Classical liberalism

Classical liberalism is a term used to describe the following:

• the philosophy developed by early liberals from the Enlightenment until John Stuart Mill
• the philosophy developed by early liberals from the Age of Enlightenment until John Stuart Mill and and reclaimed in the 20th century by Friedrich Hayek and Milton Friedman.

This entry is about the political philosophy termed "classical liberalism."

Classical liberalism is a political philosophy that supports individual rights as pre-existing the state, a government that exists to protect those moral rights, ensured by a constitution that protects individual autonomy from other individuals and governmental power, protects private property rights, and which encourages a laissez-faire economic policy. The early liberal figures that libertarians now describe as their fellow "classical liberals" rejected many foundational assumptions which dominated most earlier theories of government, such as the Divine Right of Kings, hereditary status, and separation of church and state, and focuses on individual freedom, reason, justice and tolerance.. Such thinkers and their ideas helped to inspire the American Revolution and French Revolution.

Overview

Classical liberals place a particular emphasis on the sovereignty of the individual, with private property rights being seen as essential to individual liberty. This forms the philosophical basis for laissez-faire public policy. The ideology of the classical liberals argued against direct democracy "for there is nothing in the bare idea of majority rule to show that majorities will always respect the rights of property or maintain rule of law."For example, James Madison argued for a constitutional republic, with protections for individual liberty, over a pure democracy reasoning that in a pure democracy, a "common passion or interest will be felt by a majority, and there is nothing to check the inducements to sacrifice the weaker party."

In economics, classical liberals believe that "an unfettered market" is the most efficient mechanism for satisfying human needs and channeling resources to their most productive uses and "are more suspicious than conservatives of all but the most minimal government." Their advocacy of an "unregulated free market" is founded on an "assumption about individuals being rational, self-interested and methodical in the pursuit of their goals."

They do not believe that government creates individual rights (in a moral sense), but rather that moral rights exist independently of government. Thomas Jefferson called these "inalienable rights" and indicative of the classical liberal belief that rights do not come from law but that law serves to protect natural individual rights, he says, "rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law', because law is often but the tyrant’s will, and always so when it violates the rights of the individual." For classical liberals, rights are of a negative nature — rights that require that other individuals (and governments) refrain from interfering with individual liberty, whereas social liberalism (also called modern liberalism) holds that individuals have a right to be provided with certain benefits or services by others. Unlike social liberals, classical liberals are "hostile to the welfare state."

Early in the 20th century, classical liberalism took a backseat to the ideas of modern liberalism which embraced central planning of the economy by the state and social welfare. According to Harry Girvetz and Kenneth Minogue, classical liberalism experienced a revival in the 20th century, with Friedrich von Hayek and Milton Friedman providing the intellectual foundations. This was a response to the seeming inability of Keynesian interventionist economic policies from being able to revive stagnant economies beset with high unemployment and inflation, and to the high taxation levels necessary to maintain the welfare state.

Origins

Modern classical liberals trace their ideology to ancient Greek and medieval thought. They cite as an expression the 16th century School of Salamanca in Spain and its classic formulation in the Enlightenment tradition. The Wealth of Nations (1776) by Scottish philosopher Adam Smith is one of the classic works that rejects the philosophy of mercantilism, which advocated state interventionism in the economy and protectionism. These early liberals saw mercantilism as enriching privileged elites at the expense of well being of the populace. Another early expression is the tradition of a Nordic school of liberalism set in motion by a Finnish parliamentarian Anders Chydenius.

Key Thinkers in Classical Liberalism

Thomas Hobbes

Main article: Thomas Hobbes

John Locke

Main article: John Locke

John Locke

As the industrial revolution began in the United Kingdom, so did the first conceptions of liberalism. John Locke (1632-1704) defended religious freedom in his important work A Letter Concerning Toleration published, along with his other important work Two Treatises of Government in 1689. However, Locke would not extend his view on religious freedom to Catholics.

Locke was responsible for the idea of "natural rights" which he saw as "life, liberty and property". To Locke, property was a more compelling natural right than the right to participate in collective decision-making: he would not endorse direct democracy in government, as he feared that the "tyranny of the majority" would seek to deny people their rights to property. Nevertheless, the idea of natural rights played a key role in providing the ideological justification for the American revolution and French revolution.

Baron de Montesquieu

Main article: Baron de Montesquieu

Voltaire

Main article: Voltaire

Denis Diderot

Main article: Denis Diderot

Thomas Paine

Thomas Paine was the author of Common Sense, was credited with helping start the American Revolution, and was the best-selling liberal writer of his era. Paine opposed slavery and was amongst the earliest proponents of social security, universal free public education, a guaranteed minimum income, and many other radical ideas now common practice in most western democracies.

Main article: Thomas Paine

David Hume

Main article: David Hume

Immanuel Kant

Main article: Immanuel Kant

Kant further advanced the idea of a liberal peace by demonstrating conditions and requisites for international peace among states in his work Perpetual Peace: A Philosophical Sketch (1795). As an early liberal, Kant opposed the concept of majority rule over the individual. In opposition to democracy, which in his time meant direct democracy, he advocates a constitutional republic. He says, "Democracy is necessarily despotism, as it establishes an executive power contrary to the general will; all being able to decide against one whose opinion may differ, the will of all is therefore not that of all: which is contradictory and opposite to liberty."

The Founding Fathers

Main article: Founding Fathers of the United States

Adam Smith

Main article: Adam Smith

Adam Smith believed that the government had three and only three roles to play: 1.) "protecting the society from the violence and invasion of other independent societies...which can only be performed by means of a military force" 2.) "protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it..." and 3.) "erecting and maintaining those public institutions and those public works, which...though most advantageous...are such that the profit could never repay the expense to any individual or small group of individuals" which implies that governments should work to provide some public goods and correct market externalities. Smith, advocates the state should not interfere in domestic or international trade through protectionism and that prices for goods, services, and labour should be set through the mechanism of a free market. He believed that if individuals pursue their economic self-interest that the good of society will be achieved indirectly by maximizing the stock of wealth.

Marquis de Condorcet

Main article: Marquis de Condorcet

Mary Wollstonecraft

Main article: Mary Wollstonecraft

Gustave de Molinari

Main article: Gustave de Molinari

John Stuart Mill

Main article: John Stuart Mill

Though Mill is considered a utilitarian, he did advocate a sphere of inviolable individual liberty that should not be transgressed for utilitarian concerns. In On Liberty (1859), he says: "The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant." Many have pointed out that the doctrine of the absolute right to liberty outlined in On Liberty and the absolute pragmatism of Utilitarianism are difficult to reconcile.

Friedrich von Hayek

Main article: Friedrich Hayek

Hayek was a contemporary critic of John Maynard Keynes and believed that the outcomes of Keynes' interventionist policies would result in the destruction of civil liberal society. He further advovated this thesis in his work, The Road to Serfdom, arguing that restrictions among economic freedom result in a loss of civil and political freedom.

Ludwig von Mises

Main article: Ludwig von Mises

Milton Friedman

Main article: Milton Friedman

Credited as being co-responsible with Friedrich von Hayek for providing the intellectual foundations for the revival of classical liberalism in the 20^th century, Milton Friedman is known for his work in monetary economics: specifically the quantity theory of money. He co-authored, with Anna Schwartz, "A Monetary History of the United States", which sought to examine the role of money supply in explaining macroeconomic fluctations in US history. He is also well-known for this work on the consumption function especially the permanent income hypothesis. Other important contributions include his critique of the Phillips curve and the concept of the natural rate of unemployment. Friedman, like Hayek believes that economic freedom created and protected civil and political freedom and that the loss of economic freedom led to a loss in civil and political freedom. His most famous popular works include Capitalism and Freedom and Free to Choose where he advances the ideas of laissez-faire free market liberal government. Friedman classifies himself as both a "libertarian" and a "classical liberal."

The split between classical liberalism and modern liberalism

The Industrial Revolution greatly increased material wealth, but made social problems more visible, such as pollution, child labor, and overcrowding in the cities. Material and scientific progress led to greater longevity and a reduced mortality rate. The population increased dramatically resulting in an increased supply of labor relative to capital, which led to declining wages. Many laissez-faire economists felt that these problems of industrial society would correct themselves without government action.

In the 19th century, the voting franchise in most democracies was extended, and these newly enfranchised citizens often voted in favor of government intervention into the economy. Rising literacy rates and the spread of knowledge led to social activism in a variety of forms. Those calling themselves liberals instigated laws against child labor and laws requiring minimum standards of worker safety. The laissez faire economic liberals considered such measures to be an unjust imposition upon liberty, as well as a hindrance to economic development. This 19th century social liberalism is considered by libertarians as the first significant split of modern liberalism from "classical liberalism." By the end of the 19th century, a growing body of liberal thought asserted that, in order to be free, individuals needed access to the basic necessities of life, including education, and protection from economic exploitation. In 1911, L.T. Hobhouse published Liberalism, which summarized what libertarians believe is a "new liberalism," including qualified acceptance of government intervention in the economy, and the collective right to equality in dealings, what he called "just consent."

In some european countries the term "liberalism" refers mostly to what is called "classical liberalism" in the United States, e.a. european "liberalism" is most often in favor of a free market-economy and a more restricted government.

Disputes over whether modern liberalism is derived from classical liberalism

Whether modern liberalism is founded upon the philosophy of classical liberalism is a subject of dispute. Scholar Leonard Liggio (a self-described classical liberal) holds that modern liberalism does not share the same intellectual foundations as classical liberalism. He says, "Classical liberalism is liberalism, but the current collectivists have captured that designation in the United States. Happily they did not capture it in Europe, and were glad enough to call themselves socialists. But no one in America wants to be called socialist and admit what they are." He believes that this is why liberalism means something different in Europe than in America.Proponents of the Austrian School and the Chicago School (sometimes called neo-classical economists), such as Milton Friedman, Ludwig von Mises and Friedrich von Hayek, also reject claims that modern liberalism represents a continuous development from classical liberalism. According to Friedman

Their view is that beginning in the late nineteenth century, and especially after 1930 in the United States, the term liberalism came to be associated with a very different emphasis, particularly in economic policy. It came to be associated with a readiness to rely primarily on the state rather than on private arrangements to achieve objectives regarded as desirable. Their catchwords became welfare and equality rather than freedom.

Neo-classical economists instead see themselves as the true inheritors of classical liberalism. For example, Hayek argued that he was not a conservative because he was a liberal; and had refused to give up that label to modern usurpers.

Criticism of neo-classical economists as classical liberals

Many have rejected this claim describing the neo-classical economists as "right-wing economic liberals", "liberal conservatives" and as the "new right" viewing their efforts at co-opting the term as ignoring the political side of early liberalism and only focusing on the work of the classical economists such as Smith and Ricardo. Furthermore, it has been argued that "Hayek's view of classical liberal principles is a peculiar one" which ignores the work of pre-eminent thinkers such as Locke and Mill.

"Classical Liberalism" and Libertarianism

Libertarians tend to use the phrase "classical liberal" interchangeably with "libertarian". An example of this is that the CATO Institute sees classical liberals, liberals, and libertarians being from the same ideological family. Thus, the CATO Institute prefers to call itself "liberal" because it sees itself as the only rightful inheritor of liberalism. Libertarians do share many philosophical, political, and economic undertones with classical liberalism, including the ideas of laissez-faire government, free markets, and individual freedom. Classical liberals maintained that in order to protect individual liberty the government must be limited in what it can do. The Libertarian party takes this classical liberal understanding further by arguing for greater restrictions upon the government.

Raimondo Cubeddu of the Department of Political Science of the University of Pisa says "It is often difficult to distinguish between "Libertarianism" and "Classical Liberalism." Those two labels are used almost interchangeably by those who we may call libertarians of a "minarchist" persuasion: scholars who, following Locke and Nozick, believe a State is needed in order to achieve effective protection of property rights."

Alan Ryan, professor of Politics at Princeton, argues that the claim from "contemporary libertarians...that they are classical liberals...is not wholly true. There is at least one strain of libertarian thought represented by Robert Nozick's Anarchy, State and Utopia that advocates the decriminalization of 'victimless crimes' such as prostitution, drug-taking and unorthodox sexual activities. There is nothing of that in John Locke or Adam Smith."

See also

• Austrian School
• Capitalism
• Free market
• Globalization
• Privatization
• Liberalization
• Liberalism
• Libertarianism
• Manchesterism
• Contributions to liberal theory

External links

• A Guide to Classical-Liberal Think Tanks by Joseph L. Bast
• What is Classical Liberalism? by John C. Goodman
• The Liberal Institute [1] A classical liberal think tank based in New York City
• Liberty Ideas - International platform for classical liberalism