, Libya, Syria, and other places in the world over the last 30 years have prevented any of the promised “peace dividend” expected three decades ago with the end to the Cold War.

Now, with U.S., NATO, and European Union military support for Ukraine in its war with Russia, and the emerging new Cold War between the United States and China, Defense Department spending can only be expected to increase in the years ahead. After all, President Biden has publicly committed America to coming to Taiwan’s defense if China were to attempt to invade that island. If this is a serious “promise,” in the face of growing Chinese military expenditures and outreach in East Asia and the Indian Ocean, this will require greater sums spent by the United States to militarily match its new chosen rival for global hegemony.

These numbers, of course, do not include all the other categories of federal spending, from National Public Radio to the Departments of Education, Housing and Urban Development, Health and Human Resources, Agriculture, State, Interior, Homeland Security, and all the rest. Still more tens of billions of dollars on these.

Government spending equals what is taken from the private sector

This is all a far cry from the beginning of the twentieth century, when in 1900, federal spending equaled only around 2.7 percent of GDP, with state and local spending, together, coming to another 4 percent of GDP. That is, all levels of government took less than 7 percent of national income. That meant that the American citizenry was keeping 93 percent of the income they earned. Keep in mind that this was also before the introduction of federal income tax in 1913. In comparison, with a CBO-estimated GDP in 2022 of almost $24.7 trillion, all levels of government — federal, state, and local — will be spending almost $10 trillion, or over 40 percent of the national economic pie.

The reader may have noticed that I have given greater emphasis to levels of government spending than to amounts taxed or borrowed, per se. The reason being that it is government spending that represents the amount of private production siphoned off and out of the direct hands of the private producers and income earners of the society. This is how much the government plunders from the people of the country, regardless of whether the production and income that is transferred into the hands of those in political power has been done by taxation or borrowing.

What does $10 trillion of total government spending equal? It is, in fact, more than the $9.777 trillion that the American citizenry spent in 2021 on household consumption expenditures for “services.” These included housing and utilities, health care, transportation, recreational activities, food services and hotel accommodations, and financial services and insurance, as well as nonprofit institutional spending on household services.

What this means is that if government had not pickpocketed this $10 trillion out of our income and wealth, we would have had the financial wherewithal to more than double our expenditures on these types of personal and consumption services. Our consumer-chosen standards of living would have been that much higher, as reflected in what we decided to spend that $10 trillion on.

Bigger government reduces freedom in many ways

All of this, of course, is just the relatively direct dollars-and-cents size and scope of government in modern American society. It does not include the estimated additional $2 trillion a year that private businesses must incur in additional costs to comply with all the federal regulations imposed on private enterprises in the United States. It does not capture all the human misfortunes imposed on all those priced out of employment opportunities due to the minimum wage, or who do not have the financial means to meet the regulatory rules and expenses to be able to open and operate a business and thus never have a chance to be self-employed or try their hand at being an entrepreneur.

Also, that $10 trillion of government spending does not directly remind us of the extent to which government intrudes and surveils into the privacy of our individual and family lives in the name of a war on terrorism or the never-ending war on drugs, or restrictions on people’s movements through passport and visa requirements, or due to border controls that represent government central planning of who may travel and for what reasons they may enter or leave the country.

It also enables the United States government to play the role of self-appointed policeman of the world, with military bases in dozens of countries, which carries the constant risk of Americans at any time being drawn into new foreign wars and conflicts based on what those in political power in Washington, D.C., decide is in the “national interest.” This can include the danger of a nuclear conflict with Russia over Ukraine or a potentially equally cataclysmic war with China over Taiwan.

Albert Jay Nock on social versus political power

Thinking about all of this, as I said at the beginning, easily sinks the friend of freedom into despair and despondency. How can it even be stopped, let alone reversed, so that a society of individual liberty, limited government and truly free markets can be established in the United States? This gets me to a famous but seemingly neglected essay written by Albert Jay Nock in the 1930s called “Isaiah’s Job.”

Nock was one of the most insightful advocates of individual liberty in the twentieth century. He is most famous for his 1935 book, Our Enemy, the State. He clearly laid out what he called the difference between “social power” and “political power.” Social power is the sum of all the free actions of all the free individuals in a free society. It comprises the personal choices, free associations and exchanges, and creative achievements when government leaves people alone to peacefully follow their own paths for betterment as they, respectively, see it.

Political power comprises all the government actions that interfere with those free actions by free people in the form of taxes collected, regulations and restrictions imposed on personal and market activities, and the compulsory redistributions of income and wealth that are meant to privilege some at others’ expense. The greater the political power by government in the society, the more social power is diminished; that is, individual freedom is reduced and “the state” grows with its legitimized use of force over people’s lives.

The dark New Deal days of growing government

Nock wrote all this during the New Deal days of Franklin D. Roosevelt’s administration. Government spending had never before been as large; government taxes had never been so high; government deficits and the national debt had never before reached such heights. The people’s gold had been confiscated by the government, and depreciating paper money was given to them in exchange. Millions were on the government dole, and huge government “public works” projects replaced private enterprise or seduced private business with government contracts and subsidies.

In addition, during the first years of FDR’s New Deal, there was the attempt to impose a system of fascist-type central planning over the entire U.S. economy. Only a series of Supreme Court decisions brought this “experiment” in a fully command-and-control economy to an end. Roosevelt merely continued with more and bigger government through greater spending on welfare and “make-work” projects.

FDR demonstrated an arrogance and hubris in his wielding of presidential power than seemed not much different from the dictators of Europe who finally brought about a terrible war in 1939. Roosevelt then finagled his way into the war, a war that a huge majority of Americans wanted no part of, by introducing a system of aggressive economic sanctions and ultimatums on the Japanese. It culminated in the Japanese attack on Pearl Harbor in December 1941.

These were dark times for friends of freedom. The classical liberal idea and ideal seemed not only to be in eclipse, coming to an end with collectivisms like communism, socialism, fascism, and Nazism seeming to be the future for mankind.

Isaiah’s job of speaking the truth

In the midst of all this, Nock wrote his essay, “Isaiah’s Job,” which appeared in The Atlantic Monthly in 1936. He paraphrased the story of Isaiah in the Old Testament. Isaiah was sent by God to warn people about the evils of their ways and their need to repent and return to the path of righteousness. But wherever he goes, Isaiah is met with resistance and ridicule. Finally, in despair, Isaiah cries out to God, asking why he has been sent on this hopeless mission.

God replies that it’s not Isaiah’s job to know whether or how successful he may or may not have been in getting people to change their ways. That’s God’s job, since he can look into the hearts and minds of people in a way that Isaiah cannot, and as a result, Isaiah can never know who may have been touched and influenced by what he had said in God’s name. Isaiah’s job is to uprightly speak the truth and tell people where a better path may be found. The rest is God’s job.

Nock’s point was to say that nobody can read the future, or how people may or may not change what they believe and what they will socially and politically want or oppose. All that a friend of freedom can do is speak what he knows to be true about the right principles for a free society and how and why such a free society should be desired if liberty has any value and if peaceful prosperity for mankind is to be made possible.

In dark political times, like those in the 1930s or now in 2022 America, Nock said that the cause of freedom had need for a “remnant,” by which he meant, “those who by force of intellect are able to apprehend these principles [of freedom], and by force of character are able, at least measurably, to cleave to them.” They learn, preserve, and share their understanding about the idea and ideal of liberty when and as they can with those around them, when opportunities present themselves in their respective corners of society. And you may never know who has listened to what you said or how effective and influential it may have been.

You never know who is listening when you explain freedom

Let me give an example from my own experience. When I was in graduate school in the New York City area, I started to make some extra money teaching introductory economic classes at the Newark campus of Rutgers’s University in New Jersey. I lived in New York City and would have to commute back and forth on the nights that I was teaching.

One evening after taking the train under the Hudson River from New Jersey to lower Manhattan, I stopped to do some food shopping at a small market before continuing over to Queens, where I was living. Waiting on line at the checkout, I noticed the woman behind me was staring at me. Finally, she asked, “Aren’t you Richard Ebeling? And you teach at Rutgers’s, don’t you?” I nervously replied, “Yes,” Then in a voice loud enough that everyone around could hear, she said, “You have ruined my marriage.”

That got everyone’s attention, especially when she repeated the words for a second time. My eyes were looking for the exit. I said, “Excuse me?” She answered, “My husband took your economics class last semester, and all he does now is come home from work, watch the evening news, and complain about government for the rest of the night. You have ruined my marriage.”

How she knew that I was his teacher for that class I never found out. Nor do I have any idea who her husband was. Did he earn an “A” or was he a “C” student? Did he ask any questions during class or did he just listen silently the entire semester? Did he sit in the front or way in the back of the room? I have no idea.

But what it did teach me was that you never know how or who you may influence and get to think about things after sharing your ideas about freedom. Even when it seems that the person you are talking to is resistant or oblivious to the ideas you are expressing, you never know how they may rattle around in his mind the next day or a year later and affect how he thinks about freedom and the free society. Nor can you always know if someone not part of the conversation is listening in to what is being said and making him think about things a little differently about the value and importance of liberty.

Modern communication facilitates the freedom advocate’s task

When Albert Jay Nock wrote “Isaiah’s Job,” back in the 1930s, it was a much more isolated and lonelier environment in which to discover others who shared classical liberal or libertarian ideas. There were only a handful of print publications open to them. And communication was limited to snail mail, landline telephones, and having to physically travel to meet and interact with people face-to-face.

Today, the internet and email and text messaging have transformed the means by which friends of freedom can find out about each other, publish articles, write blogs, film and upload videos, and talk face-to-face via Skype or Zoom, from one’s own living room. We have come to take such things so much for granted that we forget how revolutionary they really are, compared to not very long ago.

This also means that we have amazing ways to communicate with multitudes of others; friends of freedom are able to share and improve their understandings of the ideas of liberty and the better ways to express them. These are ways that Nock and others like him never had in those earlier times. We can far more easily and rapidly work to change the climate of opinion by making people aware of the facts and the consequences of a government out-of-control.

The most important thing not to lose sight of, in my opinion is that regardless of how bad things may seem, they have seemed equally bad in the past. Just as Albert Jay Nock helped to cultivate a new generation of friends of freedom, that is our task in our own time. And together we can make a society of liberty a reality, without always being depressed or despondent about who or how many may be listening.