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Source link: http://archive.mises.org/14170/the-achievements-of-liberalism/

The Achievements of Liberalism

October 7, 2010 by

One of our most recent uploads is The Liberal Tradition from Fox to Keynes, edited by Alan Bullock and Maurice Shock, published first in 1957. It is an extremely inspiring book that collects the great writings and speeches of English liberals from the 18th to the 20th century.

The book reminds us of the fantastic achievements of the liberal tradition, like the absolutely security of private property, civil liberties for women and Jews, the end of slavery, the establishment of the freedom of association and religion, the end of mercantilism and the institutionalization of free trade, the end of torture and cruelty in penal laws, the hard-core opposition to imperialism, the celebration of the merchant class, the heralding of individualism. It’s all magnificent and sweeping. Reading through it, you can feel your heart racing with excitement. The statism of old was being swept away. In the minds of these great figures, there could never be too much liberty.

And yet the book also documents the change that began to overtake liberalism in the late 19th century, all resulting from what Hans Hoppe has called the great failing of liberalism: its belief that the state could itself be made liberal, benign, and even part of the structure of society itself. And so you begin to detect a change in the narrative, all based on the myth of the possibility of good government. The first sector to fall is education, as we might expect. Then we have slippage in the area of foreign policy, stemming from the view that the state itself could become the liberator of peoples. World War I then changed everything and liberalism lost its anti-statist core and abandoned laissez-faire in economics.

The book end with Keynes’s famous essay calling for an end to individualism. “Progress lies in the growth and the recognition of semi-autonomous bodies within the State-bodies whose criterion of action within their own field is solely the public good as they understand it.” Thanks J.M.! He is critical of socialism because it is too enamored with the idea of freedom!

In any case, this is a wonderful collection with great lessons to teach us today.


Daniel Kuehn October 7, 2010 at 9:31 am

Nice selective quotation. The piece is actually about how states are too big and that these “semi-autonomous bodies” are better because they are smaller than states. He also praises “the tendency of businesses to socialize themselves” as a great example of what he’s thinking of in this respect. He does this in the General Theory too. Whenever you hear “the socialization of investment” on here, you all talk as if Keynes is talking about state run industries. If you read on he identifies private joint stock companies as one of the important examples of what he means by “socialization of investment”.

The whole essay is an embrace of liberalism. It is, of course, a recognition of the interaction of communitarian and individualist liberalism over time, and it does lean towards communitarian liberalism. But it’s not a rejection of the liberal tradition.

If you had any genuine interest in the prospect of liberalism, you wouldn’t continually distort it like this. What you advocate is a very narrow brand of liberalism. Just say that and differentiate yourself from classical liberalism – don’t distort and mislead people about other liberals that don’t share your particular brand of the tradition.

Slim934 October 7, 2010 at 10:36 am

Clearly Keynes was an advocate of liberalism.

One need only read the Foreward he wrote for the german language version of his General Theory to see how liberal he actually was.

Daniel Kuehn October 7, 2010 at 10:58 am

Ha – well that’s another one that is selectively quoted on here on a regular basis. Have you ever read that foreward in its entirety?

If you’re curious about the take of someone who (1.) does not think Keynes was illiberal, and (2.) who has read the foreward in its entirety, you can read this: http://factsandotherstubbornthings.blogspot.com/2010/07/keyness-foreword-to-german-edition-of.html

Slim934 October 7, 2010 at 11:25 am

I had actually read it before but I still stand by my assessment.

I will quote from you directly on your take on the particular passage in question.

“Since totalitarian Germany departs so regularly from the assumptions made by British orthodoxy, such a theory is of little use to German economists. But a general theory may be of greater use. This, at least, is the argument. I see no reference in any part of this foreword to what has been understood as a Keynesian policy response. I see only references to Keynesian economic theory. And I see no defense of totalitarianism, what I see is Keynes selling a theory that he thinks is most appropriate for explaining the operation of a totalitarian economy.”

I’m sorry but I fail to see how one can both champion the primacy of the individual and simultaneously champion a theory which (by his own admission) is useful for state management of an economy. This does not strike me as the pronouncement of a liberal economist given that the actual methods of resource allocation are completely diametrically opposite of each other (one being the allocation based on consumer preferences and the other based on political preferences).

Although I will admit I have never read the entire general theory from front to back so I cannot speak for the final chapter which is supposedly a repudiation of fascism. After failing to make heads or tails from the preliminary chapters where he constantly shifts definitions in his terminology I simply got fed up with it and stopped reading part way through.

Daniel Kuehn October 7, 2010 at 11:32 am

“I’m sorry but I fail to see how one can both champion the primacy of the individual and simultaneously champion a theory which (by his own admission) is useful for state management of an economy.”

I think you misunderstand Keynes. What does he say is more easily applicable to a totalitarian state? Not a policy, but a “theory of aggregate production”, right? Look at what he writes! If there are any doubts about this (which there really shouldn’t be) he goes on to provide more detail on why it’s applicable – because it is a more “general” theory. A totalitarian state doesn’t satisfy Marshall’s modeling assumptions, and so Marshall is useless. That is Keynes’s argument in all those paragraphs that most people never cite. The Keynesian theory relies on no such assumptions and so can explain a wider range of situations.

“I simply got fed up with it and stopped reading part way through.”

That’s unfortunate – it’s worth pushing through. I’m not sure about some of your accusations here, but I will agree the beginning can be dense.

Slim934 October 7, 2010 at 11:48 am

…hmm I think our problem here may be a misunderstanding of what classical liberalism entails. This would not surprise me because most of my classical liberalism comes directly from Bastiat and Mises and Hayek. I may be being too narrow in precisely who all comprises the whole intellectual movement of liberalism. I would need to learn more about that before commenting more intelligently.

He definitely did quite a bit of terminology shifting throughout the whole of the book. It’s been awhile so I would have to go back to look up specific examples.

Slim934 October 7, 2010 at 11:37 am

Bloody 5 minute editing time limit.

I also meant to add in my 1st paragraph: Furthermore, that fact that the theory claims to satisfactorily explain both economic systems seems to me a carte blanche justification for increased state meddling in the economy. Since the state can simply argue that it has better economic statistics it can always argue that its policy subscriptions will be the better informed and therefore the wisest. Whether the theory itself is correct is one thing, but it seems strange to conclude that (given the logical conclusions of the theory) Keynes could possibly be even sustaining the ideas of classical liberalism.

Daniel Kuehn October 7, 2010 at 11:52 am

There is certainly wider scope for fascism if the Keynesian framework is accurate, if that’s what you mean by “carte blanche justification”. But that hardly seems like (1.) a good way to assess the accuracy of the theory, or (2.) a reason to assume anything about the liberal credentials of the proponent of the theory. Evolutionary biology gives more license for genocide than young-Earth creationism. That fact doesn’t make evolutionary biology less plausible, nor does it make Darwin a proponent of genocide.

Slim934 October 7, 2010 at 12:50 pm

The comments are not permitting me to further reply down the chain so I will do so here.

You are misinterpreting what I meant, which may be the fault of how I wrote it.

My final sentence was to do exactly what you claim I am not doing: separating the correctness of the theory from the practical implications of it. I meant that even assuming the theory is correct the theory itself is in of itself still useful in promoting a fascist state system. Given this, I hardly see how one can consider the theory a liberal one or how the one who wrote it can be considered a liberal.

Furthermore, after just reading portions of the final chapter of the general theory I must concluded that the general representation of the “socialisation” of investment as is normally represented on this site seems wholly accurate.

First: “At the same time we must recognise that only experience can show how far the common will, embodied in the policy of the State, ought to be directed to increasing and supplementing the inducement to invest; and how far it is safe to stimulate the average propensity to consume, without foregoing our aim of depriving capital of its scarcity-value within one or two generations.”

Second: “Thus I agree with Gesell that the result of filling in the gaps in the classical theory is not to dispose of the “Manchester System”, but to indicate the nature of the environment which the free play of economic forces requires if it is to realise the full potentialities of production. The central controls necessary to ensure full employment will, of course, involve a large extension of the traditional functions of government.”

How in the heck after reading that last sentence can argue that Keynes IS NOT endorsing fascism?

This 3rd one is even MORE damning IMO: “The authoritarian state systems of to-day seem to solve the problem of unemployment at the expense of efficiency and of freedom. It is certain that the world will not much longer tolerate the unemployment which, apart from brief intervals of excitement, is associated�and, in my opinion, inevitably associated�with present-day capitalistic individualism. But it may be possible by a right analysis of the problem to cure the disease whilst preserving efficiency and freedom. ”

Again, the solving of this (and this seems apparent to me from reading the previous text) is the use of the State to set economic policy. If I am not mistaken this is the textbook definition of fascism: nominal ownership of productive resources by private owners with the actual rules of its employment set by the state.

Daniel Kuehn October 7, 2010 at 2:47 pm

Hi – I don’t have time to respond in detail, but I want to make clear I agree government investment was an important part of his vision, but (1.) state run industries weren’t necessarily what was implied (and in fact seems to have been specifically opposed in the GT, and (2.) there were a variety of private things he had in mind too. People view the phrase too narrowly (in the sense of thinking he was only talking about the government) and too broadly (in the sense that “socialization of investment” mean “socialism” or public ownership of the means of production) at the same time.

Stephan Kinsella October 7, 2010 at 11:59 am

What’s a foreward?

Daniel Kuehn October 7, 2010 at 2:36 pm

Also known as “foreword”, usually known buy most people on cite as “foreword” with know knead four inquiry :)

Slim934 October 7, 2010 at 5:39 pm

Silly me.

Common mistake on my part. Like when I improperly use “their” and “they’re” regardless of knowing their proper usage.

Daniel Kuehn October 7, 2010 at 11:23 am

Hmmm… my comment seems to have been lost in the shuffle. Or maybe Jeff doesn’t like sharing other links.

Read the whole foreward – only one paragraph of that is usually quoted on here.

Better yet, google “Schmoller” and “Methodenstreit” and read Mises’s “The Historical Setting of Austrian Economics” in its entirety (you can find it on this site), and then read the foreward in its entirety and then tell me if any objective person could argue that that foreward is illiberal or pro-fascist.

Daniel Kuehn October 7, 2010 at 11:24 am

And now my first comment is back and I can’t delete this comment… oh well… the hosts can feel free to drop this comment and the immediately preceding one.

Jeffrey Tucker October 7, 2010 at 10:37 am

hmm, Daniel, it’s just not believable.

Jeffrey Tucker October 7, 2010 at 12:41 pm

Anyone interested in discussing the book or the main point of the post, instead of arguing that the moon is made of cheese?

Daniel Kuehn October 7, 2010 at 2:37 pm

Does the title of the book not imply that Keynes’s place in the liberal tradition is an important subject of the book?

Is Keynes’s place in the liberal tradition not what we are discussing?

Mrhuh October 7, 2010 at 5:00 pm

I don’t understand how anyone can consider Keynes to be liberal giving that he believed that war was good for the economy and was horrified at the prospects of peace after WWII.

Alexander S. Peak October 8, 2010 at 12:25 am

Another book that I wish I had the time to read!

This sounds extremely interesting. Hopefully it can help clarify for me some of the nuances within the modern forms of “liberalism.”

For example, my understanding of neoliberalism is that it is the view that democracy and free trade are good things, but that one needs to support powerful, perhaps even monopolistic institutions in order to “fine tune” the market and thereby “ensure” the promotion of democracy and free trade. Thus, it is my understanding currently that neoliberalism tends to support the Federal Reserve (and other centralised banks), so-called “free trade” agreements, the IMF, the UN, the World Bank, NATO, the WTO, the EU, the US, and even some degree of military interventionism. Thus, if my understanding of neoliberalism is correct, it would seem that Keynes and Reagan could both be decribed as neoliberals, since neither, as far as I’m aware, were fundamentally opposed to any of the above.

But, then, wikipedia also mentions another kind of modern “liberalism” called ordoliberalism, and from its description, I can’t figure out how it differs (if it even does) from neoliberalism. More surprisingly, the article lists Hayek as an ordoliberal, while I had always been under the impression that he was a classical liberal minarchist, not very different from Mises.

Then the article says that Röpke rejected ordoliberalism and considered it to be no different from “liberal conservatism,” which is fine and good, but I seem to recall an article written by Scott Trask which said that Röpke was a neoliberal, and pointing out that he unfortunately favoured the existence of a centralised bank.

So, much of this leaves me confused. Naturally, I do not believe that modern “liberalism” deserves to be called “liberalism” without the quotation marks. But, I remain somewhat confused about the various subcategories, how they interrelate, and what spurred their development. Will this book help to answer some of these questions, or ought I look to some other book for these answers?

Alex Peak

Michael J. Green October 8, 2010 at 2:49 am

I love these sorts of collections; I’m currently going through Lord Acton’s “Essays on Freedom and Power,” as well as some of Herbert Spencer’s essays. It’s a handy way to expose one’s self to the great liberals of the 18th and 19th centuries, and I’m eager to read some of the Manchester Liberals. Any idea if this will be added to the epub library soon?

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