What Happened to Liberalism?

It began in 1846 in Great Britain with the repeal of corn tariffs. So says The Economist magazine and so reports Robert Samuelson in the Washington Post.

With the repeal of the tariffs, instituted to protect British corn farmers, liberal economic policies ascended. Free trade, free enterprise, free markets and limited government became the rule. And the world has not been the same since.

It is a wonderfully uplifting story… especially if you ignore the simple fact that the twentieth century was a charnel house. Whether or not you want to curb your enthusiasm, you should always curb  your optimism when surveying the movement of big ideas.

The old liberalism advanced the interests of the individual as against the state. But, we need to be careful here, because Germanic philosophers also had a notion of the individual and their notion did not involve free markets, free trade or limited government. So, let’s be clear, the British defined the individual as a free participant in free markets. The more German version, whether in Hegel or in Nietzsche aimed to produce a race of people who were not bound by any rules, but who were their own rules. No more free markets. No more free trade. Welcome to the police state.

Anyway, Samuelson explains the Western liberalism became “mushier” when it morphed into a statist version.

As he write:

Over the years, the staunch individualism gradually gave way to a mushier liberalism that called upon government to stabilize the economy and, through an expanding welfare state, provide economic security.

To be fair, Adam Smith believed that government had a role in the economy. He argued that coinage had evolved because only an objective outsider could guarantee that the gold piece in your pocket was really gold. The government guaranteed it by stamping its mark on it.

And yet, free markets ultimately produce uncertain outcomes. The same is true of any game. If you know the results before the game has begun, the game has been rigged. Modern liberalism, and its socialist cousin have defined the role of government to include: stabilizing markets and providing economic security. Whether or not this will protect us from pending economic calamities like the Great Depression remains to be seen. For all I know the faith in government is yet another misguided attempt to play god. These rarely end well.

Among the problems of big government, and even of international agencies, is that they promise more than they can deliver. They promise peace and prosperity for everyone, regardless of achievement. The promise equitable distribution of wealth and produce rampant inequality.

And, we must note, today’s liberalism, more radical than liberal, has glommed on to a series of dubious causes, like diversity quotas and transgender rights, and has tried to transform the culture to make it fulfill the dreams and hopes of Western idealists. Besides, the advent of multiculturalism and open borders threaten the cohesion of native cultures.

With the advent of massive welfare states, liberal democracy has ceased to work. Samuelson notes the important point. However much we believe that liberal democracy is better than the Chinese and Singaporean model of authoritarian capitalism, the latter has more in common with nineteenth century liberalism than do our current efforts to make government provide for everyone, even for people who have no legal right to be in the country.

Siphoning off wealth and investment capital does not promote economic growth. It makes government into a large scale charity, not a facilitator of free enterprise.

And it involves nations in an endless public drama about issues that have little to do with free markets or free trade. Debates over abortion rights, gun control and same-sex marriage distract from the business at hand. At worse, they undermine the work ethic that produced wealth.

It’s nice to consider that government policy, all by its lonesome, changed the world. It’s nice to imagine that repealing the corn tariffs set Britain on the road to prosperity… and, by the way, to imperial overreach. The truth is, British culture had practiced the values that made it possible for people to compete fairly in the marketplace and to accept the results. Values like good sportsmanship are essential to the functioning of a marketplace. Once you decide that the old British ethos, composed of pragmatism and empiricism, must produce outcomes that fulfill our ideals, we are heading down a road to ruin.