2010 FNF - Readings in Liberalism-English

Friedrich-Naumann-Stiftung für die Freiheit would welcome reproduction and dissemination ofthe contents of the report with due acknowledgments.

Friedrich-Naumann-Stiftung für die FreiheitPost Box 1733House 19, Street 19, F-6/2, Islamabad – PakistanTel: +92-51-2 27 88 96, 2 82 08 96Fax: +92-51-2 27 99 15 E-mail: [email protected] Url: www.southasia.fnst.org

No of printed copies: 1500Seventh Edition: November 2010ISBN: 978-969-9515-13-2

We thank Dr. Detmar Doering for permission to reprint this reader in Pakistan

Disclaimer: Every effort has been made to ensure the accuracy of the contents of this publication. The authorsor the organization do not accept any responsibility of any omission as it is not deliberate. Never-theless, we will appreciate provision of accurate information to improve our work. The views ex-pressed in this report do not necessarily represent the views of the Friedrich-Naumann-Stiftungfür die Freiheit.

CONTENTS

Foreword to 7th Edition

Foreword

Introduction

Karl R. Popper (1956): Liberalism – Some Theses

Ludwig von Mises (1927): Liberalism – A Record of Success

John Locke (1689): A Plea for Tolerance

William Leggett (1834): The Rights of the People

Wilhelm von Humboldt (1792): The Purpose of Man

Adam Smith (1776): The Market and the Individual

Frédérick Bastiat (1849): Freedom as Competition

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xi

xv

1-6

7-20

21-26

27-32

33-40

41-46

47-54

Contents

Edmund Burke (1790): The Principle of Reform

John Stuart Mill (1859): Freedom and Education

David Hume (1739): Self interest and Justice

Jose Ortega y Gasset (1930): The Tyranny of the Masses

Robert Nozick (1974): Utopia

Friedrich August von Hayek (1976):The Fiction of Social Justice

John Gray (1986): The Opponents of Liberalism

John Prince Smith (1860): The Freedom of Trade

55-60

61-66

67-76

77-84

85-92

93-100

101-110

111-122

FOREWORD TO THE 7TH EDITION

viii

In the light of the Global Financial Crises Liber-alism has come under unjustified attack. Mostly,neither its root causes are understood properly nordo many people have a notion what Liberalismstands for. It is not seen that government inter-vention into the real estate market was responsi-ble for the following turmoil. Additionally,Liberalism or even more the term Neoliberalism,both are equated with unlimited capitalism. Peo-ple pillory the concept of Neoliberalism for the op-posite of its intent; that is to restrain exploitationof people without limits. Naïve islamists even seeIslamic economy as contrary to capitalism. Noth-ing can be more wrong: As capitalism is an eco-nomic and social order in which means ofproduction are privately controlled plus labour andgoods are traded in a free markets Islamic Econ-omy is purely capitalist. There are some con-straints in order to limit market actions for socialreasons – the same intent and similar solutionscan be found in Neoliberalism.

Furthermore, the term liberal is used widely butoften in a misleading way: Liberal is neither lib-

Olaf Kellerhoff,Resident

RepresentativePakistan

Nov., 2010

ix

ertarian1 nor does it mean libertine2. Liberalism isnot about drinking alcohol. It is not about havinga promiscuous spare time. And even the secularaspect of it does not mean a life free of religion.Liberal stems from the latin word liber – free.Freedom is the highest value of an individual. Onlyin Liberalism each individual is seen as equal withequal chances as well as the freedom to use them.It is self-understanding that an individual has thegranted right to choose his or her religion and tolive it freely.

All in all, Liberalism needs to be clarified fur-ther. As Liberals are outspoken individualists andtend to reject dogmas a printed concept on liber-alism does not exist. Therefore, the best approachmight be to study liberal thoughts by theirthinkers and philosophers starting with the en-lightenment they’ve started. Accordingly, this lit-tle reader will be of utmost usefulness as it hasalready proven its advantages in six editions inEnglish as well as several reprints in Urdu, Sindhi,and Pashtu.

Hence, I’d like to express my gratitude to Dr.Detmar Doering who has undertaken the task tocompile the articles thoroughly and has grantedpermission for this online publication.

Foreword

1 libertarian 1 an advocate of the doctrine of free will. 2 a a per-son who upholds the principles of absolute and unrestricted lib-erty esp. of thought and action b cap: a member of a politicalparty advoating libertarian principles. (Merriam-Webster, 1994).

2 libertine 1: a freethinker esp. in religious matters—usu. Udesddisparagingly 2: a person who is unrestrained by convention ormorality; specif: one leading a dissolute life – libertine adj (Mer-riam-Webster, 1994).

All in all, Liberalism needs to be clarified further. As Liberals

are outspoken individualists and tend to reject dogmas a printed

concept on liberalism does not exist. Therefore, the best approach

might be to study liberal thoughts by their thinkers and philoso-

phers starting with the enlightenment they’ve started. Accord-

ingly, this little reader will be of utmost usefulness as it has

already proven its advantages in six editions in English as well as

several reprints in Urdu, Sindhi, and Pashtu.

x

FOREWORD

xi

xii

The way it is a present, the world certainly needsa political turnaround. It needs to see a reversionto strong principles. The consequence of the col-lapse of the communist regimes in Eastern Europehave shown us that constructing and maintaininga liberal social order is not easy. So far, though,there has been no “end of history”, nor is this tobe expected. Worldwide we see victories of theliberal cause but also the emergence of new op-ponents. In many places aggressive nationalismsor religious fanaticism have replaced communismas the new “doctrines of salvation” – with terribleconsequences for the people there.

Yet there are danger signs in the liberal democ-racies of highly indus-trialised countries which,while less clearly visible, are threatening in theirown way. Social systems that cannot be affordedfor much longer are more and more resemblinggenerations. At the same time citizens are increas-ingly burdened by taxes and bureaucracy. Finally,the economic opportunities which a free marketcould offer are being minimised to an extent thatmakes a high rate of unemployment appear almostfixture.

Rolf Berndt,Executive ChairmanFriedrich-Naumann

Foundation

xiii

The Federal Republic is particular affected bythis - primarily because there is a lack of thecourage and convictions needed to turn thingsaround politically. Political life has become aim-less. Yet liberals should actually find it easy toconvey the vision of an open, free society, consis-tently seeking the right to self-determination ofthe individual citizen. The vision has a long, hon-orable tradition and is more appropriate than ever.With the re-edition of the Kleines Lesebuch überden Liberalismus the Friedrich Naumann Founda-tion would like to make its contribution to polit-ical change.

Liberalism has always had the best arguments,as the reader will know after reading this book. Itsconvincing intellectual foundation is its greatestcapital. We should not gamble it away.

Foreword

xiv

The Federal Republic is particular affected by this - primarily

because there is a lack of the courage and convictions needed to

turn things around politically. Political life has become aimless.

Yet liberals should actually find it easy to convey the vision of an

open, free society, consistently seeking the right to self-determi-

nation of the individual citizen. The vision has a long, honorable

tradition and is more appropriate than ever. With the re-edition

of the Kleines Lesebuch über den Liberalismus the Friedrich Nau-

mann Foundation would like to make its contribution to political

change.

xiv

xv

INTRODUCTION

xvi

Hardly any political movement can look backupon such a proud intellectual tradition as liber-alism. The greatest minds of the West have gath-ered under its banner. In doing so, they have builtupon classical and medieval traditions of freedom.Nonetheless, it is only in the last 300 years thatthe idea of freedom has been logically formulatedas the basis of an entire political system. Liberal-ism, thus, represents both the best of what West-ern tradition has produced and the best of whatconstitutes modernity. It is natural for this liberalidea of freedom to abstain from formulating de-finitive truths. This applies to it as well. There isno complete definition of liberalism, and there isnever likely to be one. One reason for this is notonly that politics continually brings forth newchallenges that require new liberal answers. Butthe main reason is that liberalism was not in-vented "at one fell swoop"; instead, it is the workof many individuals. Each of them has contributedto its development in his own way. This presentsmall collection of classical liberal texts is in-tended to give an impression of this fact. Needlessto say, no such collection can claim to perform thistask to the fullest extent. In order to pre-empt anycriticism in this regard, this collection does not

Detmar Doering,November 2010

xvii

even make a pretext of completeness. Classicalliberalism's tradition is too complex for such apretext. The collection is, rather, an attempt tofoster interest in a great tradition of politicalthought, by providing a few examples of that tra-dition's diversity. The texts selected for this vol-ume span the long period from the 17th centurywritings of John Locke, through liberalism's hey-day in the 19th century (represented here by Fred-eric Bastiat, for example), to contemporaryauthors such as Popper, Gray and Nozick. Theyalso cover a wide range of topics. John Stuart Millon education, David Hume on justice, Wilhelm vonHumboldt on the purpose of man, John PrinceSmith on free trade – these are only a few exam-ples. Great names such as Adam Smith can befound next to thinkers that, unjustly, have beenpushed somewhat into the background, such asthe American William Leggett. Most importantly,a number of different, and in part, mutually con-tradictory, basic philosophical positions are pre-sented. All of them help to establish the liberalidea of freedom. Whereas Locke calls on the indi-vidual's rights that predate the state, Humefounds his political thought on the assumptionthat freedom and justice appear only with the cul-tural development that draws its dynamism fromthe individual's striving for benefit. This position,in turn, is taken to an extreme degree by Ludwigvon Mises, who admits only the individual and hiscapability for economic calculation, thus rejectingany ideas of natural rights that pre date the state.But in the final analysis, all three arrive at thesame conclusion, that the protection of property

Introduction

xviii

is one of the liberal constitutional state's most important tasks. While Milland Ortega y Gasset discern possible danger to freedom even in democracy,Leggett considers democracy to be freedom's essential philosophical basis.But all of these approaches have one thing in common: they support lib-eralism's idea of freedom. They support the idea that all power must betied to the freedom of the individual. They both serve the struggle againstevery open form of totalitarianism and reinforce the warning against thecreeping dismantling of freedom taking place through well meaning stateinterventionism. Many approaches become apparent that all lead to thesame goal. This goal is the open and liberal society that is based on theideal of the freedom of the individual and on the principles of the consti-tutional state and the free market economy. Consideration of the bases ofsuch a society (the present collection is intended to provide food forthought in this regard) is always a relevant task. As Friedrich August vonHayek once stated, "The guiding principle that a policy of freedom for theindividual is the only truly progressive policy remains as true today as itwas in the 19th century."

1 Detmar Doering, born in 1957, Ph.D., is a Research Associate atthe Friedrich Naumann Foundation

1

Karl R. Popper:LIBERALISM –SOME THESES

2

(Sir) Karl Raimund Popper was born in 1902 inVienna. With his book, Logic of Scientific Discov-ery, which appeared in 1934, he founded the phi-losophy of critical rationalism. According to thisschool, there are no ultimate truths. Humanknowledge advances only through step by steprefutation of false hypotheses. His book, The OpenSociety and its Enemies (1945), which he wrote inexile in New Zealand, became a liberal classic. Init, he employed this idea for an epochal criticismof all system designs. The scientific theory uponwhich his thought is based became the solid foun-dation of numerous works on economics and so-ciology. Among his students and followers areFriedrich August von Hayek, Hans Albert and RalfDahrendorf – some of the most important liberalthinkers of the 20th century.

1. The state is a necessary evil: its powers arenot to be multiplied beyond what is neces-sary. One might call this principle the 'Lib-eral Razor'. (In analogy to Ockham's Razor,i.e. the famous principle that entities oressences must not be multiplied beyondwhat is necessary.) In order to show the ne-cessity of the state I do not appeal toHobbes's homo hominilupus view of man.

Rolf Berndt,Executive ChairmanFriedrich-Naumann

Foundation

3

Liberalism - Some Theses

On the contrary, its necessity can be showneven if we assume that homo homini felis,or even that homo homini angelus – in otherwords, even if we assume that, because oftheir gentleness, or angelic goodness, no-body ever harms anybody else. In such aworld there would still be weaker andstronger men, and the weaker ones wouldhave no legal right to be tolerated by thestronger ones, but would owe them grati-tude for their being so kind as to toleratethem. Those (whether strong or weak) whothink this an unsatisfactory state of affairs,and who think that every person shouldhave a right to live, and that every personshould have a legal claim to be protectedagainst the power of the strong, will agreethat we need a state that protects the rightsof all. It is easy to see that the state mustbe a constant danger, or (as I have venturedto call it) an evil, though a necessary one.For if the state is to fulfil its function, itmust have more power at any rate than anysingle private citizen or public corporation;and although we might design institutionsto minimize the danger that these powerswill be misused, we can never eliminate thedanger completely. On the contrary, it seemsthat most men will always have to pay forthe protection of the state, not only in theform of taxes but even in the form of hu-miliation suffered, for example, at the handsof bullying officials. The thing is not to paytoo heavily for it.

4

2. The difference between a democracy and a tyranny is that undera democracy the government can be got rid of without blood-shed; under a tyranny it cannot.

3. Democracy as such cannot confer any benefits upon the citizenand it should not be expected to do so. In fact democracy cando nothing – only the citizens of the democracy can act (in-cluding, of course, those citizens who comprise the govern-ment). Democracy provides no more than a framework withinwhich the citizens may act in a more or less organized and co-herent way.

4. We are democrats, not be-cause the majority is always right,but because democratic traditionsare the least evil ones of which weknow. If the majority (or 'publicopinion') decides in favour oftyranny, a democrat need not there-fore suppose that some fatal incon-sistency in his views has beenrevealed. He will realize, rather, thatthe democratic tradition in his coun-try was not strong enough.

5. Institutions alone are never sufficient if not tempered by tradi-tions. Institutions are always ambivalent in the sense that, inthe absence of a strong tradition, they may also serve the op-posite purpose to the one intended. For example, a parliamen-tary opposition is, roughly speaking, supposed to prevent themajority from stealing the taxpayer's money. But I well remem-ber an affair in a south eastern European country which illus-

We are democrats, not be-cause the majority is alwaysright, but because demo-cratic traditions are the leastevil ones of which we know.If the majority (or 'publicopinion') decides in favour oftyranny, a democrat need nottherefore suppose that somefatal inconsistency in hisviews has been revealed.

5

Liberalism - Some Theses

trates the ambivalence of this institution. There, the oppositionshared the spoils with the majority. To sum up: Traditions areneeded to form a kind of link between institutions and the in-tentions and valuations of individual men.

6. A liberal Utopia – that is, a state rationally designed on a tra-ditionless tabula rasa – is an impossibility. For the liberal prin-ciple demands that the limitations tothe freedom of each which are madenecessary by social life should beminimized and equalized as much aspossible (Kant). But how can weapply such an a priori principle inreal life? Should we prevent a pianistfrom practising, or prevent hisneighbour from enjoying a quiet af-ternoon? All such problems can besolved in practice only by an appealto existing traditions and customsand to a traditional sense of justice;to common law, as it is called inBritain, and to an impartial judge'sappreciation of equity. All laws, being universal principles, haveto be interpreted in order to be applied; and an interpretationneeds some principles of concrete practice, which can be sup-plied only by a living tradition. And this holds more especiallyfor the highly abstract and universal principles of Liberalism.

7. Principles of Liberalism may be described (at least today) asprinciples of assessing, and if necessary of modifying or chang-ing, existing institutions, rather than of replacing existing in-stitutions. One can express this also by saying that Liberalismis an evolutionary rather than a revolutionary creed (unless itis confronted by a tyrannical regime).

All such problems can besolved in practice only by anappeal to existing traditionsand customs and to a tradi-tional sense of justice; tocommon law, as it is called inBritain, and to an impartialjudge's appreciation of eq-uity. All laws, being universalprinciples, have to be inter-preted in order to be applied;and an interpretation needssome principles of concretepractice,

8. Among the traditions we must count as the most important iswhat we may call the 'moral framework' (corresponding to theinstitutional 'legal framework') of a society. This incorporatesthe society's traditional sense of justice or fairness, or the de-gree of moral sensitivity it has reached. This moral frameworkserves as the basis which makes it possible to reach a fair orequitable compromise between conflicting interests where thisis necessary. It is, of course, itself not unchangeable, but itchanges comparatively slowly. Nothing is more dangerous thanthe destruction of this traditional framework, as it was con-sciously aimed at by Nazism. In the end its destruction will leadto cynicism and nihilism, i.e. to the disregard and the dissolutionof all human values.

from: Karl Popper, In search of o Better World, London/New York 1992, p.155 157 (by permission of the author).

6

7

Ludwig von Mises:LIBERALISM –

A RECORD OF SUCCESS

8

Ludwig von Mises (1881 – 1973) was one of theleading exponents of the Austrian school of na-tional economics. His liberalism is based almostexclusively on the theory of individual considera-tions of benefit, which was typical for this school.Every state intervention disturbs the capability toperceive prices as signals of scarcity. For vanMises, this view results in the scientific refutationof socialism, long ignored by many intellectuals,but ultimately proving itself true: socialism, withits inability to calculate costs rationally, is doomedto economic failure. At a time when the idea offreedom had almost completely died out in theGermanspeaking world, his book, Liberalism, whichhe wrote in 1927, was one of the few brave at-tempts to justify this idea. The extremely individ-ualistic and anti etatistic character of his thoughtwon him many followers, especially in the US,where he taught after having Red from the Nazis.

Liberalism

The philosophers, sociologists, and economistsof the eighteenth and the early part of the nine-teenth century formulated a political program thatserved as a guide to social policy first in Englandand the United States, then on the European con-

Ludwig von Mises, Liberalism

in the Classical Tradition

9

Liberalism – A Record of Success

tinent, and finally in the other parts of the inhab-ited world as well. Nowhere was this program evercompletely carried out. Even in England, whichhas been called the homeland of liberalism andthe model liberal country, the proponents of lib-eral policies never succeeded in winning all theirdemands. In the rest of the world only parts of theliberal program were adopted, while others, noless important, were either rejected from the veryfirst or discarded after a short time. Only withsome exaggeration can one say that the worldonce lived through a liberal era. Liberalism wasnever permitted to come to full fruition. Never-theless, brief and all too limited as the supremacyof liberal ideas was, it sufficed to change the faceof the earth. A magnificent economic develop-ment took place. The release of man's productivepowers multiplied the means of subsistence manytimes over. On the eve of the World War (whichwas itself the result of a long and bitter struggleagainst the liberal spirit and which ushered in aperiod of still more bitter attacks on liberal prin-ciples), the world was incomparably more denselypopulated than it had ever been, and each inhab-itant could live incomparably better than hadbeen possible in earlier centuries. The prosperitythat liberalism had created reduced considerablyinfant mortality, which had been the pitilessscourge of earlier ages, and, as a result of the im-provement in living conditions, lengthened theaverage span of life. Nor did this prosperity flowonly to a select class of privileged persons. On theeve of the World War the worker in the industrialnations of Europe, in the United States, and in the

overseas dominions of England lived better and more graciously than thenobleman of not too long before. Not only could he eat and drink accordingto his desire; he could give his children a better education; he could, if hewished, take part in the intellectual and cultural life of his nation; and, ifhe possessed enough talent and energy, he could, without difficulty, raisehis social position. It was precisely in the countries that had gone the far-thest in adopting the liberal program that the top of the social pyramidwas composed, in the main, not of those who had, from their very birth,enjoyed a privileged position by virtue of the wealth or high rank of theirparents, but of those who, under favorable conditions, had worked theirway up from straitened circumstances by their own power. The barriersthat had in earlier ages separated lords and serfs had fallen. Now therewere only citizens with equal rights. No one was handicapped or perse-cuted on account of his nationality, his opinions, or his faith. Domesticpolitical and religious persecutions had ceased, and international warsbegan to become less frequent. Optimists were already hailing the dawnof the age of eternal peace.

But events have turned out otherwise. In the nineteenth century strongand violent opponents of liberalism sprang up who succeeded in wipingout a great part of what had been gained by the liberals. The world todaywants to hear no more of liberalism. Outside England the term "liberalism"is frankly proscribed. In England, there are, to be sure, still "liberals" butmost of them are so in name only. In fact, they are rather moderate so-cialists. Everywhere today political power is in the hands of the antiliberalparties. The program of antiliberalism unleashed the forces that gave riseto the great World War and, by virtue of import and export quotas, tariffs,migration barriers, and similar measures, has brought the nations of theworld to the point of mutual isolation. Within each nation it has led tosocialist experiments whose result has been a reduction in the productivityof labor and a concomitant increase in want and misery. Whoever doesnot deliberately close his eyes to the facts must recognize everywhere thesigns of an approaching catastrophe in world economy. Antiliberalism isheading toward a general collapse of civilization. If one wants to know

10

11

what liberalism is and what it aims at, one cannot simply turn to historyfor the information and inquire what the liberal politicians stood for andwhat they accomplished. For liberalism nowhere succeeded in carrying outits program.

As it had intended. Nor can the programsand actions of those parties that todaycall themselves liberal provide us with anyenlightenment concerning the nature oftrue liberalism. It has already been men-tioned that even in England what is un-derstood as liberalism today bears a muchgreater resemblance to Toryism and so-cialism than to the old program of thefreetraders. If there are liberals who findit compatible with their liberalism to en-dorse the nationalization of railroads, ofmines, and of other enterprises, and evento support protective tariffs, one can easily see that nowadays nothing isleft of liberalism but the name.

Nor does it any longer suffice today to form one's idea of liberalism froma study of the writings of its great founders. Liberalism is not a completeddoctrine or a fixed dogma. On the contrary: it is the application of theteachings of science to the social life of man. And just as economics, so-ciology, and philosophy have not stood still since the days of David Hume,Adam Smith, David Ricardo, Jeremy Bentham, and Wilhelm Humboldt, sothe doctrine of liberalism is different today from what it was in their day,even though its fundamental principles have remained unchanged. Formany years now no one has undertaken to present a concise statement ofthe essential meaning of that doctrine. This may serve to justify our presentattempt at providing just such a work.


It has already been men-tioned that even in Englandwhat is understood as liber-alism today bears a muchgreater resemblance to Tory-ism and socialism than to theold program of the free-traders. If there are liberalswho find it compatible withtheir liberalism to endorsethe nationalization of rail-roads

Material Welfare

Liberalism is a doctrine directed entirely towards the conduct of men inthis world. In the last analysis, it has nothing else in view than the ad-vance¬ment of their outward, material welfare and does not concern itselfdirectly with their inner, spiritual and metaphysical needs. It does notpromise men happiness and contentment, but only the most abundant pos-sible satisfaction of all those desires that can be satisfied by the things ofthe outer world. Liberalism has often been reproached for this purely ex-ternal and materialistic attitude toward what is earthly and transitory. Thelife of man, it is said, does not consist in eating and drinking. There arehigher and more important needs than food and drink, shelter and clothing.Even the greatest earthly riches cannot give man happiness; they leave hisinner self, his soul, unsatisfied and empty. The most serious error of liber-alism has been that it has had nothing to offer man's deeper and nobleraspirations. But the critics who speak in this vein show only that they havea very imperfect and materialistic conception of these higher and nobler

needs. Social policy, with the means thatare at its disposal, can make men rich orpoor, but it can never succeed in makingthem happy or in satisfying their inmostyearnings. Here all external expedientsfail. All that social policy can do is to re-move the outer causes of pain and suffer-ing; it can further a system that feeds thehungry, clothes the naked, and houses thehomeless. Happiness and contentment donot depend on food, clothing, and shelter,but, above all, on what a man cherisheswithin himself. It is not from a disdain ofspiritual goods that liberalism concerns it-self exclusively with man's material wellbeing, but from a conviction that what ishighest and deepest in man cannot be

12

All that social policy can dois to remove the outer causesof pain and suffering; it canfurther a system that feedsthe hungry, clothes thenaked, and houses the home-less. Happiness and content-ment do not depend on food,clothing, and shelter, but,above all, on what a mancherishes within himself. It isnot from a disdain of spiri-tual goods that liberalismconcerns itself exclusivelywith man's material wellbeing,

13

touched by any outward regulation. It seeks to produce only outer wellbeing because it knows that inner, spiritual riches cannot come to manfrom without, but only from within his own heart. It does not aim at cre-ating anything but the outward preconditions for the development of theinner life. And there can be no doubt that the relatively prosperous indi-vidual of the twentieth century can more readily satisfy his spiritual needsthan, say, the individual of the tenth century, who was given no respitefrom anxiety over the problem of eking out barely enough for survival orfrom the dangers that threatened him from his enemies. To be sure, tothose who, like the followers of many Asiatic and medieval Christian sects,accept the doctrine of complete asceticism and who take as the ideal ofhuman life the poverty and freedom from want of the birds of the forestand the fish of the sea, we can make no reply when they reproach liber-alism for its materialistic attitude. We can only ask them to let us go ourway undisturbed, just as we do not hinder them from getting to heaven intheir own fashion. Let them shut themselves up in their cells, away frommen and the world, in peace. The overwhelming majority of our contem-poraries cannot understand the ascetic ideal. But once one rejects theprinciple of the ascetic conduct of life, one cannot reproach liberalism foraiming at outer well being.

The Aim of Liberalism

There is a widespread opinion that liberalism is distinguished from otherpolitical movements by the fact that it places the interests of a part of so-ciety – the propertied classes, the capitalists, the entrepreneurs – abovethe interests of the other classes. This assertion is completely mistaken.Liberalism has always had in view the good of the whole, not that of anyspecial group. It was this that the English utilitarians meant to express –although, it is true, not very aptly – in their famous formula, "the greatesthappiness of the greatest number". Historically, liberalism was the firstpolitical movement that aimed at promoting the welfare of all, not thatof special groups: Liberalism is distinguished from socialism, which likewiseprofesses to strive for the good of all, not by the goal at which it aims,


but by the means that it chooses to attain that goal. If it is maintainedthat the consequence of a liberal policy is or must be to favor the specialinterests of certain strata of society, this is still a question that allows ofdiscussion. It is one of the tasks of the present work to show that such areproach is in no way justified. But one cannot, from the very outset, im-pute unfairness to the person who raises it; though we consider his opinionincorrect, it could very well be advanced in the best of faith. In any case,

whoever attacks liberalism in this wayconcedes that its intentions are disinter-ested and that it wants nothing but whatit says it wants. Quite different are thosecritics of liberalism who reproach it forwanting to promote, not the general wel-fare, but only the special interests of cer-tain classes. Such critics are both unfairand ignorant. By choosing this mode ofattack, they show that they are inwardlywell aware of the weakness of their owncase. They snatch at poisoned weaponsbecause they cannot otherwise hope forsuccess. If a doctor shows a patient whocraves food detrimental to his health the

perversity of his desire, no one will be so foolish as to say: "The doctordoes not care for the good of the patient; whoever wishes the patient wellmust not grudge him the enjoyment of relishing such delicious food."Everyone will understand that the doctor advises the patient to forgo thepleasure that the enjoyment of the harmful food affords solely in order toavoid injuring his health. But as soon as the matter concerns social policy,one is prone to consider it quite differently. When the liberal advisesagainst certain popular measures because he expects harmful conse-quences from them, he is censured as an enemy of the people, and praiseis heaped on the demagogues who, without consideration of the harm thatwill follow, recommend what seems to be expedient for the moment. Rea-sonable action is distinguished from unreasonable action by the fact that

14

They snatch at poisonedweapons because they can-not otherwise hope for suc-cess. If a doctor shows apatient who craves fooddetrimental to his health theperversity of his desire, noone will be so foolish as tosay: "The doctor does notcare for the good of the pa-tient; whoever wishes the pa-tient well must not grudgehim the enjoyment of relish-ing such delicious food.

15

it involves provisional sacrifices. The latter are only apparent sacrifices,since they are outweighed by the favorable consequences that later ensue.The person who avoids tasty but unwholesome food makes merely a pro-visional, a seeming sacrifice. The outcome – the non-occurrence of injuryto his health shows that he has not lost, but gained. To act in this way,however, requires insight into the consequences of one's action. The dem-agogue takes advantage of this fact. He opposes the liberal, who calls forprovisional and merely apparent sacrifices, and denounces him as a hard-hearted enemy of the people, meanwhile setting himself up as a friend ofhumanity. In supporting the measures he advocates, he knows well howto touch the hearts of his hearers and to move them to tears with allusionsto want and misery. Antiliberal policy is a policy of capital consumption.It recommends that the present be more abundantly provided for at theexpense of the future. It is in exactly the same case as the patient of whomwe have spoken. In both instances a relatively grievous disadvantage inthe future stands in opposition to a relatively abundant momentary grat-ification. To talk, in such a case, as if the question were one of hardheart-edness versus philanthropy is downright dishonest and untruthful. It is notonly the common run of politicians and the press of the antiliberal partiesthat are open to such a reproach. Almost all the writers of the school ofSozialpolitik have made use of this under-handed mode of combat. That there iswant and misery in the world is not, as theaverage newspaper reader, in his dullness,is only too prone to believe, an argumentagainst liberalism. It is precisely want andmisery that liberalism seeks to abolish,and it considers the means that it pro-poses the only suitable ones for theachievement of this end. Let whoeverthinks that he knows a better, or even adifferent, means to this end adduce theproof. The assertion that the liberals donot strive for the good of all members of


Antiliberal policy is a policyof capital consumption. Itrecommends that the presentbe more abundantly providedfor at the expense of the fu-ture. It is in exactly the samecase as the patient of whomwe have spoken. In both in-stances a relatively grievousdisadvantage in the futurestands in opposition to a rel-atively abundant momentarygratification.

society, but only for that of special groups, is in no way a substitute forthis proof. The fact that there is want and misery would not constitute anargument against liberalism even if the world today followed a liberal pol-icy. It would always be an open question whether still more want and mis-ery might not prevail if other policies had been followed. In view of all theways in which the functioning of the institution of private property iscurbed and hindered in every quarter today by antiliberal policies, it ismanifestly quite absurd to seek to infer anything against the correctnessof liberal principles from the fact that economic conditions are not, atpresent, all that one could wish. In order to appreciate what liberalism andcapitalism have accomplished, one should compare conditions as they areat present with those of the Middle Ages or of the first centuries of themodem era. What liberalism and capitalism could have accomplished hadthey been allowed free rein can be inferred only from theoretical consid-erations.

Liberalism and Capitalism

A society in which liberal principles areput into effect is usually called a capitalistsociety, and the condition of that society,capitalism. Since the economic policy ofliberalism has everywhere been only moreor less closely approximated in practice,conditions as they are in the world todayprovide us with but an imperfect idea ofthe meaning and possible accomplish-ments of capitalism in full flower. Never-theless, one is altogether justified incalling our age the age of capitalism, be-cause all that has created the wealth ofour time can be traced back to capitalistinstitutions. It is thanks to those liberalideas that still remain alive in our society,

16

A society in which liberalprinciples are put into effectis usually called a capitalistsociety, and the condition ofthat society, capitalism.Since the economic policy ofliberalism has everywherebeen only more or lessclosely approximated inpractice, conditions as theyare in the world today pro-vide us with but an imperfectidea of the meaning and pos-sible accomplishments ofcapitalism in full flower.

17

to what yet survives in it of the capitalist system, that the great mass ofour contemporaries can enjoy a standard of living far above that whichjust a few generations ago was possible only to the rich and especiallyprivileged.

To be sure, in the customary rhetoric ofthe demagogues these facts are repre-sented quite differently. To listen to them,one would think that all progress in thetechniques of production redounds to theexclusive benefit of a favored few, whilethe masses sink ever more deeply intomisery. However, it requires only a mo-ment's reflection to realize that the fruitsof all technological and industrial innova-tions make for an improvement in the sat-isfaction of the wants of the great masses.All big industries that produce consumers'goods work directly for their benefit; al)industries that produce machines and halffinished products work for them indirectly. The great industrial develop-ments of the last decades, like those of the eighteenth century that aredesignated by the not altogether happily chosen phrase, "the IndustrialRevolution", have resulted, above all, in a better satisfaction of the needsof the masses. The development of the clothing industry, the mechaniza-tion of shoe production, and improvements in the processing and distri-bution of foodstuffs have, by their very nature, benefited the widest public.It is thanks to these industries that the masses today are far better clothedand fed than ever before. However, mass production provides not only forfood, shelter, and clothing, but also for other requirements of the multi-tude. The press serves the masses quite as much as the motion picture in-dustry, and even the theater and similar strongholds of the arts are dailybecoming more and more places of mass entertainment. Nevertheless, asa result of the zealous propaganda of the antiliberal parties, which twists


However, it requires only amoment's reflection to real-ize that the fruits of all tech-nological and industrialinnovations make for an im-provement in the satisfactionof the wants of the greatmasses. All big industriesthat produce consumers'goods work directly for theirbenefit; al) industries thatproduce machines and halffinished products work forthem indirectly.

the facts the other way round, people today have come to associate theideas of liberalism and capitalism with the image of a world plunged intoever increasing misery and poverty. To be sure, no amount of depreciatorypropaganda could ever succeed, as the demagogues had hoped, in givingthe words "liberal" and "liberalism" a completely pejorative connotation.In the last analysis, it is not possible to brush aside the fact that, in spiteof all the efforts of antiliberal propaganda, there is something in these ex-pressions that suggests what every normal person feels when he hears theword "freedom". Antiliberal propaganda, therefore, avoids mentioning theword "liberalism" too often and prefers the infamies that it attributes tothe liberal system to be associated with the term "capita¬lism". That wordbrings to mind a flint hearted capitalist, who thinks of nothing but his ownenrichment, even if that is possible only through the exploitation of hisfellow men. It hardly occurs to anyone, when he forms his notion of a cap-italist, that a social order organized on genuinely liberal principles is so

constituted as to leave the entrepreneursand the capitalists only one way towealth, viz., by better providing their fel-low men with what they themselves thinkthey need. Instead of speaking of capital-ism in connection with the prodigious im-provement in the standard of living of themasses, antiliberal propa¬ganda mentionscapitalism only in referring to those phe-nomena whose emergence was made pos-sible solely because of the restraints thatwere imposed upon liberalism. No refer-ence is made to the fact that capitalismhas placed a delectable luxury as well asa food, in the form of sugar, at the dis-posal of the great masses. Capitalism ismentioned in connection with sugar onlywhen the price of sugar in a country israised above the world market price by a

18

Instead of speaking of capi-talism in connection with theprodigious improvement inthe standard of living of themasses, antiliberal propa¬ganda mentions capitalismonly in referring to thosephenomena whose emer-gence was made possiblesolely because of the re-straints that were imposedupon liberalism. No referenceis made to the fact that cap-italism has placed a delec-table luxury as well as afood, in the form of sugar, atthe disposal of the greatmasses.

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cartel. As if such a development were even conceivable in a social order inwhich liberal principles were put into effect! In a country with a liberalregime, in which there are no tariffs, cartels capable of driving the priceof a commodity above the world market price would be quite unthinkable.

The links in the chain of reasoning by which antiliberal demagogy succeedsin laying upon liberalism and capitalism the blame for al) the excesses andevil consequences of antiliberal policies are as follows: One starts fromthe assumption that liberal principles aim at promoting the interests ofthe capitalists and entrepreneurs at the expense of the interests of therest of the population and that liberalism is a policy that favors the richover the poor. Then one observes that many entrepreneurs and capitalists,under certain conditions, advocate pro-tective tariffs, and still others – the arma-ments manufacturers support a policy of"national preparedness"; and, out of hand,one jumps to the conclusion that thesemust be "capitalistic" policies. In fact,however, the case is quite otherwise. Lib-eralism is not a policy in the interest ofany particular group, but a policy in theinterest of all mankind. It is, therefore, in-correct to assert that the entrepreneursand capitalists have any special interestin supporting liberalism. Their interest in championing the liberal programis exactly the same as that of everyone else. There may be individual casesin which some entrepreneurs or capitalists cloak their special interests inthe program of liberalism; but opposed to these are always the special in-terests of other entrepreneurs or capitalists. The matter is not quite sosimple as those who everywhere scent "interests" and "interested parties"imagine. That a nation imposes a tariff on iron, for example, can not "sim-ply" be explained by the fact that this benefits the iron magnates. Thereare also persons with opposing interests in the country, even among theentrepreneurs; and, in any case, the beneficiaries of the tariff on iron are


Then one observes that manyentrepreneurs and capital-ists, under certain conditions,advocate protective tariffs,and still others – the arma-ments manufacturers sup-port a policy of "nationalpreparedness"; and, out ofhand, one jumps to the con-clusion that these must be"capitalistic" policies.

a steadily diminishing minority. Nor can bribery be the explanation, for thepeople bribed can likewise be only a minority; and, besides, why does onlyone group, the protectionists, do the bribing, and not their opponents, thefreetraders? The fact is that the ideology that makes the protective tariffpossible is created neither by the "interested parties" nor by those bribedby them, but by the ideologists, who give the world the ideas that directthe course of all human affairs. In our age, in which anti liberal ideas pre-vail, virtually everyone thinks accordingly, just as, a hundred years ago,most people thought in terms of the then prevailing liberal ideology. Ifmany entrepreneurs today advocate protective tariffs, this is nothing morethan the form that anti liberalism takes in their case. It has nothing to dowith liberalism.

from: Ludwig von Mises, Liberalism in the Classical Tradition, translated by RalphRaico, 3. ed., Irvington – on – Hudson, NY, 1985, S. 1 5, 7 13.

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21

John Locke: A PLEA FOR TOLERANCE

22

The English philosopher John Locke (1632 1704)is considered by many historians to be the truespiritual ancestor of liberalism. His political phi-losophy is based on the idea of a democraticallyconcluded social contract for the protection of in-dividual rights and property, an idea with whichLocke inspired the American Declaration of Inde-pendence. In addition, he was a champion of reli-gious tolerance at a time when such tolerancetended to be the exception, as the following ex-cerpt from his "Letter Concerning Toleration"(1689) proves.

The commonwealth seems to me to be a societyof men constituted only for the procuring, preserv-ing, and advancing their own civil interests. Civilinterests I call life, liberty, health, and indolencyof body; and the possession of outward things,such as money, lands, houses, furniture, and thelike. It is the duty of the civil magistrate, by theimpartial execution of equal laws, to secure untoall the people in general, and to every one of hissubjects in particular, the just possession of thesethings belonging to this life. If any one presumeto violate the laws of public justice and equity, es-tablished for the preservation of these things, his

John Locke,Ein Brief über

Toleranz

23

presumption is to be checked by the fear of pun-ishment, consisting in the deprivation or diminu-tion of those civil) interests, or goods, whichotherwise he might and ought to enjoy. But seeingno man does willingly suffer himself to be pun-ished by the deprivation of any part of his goods,and much less of his liberty or life, therefore is themagistrate armed with the force and strength ofall his subjects, in order to the punishment ofthose that violate any other man's rights. Nowthat the whole jurisdiction of the magistratereaches only to these civil concernments; and thatall civil power, right, and dominion, is boundedand confined to the only care of promoting thesethings; and that it neither can nor ought in anymanner to be extended to the salvation of souls;these following considerations seem unto meabundantly to demonstrate. First, Because the careof souls is not committed to the civil magistrate,any more than to other men. It is not committedunto him, I say, by God; because it appears notthat God has ever given any such authority to oneman over another, as to compel any one to his re-ligion. Nor can any such power be vested in themagistrate by the consent of the people; becauseno man can so far abandon the care of his ownsalvation as blindly to leave it to the choice of anyother, whether prince or subject, to prescribe tohim what faith or worship he shall embrace. Forno man can, if he would, conform his faith to thedictates of another. All the life and power of truereligion consists in the inward and full persuasionof the mind; and faith is not faith without believ-ing.

A Plea for Tolerance

24

Whatever profession we make, to whatever outward worship we conform,if we are not fully satisfied in our own mind that the one is true, and theother well pleasing unto God, such profession and such practice, far frombeing any furtherance, are indeed great obstacles to our salvation. For inthis manner, instead of expiating other sins by the exercise of religion, Isay, in offering thus unto God Almighty such a worship as we esteem toesteem to be displeasing unto him, we add unto the number of our othersins, those also of hypocrisy, and contempt of his Divine Majesty.

In the second place. The care of souls cannot belong to the civil magistrate,because his power consists only in outward force: but true and saving re-ligion consists in the inward persuasion of the mind, without which noth-

ing can be acceptable to God. And such isthe nature of the understanding, that itcannot be compelled to the belief of anything by outward force. Confiscation ofestate, imprisonment, torments, nothingof that nature can have any such efficacyas to make men change the inward judge-ment that they have framed of things. Inthe last place. Let us now consider whatis the magistrate's duty in the business oftoleration: which is certainly very consid-erable. We have already proved, that thecare of souls does not belong to the mag-istrate: not a magisterial care, I mean, if Imay so call it, which consists in prescrib-ing by laws, and compelling by punish-ments. But a charitable care, whichconsists in teaching, admonishing, andpersuading, cannot be denied unto anyman. The care therefore of every man'ssoul belongs unto himself, and is to be leftunto himself. But what if he neglect the

The care of souls cannot be-long to the civil magistrate,because his power consistsonly in outward force: buttrue and saving religion con-sists in the inward persua-sion of the mind, withoutwhich nothing can be ac-ceptable to God. And such isthe nature of the under-standing, that it cannot becompelled to the belief ofany thing by outward force.Confiscation of estate, im-prisonment, torments, noth-ing of that nature can haveany such efficacy as to makemen change the inwardjudgement that they haveframed of things. In the lastplace.

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care of his soul? I answer, what if he neglect the care of his health, or ofhis estate, which things are nearlier related to the government of the mag-istrate than the other? Will the magistrate provide by an express law, thatsuch an one shall not become poor or sick? Laws provide, as much as ispossible, that the goods and health of subjects be not injured by the fraudor violence of others, they do not guard them from the negligence or illhusbandry of the possessors themselves. No man can be forced to be richor healthful, whether he will or no. Nay, God himself will not save menagainst their wills. Let us suppose, however, that some prince were desirousto force his subjects to accumulate riches, or to preserve the health andstrength of their bodies. Shall it be provided by law, that they must consultnone but Roman physicians, and shall every one be bound to live accordingto their prescriptions? What, shall no potion, no broth be taken, but whatis prepared either in the Vatican, suppose, or in a Geneva shop? Or to makethese subjects rich, shall they all be obliged by law to become merchants,or musicians? Or, shall every one turn victualler, or smith, because thereare some that maintain their families plentifully, and grow rich in thoseprofessions? But it may be said, there are a thousand ways to wealth, butone only way to heaven.

It is well said indeed, especially by those than plead for compelling meninto this or the other way; for if there were several ways that lead thither,there would not be so much as a pretence left for compulsion. But now, ifI be marching on with my utmost vigour, in that way which, according tothe sacred geography, leads straight to Jerusalem; why am I beaten andill used by others, because, perhaps, I wear not buskins; because my hairis not of the right cut; because, perhaps, I have not been dipt in the rightfashion; because I eat flesh upon the road, or some other food whichagrees with my stomach; because I avoid certain byways, which seem untome to lead into briars or precipices; because, amongst the several pathsthat are in the same road, I choose that to walk in which seems to be thestraightest and cleanest; because I avoid to keep company with some trav-ellers that are less grave, and others that are more sour than they oughtto be; or in fine, because I follow a guide that either is, or is not, clothed

A Plea for Tolerance

26

in white, and crowned with a mitre? Certainly, if we consider right, weshall find that for the most part they are such frivolous things as these,that, without any prejudice to religion or the salvation of souls, if not ac-companied with superstition or hypocrisy, might either be observed oromitted; I say, they are such like things as these, which breed implacableenmities among Christian brethren, who are all agreed in the substantialand truly fundamental part of religion. But let us grant unto these zealots,who condemn all things that are not of their mode, that from these cir-cumstances arise different ends. What shall we conclude from thence?There is only one of these which is the true way to eternal happiness. But,in this great variety of ways that men follow, it is still doubted which isthis right one. Now, neither the care of the commonwealth, nor the rightof enacting laws, does discover this way that leads to heaven more cer-tainly to the magistrate, than every private man's search and study dis-covers it unto himself.

I have a weak body, sunk under a languishing disease, for which I supposethere is only one remedy, but that unknown: does it therefore belong untothe magistrate to prescribe me a remedy, because there is but one, andbecause it is unknown? Because there is but one way for me to escapedeath, will it therefore be safe for me to do whatsoever the magistrate or-dains? Those things that every man ought sincerely to inquire into himself,and by meditation, study, search, and his own endeavours, attain theknowledge of, cannot be looked upon as the peculiar possession of anyone sort of men. Princes, indeed, are born superior unto other men inpower, but in nature equal. Neither the right, nor the art of ruling, doesnecessarily carry along with it the certain knowledge of other things; andleast of all of the true religion; for if it were so, how could it come to passthat the lords of the earth should differ so vastly as they do in religiousmatters?

from: John Locke, Ein Brief über Toleranz (A letter concerning Toleration), ed. J.Ebbringhaus, Hamburg 1957, p. 12 14, 42 46.

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William Leggett: THE RIGHTS OF

THE PEOPLE

William Leggett,Democratick

Editorials

28

As the publisher of two New York journals, theEvening Post and the Plaindealer, William Leggett(1801-1839) proved to be the most effective jour-nalist within the laissez faire wing of the PresidentAndrew Jackson's (1829-1837) followers. Jack-son's administration is considered the true heydayof classical liberalism in the US. During this period,the state's supreme power was drastically cur-tailed. In extremely elegantly written essays,Leggett defended free trade, the rights of individ-ual states and a democracy subject to radical con-stitutional limits. He was one of the mosttenacious opponents of slavery in the SouthernStates.

The President of the United States, PresidentAndrew Jackson (1829 1837), in his last Messageto Congress, has the following remarkable senti-ment which we shall make the subject of a briefcommentary: "To suppose that because our Gov-ernment has been instituted for the benefit of thepeople, it must therefore have the power to dowhatever may seem to conduce to the publicgood, is an error into which even honest minds areapt to fall." Whoever has watched with attentionthe course pursued by the General and State Gov-ernments ever since their first organization, must,

29

The Rights of the People

we think, have been struck with the convictionthat one of the great practical evils of our systemarises from a superabundance of legislation. It isprobable, nay certain, that putting the acts ofCongress and those of the State legislature to-gether, they amount to some thousands annually.Is it possible that the good people of the UnitedStates require to be hampered and pestered bysuch a multiplicity of fetters as this; or that theycannot be kept in order without being manacledevery year by new laws and regulations? Every su-perfluous law is a wanton and unnecessary inno-vation of the freedom of action, and impairs theRESERVED RIGHTS OF THE PEOPLE. Let us inquirewhat these rights are. All governments are origi-nally instituted for the protection of person andproperty; and the people, in their formation, onlydelegate to their rulers such powers as are indis-pensable to these great objects. All the powers notthus delegated are retained by the people, andmay be denominated their reserved rights. Indefining the objects of government, all writersagree that they are those which we have justspecified, namely, the protection of the rights ofperson and property. Whatever is necessary tothese purposes, the people have given away,whatever is not necessary they have retained. Pro-tect their persons and property, and all the restthey can do for themselves. They want no govern-ment to regulate their private concerns; to pre-scribe the course and mete out the profits of theirindustry. They want no fireside legislators; no ex-ecutive interference in their workshops and fields;and no judiciary to decide their domestic disputes.

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They require a general system of laws, which, while it equally restrainsthem from violating the persons and property of others, leaves their ownunimpaired. For the attainment of these primary objects in the formationof government it can never be necessary to confer privileges on one classof a community which the others do not equally enjoy. Such privilegeswould be destructive of the great end of all governments, since they tendto create, or at least strengthen those inequalities of wealth and influencefrom which originate those dangers to person and property against whichall governments were intended to guard. Such a course inevitably tendsto increase the vigour of the strong, and the imbecility of the weak bycomparison, thus exposing the latter to successful invasions of their rightsof person and property. Among the rights expressly reserved to themselvesby the people of the United States, was a complete equality of civil privi-leges. This right is inherent in every people, and when not expressly relin-quished, remains with them as a matter of course. But in respect to thepeople of the United States, it is not merely tacitly reserved, it is guaran-teed, and asserted, and recognized in the constitution of our general gov-ernment, as well as in those of the states, as their great fundamentalprinciple. The only case in which the people of the United States have del-egated to their representatives the right of interfering in their private busi-ness and pursuits is that of commerce, and the reason is obvious. Such apower was necessary in the government, to enable it to establish a uniformsystem of regulations and imposts, and to make commercial treaties withforeign nations. Without it there would have been no regular or permanentsystem of foreign trade; each man might make his own private arrange-ments without conforming to any rule and thus the government would bereduced to the alternative of either leaving our ships and commerce totheir fate, or going to war to protect those whom it could not controul.And this power to "regulate" the pursuits of industry extends no further.It was not necessary to the purposes of a good government, in relation toany other class of the community, and was never conceded by them eithervirtually or verbally. Yet if we analyse the course of legislation in the UnitedStates, ever since the adoption of the various constitutions of government,we shall find that legislative bodies have been regularly and systematically

31

employed in frittering away, under athousand pretences, the whole fabric ofthe reserved rights of the people. Ninetenths of their legislation has consisted ofinfringements on that great principle ofequal rights without whose eternal barrierno nation can ever long maintain its lib-erty. The representatives of the peoplehave gradually usurped and exercised allthe rights which, if our government wasadministered in its purity, would be leftfor the people to exercise. Their vocationhas consisted, not in making general, butspecial laws; not in legislating for thewhole, but for a small part; not in preserv-ing unimpaired the rights of the people, but in bartering them away tocorporations. Corporations for purposes of charity – for men cannot giveto the poor unless they are incorporated; corporations for purposes of ed-ucation – for children will not learn their A B C nowadays, unless under asystem of exclusive privileges; corporations for spinning and weaving –for the wheel will not turn nor the shuttle go, unless they are incorporated– corporations for this, that, and for every purpose which the ingenuity ofmoney making man can devise. Each one of these not only enjoys privilegesdenied to every other citizen, and of which none but monied men can par-take, because the foundation of all these corporations is money, money,money; but each one of these also violates the reserved right of the greatbody of the people. It is either legislating away for a certain period, or for-ever, a part of their sovereignty, or it is interfering with the pursuits of in-dividual industry, by raising up a rival fatal to its prosperity.

In this way our national and state governments have, until lately, beenemployed in filching away the reserved rights of the great body of thepeople, to give or sell them, to little knots of monied men, and thus enablethem by the aid of certain privileges, to combine more successfully against

The Rights of the People

Nine tenths of their legisla-tion has consisted of in-fringements on that greatprinciple of equal rightswithout whose eternal bar-rier no nation can ever longmaintain its liberty. The rep-resentatives of the peoplehave gradually usurped andexercised all the rightswhich, if our governmentwas administered in its pu-rity, would be left for thepeople to exercise.

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individual rights and individual industry. The people were placed betweentwo fires. On one hand Congress was establishing a great Bank, and givingaway tens of millions to great corporations in all quarters; on the otherthe states were forging another set of fetters in the shape of all sorts ofprivileged bodies, each one ruling its little district; each one swallowingup the business of private individuals; each one prescribing the prices ofgoods and the rates of labour, and each one a rotten borough, returningmembers of Congress. At one time these rotten boroughs, like those ofEngland, returned a majority of the members of Congress! Can we wonderthen that protection and prohibition, internal improvements, and corporateprivileges, were almost the only words heard in that honourable body? Canwe wonder that the voice of the people was as the voice of one crying inthe wilderness, and that but for the honest, fearless, high minded, andclear headed Andrew Jackson and his worthy counsellors, not a vestige ofthe reserved rights of the people would have survived the practical oper-ation of the principle repudiated by that great and wise man, namely, "thatbecause our government has been instituted for the benefit of the people,it must therefore have the power to do whatever may seem to conduce tothe public good." Under the sanction of such a principle, a governmentcan do any thing on pretence of acting for the public good. It will becomethe mere creature of designing politicians interested speculators, or crackbrained enthusiasts.

It will gradually concentrate to itself all the reserved rights of the people;it will become the great arbiter of individual prosperity; and thus beforewe know it, we shall become the victims of a new species of despotism,that of a system of laws made by ourselves. It will then remain to be seenwhether our chains will be the lighter from having been forged by our ownhands.

from: Evening Post, 13. Dez. 1834; quoted from: William Leggett, DemocratickEditorials. Essays in Jacksonian Political Economy, hrsg. v. L.H. White,Indianapo¬lis 1984 (Liberty Fund), S. 7 11.

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Wilhelm von Humboldt:THE PURPOSE OF MAN

34

Wilhelm vonHumboldt,

The Limits of State Action

Wilhelm von Humboldt (1767 1835), Prussianstatesman, linguistic researcher and philosopher,is the most important representative of Germanneo humanism, which considers the true purposeof human life to lie in the perfect development ofall individual capabilities. In his work, The Limitsof State Action, which was written in 1792, butpublished only posthumously, in 1851, Humboldtdevelops this idea in an extremely liberal fashion,calling for a radically minimal state. In his view,the state should do not more than use law to pro-tect freedom, which is the necessary condition forindividual development.

The true end of Man, or that which is prescribedby the eternal and immutable dictates of reason,and not suggested by vague and transient desires,is the highest and most harmonious developmentof his powers to a complete and consistent whole.Freedom is the first and indispensable conditionwhich the possibility of such a development pre-supposes; but there is besides another essential –intimately connected with freedom, it is true a va-riety of situations. Even the most free and self re-liant of men is hindered in his development, whenset in a monotonous situation. But as it is evident,on the one hand, that such a diversity is a con-stant result of freedom, and on the other hand,

35

The Purpose of Man

that there is a species of oppression which, with-out imposing restrictions on man himself, gives apeculiar impress of its own to surrounding circum-stances; these two conditions, of freedom and va-riety of situation, may be regarded, in a certainsense, as one and the same. Still, it may contributeto clarity to point out the distinction betweenthem. Every human being, then, can act with onlyone dominant faculty at a time; or rather, ourwhole nature disposes us at any given time tosome single form of spontaneous activity. It wouldtherefore seem to follow from this, that man is in-evitably destined to a partial cultivation, since heonly enfeebles his energies by directing them to amultiplicity of objects. But man has it in his powerto avoid this one sidedness, by attempting to unitethe distinct and generally separately exercisedfaculties of his nature, by bringing into sponta-neous co-operation, at each period of his life, thedying sparks of one activity, and those which thefuture will kindle, and endeavouring to increaseand diversify the powers with which he works, byharmoniously combining them, instead of lookingfor a mere variety of objects for their separate ex-ercise. What is achieved, in the case of the indi-vidual, by the union of the past and future withthe present, is produced in society by the mutualco-operation of its different members; for, in allthe stages of his life, each individual can achieveonly one of those perfections, which represent thepossible features of human character. It is througha social union, therefore, based on the internalwants and capacities of its members, that each isenabled to participate in the rich collective re-sources of all the others.

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The experience of all, even the rudest, nations, furnishes us an example ofa union formative of individual character, in the union of the sexes. And,although in this case the difference as well as the longing for union, ap-pears more marked and striking, it is still no less active in other kinds of

association where there is actually no dif-ference of sex; it is only more difficult todiscover in these, and may perhaps bemore powerful for that very reason. If wewere to follow out this idea, it might per-haps lead us to a clearer insight into thoserelations so much in vogue among the an-cients, and more especially the Greeks,among whom we find them engaged ineven by the legislators themselves: I meanthose so frequently, but unworthily, giventhe name of ordinary love, and sometimes,but always erroneously, that of merefriendship. The effectiveness of all such re-lations as instruments of cultivation, en-tirely depends on the extent to which the

members can succeed in combining their personal indepen¬dence withthe intimacy of the association; for whilst, without this intimacy, one in-dividual cannot sufficiently possess, as it were, the nature of the others,independence is no less essential, in order that each, in being possessed,may be transformed in his own unique way. On the one hand, individualenergy is essential to both parties and, on the other hand, a difference be-tween them, neither so great as to prevent one from comprehending theother, nor so small as to exclude admiration for what the other possesses,and the desire to assimilate it into one's own character. This individualvigour, then, and manifold diversity, combine themselves in originality;and hence, that on which the whole greatness of mankind ultimately de-pends towards which every human being must ceaselessly direct his efforts,and of which especially those who wish to influence their fellow – menmust never lose sight: individuality of energy and self development. Just

If we were to follow out thisidea, it might perhaps lead usto a clearer insight into thoserelations so much in vogueamong the ancients, andmore especially the Greeks,among whom we find themengaged in even by the leg-islators themselves: I meanthose so frequently, but un-worthily, given the name ofordinary love, and some-times, but always erro-neously, that of merefriendship.

37

as this individuality springs naturally from freedom of action, and thegreatest diversity in the agents, it tends in turn directly to produce them.Even inanimate nature, which, proceeding according to unchangeablelaws, advances by regular steps, appears more individual to the man whohas been developed in his individuality. He transports himself, as it were,into nature itself; and it is in the highest sense true that each man per-ceives the beauty and abundance of the outer world, in the same degreeas he is conscious of them in his own soul. How much closer must thiscorrespondence become between effect and cause – this reaction betweeninternal feeling and outward perception – when man is not only passivelyopen to external sensations and impressions, but is himself also an agent?I therefore deduce, as the natural inference from what has been argued,that reason cannot desire for man any other condition than that in whicheach individual not only enjoys the most absolute freedom of developinghimself by his own energies, in his perfect individuality, but in which ex-ternal nature itself is left unfashioned by any human agency, but only re-ceives the impress given to it by each individual by himself and of his ownfree will, according to the measure of his wants and instincts, and re-stricted only by the limits of his powersand his rights. From this principle it seemsto me, that reason must never retract any-thing except what is absolutely necessary.It must therefore be the basis of every po-litical system, and must especially consti-tute the starting point of the inquirywhich at present claims our attention.Keeping in view the conclusions arrived atin the last chapter, we might embody in ageneral formula our idea of State agencywhen restricted to its proper limits, anddefine its objects as all that a governmentcould accomplish for the common weal,without departing from the principle justestablished; while, from this position, we

The Purpose of Man

It must therefore be the basisof every political system, andmust especially constitutethe starting point of the in-quiry which at present claimsour attention. Keeping inview the conclusions arrivedat in the last chapter, wemight embody in a generalformula our idea of Stateagency when restricted to itsproper limits, and define itsobjects as all that a govern-ment could accomplish forthe common weal

38

could proceed to derive the still stricter limitation, that any State inter-ference in private affairs, where there is no immediate reference to vio-lence done to individual rights, should be absolutely condemned. It will benecessary, however, to examine in succession the different departmentsof a State's usual or possible activity, before we can circumscribe its spheremore positively, and arrive at a full solution of the question proposed. AState, then, has one of two ends in view; it designs either to promote hap-piness, or simply to prevent evil; and in the latter case, the evil which arisesfrom natural causes, or that which springs from man himself. If it restrictsits concern to the second of these objects, it aims merely at security; andI would here oppose this term security to every other possible end of Stateagency, and comprise these last under the general heading of Positive Wel-fare. Further, the various means adopted by a State affect in very differentdegrees the extension of its activity.

It may endeavour, for instance, to secure its ends directly, either by coer-cion or by the induce¬ments of example and exhortation; or it may com-bine all these sources of influence in the attempt to shape the citizen'soutward life, and forestall actions contrary to its intention; or, lastly, itmay try to exercise a sway over his thoughts and feelings, so as to bringhis inclinations, even, into conformity with its wishes. It is particular ac-tions only that come under political supervision in the first of these cases;in the second, the general conduct of life; and, in the last instance, it isthe very character of the citizen, his views, and modes of thought, whichare brought under the influence of State control. The actual working ofthis restrictive agency, moreover, is clearly least in the first of these cases,more so in the second, and greatest in the third; either because, in this, ittouches the sources from which the greater number of actions arise, orbecause the very possibility of such an influence presupposes a greatermultiplicity of institutions. But however seemingly different the depart-ments of political action to which they respectively belong, we shallscarcely find any one institution which is not more or less intimately con-nected with several of these. We may take, for example, the close interde-pendence that exists between the promotion of welfare and the

39

maintenance of security; furthermore, when any influence affecting par-ticular actions only, creates a habit through the force of repetition, itcomes ultimately to modify the character itself. Hence, in view of this in-terdependence of political institutions, it is very difficult to find a suitableway of classifying the different aspects of the subject with which we areconcerned.

But, in any case, it will be best to examine at the outset whether the Stateshould extend its concern to the positive welfare of the nation, or contentitself with provisions for its security; and, confining our view of institutionsto what is strictly essential either in their objects or consequences, to dis-cuss next, as regards both of these aims, the means that the State mayproperly make use of in accomplishing them. I am speaking here, then, ofthe entire efforts of the State to raise the positive welfare of the nation;of all solicitude for the population of the country, and the subsistence ofits inhabitants, whether shown directly in such institutions as poor laws,or indirectly, in the encouragement of agriculture, industry, and commerce;of all regulations relative to finance and currency, imports and exports,etc. (in so far as these have positive welfare in view); finally, of all meas-ures employed to remedy or prevent natural devastations, and, in short, ofevery political institution designed to preserve or augment the physicalwelfare of the nation. For moral welfare is not generally regarded so muchfor its own sake, as with reference to itsbearing on security, and I shall thereforecome to it later. Now all such institutions,I maintain, have harmful consequences,and are irreconcilable with a true systemof polity; a system conceived in the lightof the highest aspirations yet in no wayincompatible with human nature. A spiritof governing predominates in every insti-tution of this kind; and however wise andsalutary such a spirit may be, it invariablyproduces national uniformity, and a con-

The Purpose of Man

Now all such institutions, Imaintain, have harmful con-sequences, and are irrecon-cilable with a true system ofpolity; a system conceived inthe light of the highest aspi-rations yet in no way incom-patible with human nature. Aspirit of governing predomi-nates in every institution ofthis kind;

40

strained and unnatural manner of acting. Instead of men grouping them-selves into communities in order to discipline and develop their powers,even though, to secure these benefits, they may have to forgo a part oftheir exclusive possessions and enjoyments; they actually sacrifice theirpowers to their possessions. The very variety arising from the union ofnumbers of individuals is the highest good which social life can confer,and this variety is undoubtedly lost in proportion to the degree of Stateinterference. Under such a system, we have not so much the individualmembers of a nation living united in the bonds of a civil compact; but iso-lated subjects living in a relation to the State, or rather to the spirit whichprevails in its government – a relation in which the undue preponderanceof the State already tends to fetter the free play of individual energies.Like causes produce like effects; and hence, in proportion as State inter-ference increases, the agents to which it is applied come to resemble eachother, as do all the results of their activity.

And this is the very design which States have in view. They desire comfort,ease, tranquillity; and these are most readily secured to the extent thatthere is no clash of individualities. But what man does and must have inview is something quite different – it is variety and activity. Only thesedevelop the many – sided and vigorous character; and, there can be noone, surely, so far degraded, as to prefer, for himself personally, comfortand enjoyment to greatness; and he who draws conclusions for such apreference in the case of others, may justly be suspected of misunder-standing human nature, and of wishing to make men into machines. If Icome now to the ultimate result of the whole argument, the first principleof this part of the present inquiry must be that the State is to abstain formall solicitude for the positive welfare of the citizens, and not to proceed astep further than is necessary for their mutual security and protectionagainst foreign enemies; for with no other object should it impose restric-tions on freedom.

from: Wilhelm von Humboldt, The Limits of State Action, ed. J.W. Burrow, Cam-bridge 1969, p. 16 18, 20 24, 37.

41

Adam Smith: THE MARKET AND THE INDIVIDUAL

42

Adam Smith, An Inquiry

into the Nature and Causes of the

Wealth of Nations,

Although Adam Smith (1723 1790) was a pro-fessor of philosophy in Edinburgh, he is the truefounder of modem national economics. In his chiefphilosophical work, Theory of Moral Sentiments,which is one of the classic works of the 18th cen-tury Scottish school of moral philosophy, Smithattempted to found his ethical system on obser-vation of human nature. In doing so, he empha-sised primarily the value of sympathy. In hispioneering economic work, The Wealth of Nations,he develops a similar idea, but his main premise ishuman striving for economic benefit. This benefit,when it can unfold freely within the constraintsof law, is best suited to promoting the commongood. To this day, his great influence on the liberalschool of market economics, of which he is thetrue ancestor, continues.

The produce of industry is what it adds to thesubject or materials upon which it is employed. Inproportion as the value of this produce is great orsmall, so will likewise be the profits of the em-ployer. But it is only for the sake of profit that anyman employs a capital in the support of industry;and he will always, therefore, endeavour to employit in the support of that industry of which the pro-duce is likely to be of the greatest value, or to ex-change for the greatest quantity either of money

43

The Market and the Individual

or of other goods. But the annual revenue of everysociety is always precisely equal to the exchange-able value of the whole annual produce of its in-dustry, or rather is precisely the same thing withthat exchangeable value. As every individual,therefore, endeavours as much as he can both toemploy his capital in the support of domestic in-dustry, and so to direct that industry that its pro-duce may be of the greatest value; every individualnecessarily labours to render the annual revenueof the society as great as he can. He generally, in-deed, neither intends to promote the public inter-est, nor knows how much he is promoting it. Bypreferring the support of domestic to that of for-eign industry, he intends only his own security;and by directing that industry in such a manneras its produce may be of the greatest value, he in-tends only his own gain, and he is in this, as inmany other cases, led by an invisible hand to pro-mote an end which was no part of his intention.Nor is it always the worse for the society that itwas no part of it. By pursuing his own interest hefrequently promotes that of the society more ef-fectually than when he really intends to promoteit. I have never known much good done by thosewho affected to trade for the public good. It is anaffectation, indeed, not very common among mer-chants, and very few words need be employed indissuading them from it. What is the species ofdomestic industry which his capital can employ,and of which the produce is likely to be of thegreatest value, every individual, it is evident, can,in his local situation, judge much better than anystatesman or lawgiver can do for him.

44

The statesman, who should attempt to direct private people in what man-ner they ought to employ their capitals, would not only load himself witha most unnecessary attention, but assume an authority which could safelybe trusted, not only to no single person, but to no council or senate what-ever, and which would no where be so dangerous as in the hands of a manwho had folly and presumption enough to fancy himself fit to exercise it.To give the monopoly of the home market to the produce of domestic in-dustry, in any particular art or manufacture, is in some measure to directprivate people in what manner they ought to employ their capitals, andmust, in almost all cases, be either a useless or a hurtful regulation. If theproduce of domestic can be brought there as cheap as that of foreign in-dustry, the regulation is evidently useless. If it cannot, it must generallybe hurtful.

It is the maxim of every prudent master of a family, never to attempt tomake at home what it will cost him more to make than to buy. The taylordoes not attempt to make his own shoes, but buys them of the shoemaker.The shoemaker does not attempt to make his own clothes, but employs ataylor. The farmer attempts to make neither the one nor the other, butemploys those different artificers. All of them find it for their interest toemploy their whole industry in a way in which they have some advantageover their neighbours, and to purchase with a part of its produce, or whatis the same thing, with the price of a part of it, whatever else they haveoccasion for. What is prudence in the conduct of every private family, canscarce be folly in that of a great kingdom. If a foreign country can supplyus with a commodity cheaper than we ourselves can make it, better buy itof them with some part of the produce of our own industry, employed ina way in which we have some advantage. The general industry of the coun-try, being always in proportion to the capital which employs it, will notthereby be diminished, no more than that of the above mentioned artifi-cers; but only left to find out the way in which it can be employed withthe greatest advantage. It is certainly not employed to the greatest ad-vantage, when it is thus directed towards an object which it can buycheaper than it can make. The value of its annual produce is certainly more

45

The Market and the Individual

or less diminished, when it is thus turned away from producing commodi-ties evidently of more value than the commodity which it is directed toproduce. According to the supposition, that commodity could be purchasedfrom foreign countries cheaper than it can be made at home. It could,therefore, have been purchased with a part only of the commodities, or,what is the same thing, with a part only of the price of the commodities,which the industry employed by an equal capital would have produced athome, had it been left to follow its natural course. The industry of thecountry, therefore, is thus turned away from a more, to a less advanta-geous employment, and the exchangeable value of its annual produce, in-stead of being increased, according to the intention of the lawgiver, mustnecessarily be diminished by every such regulation.

By means of such regulations, indeed, a particular manufacture may some-times be acquired sooner than it could have been otherwise, and after acertain time may be made at home as cheap or cheaper than in the foreigncountry. But though the industry of the society may be thus carried withadvantage into a particular channel sooner than it could have been oth-erwise, it will by no means follow that the sum total; either of its industry,or of its revenue, can ever be augmented by any such regulation. The in-dustry of the society can augment only inproportion as its capital augments, and itscapital can augment only in proportion towhat can be gradually saved out of itsrevenue. But the immediate effect ofevery such regulation is to diminish itsrevenue, and what diminishes its revenueis certainly not very likely to augment itscapital faster than it would have aug-mented of its own accord, had both capi-tal and industry been left to find out theirnatural employments. It is thus that everysystem which endeavours, either, by ex-traordinary encouragements, to draw to-

But the immediate effect ofevery such regulation is todiminish its revenue, andwhat diminishes its revenueis certainly not very likely toaugment its capital fasterthan it would have aug-mented of its own accord,had both capital and industrybeen left to find out theirnatural employments. It isthus that every system whichendeavours, either,

46

wards a particular species of industry a greater share of the capital of thesociety than what would naturally go to it; or, by extraordinary restraints,to force from a particular species of industry some share of the capitalwhich would otherwise be employed in it; is in reality subversive of thegreat purpose which it means to promote. It retards, instead of accelerat-ing, the progress of the society towards real wealth and greatness; and di-minishes, instead of increasing, the real value of the annual produce of itsland and labour. All systems either of preference or of restraint, therefore,being thus completely taken away, the obvious and simple system of nat-ural liberty establishes itself of its own accord. Every man, as long as hedoes not violate the laws of justice, is left perfectly free to pursue his owninterest his own way, and to bring both his industry and capital into com-petition with those of any other man, or order of men. The sovereign iscompletely discharged from a duty, in the attempt¬ing to perform whichhe must always be exposed to innumerable delusions, and for the properperformance of which no human wisdom or knowledge could ever be suf-ficient; the duty of superintending the industry of private people, and ofdirecting it towards the employments most suitable to the interest of thesociety. According to the system of natural liberty, the sovereign has onlythree duties to attend to; three duties of great importance, indeed, butpain and intelligible to common understandings: first, the duty of protect-ing the society from the violence and invasion of other independent soci-eties; secondly, the duty of protecting, as far as possible, every member ofthe injustice or oppression of every other member of it, or the duty of es-tablishing an exact administration of justice; and, thirdly, the duty of erect-ing and maintaining certain public works and certain public institutions,which it can never be for the interest of any individual, or small numberof individuals, to erect and maintain; because the profit could never repaythe expense to any individual or small number of individuals, though itmay frequently do much more than repay it to a great society.

from: Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Na-tions, Two Volumes in One, ed. Edwin Cannan, Chicago 1976, I p. 477 479, IIp.208 209.

47

Frédérick Bastiat: FREEDOM AS COMPETITION

48

Frederic Bastiat,Economic Harmonies

Frédérick Bastiat (1801 1 850), publisher of theJournal des economistes, was perhaps France'smost influential journalist in the cause of freetrade in the 19th century. His work, Harmonieseconomiques, which appeared in 1850, and whichis the source for the following excerpt, had a last-ing influence on the free trade movementthroughout all of Europe. This is especially true inGermany, where the work was published in trans-lation in 1850 by John Prince Smith. AlthoughBastiat's style, which was justly praised by Ludwigvon Mises as a "pleasure to read", still holds its at-traction for modem readers, Bastiat, unfortu-nately, has been somewhat forgotten in Europe –unjustly. In the US, his writings, which are full ofoptimism for the cause of economic freedom, stillenjoy undiminished popularity among economistswith a classically liberal orientation.

There is no word in all the vocabulary of politi-cal economy that has so aroused the angry denun-ciations of the modern reformers as the word"competition", to which, to add to the insult, theyunfailingly apply the epithet "anarchistic." Whatdoes "anarchistic competition" mean? I do notknow. What can replace it? I do not know that ei-ther. Of course, I hear the cries of "Organization!Association!" But what does that mean? Once and

49

Freedom as Competition

for all we must come to an understanding. I reallymust know what kind of authority these authorspropose to exert over me and over all men livingon this earth of ours; for, in truth, the only author-ity I can grant them is the authority of reason,provided they can enlist reason on their side. Dothey really propose to deprive me of the right touse my own judge¬ment in a matter where myvery existence is at stake? Do they hope to takefrom me my power to compare the services that Irender with those than I receive? Do they meanthat I should act under restraints that they willimpose rather than according to the dictates ofmy own intelligence? If they leave me my liberty,competition also remains. If they wrest it from me,I become only their slave. The association will befree and voluntary, they say. Very well! But in thatcase every group with its associated members willbe pitted against every other group, just as indi-viduals are pitted against one another today, andwe shall have competition. The association will beall embracing, it is replied. This ceases to be a jok-ing matter. Do you mean to say that anarchisticcompetition is wrecking our society right now, andto cure this malady we shall have to wait until allmankind, the French, the English, the Chinese, theJapanese, the Kafirs, the Hottentots, the Lapps, theCossacks, the Patagonians, persuaded by your ar-guments, agree to unite for all time to come inone of the forms of association that you have con-trived? But beware! This is simply to acknowledgethat competition is indestructible; and do youhave the presumption to claim that an indestruc-tible, and therefore providential, phenomenon of

50

society can be mischievous? After all, what is competition? Is it somethingthat exists and has a life of its own, like cholera? No. Competition is merelythe absence of oppression. In things that concern me, I want to make myown choice, and I do not want another to make it for me without regardfor my wishes; that is all. And if someone proposes to substitute his judge-ment for mine in matters that concern me, I shall demand to substitutemy judgement for his in matters that concern him. What guarantee is therethat this will make things go any better? It is evident that competition isfreedom. To destroy freedom of action is to destroy the possibility, andconsequently the power, of choosing, of judging, of comparing; it amountsto destroying reason, to destroying thought, to destroying man himself.Whatever their starting point, this is the ultimate conclusion our modernreformers always reach; for the sake of improving society they begin bydestroying the individual, on the pretext that all evils come from him, asif all good things did not likewise come from him. We have seen that serv-ices are exchanged for services. In the last analysis, each one of us comesinto the world with the responsibility of providing his own satisfactionsthrough his own efforts. Hence, if a man spares us pains, we are obligatedto save him paints in return. His effort brings us a satisfaction; we mustdo as much for him. 44 But who is to make the comparison? For it is ab-solutely necessary that these efforts, these pains, these services that areto be exchanged, be compared so that an equivalence, a just rate, may bearrived at, unless injustice, inequality, chance, is to be our norm – whichis another way of throwing the testimony of human reason out of court.There must be, therefore, one or more judges. Who will it be? Is it not nat-ural that, in every particular case, wants should be judged by those whoexperience them, satisfactions by those who seek them, efforts by thosewho exchange them? Is it proposed in all seriousness to substitute for thiseternal vigilance by the interested parties a social authority (even if itshould be the reformer himself) charged with determining the intricateconditions affecting countless acts of exchange in all parts of the world?Is it not obvious that this would mean the establishment of the most fal-lible, the most far reaching, the most arbitrary, the most inquisitorial, themost unbearable, the most short sighted, and, fortunately, let us add, the

51


most impossible of all despotisms ever conceived in the brain of an Orientalpotentate? We need only know that competition is merely the absence ofany arbitrary authority set up as a judge over exchange, to realize that itcannot be eliminated. Illegitimate coercion can indeed restrain, counteract,impede the freedom of exchange, as it can the freedom of walking; but itcannot eliminate either of them without eliminating man himself. Thisbeing so, the only question that remains is whether competition tends to-ward the happiness or the misery of mankind – a question that amountsto this: Is mankind naturally inclined toward progress or fatally markedfor decadence?

I do not hesitate to say that competition, which, indeed, we could callfreedom – despite the aversion it inspires and the tirades directed againstit – is essentially the law of democracy. It is the most progressive, the mostegalitarian, the most universally levelling of all the laws to whichProvi¬dence has entrusted the progress of human society. It is this law ofcompetition that brings one by one within common reach the enjoymentof all those advantages that Nature seemed to have bestowed gratis oncertain countries only. It is this law, also, that brings within common reachall the conquests of Nature that men of genius in every century pass onas a heritage to succeeding generations, leaving still to be performed onlysupplementary labors, which they exchange without succeeding in beingremunerated, as they would like to be, for the co operation of natural re-sources. And if, as always happens at the beginning, the value of this laboris not proportional to its intensity, it is once again competition that, by itsimperceptible but constant action, restores a fairer and more accurate bal-ance than could be arrived at by the fallible wisdom of any human offi-cialdom. The accusation that competition tends toward inequality is farfrom true. On the contrary, all artificial inequality is due to the absence ofcompetition; and if the distance separating a Grand Lama from a pariah isgreater than that between the President and an artisan in the UnitedStates, the reason is that competition (or liberty) is suppressed in Asia, andnot in America. Therefore, while the socialists find in competition thesource of all evil, it is actually the attacks upon competi¬tion that are the

52

disruptive elements working against all that is good. Although this greatlaw has been misunderstood by the socialists and their partisans, althoughit is often harsh in its operation, there is no law that is richer in social har-monies, more beneficial in its general results; no law attests more strikinglyto the immeasurable superiority of God's plans over man's futile con-trivances. I must at this point remind the reader of that curious but indis-putable effect of the social order to which I have already called his

attention, for too frequently the force ofhabit causes us to overlook it. It may becharacterized thus: The total number ofsatisfactions that each member of societyenjoys is far greater than the number thathe could secure by his own efforts. Inother words, there is an obvious dispro-portion between our consumption and ourlabor. This phenomenon, which we can alleasily observe, if we merely look at ourown situation for an instant, should, itseems to me, inspire in us some sense ofgratitude toward the society to which weowe it. We come into the world destitute

in every way, tormented by countless wants, and provided with only ourfaculties to satisfy them. It would appear, a priori, that the most we couldhope for would be to obtain satisfactions equal to our labors. If we possessmore, infinitely more, to what do we owe the excess? Precisely to that nat-ural order of society against which we are constantly railing, when we arenot actually trying to destroy it. The phenomenon, in itself, is truly extraor-dinary. It is quite understandable that certain men should consume morethan they produce, if, in one way or another, they usurp the rights of othersand receive services without rendering any in return. But how can this betrue of all men simultaneously? How can it be that, after exchang¬ingtheir services without coercion or plunder, on a footing of value for value,every man can truly say to himself: I use up in one day more than I couldproduce in a hundred years?

This phenomenon, which wecan all easily observe, if wemerely look at our own situ-ation for an instant, should,it seems to me, inspire in ussome sense of gratitude to-ward the society to which weowe it. We come into theworld destitute in every way,tormented by countlesswants, and provided withonly our faculties to satisfythem.

53


The reader realizes that the additional element that solves the problem isthe increasingly effective participation of the forces of Nature in the workof production; it is the fact of more and more gratuitous utility comingwithin the common reach of all; it is the work of heat, of cold, of light, ofgravitation, of natural affinity, of elasticity, progressively supplementingthe labor of man and reducing the value of his services by making themeasier to perform. Certainly I must have explained the theory of value verybadly indeed if the reader thinks that value declines immediately and au-tomatically through the mere act of harnessing the forces of Nature andreleasing the labor of man. No, such is not the case; for then we could say,as the English economists do: Value is in direct proportion to labor. Theman who uses the help of a gratuitous force of Nature performs his serv-ices more easily; but he does not on that account voluntarily surrenderany part whatsoever of what he has been accustomed to receive. To inducehim to do so, some pressure from without – heavy, but not unjust – is nec-essary. This pressure is competition. As long as it does not intervene, aslong as the man using a force of Nature remains master of his secret, thatforce of Nature is gratuitous, undoubtedly, but it is not yet common to all,the conquest of Nature has been achieved, but to the profit of only oneman or one class. It is not yet of benefit to all mankind. Nothing has beenchanged in the world, except that one type of services, although partiallyrelieved of its burden of pains, still brings the full price.

We have, on the one hand, a man who asks the same amount of labor asbefore from his fellow men, while he offers them a reduced amount of hisown labor; and, on the other, all mankind, still obliged to make the samesacrifices in time and toil to obtain a commodity that is now produced inpart by Nature. If things were to remain in this state, every new inventionwould bring into the world a further source of ever spreading inequality.Not only could we not say that value is proportional to labor, but we couldnot even say that value tends to become proportional to labor. All that wehave said in earlier chapters concerning gratuitous utility and the trendtoward the enlargement of the communal domain would be illusory. Itwould not be true that services are exchanged for services in such a way

54

that God's gifts are transmitted, free of charge, from person to person untilthey reach the ultimate consumer. Everyone who had once managed toexploit any part of the forces of Nature would for all time to come chargefor it along with the cost of his labor; in a word, mankind would be or-ganized on the principle of universal monopoly, instead of the principle ofan expanding domain of gratuitous and common utilities.

But such is not the case. God has lavished on His creatures the gifts ofheat, light, gravitation, air, water, the soil, the marvels of plant life, elec-tricity, and many other blessings too numerous to mention. And even asHe has implanted in each man's heart a feeling of self interest, which, likea magnet draws all things to it; so has He, in the social order, providedanother mainspring whose function it is to preserve His gifts as they wereoriginally intended to be: gratis and common to all. This mainspring iscompetition. Thus, self interest is that indomitable individual¬istic forcewithin us that urges us on to progress and discovery, but at the same timedisposes us to monopolize our discoveries. Competition is that no less in-domitable humanitarian force that wrests progress, as fast as it is made,from the hands of the individual and places it at the disposal of allmankind. These two forces, which may well be deplored when con¬sideredindividually, work together to create our social harmony. And, we may re-mark in passing, it is not surprising that individualism, as it finds expressionin a man's self interest when he is a producer, has always revolted againstthe idea of competition, has decried it, and sought to destroy it, calling toits aid force, guile, privilege, sophistry, monopoly, restriction, governmentcontrols, etc. The immorality of its means discloses clearly enough the im-morality of its end. But the amazing, and unfortunate, thing is that politicaleconomy – that is, false political economy – propagated with such ardorby the socialist schools, has, in the name of love of humanity, equality,and fraternity, espoused the cause of individualism in its narrowest formand has abandoned the cause of humanity.

from: Frederic Bastiat, Economic Harmonies, transl. by W.H. Boyars, Irvington –on – Hudson, NY, 1964, S. 284 290.

55

Edmund Burke:THE PRINCIPLEOF REFORM

56

Edmund Burke,Reflections on

the French Revolution andother Essays

Edmund Burke (1729 1797) was a British writerand Whig (the precursor to the Liberal Party) par-liamentarian. In extremely effective and stylisti-cally outstanding speeches and pamphlets, headvocated far reaching reform policies. He stoodon the side of the Americans in the conflict thatled to the independence of the United States, andhe opposed the corruption and parliamentary in-fluence of King George III. His rejection of the ideathat society can be completely planned (a rejec-tion shared by his friend Adam Smith) made himthe opponent of every ideologically motivated rev-olutionary idea, however; he became a bitterenemy of the French Revolution. In his Reflectionson the Revolution in France" of 1790, Burke an-ticipated that the total revolution, as a result ofits overestimation of reason in planning, wouldsoon discard its liberal values, and he predictedthe rule of terror. But in this work as well he in-serted an impressive plea for reform policies, for:"a state without the means of some change iswithout the means of its own preservation".

Your leaders in France began by affecting to ad-mire, almost to adore, the British constitution; butas they advanced, they came to look upon it witha sovereign contempt. The friends of your NationalAssembly amongst us have full as mean an opinion

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The Principle of Reform

of what was formerly thought the glory of theircountry. The Revolution Society has discoveredthat the English nation is not free. It is no wondertherefore, that with these ideas of everything intheir constitution and government at home, eitherin church or state, as illegitimate and usurped, orat best as a vain mockery, they look abroad withan eager and passionate enthusiasm. Whilst theyare possessed by these notions, it is vain to talk tothem of the practice of their ancestors, the fun-damental laws of their country, the fixed form ofa constitution, whose merits are confirmed by thesolid test of long experience, and an increasingpublic strength and national prosperity. They de-spise experi¬ence as the wisdom of unletteredmen; and as for the rest, they have wrought underground a mine that will blow up, at one grand ex-plosion, all examples of antiquity, all precedents,charters, and acts of parliament. They have "therights of men". Against these there can be no pre-scription; against these no agreement is binding:these admit no temperament and no compromise:anything withheld from their full demand is somuch of fraud and injustice. Against these theirrights of men let no government look for securityin the length of its continuance, or in the justiceand lenity of its administration. The objections ofthese speculatists, if its forms do not quadratewith their theories, are as valid against such anold and beneficent government, as against themost violent tyranny, or the greenest usurpation.They are always at issue with governments, not ona question of abuse, but a question of competency,and a question of title.

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I have nothing to say to the clumsy sub-tilty of their political metaphysics. Letthem be their amusement in the schools.– "Illa se jactat in aula – Aeolus, et clausoventorum carcere regnet." – But let themnot break prison to burst like a Levanter,to sweep the earth with their hurricane,and to break up the fountains of the greatdeep to overwhelm us. Far am I fromdenying in theory, full as far is my heartfrom withholding in practice (if I were ofpower to give or to withhold), the realrights of men. In denying their false claimsof right, I do not mean to injure thosewhich are real, and are such as their pre-tended rights would totally destroy. If civilsociety be made for the advantage of man,all the advantages for which it is made

become his right. It is an institution of beneficence; and law itself is onlybenefi¬cence acting by a rule. Men have a right to live by that rule; theyhave a right to do justice, as between their fellows, whether their fellowsare in public function or in ordinary occupation. They have a right to thefruits of their industry; and to the means of making their industry fruitful.They have a right to the acquisitions of their parents; to the nourishmentand improvement of their offspring; to instruction in life, and to consola-tion in death. Whatever each man can separately do, without trespassingupon others, he has a right to do for himself; and he has a right to a fairportion of all which society, with all its combinations of skill and force,can do in his favour. In this partnership all men have equal rights; but notto equal things. He that has but five shillings in the partnership, has asgood a right to it, as he that has five hundred pounds has to his largerproportion. But he has not a right to an equal dividend in the product ofthe joint stock; and as to the share of power, authority, and direction whicheach individual ought to have in the management of the state, that I must

But let them not break prisonto burst like a Levanter, tosweep the earth with theirhurricane, and to break upthe fountains of the greatdeep to overwhelm us. Faram I from denying in theory,full as far is my heart fromwithholding in practice (if Iwere of power to give or towithhold), the real rights ofmen. In denying their falseclaims of right,I do not meanto injure those which arereal, and are such as theirpretended rights would to-tally destroy.

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The Principle of Reform

deny to be amongst the direct original rights of man in civil society; for Ihave in my contemplation the civil social man, and no other. It is a thingto he settled by convention. If civil society be the offspring of convention,that convention must be its law. That convention must limit and modifyall the descriptions of constitution which are formed under it. Every sortof legislative, judicial, or executory power are its creatures. They can haveno being in any other state of things; and how can any man claim underthe conventions of civil society, rights which do not so much as supposeits existence? rights which are absolutely repugnant to it? One of the firstmotives to civil society, and which becomes one of its fundamental rules,is, that no man should be judge in his own cause. By this each person hasat once divested himself of the first fundamental right of uncovenantedman, that is, to judge for himself, and to assert his own cause. He abdicatesall right to be his own governor. He inclusively, in a great measure, aban-dons the right of self defence, the first law of nature. Men cannot enjoythe rights of an uncivil and of a civil state together. That he may obtainjustice, he gives up his right of determining what it is in points the mostessential to him. That he may secure some liberty, he makes a surrenderin trust of the whole of it. Government is not made in virtue of naturalrights, which may and do exist in total independence of it; and exist inmuch greater clearness, and in a much greater degree of abstract perfec-tion: but their abstract perfection is their practical defect. By having aright to everything they want everything. Government is a contrivance ofhuman wisdom to provide for human wants. Men have a right that thesewants should be provided for by this wisdom. Among these wants is to bereckoned the want, out of civil society, of a sufficient restraint upon theirpassions. Society requires not only that the passions of individuals shouldhe subjected, but that even in the mass and body, as well as in the indi-viduals, the inclinations of men should frequently be thwarted, their willcontrolled, and their passions brought into subjection. This can only bedone by a power out of themselves; and not, in the exercise of its function,subject to that will and to those passions which it is its office to bridleand subdue. In this sense the restraints on men, as well as their liberties,are to be reckoned among their rights. But as the liberties and the restric-

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tions vary with times and circumstances, and admit of infinite modifica-tions, they cannot be settled upon any abstract rule; and nothing is sofoolish as to discuss them upon that principle.

The moment you abate anything from the full rights of men, each to governhimself, and suffer any artificial, positive limitation upon those rights, fromthat moment the whole organization of government becomes a consider-ation of convenience. This it is which makes the constitution of a state,and the due distribution of its powers, a matter of the most delicate andcomplicated skill. It requires a deep knowledge of human nature andhuman necessities, and of the things which facilitate or obstruct the var-ious ends, which are to be pursued by the mechanism of civil institutions.The state is to have recruits to its strength, and remedies to its distempers.What is the use of discussing a man's abstract right to food or medicine?The question is upon the method of procuring and administer¬ing them.In that deliberation I shall always advise to call in the aid of the farmerand the physician, rather than the professor of metaphysics. The scienceof constructing a commonwealth, or renovating it, or reforming it, is, likeevery other experimental science, not to be taught a' priori. Nor is it a shortexperience that can instruct us in that practical science; because the realeffects of moral causes are not always immediate; but that which in thefirst instance is prejudicial may be excellent in its remoter operation; andits excellence may arise even from the ill effects it produces in the begin-ning. The reverse also happens: and very plausible schemes, with verypleasing commencements, have often shameful and lamentable conclu-sions. In state there are often some obscure and almost latent causes,things which appear at first view of little moment, on which a very greatpart of its prosperity or adversity may most essentially depend. The scienceof government being therefore so practical in itself, and intended for suchpractical purposes, a matter which requires experience, and even more ex-perience than any person can gain in his whole life, however sagaciousand observing he may be.

from: Edmund Burke, Reflections on the French Revolution and other Essays, ed.A.J. Grieve, London 1910, p. 53, 55 59.

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John StuartMill

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John Stuart Mill,On Liberty,

London 1865

John Stuart Mill (1806 1873), son of thephilosopher and historian James Mill, also a liberal,is considered perhaps the most archetypical liberalthinker of 19th century England. In his later eco-nomic works, under the influence of his wife, thewomen's rights advocate Harriet Taylor Mill, hetended more and more to feeble compromises"with socialism (according to Ludwig von Mises).Nonetheless, in the following excerpt from hisclassic essay, On Liberty (1859), he proves himselfa thorough going liberal, who categorically rejectsfull state control of education.

A person should be free to do as he likes in hisown concerns; but he ought not to be free to doas he likes in acting for another, under the pretextthat the affairs of the other are his own affairs.The State, while it respects the liberty of each inwhat specially regards himself, is bound to main-tain a vigilant control over his exercise of anypower which it allows him to possess over others.This obligation is almost entirely disregarded inthe case of the family relations, a case, in its directinfluence on human happiness, more importantthan all others taken together. The almost despoticpower of husbands over wives needs not be en-larged upon here, because nothing more is neededfor the complete removal of the evil, than that

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Freedom and Education

wives should have the same rights, and should re-ceive the protection of law in the same manner,as all other persons; and because, on this subject,the defenders of established injustice do not availthemselves of the plea of liberty, but stand forthopenly as the champions of power. It is in the caseof children, that misapplied notions of liberty area real obstacle to the fulfilment by the State of itsduties. One would almost think that a man's chil-dren were supposed to be literally, and notmetaphorically, a part of himself, so jealous isopinion of the smallest interference of law withhis absolute and exclusive control over them; morejealous than of almost any interference with hisown freedom of action: so much less do the gen-erality of mankind value liberty than power. Con-sider, for example, the case of education. Is it notalmost a self evident axiom, that the State shouldrequire and compel the educa-tion, up to a certainstandard, of every human being who is born itscitizen? Yet who is there that is not afraid torecognise and assert this truth? Hardly any one in-deed will deny that it is one of the most sacredduties of the parents (or as law and usage nowstand, the father), after summoning a humanbeing into the world, to give to that being an ed-ucation fitting him to perform his part well in lifetowards others and towards himself. But while thisis unanimously declared to be the father's duty,scarcely anybody, in this country, will bear to hearof obliging him to perform it. Instead of his beingrequired to make any exertion or sacrifice for se-curing education to his child, it is left to his choiceto accept it or not when it is provided gratis!

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It still remains unrecognised, that to bring a child into existence withouta fair prospect of being able, not only to provide food for its body, but in-struction and training for its mind, is a moral crime, both against the un-fortunate offspring and against society; and that if the parent does notfulfil this obligation, the State ought to see it fulfilled, at the charge, asfar as possible, of the parent.

Were the duty of enforcing universal education once admitted, there wouldbe an end to the difficulties about what the State should teach, and howit should teach, which now convert the subject into a mere battle field forsects and parties, causing the time and labour which should have beenspent in educating, to be wasted in quarrelling about education. If the gov-ernment would make up its mind to require for every child a good educa-tion, it might save itself the trouble of providing one. It might leave toparents to obtain the education where and how they pleased, and content

itself with helping to pay the school feesof the poorer classes of children, and de-fraying the entire school expenses ofthose who have no one else to pay forthem. The objections which are urged withreason against State education, do notapply to the enforcement of education bythe State, but to the State's taking uponitself to direct that education: which is atotally different thing. That the whole orany large part of the education of thepeople should be in State hands, I go asfar as any one in deprecating. All that hasbeen said of the importance of individu-ality of character, and diversity in opinionsand modes of conduct, involves, as of thesame unspeakable importance, diversity ofeducation. A general State education is amere contrivance for moulding people to

It might leave to parents toobtain the education whereand how they pleased, andcontent itself with helping topay the school fees of thepoorer classes of children,and defraying the entireschool expenses of thosewho have no one else to payfor them. The objectionswhich are urged with reasonagainst State education, donot apply to the enforcementof education by the State,but to the State's takingupon itself to direct that ed-ucation: which is a totallydifferent thing.

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Freedom and Education

be exactly like one another: and as the mould in which it casts them isthat which pleases the predominant power in the government, whetherthis be a monarch, a priesthood, an aristocracy, or the majority of the ex-isting generation; in proportion as it is efficient and successful, it estab-lishes a despotism over the mind, leading by natural tendency to one overthe body. An education established and controlled by the State should onlyexist, if it exist at all, as one among many competing experiments, carriedon for the purpose of example and stimulus, to keep the others up to acertain standard of excellence. Unless, indeed, when society in general isin so backward a state that it could not or would not provide for itself anyproper institutions of education, unless the government undertook thetask: then, indeed, the government may, as the less of two great evils, takeupon itself the business of schools and universities, as it may that of jointstock companies, when private enterprise, in a shape fitted for undertakinggreat works of industry, does not exist in the country. But in general, ifthe country contains a sufficient number of persons qualified to provideeducation under government auspices, the same persons would be ableand willing to give an equally good education on the voluntary principle,under the assurance of remuneration afforded by a law rendering educa-tion compulsory, combined with State aid to those unable to defray theexpense.

from: John Stuart Mill, On Liberty, London 1865, p. 62/3.

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David Hume: SELF INTERESTAND JUSTICE

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The radical scepticism of David Hume (17111776), which was directed against both religionand rationalism, made him an extremely suspectfigure for many a contemporary. Today Hume islargely accepted as the most important exponentof the Scottish school of moral philosophy, alongwith his friend Adam Smith. His political and eth-ical philosophy, which he first laid out in detail in1739 in his "Treatise of Human Nature", combineda utilitarian concept of the human striving forbenefit with sceptical reservation with respect tounqualified planning of social and political struc-tures. Primarily through the reinterpretation of hisworks by F.A. v. Hayek, the importance of Hume'seconomic and legal philosophy for modem liberaltheory has only recently received its deservedcredit.

I HAVE ALREADY HINTED that our sense of everykind of virtue is not natural, but that there aresome virtues that produce pleasure and approba-tion by means of an artifice or contrivance, whicharises from the circumstances and necessity ofmankind. Of this kind I assert justice to be; andshall endeavour to defend this opinion by a shortand, I hope, convincing argument, before I exam-ine the nature of the artifice from which the senseof that virtue is derived. It is evident that, when

David Hume, A Treatise of

Human Nature(1739)

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Self Interest and Justice

we praise any actions, we regard only the motivesthat produced them, and consider the actions assigns or indications of certain principles in themind and temper. The external performance hasno merit. We must look within to find the moralquality. This we cannot do directly; and thereforefix our attention on actions, as on external signs.But these actions are still considered as signs, andthe ultimate object of our praise and approba¬tionis the motive that produced them. After the samemanner, when we require any action, or blame aperson for not performing it, we always supposethat one in that situation should be influenced bythe proper motive of that action, and we esteemit vicious in him to be regardless of it. If we findupon inquiry that the virtuous motive was stillpowerful over his breast, though checked in its op-eration by some circumstances unknown to us, weretract our blame and have the same esteem forhim as if he had actually performed the actionwhich we require of him. It appears, therefore,that all virtuous actions derive their merit onlyfrom virtuous motives, and are considered merelyas signs of those motives. From this principle Iconclude that the first virtuous motive which be-stows a merit on any action can never be a regardto the virtue of that action, but must be someother natural motive or principle. To suppose thatthe mere regard to the virtue of the action may bethe first motive which produced the action andrendered it virtuous, is to reason in a circle. Beforewe can have such a regard, the action must be re-ally virtuous; and this virtue must be derived fromsome virtuous motive; and, consequently,

the virtuous motive must be different from the regard to the virtue of theaction. A virtuous motive is requisite to render an action virtuous. An ac-tion must be virtuous before we can have a regard to its virtue. Some vir-tuous motive, therefore, must be antecedent to that regard. Nor is thismerely a metaphysical subtility; but enters into all our reasonings in com-mon life, though, perhaps, we may not be able to place it in such distinctphilo¬sophical terms. We blame a father for neglecting his child. Why?Because it shows a want of natural affection which is the duty of everyparent. Were not natural affection a duty, the care of children could notbe a duty; and it were impossible we could have the duty in our eye in theattention we give to our offspring. In this case, therefore, all men supposea motive to the action distinct from a sense of duty.

Here is a man that does many benevolentactions: relieves the distressed, comfortsthe afflicted, and extends his bounty evento the greatest strangers. No charactercan be more amiable and virtuous. We re-gard these actions as proofs of the great-est humanity. This humanity bestows amerit on the actions. A regard to this meritis, therefore, a secondary considerationand derived from the antecedent princi-ples of humanity, which is meritorious andlaudable. In short, it may be established asan undoubted maxim that no action canbe virtuous or morally good, unless therebe in human nature some, motive to pro-duce it distinct from the sense of itsmorality. But may not the sense of moral-ity or duty produce an action without anyother motive? I answer, it may; but this is

no objection to the present doctrine. When any virtuous motive or principleis common in human nature, a person who feels his heart devoid of that

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We regard these actions asproofs of the greatest hu-manity. This humanity be-stows a merit on the actions.A regard to this merit is,therefore, a secondary con-sideration and derived fromthe antecedent principles ofhumanity, which is meritori-ous and laudable. In short, itmay be established as an un-doubted maxim that no ac-tion can be virtuous ormorally good, unless there bein human nature some, mo-tive to produce it distinctfrom the sense of its moral-ity.

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motive may hate himself upon that account, and may perform the actionwithout the motive, from a certain sense of duty, in order to acquire bypractice that virtuous principle, or at least to disguise to himself as muchas possible his want of it. A man that really feels no gratitude in his temperis still pleased to perform grateful actions, and thinks he has by that meansfulfilled his duty. Actions are at first only considered as signs of motives;but it is usual in this case as in all others to fix our attention on the signs,and neglect in some measure the thing signified. But though, on some oc-casions, a person may perform an action merely out of regard to its moralobliga¬tion, yet still this supposes in human nature some distinct princi-ples which are capable of producing the action, and whose moral beautyrenders the action meritorious. Now, to apply all this to the present case,I suppose a person to have lent me a sum of money on condition that itbe restored in a few days; and also suppose that after the expiration ofthe term agreed on he demands the sum; I ask, What reason or motivehave I to restore the money? It will perhaps be said that my regard to jus-tice, and abhorrence of villainy and knavery, are sufficient reasons for meif I have the least grain of honesty or sense of duty and obligation. Andthis answer, no doubt, is just and satisfactory to man in his civilized state,and when trained up according to a certain discipline and education. Butin his rude and more natural condition, if you are pleased to call such acondition natural, this answer would be rejected as perfectly unintelligibleand sophistical. For one in that situationwould immediately ask you, Wherein con-sists this honesty and justice, which youfind in restoring a loan and abstainingfrom the property of others? It does notsurely lie in the external action. It must,therefore, be placed in the motive fromwhich the external action is derived. Thismotive can never be a regard to the hon-esty of the action. For it is a plain fallacyto say that a virtuous motive is requisiteto render an action honest, and, at the


For one in that situationwould immediately ask you,Wherein consists this hon-esty and justice, which youfind in restoring a loan andabstaining from the propertyof others? It does not surelylie in the external action. Itmust, therefore, be placed inthe motive from which theexternal action is derived.

same time, that a regard to the honesty is the motive of the action. Wecan never have a regard to the virtue of an action, unless the action beantecedently virtuous. No action can be virtuous, but so far as it proceedsfrom a virtuous motive. A virtuous motive, therefore, must precede the re-gard to the virtue; and it is impossible that the virtuous motive and theregard to the virtue can be the same.

It is requisite, then, to find some motiveto acts of justice and honesty, distinctfrom our regard to the honesty; and in thislies the great difficulty. For should we saythat a concern for our private interest orreputation is the legitimate motive to allhonest actions: it would follow that wher-ever that concern ceases, honesty can nolonger have place. But it is certain thatself love, when it acts at its liberty insteadof engaging us to honest actions, is thesource of all injustice and violence; norcan a man ever correct those vices with-out correcting and restraining the natural

move¬ments of that appetite. But should it be affirmed that the reason ormotive of such actions is the regard to public interest, to which nothing ismore contrary than examples of injustice and dishonesty – should this besaid, I would propose the three following considerations as worthy of ourattention. First, public interest is not naturally attached to the observationof the rules of justice, but is only connected with it, after an artificial con-vention for the establishment of these rules, as shall be shown more atlarge hereafter. Secondly, if we suppose that the loan was secret, and thatit is necessary for the interest of the person that the money be restored inthe same manner (as when the lender would conceal his riches), in thatcase the example ceases, and the public is no longer interested in the ac-tions of the borrower, though I suppose there is no moralist who will affirmthat the duty and obligation ceases. Thirdly, experience sufficiently proves

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It is requisite, then, to findsome motive to acts of jus-tice and honesty, distinctfrom our regard to the hon-esty; and in this lies the greatdifficulty. For should we saythat a concern for our privateinterest or reputation is thelegitimate motive to all hon-est actions: it would followthat wherever that concernceases, honesty can nolonger have place.

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that men in the ordinary conduct of life look not so far as the public in-terest, when they pay their creditors, perform their promises, and abstainfrom theft, and robbery, and injustice of every kind. That is a motive tooremote and too sublime to affect the generality of mankind, and operatewith any force in actions so contrary to private interest as are frequentlythose of justice and common honesty.

In general, it may be affirmed that there is no such passion in human mindsas the love of mankind, merely as such, independent of personal qualities,of services, or of relation to ourself. It is true, there is no human and indeedno sensible creature whose happiness or misery does not in some measureaffect us when brought near us and represented in lively colours; but thisproceeds merely from sympathy, and is no proof of such an universal af-fection to mankind, since this concern extends itself beyond our ownspecies. An affection betwixt the sexes is a passion evidently implanted inhuman nature; and this passion not only appears in its peculiar symptoms,but also in inflaming every other principle of affection, and raising astronger love from beauty, wit, kindness, than what would otherwise flowfrom them. Were there an universal loveamong all human creatures, it would ap-pear after the same manner. Any degreeof a good quality would cause a strongeraffection than the same degree of a badquality would cause hatred; contrary towhat we find by experience. Men's tem-pers are different, and some have apropensity to the tender, and others to therougher affections; but in the main, wemay affirm that man in general, or humannature, is nothing but the object both oflove and hatred, and requires some othercause which, by a double relation of im-pressions and ideas, may excite these pas-sions. In vain would we endeavour to


An affection betwixt thesexes is a passion evidentlyimplanted in human nature;and this passion not only ap-pears in its peculiar symp-toms, but also in inflamingevery other principle of af-fection, and raising astronger love from beauty,wit, kindness, than whatwould otherwise flow fromthem. Were there an univer-sal love among all humancreatures, it would appearafter the same manner.

elude this hypothesis. There are no phenomena that point out any suchkind affection to men, independent of their merit and every other circum-stance. We love company in general; but it is as we love any other amuse-ment. An Englishman in Italy is a friend; an European in China; and perhapsa man would be beloved as such, were we to meet him in the moon. Butthis proceeds only from the relation to ourselves, which in these casesgathers force by being confined to a few persons. If public benevolence,therefore, or a regard to the interests of mankind, cannot be the originalmotive to justice, much less can private benevo-lence or a regard to the

interests of the party concerned be thismotive. For what if he be my enemy andhas given me just cause to hate him?What if he be a vicious man and deservesthe hatred of all mankind? What if he bea miser and can make no use of what Iwould deprive him of? What if he be aprofligate debauchee and would rather re-ceive harm than benefit from large pos-sessions? What if I be in necessity andhave urgent motives to acquire somethingto my family? In all these cases, the orig-inal motive to justice would fail, and, con-sequently, the justice itself, and alongwith it all property, right, and obligation.A rich man lies under a moral obligationto communicate to those in necessity a

share of his superfluities. Were private benevolence the original motive tojustice a man would not be obliged to leave others in the possession ofmore than he is obliged to give them. At least, the difference would bevery inconsiderable. Men generally fix their affections more on what theyare possessed of than on what they never enjoyed; for this reason it wouldbe greater cruelty to dispossess a man of anything than not to give it him.But who will assert that this is the only foundation of justice?

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In all these cases, the originalmotive to justice would fail,and, consequently, the jus-tice itself, and along with itall property, right, and obli-gation. A rich man lies undera moral obligation to com-municate to those in neces-sity a share of hissuperfluities. Were privatebenevolence the original mo-tive to justice a man wouldnot be obliged to leave oth-ers in the possession of morethan he is obliged to givethem.

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Besides, we must consider that the chief reason why men attachthem¬selves so much to their possessions is that they consider them astheir property, and as secured to them inviolably by the laws of society.But this is a secondary consideration and dependent on the preceding no-tions of justice and property. A man's property is supposed to be fencedagainst every mortal, in every possible case. But private benevolence is,and ought to be, weaker in some persons than in others, and in many orindeed in most persons must absolutely fail. Private benevolence, therefore,is not the original motive of justice. From all this it follows that we haveno real or universal motive for observing the laws of equity but the veryequity and merit of that observance; and as no action can be equitable ormeritorious, where it cannot arise from some separate motive, there ishere an evident sophistry and reasoning in a circle. Unless, therefore, wewill allow that nature has established a sophistry, and rendered it neces-sary and unavoidable, we must allow that the sense of justice and injusticeis not derived from nature, but arises artificially, though necessarily, fromeducation and human conventions. I shalladd, as a corollary to this reasoning, thatsince no action can be laudable or blame-able, without some motives or impellingpassions distinct from the sense of morals,these distinct passions must have a greatinfluence on that sense. It is according totheir general force in human nature thatwe blame or praise.In judging of thebeauty of animal bodies, we always carryin our eye the economy of a certainspecies; and where the limbs and featuresobserve that proportion which is commonto the species, we pronounce them hand-some and beautiful. In like manner, we al-ways consider the natural and usual forceof the passions, when we determine con-cerning vice and virtue; and if the pas-


In judging of the beauty ofanimal bodies, we alwayscarry in our eye the economyof a certain species; andwhere the limbs and featuresobserve that proportionwhich is common to thespecies, we pronounce themhandsome and beautiful. Inlike manner, we always con-sider the natural and usualforce of the passions, whenwe determine concerningvice and virtue; and if thepassions depart very muchfrom the common measureson either side,

sions depart very much from the common measures on either side, theyare always disapproved as vicious. A man naturally loves his children betterthan his nephews, his nephews better than his cousins, his cousins betterthan strangers, where everything else is equal. Hence arise our commonmeasures of duty, in preferring the one to the other. Our sense of duty al-ways follows the common and natural course of our passions.

To avoid giving offence, I must here observe that when I deny justice tobe a natural virtue, I make, use of the word natural only as opposed to ar-tificial. In another sense of the word, as no principle of the human mind ismore natural than a sense of virtue, so no virtue is more natural than jus-tice. Mankind is an inventive species; and where an invention is obviousand absolutely necessary, it may as properly be said to be natural as any-thing that proceeds immediately from original principles, without the in-tervention of thought or reflection. Though the rules of justice be artificial,they are not arbitrary. Nor is the expression improper to call them laws ofnature, if by natural we understand what is common to any species, oreven if we confine it to mean what is inseparable from the species.

from: David Hume, A Treatise of Human Nature (1739); quoted from: David Hume,Moral and Political Philosophy, ed. M.D. Aiken, New York 1948, S. 49 55.

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José Ortega y Gasset:THE TYRANNY OF

THE MASSES

78

Jose Ortega yGasset,

The Revolt of theMasses,authorized

translation

José, Ortega y Gasset (1883 1955), one ofSpain's greatest liberals, voluntarily gave up hischair in philosophy at Madrid University in orderto go into exile when the civil war ended the re-public. His book, La Rebelion de las Massas (TheRebellion of the Masses), which appeared in 1930,and from which the following excerpt was taken,warns in memorable words of the threat to free-dom through totalitarian mass movements.

WE TAKE it, then, that there has happenedsomething supremely paradoxical, but which wasin truth most natural; from the very open-ing outof the world and of life for the average man, hissoul has shut up within him. Well, then, I maintainthat it is in this obliteration of the average soulthat the rebellion of the masses consists, and inthis in its turn lies the gigantic problem set beforehumanity to day. The mass man regards himself asperfect. The select man, in order to regard himselfso, needs to be specially vain, and the belief in hisperfection is not united with him consubstantially,it is not ingenuous, but arises from his vanity, andeven for himself has a fictitious, imaginary, prob-lematic character. Hence the vain man stands inneed of others, he seeks in them support for theidea that he wishes to have of himself. So that noteven in this diseased state, not even when blinded

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The Tyranny of the Masses

by vanity, does the "noble" man succeed in feelinghimself as in truth complete. Contrariwise, it neveroccurs to the mediocre man of our days, to theNew Adam, to doubt of his own plenitude. His selfconfidence is, like Adam's, paradisical. The innatehermetism of his soul is an obstacle to the neces-sary condition for his discovery of his insufficiency,namely: a comparison of himself with other be-ings. To compare himself would mean to go out ofhimself for a moment and to transfer himself tohis neighbour. But the mediocre soul is incapableof transmigrations – the supreme form of sport.We find ourselves, then, met with the same dif-ference that eternally exists between the fool andthe man of sense. The latter is constantly catchinghimself within an inch of being a fool; hence hemakes an effort to escape from the imminent folly,and in that effort lies his intelligence. The fool, onthe other hand, does not suspect himself; hethinks himself the most prudent of men, hence theenviable tranquillity with which the fool settlesdown, instals himself in his own folly. Like thoseinsects which it is impossible to extract from theorifice they inhabit, there is no way of dislodgingthe fool from his folly, to take him away for awhile from his blind state and to force him to con-trast his own dull vision with other keener formsof sight. The fool is a fool for life; he is devoid ofpores. This is why Anatole France said that the foolis much worse than the knave, for the knave doestake a rest sometimes, the fool never. It is not aquestion of the mass man being a fool. On thecontrary, to day he is more clever, has more ca-pacity of understanding than his fellow of anyprevious period.

But that capacity is of no use to him; in reality, the vague feeling that hepossesses it seems only to shut him up more within himself and keep himfrom using it. Once for all, he accepts the stock of commonplaces, preju-dices, fag ends of ideas or simply empty words which chance has piled upwithin his mind, and with a boldness only explicable by hisingenuous¬ness, is prepared to impose them everywhere. The varying de-grees of culture are measured by the greater or less precision of the stan-dards. Where there is little such precision, these standards rule existenceonly grosso modo; where there is much they penetrate in detail into theexercise of all the activities.

Anyone can observe that in Europe, forsome years past, "strange things" havebegun to happen. To give a concrete ex-ample of these "strange things" I shallname certain political movements, such asSyndicalism and Fascism. We must notthink that they seem strange simply be-cause they are new. The enthusiasm fornovelty is so innate in the European thatit has resulted in his producing the mostunsettled history of all known to us. Theelement of strangeness in these new factsis not to be attributed to the element ofnovelty, but to the extraordinary formtaken by these new things. Under thespecies of Syndicalism and Fascism thereappears for the first time in Europe a type

of man who does not wont to give reasons or to be right, but simply showshimself resolved to impose his opinions.

This is the new thing: the right not to be reasonable, the "reason of un-reason". Here I see the most palpable manifestation of the new mentalityof the masses, due to their having decided to rule society without the ca-

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I shall name certain politicalmovements, such as Syndi-calism and Fascism. We mustnot think that they seemstrange simply because theyare new. The enthusiasm fornovelty is so innate in theEuropean that it has resultedin his producing the mostunsettled history of allknown to us. The element ofstrangeness in these newfacts is not to be attributedto the element of novelty,but to the extraordinary formtaken by these new things.

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pacity for doing so. In their political conduct the structure of the new men-tality is revealed in the rawest, most convincing manner; but the key to itlies in intellectual hermetism. The average man finds himself with "ideas"in his head, but he lacks the faculty of ideation. He has no conception evenof the rare atmosphere in which ideas live. He wishes to have opinions,but is unwilling to accept the conditions and presuppositions that underlieall opinion. Hence his ideas are in effect nothing more than appetites inwords, something like musical romanzas. To have an idea means believingone is in possession of the reasons for having it, and consequently meansbelieving that there is such a thing as reason, a world of intelligible truths.To have ideas, to form opinions, is identical with appealing to such an au-thority, submitting oneself to it, accepting its code and its decisions, andtherefore believing that the highest form of intercommunion is the dia-logue in which the reasons for our ideas are discussed.

But the mass man would feel himself lostif he accepted discussion, and instinctivelyrepudiates the obligation of acceptingthat supreme authority lying outside him-self. Hence the "new thing" in Europe is"to have done with discussions", and de-testation is expressed for all forms of in-tercommunion which imply acceptance ofobjective standards, ranging from conver-sation to Parliament, and taking in sci-ence. This means that there is a renunciation of the common life based onculture, which is subject to standards, and a return to the common life ofbarbarism. All the normal processes are suppressed in order to arrive di-rectly at the imposition of what is desired.

The hermetism of the soul which, as we have seen before, urges the massto intervene in the whole of public life, also inevitably leads it to one singleprocess of intervention: direct action. When the reconstruction of the ori-gins of our epoch is undertaken, it will be observed that the first notes of


This means that there is a re-nunciation of the commonlife based on culture, whichis subject to standards, and areturn to the common life ofbarba¬rism. All the normalprocesses are suppressed inorder to arrive directly at theimposition of what is desired.

its special harmony were sounded in those groups of French syndicalistsand realists of about 1900, inventors of the method and the name of "di-rect action". Man has always had recourse to violence; sometimes this re-course was a mere come, and does not interest us here. But at other timesviolence was the means resorted to by him who had previously exhaustedall others in defence of the rights of justice which he thought he possessed.It may be regrettable that human nature tends on occasion to this formof violence, but it is undeniable that it implies the greatest tribute to rea-son and justice. For this form of violence is none other than reason exas-perated. Force was, in fact, the ultima ratio. Rather stupidly it has beenthe custom to take ironically this expression, which clearly indicates theprevious submission of force to methods of reason. Civilisation is nothingelse than the attempt to reduce force to being the ultima ratio.

We are now beginning to realise this with startling clearness, because "di-rect action" consists in inverting the order and proclaiming violence asprima ratio, or strictly as unica ratio. It is the norm which proposes theannulment of all norms, which suppresses all intermediate process betweenour purpose and its execution. It is the Magna Charta of barbarism. It iswell to recall that at every epoch when the mass, for one purpose or an-other, has token a part in public life, it has been in the form of "direct ac-

tion". This was, then, the natural modusoperandi of the masses. And the thesis ofthis essay is strongly confirmed by thepatent fact that at present when the over-ruling intervention in public life of themasses has passed from casual and infre-quent to being the normal, it is "direct ac-tion" which appears officially as therecognized method. All our communal lifeis coming under this regime in which ap-peal to "indirect" authority is suppressed.In social relations "good manners" nolonger hold sway.

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It is the norm which proposesthe annulment of all norms,which suppresses all inter-mediate process between ourpurpose and its execution. Itis the Magna Charta of bar-barism. It is well to recallthat at every epoch when themass, for one purpose or an-other, has token a part inpublic life, it has been in theform of "direct action".

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Literature as "direct action" appears in the form of insult. The restrictionsof sexual relations are reduced. Restrictions, standards, courtesy, indirectmethods, justice, reason! Why were all these invented, why all these com-plications created? They are all summed up in the word civilisation, which,through the underlying notion of civis, the citizen, reveals its real origin.By means of all these there is an attempt to make possible the city, thecommunity, common life. Hence, if we look into all these constituents ofcivilisation just enumerated, we shall find the same common basis. All, infact, presuppose the radical progressive desire on the part of each indi-vidual to take others into consideration. Civilisation is before all, the willto live in common. A man is uncivilised, barbarian in the degree in whichhe does not take others into account. Bar-barism is the tendency to disassociation.Accordingly, all barbarous epochs havebeen times of human scattering, of thepollution of tiny groups, separate fromand hostile to one another. The politicaldoctrine which has represented the lofti-est endeavour towards common life is lib-eral democracy. It carries to the extremethe determination to have considerationfor one's neighbour and is the prototypeof "indirect action". Liberalism is thatprinciple of political rights, according towhich the public authority, in spite of being all powerful, limits itself andattempts, even at its own expense, to leave room in the State over whichit rules for those to live who neither think nor feel as it does, that is to sayas do the stronger, the majority. Liberalism – it is well to recall this to day– is the supreme form of generosity; it is the right which the majority con-cedes to minorities and hence it is the noblest cry that has ever resoundedin this planet.

The political doctrine whichhas represented the loftiestendeavour towards commonlife is liberal democracy. Itcarries to the extreme thedetermination to have con-sideration for one's neigh-bour and is the prototype of"indirect action". Liberalismis that principle of politicalrights, according to whichthe public authority,

It announces the determination to share existence with the enemy; morethan that, with an enemy which is weak. It was incredible that the humanspecies should have arrived at so noble an attitude, so paradoxical, so re-fined, so acrobatic, so antinatural. Hence, it is not to be wondered at thatthis same humanity should soon appear anxious to get rid of it. It is a dis-cipline too difficult and complex to take firm root on earth. Share our ex-istence with the enemy! Govern with the opposition! Is not such a form oftenderness beginning to seem incomprehensible? Nothing indicates moreclearly the characteristics of the day than the fact that there are so fewcountries where an opposition exists. In almost all, a homogeneous massweighs on public authority and crushes down, annihilates every opposinggroup. The mass who would credit it as one sees its compact, multitudinousappearance? – does not wish to share life with those who are not of it. Ithas a deadly hatred of all that is not itself.

from: Jose Ortega y Gasset, The Revolt of the Masses, authorized translation, NewYork/London 1957, p. 68 77.

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85

Robert Nozick:UTOPIA

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Robert Nozick is probably the most importantcontemporary American philosophical exponent ofradical individualism. His book, Anarchy, State andUtopia, which appeared in 1974, witheringly, thor-oughly and precisely criticised all concepts of dis-tributive justice, thus strongly contributing to arenaissance of classical liberalism in the U.S. ForNozick, who employs a theory inspired by JohnLocke of inalienable rights protected by contract,only the minimal state has true legitimacy.

No state more extensive than the minimal statecan be justified. But doesn't the idea, or ideal, ofthe minimal state lack luster? Can it thrill theheart or inspire people to struggle or sacrifice?Would anyone man barricades under its banner?It seems pale and feeble in comparison with, topick the polar extreme, the hopes and dreams ofutopian theorists. Whatever its virtues, it appearsclear that the minimal state is no utopia. Wewould expect then that an investigation intoutopian theory should more than serve to high-light the defects and shortcomings of the minimalstate as the end of political philosophy. Such aninvestigation also promises to be intrinsically in-teresting. let us then pursue the theory of utopia

Robert Nozick,Anarchy, State, and

Utopia, New York 1974

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Utopia

to where it leads. It would be disconcerting ifthere were only one argument or connected set ofreasons for the adequacy of a particular descrip-tion of utopia. Utopia is the focus of so many dif-ferent strands of aspiration that there must bemany theoretical paths leading to it. Let us sketchsome of these alternate, mutually supporting, the-oretical routes. The first route begins with the factthat people are different. They differ in tempera-ment, interests, intellectual ability, aspirations,natural bent, spiritual quests, and the kind of lifethey wish to lead. They diverge in the values theyhave and have different weightings for the valuesthey share. (They wish to live in different climates– some in mountains, plains, deserts, seashores,cities, towns.) There is no reason to think thatthere is one community which will serve as idealfor all people and much reason to think that thereis not. Wittgenstein, Elizabeth Taylor, BertrandRussell, Thomas Merton, Yogi Berra, Allen Gins-burg, Harry Wolfson, Thoreau, Casey Stengel, TheLubavitcher Rebbe, Picasso, Moses, Einstein, HughHeffner, Socrates, Henry Ford, Lenny Bruce, BabaRam Dass, Gandhi, Sir Edmund Hillary, RaymondLubitz, Buddha, Frank Sinatra, Columbus, Freud,Norman Mailer, Ayn Rand, Baron Rothschild, TedWilliams, Thomas Edison, H.L. Mencken, ThomasJefferson, Ralph Ellison, Bobby Fischer, EmmaGoldman, Peter Kropotkin, you, and your parents.Is there really one kind of life which is best foreach of these people? Imagine all of them livingin any utopia you've ever seen described in detail.Try to describe the society which would be bestfor all of these persons to live in.

Would it be agricultural or urban? Of great material luxury or of austeritywith basic needs satisfied? What would relations between the sexes belike? Would there be any institution similar to marriage? Would it bemonogamous? Would children be raised 6y their parents? Would there beprivate property? Would there be a serene secure life or one with adven-

tures, challenges, dangers, and opportuni-ties for heroism? Would there be one,many, any religion? How important wouldit be in people's lives? Would people viewtheir life as importantly centered aboutprivate concerns or about public actionand issues of public policy? Would they besingle mindedly devoted to particularkinds of accomplishments and work orjack of all trades and pleasures or wouldthey concentrate on full and satisfyingleisure activities? Would children be raisedpermissively, strictly? What would theireducation concentrate upon? Will sportsbe important in people's lives (as specta-tors, participants)? Will art? Will sensualpleasures or intellectual activities pre-dominate? Or what? Will there be fashions

in clothing? Will great pains be taken to beautify appearance? What willthe attitude toward death be? Would technology and gadgets play an im-portant role in the society? And so on.

The idea that there is one best composite answer to all of these questions,one best society for everyone to live in, seems to me to be an incredibleone. (And the idea that, if there is one, we now know enough to describeit is even more incredible.) No one should attempt to describe a utopia un-less he's recently reread, for example, the works of Shakespeare, Tolstoy,Jane Austen, Rabelais and Dostojewski to remind himself of how differentpeople are. (It will also serve to remind him of how complex they are.)

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The idea that there is onebest composite answer to allof these questions, one bestsociety for everyone to livein, seems to me to be an in-credible one. (And the ideathat, if there is one, we nowknow enough to describe it iseven more incredible.) Noone should attempt to de-scribe a utopia unless he'srecently reread, for example,the works of Shakespeare,Tolstoy, Jane Austen, Ra-belais and Dostojewski to re-mind himself of howdifferent people are.

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Utopian authors, each very confident of the virtues of his own vision andof its singular correctness, have differed among themselves (no less thanthe people listed above differ) in the institutions and kinds of life theypresent for emulation. Though the picture of an ideal society that eachpresents is much too simple (even for the component communities to bediscussed below), we should take the fact of the differences seriously. Noutopian author has everyone in his society leading exactly the same life,allocating exactly the same amount of time to exactly the same activities.Why not? Don't the reasons also count against just one kind of commu-nity? The conclusion to draw is that there will not be one kind of commu-nity existing and one kind of life led in utopia. Utopia will consist ofutopias, of many different and divergent communities in which peoplelead different kinds of lives under different institutions. Some kinds ofcommunities will be more attractive to most than others; communitieswill wax and wane. People will leave some for others or spend their wholelives in one.

Utopia is a framework for utopias, a placewhere people are at liberty to join to-gether voluntarily to pursue and attemptto realize their own vision of the good lifein the ideal community but where no onecan impose his own utopian vision uponothers. The utopian society is the societyof utopianism. (Some of course may becontent where they are. Not everyone willbe joining special experimental commu-nities, and many who abstain at first willjoin the communities later, after it is clearhow they actually are working out.) Halfof the truth I wish to put forth is thatutopia is meta utopia: the environment inwhich utopian experiments may be triedout; the environment in which people are

Utopia

Utopia is a framework forutopias, a place where peo-ple are at liberty to join to-gether voluntarily to pursueand attempt to realize theirown vision of the good life inthe ideal community butwhere no one can impose hisown utopian vision uponothers. The utopian society isthe society of utopianism.(Some of course may be con-tent where they are. Noteveryone will be joining spe-cial experimental communi-ties,

free to do their own thing; the environment which must, to a great extent,be realized first if more particular utopian visions are to be realized stably.So is this all it comes to: Utopia is a free society?" Utopia is not just a so-ciety in which the framework is realized. For who could believe that tenminutes after the framework was established, we would have utopia?Things would be no different than now. It is what grows spontaneouslyfrom the individual choices of many people over a long period of time thatwill be worth speaking eloquently about. (Not that any particular stage ofthe process is an end state which all our desires are aimed at.

The utopian process is substituted for the utopian end stare of other statictheories of utopias.) Many communities will achieve many different char-acters. Only a fool, or a prophet, would try to prophesy the range and limitsand characters of the communities after, for example, 1 SO years of theoperation of this framework. Aspiring to neither role, let me close by em-phasizing the dual nature of the conception of utopia being presentedhere. There is the framework of utopia, and there are the particular com-munities within the framework. Almost all of the literature on utopia is,

according to our conception, concernedwith the character of the particular com-munities within the framework. The factthat I have not propounded some partic-ular description of a constituent commu-nity does not mean that (I think) doing sois unimportant, or less important, or un-interesting. How could that be? We live inparticular communities. It is here thatone's nonimperialistic vision of the idealor good society is to be propounded andrealized. Allowing us to do that is whatthe framework is for. Without such visionsimpelling and animating the creation ofparticular communities with particulardesired characteristics, the framework will

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The fact that I have not pro-pounded some particular de-scription of a constituentcommunity does not meanthat (I think) doing so isunimportant, or less impor-tant, or uninteresting. Howcould that be? We live inparticular communities. It ishere that one's nonimperial-istic vision of the ideal orgood society is to be pro-pounded and realized. Allow-ing us to do that is what theframework is for.

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lack life. Conjoined with many persons' particular visions, the frameworkenables us to get the best of all possible worlds. The position expoundedhere totally rejects planning in detail, in advance, one community in whicheveryone is to live yet sympathize with voluntary utopian experimentationand provides it with the background in which it can flower; does this po-sition fall within the utopian or the antiutopian camp? My difficulty inanswering this question encourages me to think the framework capturesthe virtues and advantages of each position. (If instead it blunders intocombining the errors, defects, and mistakes of both of them, the filteringprocess of free and open discussion will make this clear.) The frameworkfor utopia that we have described is equivalent to the minimal state.

This morally favored state, the only morally legitimate state, the onlymorally tolerable one, we now see is the one that best realizes the utopianaspirations of untold dreamers and visionaries. It preserves what we allcan keep from the utopian tradition and opens the rest of that traditionto our individual aspirations. Recall now the question with which thischapter began. Is not the minimal state, the framework for utopia, an in-spiring vision? The minimal state treats us as inviolate individuals, whomay not be used in certain ways 6y others as means or tools or instrumentsor resources; it treats us as persons having individual rights with the dig-nity this constitutes. Treating us with respect by respecting our rights, itallows us, individually or with whom we choose, to choose our life and torealize our ends and our conception of ourselves, insofar as we can, aidedby the voluntary co-operation of other individuals possessing the samedignity. How dare any state or group of individuals do more or less.

from: Robert Nozick, Anarchy, State, and Utopia, New York 1974, p. 297/ 309-312/332-334.

Utopia

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Friedrich Augustvon Hayek:

THE FICTIONOF SOCIAL JUSTICE

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Friedrich Augustvon Hayek, New Studies

in Philosophy, Politics,

Economics and theHistory of Ideas, London 1978

Friedrich August von Hayek (1899 1992), winnerof the Nobel Prize for Economics in 1 974, wasperhaps the most important liberal thinker of thiscentury. Following in the footsteps of his teacherLudwig von Mises, he refuted the theory of social-ism with arguments from economic theory. In hisclassic book, The Road to Serfdom, which waspublished in England in 1944, he attacked totali-tarian ideologies, of both leftist and rightist per-suasion, and called attention to their structuralsimilarities. This elicited outrage, especially in thesocialist camp. The same holds for his criticism ofthe welfare state, which, with its increasing stateeconomic intervention, would undermine the basisof every free society. In later works, such as TheConstitution of Liberty (1960), he developed aphilosophical apology for the free society, an apol-ogy that went beyond the bounds of pure eco-nomics and was primarily oriented to legal ideas.This becomes particularly clear in the followingexcerpt from a lecture held in 1976, in which,building upon Hume's arguments, he subjects theconcept of social justice to a critical examination.It is no wonder that, after the collapse of commu-nism in Eastern Europe, Hayek dubs formed therespontaneously in honour of this warner againstsocialistic tyranny.

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To discover the meaning of what is called 'socialjustice' has been one of my chief preoccupationsfor more than 10 years. I have failed in this en-deavour – or, rather, have reached the conclusionthat, with reference to a society of free men, thephrase has no meaning whatever. The search forthe reason why the word has nevertheless forsomething like a century dominated political dis-cussion, and has everywhere been successfullyused to advance claims of particular groups for alarger share in the good things of life, remains,however, a very interesting one. It is this questionwith which I shall here chiefly concern myself. ButI must at first briefly explain, as I attempt todemonstrate at length in volume 2 of my Law,Legislation and Liberty, about to be published, whyI have come to regard 'social justice' as nothingmore than an empty formula, conventionally usedto assert that a particular claim is justified withoutgiving any reason. Indeed that volume, whichbears the sub title The Mirage of Social Justice, ismainly intended to convince intellectuals that theconcept of 'social justice', which they are so fondof using, is intellectually disreputable. Some ofcourse have already tumbled to this; but with theunfortunate result that, since 'social' justice is theonly kind of justice they have ever thought of, theyhave been led to the conclusion that all uses ofthe term justice have no meaningful content. Ihave therefore been forced to show in the samebook that rules of just indivi¬dual conduct are asindispensable to the preservation of a peaceful so-ciety of free men as endeavours to realise 'social'justice are incompati¬ble with it.

The Fiction of Social Justice

The term 'social justice' is today generally used as a synonym of what usedto be called 'distributive justice'. The latter term perhaps gives a somewhatbetter idea of what can be meant by it, and at the same time shows whyit can have no application to the results of a market economy: there canbe no distributive justice where no one distributes. Justice has meaningonly as a rule of human conduct, and no conceivable rules for the conductof individuals supplying each other with goods and services in a marketeconomy would produce a distribution which could be meaningfully de-scribed as just or unjust. Individuals might conduct themselves as justlyas possible, but as the results for separate individuals would be neither in-tended nor foreseeable by others, the resulting state of affairs could neitherbe called just nor unjust. The complete emptiness of the phrase 'social jus-tice' shows itself in the fact that no agreement exists about what socialjustice requires in particular instances; also that there is no known test bywhich to decide who is right if people differ, and that no preconceivedscheme of distribution could be effectively devised in a society whose in-dividuals are free, in the sense of being allowed to use their own knowledgefor their own purposes. Indeed, individual moral responsibility for one'sactions is incompatible with the realisation of any such desired overallpattern of distribution.

A little inquiry shows that, though a greatmany people are dissatisfied with the ex-isting pattern of distribution, none ofthem has really any clear idea of whatpattern he would regard as just. All thatwe find are intuitive assessments of indi-vidual cases as unjust. No one has yetfound even a single general rule fromwhich we could derive what is 'sociallyjust' in all particular instances that wouldfall under it – except the rule of 'equal pay

for equal work'. Free competition, precluding all that regard for merit orneed and the like, on which demands for social justice are based, tends to

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A little inquiry shows that,though a great many peopleare dissatisfied with the ex-isting pattern of distribution,none of them has really anyclear idea of what pattern hewould regard as just. All thatwe find are intuitive assess-ments of indi¬vidual cases asunjust.

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enforce the equal pay rule. The reason why most people continue firmlyto believe in 'social justice', even after they discover that they do not reallyknow what the phrase means, is that they think if almost everyone elsebelieves in it, there must be something in the phrase. The ground for thisalmost universal acceptance of a belief, the significance of which peopledo not under-stand, is that we have all inherited from an earlier differenttype of society, in which man existed very much longer than in the presentone, some now deeply ingrained instincts which are inapplicable to ourpresent civilisation. In fact, man emerged from primitive society when incertain conditions increasing numbers succeeded by disregarding thosevery principles which had held the old groups together. We must not forgetthat before the last 10,000 years, during which man has de-veloped agri-culture, towns and ultimately the 'Great Society', he existed for at least ahundred times as long in small food sharing hunting bands of 50 or so,with a strict order of dominance within the defended common territory ofthe band. The needs of this ancient primitive kind of society determinedmuch of the moral feelings which still govern us, and which we approvein others. It was a grouping in which, at least for all males, the commonpursuit of a perceived physical common object under the direction of thealpha male was as much a condition of its continued existence as the as-signment of different shares in the prey to the different members accord-ing to their importance for the survival of the band.

It is more than probable that many of the moral feelings then acquiredhave not merely been culturally transmitted by teaching or imitation, buthave become innate or genetically determined. But not all that is naturalto us in this sense is therefore necessarily in different circumstances goodor beneficial for the propagation of the species. In its primitive form thelittle band indeed did possess what is still attractive to so many people: aunitary purpose, or a common hierarchy of ends, and deliberate sharingof means according to a common view of individual merits. It has beensuggested more than once that the theory explaining the working of themarket be called catallactics from the classical Greek word for barteringor exchanging – katalattein. I have fallen somewhat in love with this word


since discovering that in ancient Greek, in addition to 'exchanging', it alsomean 'to admit into the community' and 'to change from enemy intofriend'. I have therefore proposed that we call the game of the market , bywhich we can induce the stranger to welcome and serve us, the 'game ofcatallaxy'. The market process indeed corresponds fully to the definitionof a game which we find in The Oxford English Dictionary. It is 'a contestplayed according to rules and decided by superior skill, strength or good

fortune'. It is in this respect both a gameof skill as well as a game of chance. Aboveall, it is a game which serves to elicit fromeach player the highest worthwhile con-tribution to the common pool from whicheach will win an uncertain share. Thegame was probably started by men whohad left the shelter and obligations oftheir own tribe to gain from serving theneeds of others they did not know person-ally. When the early neolithic traders tookboatloads of flint axes from Britain acrossthe Channel to barter them against amberand probably also, even then, jars of wine,their aim was no longer to serve the needsof known people, but to make the largestgain.

Precisely because they were interested only in who would offer the bestprice for their products, they reached persons wholly unknown to them,whose standard of life they thereby enhanced much more than they couldhave that of their neighbours by handing the axes to those who no doubtcould also have made good use of them. The result of this game of catal-laxy, therefore, will necessarily be that many have much more than theirfellows think they deserve, and even more will have much less than theirfellows think they ought to have. It is not surprising that many peopleshould wish to correct this by some authorita¬tive act of redistribution.

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The game was probablystarted by men who had leftthe shelter and obligations oftheir own tribe to gain fromserving the needs of othersthey did not know personally.When the early neolithictraders took boatloads offlint axes from Britain acrossthe Channel to barter themagainst amber and probablyalso, even then, jars of wine,their aim was no longer toserve the needs of knownpeople, but to make thelargest gain.

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The trouble is that the aggregate product which they think is available fordistribution exists only because returns for the different efforts are heldout by the market with little regard to deserts or needs, and are needed toattract the owners of particular information, material means and personalskills to the points where at each moment they can make the greatestcontribution. Those who prefer the quiet of an assured contractual incometo the necessity of taking risks to exploit ever changing opportuni¬tiesfeel at a disadvantage compared with possessors of large incomes, whichresult from continual redisposition of resources. High actual gains of thesuccessful ones, whether this success is deserved or accidental, is an es-sential element for guiding resources to where they will make the largestcontribution to the pool from which all draw their share.

We should not have as much to share ifthat income of an individual were nottreated as just, the prospects of which in-duced him to make the largest contribu-tion to the pool. Incredibly high incomesmay thus sometimes be just. What is moreimportant, scope for achieving such in-comes may be the necessary condition forthe less enterprising, lucky, or clever toget the regular income on which theycount. The inequality, which so many peo-ple resent, however, has not only been theunderlying condition for producing therelatively high incomes which most peoplein the West now enjoy. Some people seemto believe that a lowering of this generallevel of incomes or at least a slowing down of its rate of increase – wouldnot be too high a price for what they feel would be a juster distribution.But there is an even greater obstacle to such ambitions today.


We should not have as muchto share if that income of anindividual were not treatedas just, the prospects ofwhich induced him to makethe largest contribution tothe pool. Incredibly high in-comes may thus sometimesbe just. What is more impor-tant, scope for achievingsuch incomes may be thenecessary condition for theless enterprising, lucky, orclever to get the regular in-come on which they count.

As a result of playing the game of catallaxy, which pays so little attentionto justice but does so much to increase output, the population of the worldhas been able to increase so much, without the income of most people in-creasing very much, that we can maintain it, and the further increases inpopulation which are irrevocably on the way, only if we make the fullestpossible use of that game which elicits the highest contributions to pro-ductivity. I am told that there are still communities in Africa in which ableyoung men, anxious to adopt modern commercial methods, find it impos-sible thereby to improve their position, because tribal customs demandthat they share the products of their greater industry, skill or luck with alltheir kin. An increased income of such a man would merely mean that hehad to share it with an ever increasing number of claimants. He can, there-fore, never rise substantially above the average level of his tribe. The chiefadverse effect of 'social justice' in our society is that it prevents individualsfrom achieving what they could achieve – through the means for furtherinvestment being taken from them. It is also the application of an incon-gruous principle to a civilisation whose productivity is high, because in-comes are very unequally divided and thereby the use of scarce resourcesis directed and limited to where they bring the highest return.

Thanks to this unequal distribution the poor get in a competitive marketeconomy more than they would get in a centrally directed system. All thisis the outcome of the, as yet merely imperfect, victory of the obligatoryabstract rule of individual conduct over the common particular end as themethod of social co ordination – the development which has made boththe open society and individual freedom possible, but which the socialistsnow want to reverse. Socialists have the support of inherited instincts,while maintenance of the new wealth which creates the new ambitionsrequires an acquired discipline which the non domesticated barbarians inour midst, who call themselves 'alienated', refuse to accept although theystill claim all its benefits.

from: Friedrich August von Hayek, New Studies in Philosophy, Politics, Economicsand the History of Ideas, London 1978

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101

John Gray:THE OPPONENTS OF

LIBERALISM

102

John Gray,Liberalism, Milton

Keynes 1986,S. 82 89

(by permission ofOpen University

Press)

John Gray, who was born in 1948, is one of Eng-land's leading contemporary liberal thinkers. Heteaches philosophy at Oxford. His book Liberalism(1986), presented here in excerpts, represents oneof the few systematic treatments of the topic thathas appeared for some time. Mention should alsobe made of his monographs on Hayek and Miss,and of his treatise "Limited Government: A PositiveAgenda", which appeared in 1989.

Liberalism – and most especially liberalism inits classical form – is the political theory ofmodernity. Its postulates are the most distinctivefeatures of modern life – the autonomous individ-ual with his concern for liberty and privacy, thegrowth of wealth and the steady stream of inven-tion and innovation, the machinery of governmentwhich is at once indispensable to civil life and astanding threat to it – and its intellectual out lookis one that could have originated in its fullnessonly in the post traditional society of Europe afterthe dissolution of medieval Christendom. Despiteits dominance as the political theory of the mod-ern age, liberalism has never been without seriousintellectual and political rivals. In their differentways, conservatism and socialism alike are no lessresponses to the challenges of modernity, whoseroots may be traced back to the crises of

103

The Opponents of Liberalism

seven¬teenth century England, but which crystal-lize into definite traditions of thought and practiceonly in the aftermath of the French Revolution.Both conservative and socialist thinkers suggestgenuine criticisms of the liberal out look and ofliberal society which can be understood and ad-dressed only in the historical context in which allthree traditions came to birth. Conservatives havesometimes disdained theoretical reflection on po-litical life, implying that political knowledge is firstand last the practical knowledge of a hereditaryruling class as to how affairs of state are to beconducted – a form of knowledge that is best leftinarticulate, uncorrupted by rationalist system-atizing. The nineteenth and twentieth centuriesare nevertheless replete with conservative thoughtof a sort that is fully as systematic and reflectiveas any found in the liberal tradition, and rich withinsights of which liberal thought can make prof-itable use. We find in the writings of Hegel, Burke,de Maistre, Savigny, Santayana and Oakeshott –all of them conservatives, if only in sharing a com-mon spirit of reaction against the excesses of lib-eral rationalism – many incisive criticisms whichliberal thought neglects at its peril. Such conser-vative criticisms are invaluable corrections of thecharacteristic liberal illusions, but they often em-body forms of nostalgia and quixotism which noliberal can support, and they sometimes expressclear misconceptions of the character of liberalismitself. So let us consider what it is that distin-guishes a conservative view of man and society,and what the conservative view can offer to theliberal.

In its intellectual response to the revolution of 1688 and 1789, conserva-tive thought in England and France, and everywhere thereafter, is distinc-tive in conceiving the central fact of political life to be the relation ofsubjects to rulers. For the conservative, relations of authority are aspectsof the natural form of social life, not to be accounted for in liberal fashionby any contract among individuals, and still less by reference to moral be-liefs of the kind which comprise socialist movements. The stuff of politicallife is made up of historical communities and is composed of many gen-erations of human beings, shaped by the peculiar traditions 'of their regionand country. Conservative thought proclaims its scepticism of the generichumanity and abstract individuality it sees celebrated in liberalism and in-sists that the human individual is a cultural achievement rather than anatural fact.

As we read it in the works of de Maistre and Burke, conservative thoughthas as its central terms, authority, loyalty, hierarchy and order – ratherthan equality, liberty or mankind. The emphasis is on the particularities ofpolitical life instead of any universal principles it may be supposed to ex-emplify. Often, though not always, it is suggested that the role of generalideas in political life is that of an epiphenomenon – a reflection of deeperforces of sentiment, interest and passion. As against liberalism and social-ism, then, conservative thought is particularist, and suspicious of the pur-suit of equality. It is also sceptical and pessimistic and, in its reaction tothe Industrial Revolution, prone to see breakdown and the desolation ofold ways and to distrust the opportunities of improvement and liberationwrought by the spread of invention and machinery.

Nineteenth century English conservatism spawned an entire school of his-torical interpretation and social criticism, which pictured industrialism asbringing about a collapse in popular living standards and disrupting ancientrelations of hierarchy in which rulers acknowledged an obligation to thecommon people. In the political writings of Benjamin Disraeli perhaps themost influential nineteenth century English antiliberal thinker because ofhis massive political presence, but evincing attitudes shared by many oth-ers such as Carlyle, Ruskin and Southey – this hostility to the social impli-

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105

cations of the Industrial Revolution generated a nostalgic and fantasticphilosophy of Tory paternalism, in which national government performedthe duties once discharged by the local nobility. In many ways socialistthought echoes conservative voices in lamenting the dislocation of ancientfolkways brought about by commerce and industry. Friedrich Engels's studyof the conditions of the English working class is notable as much for itsarcadian representation of pre industrial life as for its account of contem-porary deprivation and misery.

Both conservative and socialist writerstend to see in English life, somewhere be-tween the sixteenth century and the nine-teenth, a Great Transformation (in KarlPolanyi's terminology in which communalsocial forms were shattered by the forceof individualism and rising new classes.Unlike conservatives, socialists were forthe most part optimists about the socialconsequences of industrialism and, in-deed, regarded the abundance which in-dustry made possible as a necessarycondition of progress to the classlessegalitarian society. But like conservativesand unlike liberals, socialists mostly repu-diated the abstract individualism theyfound in liberal thought and rejected lib-eral ideas of civil society in favor of con-ceptions of moral community. If socialists were always more hopeful thanconservatives about the political prospect, in nineteenth century Englandand Europe they were at one with conservatives in representing the liberalage as an episode, a transitional phase in social development. The weak-nesses of socialist and conservative thought lie partly in their interpreta-tion of history and partly in the extremely hazy vision of a post liberalorder which their writings contain.


If socialists were alwaysmore hopeful than conserva-tives about the politicalprospect, in nineteenth cen-tury England and Europethey were at one with con-servatives in representing theliberal age as an episode, atransitional phase in socialdevelopment. The weak-nesses of socialist and con-servative thought lie partly intheir interpretation of historyand partly in the extremelyhazy vision of a post liberalorder which their writingscontain.

Both socialists and conservatives, overreacting to the visible hardships ofindustrialism, exaggerated its destructive aspects and understated its ben-eficial impart on the living standards of the people. The early decades ofthe nineteenth century witnessed a substantial and continuous expansionin population, in the consumption of luxuries and in incomes, which isscarcely to be reconciled with the historical mythology of popular immis-ertion expressed in Marxist and many conservative writings. Further, atleast in the English case, the idea of commerce and industry bringing abouta vast rupture in social order seems plainly groundless. As far back as wecan go, England was a predominantly individualist society, in which thecharac¬teristic institutions of feudalism were weak or absent. Conservativeand socialist thinkers and publicists in the nineteenth century seem to

have misread the history of the societyfrom which their models of social changewere chiefly derived. It is in their concep-tion of an anti liberal alternative orderthat the most radical weakness of socialistand conservative ideas is to be found. Bythe mid nineteenth century, individualistpatterns of economic and social life hadspread over most of Europe (includingRussia) and there nowhere remained atraditional social order of unbroken com-munal ties for conservatives to defend.Where conservatism was a political suc-

cess – as it was with Disraeli and Bismarck – it achieved this victory by apragmatic domestication of individualist life and set in motion nothinglike the anti liberal revolution of which Disraeli and other romantic con-servatives dreamt.

When the liberal order broke down in Europe in 1914, it was replaced overmost of the continent by a brutal, farcical and (in Germany) genocidalmodernism which cut loose from Western moral and legal traditions andproduced a Hobbesian anomie (rather than a reconstitution of communal

106

The early decades of thenineteenth century wit-nessed a substantial andcontinuous expansion inpopulation, in the consump-tion of luxuries and in in-comes, which is scarcely tobe reconciled with the his-torical mythology of popularimmisertion expressed inMarxist and many conserva-tive writings.

107

bonds) whenever its policies were imple¬mented. In turn, twentieth cen-tury history shows no example of a successful anti liberal conservativemovement, and the greatest of conservative statesmen – de Gaulle andAdenauer, for example – have adopted a managerial and realist attitudeto modem society which accepts its intractable individualism as an his-torical fate that wise policy may contain but not reverse. Socialist hopesof a new form of moral community have fared little better than conserva-tive visions of a renovation of communal life. Expectations of proletarianinternational solidarity were rudely shattered by the First World War, andthe ensuing victory of socialism in an illiberal and revolutionary form inRussia inaugurated a novel political system, but one which had more incommon with subsequent National Socialist experiments in totalitariancontrol than with any socialist ideal. Socialist projects and movementshave everywhere come to grief on the stubborn realities of distinctive cul-tural, national and religious traditions and, beyond them, of the pervasiveand ineradicable individualism of modern social life. For all the fashionablesocialist rhetoric of alienation, socialist movements have been most en-during and successful when they have sought to temper individualist so-ciety rather than to transform it. Just as the only viable form ofconservatism appears to be liberal conserva¬tism, so socialism hasachieved a measure of success only insofar as it has absorbed the essentialelements of liberal civilization.

As offering alternatives to liberal society, conservatism and socialism mustbe judged failures, yet each provides insights of which the liberal intellec-tual tradition can make good use. Perhaps the most valuable conservativeinsight is in its critique of progress – that the advance of knowledge andtechnology may be deployed as easily for cruel and mad purposes, as inthe Holocaust and the Gulag, as for purposes of improvement and libera-tion. Twentieth century experience has supported conservative distrust ofthe belief of the nineteenth century liberals (a belief that was not sharedby the Scottish founders of classical liberalism) that human history man-ifests a steady trajectory of progress, arrested and sometimes retarded,but irresistible in the end. It is clear now that the only support for the lib-


eral hope comes, not from imagined historical laws or tendencies, butsolely from the vitality of liberal civilisation itself. Again, time has provedwell founded conservative suspicions of a mass society whose large num-bers are emancipated from the guidance of ancient cultural traditions. Thevital truth that the maintenance of moral and cultural traditions is a nec-essary condition of lasting progress – a truth acknowledged by such liberalthinkers as Tocqueville and Constant, Ortega y Gasset and Hayek – mustbe accounted a permanent contribution of conservative reflection. In re-cent decades, conservative thought has exhibited a diminished hostility tomarket institutions, and has increasingly come to see in market freedomsa support for the spontaneous order in society which conservatives cherish.

By contrast, socialist thought has beenslow to come to terms with the indispens-ability of market institutions, seeing inthem symptoms of waste and disorder anda culpable failure of rational planning.There has indeed emerged a school ofmarket socialist thought, owing at least asmuch to John Stuart Mill as it does toMarx, which conceives the central pro-ductive institution of the socialist econ-omy to be the worker co-operative, withresources being allocated among co-op-eratives by market competitions. In its re-alistic acceptance of the market's

allocative role, the new school of socialist thought represents a welcomedeparture from conventional socialist confidence in the prospects of cen-tral economic planning, but it confronts several hard problems which incombination prove fatal to the market socialist project. There is first thedifficulty, noted by the distinguished Keynesian economist J.E. Meade, thatbreaking up the economy into worker managed enterprises involves sacri-ficing important economies of scale.

108

There has indeed emerged aschool of market socialistthought, owing at least asmuch to John Stuart Mill asit does to Marx, which con-ceives the central productiveinstitution of the socialisteconomy to be the workerco-operative, with resourcesbeing allocated among co-operatives by market compe-titions.

109

Further, the fusion of job holding with capital sharing in the workers co-operative has, as Yugoslav experience demonstrates, the unfortunate con-sequence of generating unemployment among young workers andencouraging workers in co-operatives to act like family partnerships inslowly consuming capital. If experience is any guide, worker-managedeconomies are likely to be sluggish, deficient in technological innovationand highly inequitable in the distribution of job opportunities they gener-ate. Finally, all market socialist schemes confront the radical problem ofallocating capital. By what criteria are the central state banks to allocatecapital to the different worker co-operatives? In market capitalist systems,the provision of venture capital is recognized as part of entrepreneurship– a creative activity insusceptible of formulation in hard and fast rules.When the provision of capital is concentrated in the state, as it is in mostif not all market socialist proposals, what rate of return is to be demanded,and how is the State Investment Bank to be disciplined for its losses? Inany practically realizable form, the market socialist scheme is open to thecrippling objection that the centralization of capital in government wouldbe bound to trigger a political competition for resources in which estab-lished industries and enterprises would be the winners and new, risky andweak enterprises the losers. In other words, market socialism would merelyintensify the harmful distributional conflict theorized by public choice an-alysts in the context of mixed economies. These defects in market socialistproposals suggest that there is no feasible alternative to market competi-tion as the allocative institution for capital, labor and consumer goods ina complex industrial society.

The most compelling aspect of the socialist criticism of economic liberalismlies, accordingly, not in any aspect of the market mechanism, but in theimperfections from the standpoint of justice of the initial allocation of re-sources. All real societies present a distribution of capital and incomewhich results from many factors, including previous acts of injustice inthe form of violations of property rights, restrictions on contractual liberty,and inequitable uses of economic power. In all likelihood, Nozick goes toofar in recommending a stringent egalitarian principle for the redistribution


of income as a rectificatory response to the historic burden of past injus-tices, and there is no justification for attempting to bring about any patternof income or wealth distribution. The aim of policy ought not to be theimposition of any such pattern, since respect for liberty dictates accept-ance of the disruption of patterns by free choices, but instead to compen-sate for past departures from equal liberty. This is not best achieved by anegalitarian policy of income redistribution. A more appropriate responseto the reality of injustice in the distribution of capital is a redistributionof capital itself, perhaps in the farm of a negative capital tax 1 whichwould supply the propertyless with a patrimony of wealth which wouldcompensate them for the effects of previous injustices. It would be a virtueof such a redistributional policy, from a classical liberal viewpoint, if itcould be financed by the sale of state assets and so need not entail furthergovernmental encroachment on private capital.

Whether or not this proposal be accepted as practicable, it is a valid insightof socialist thought, and one recognized most fully by the theorists of thePublic Choice School, that a restoration of economic freedom presupposesin justice a redistribution of capital holdings. Conservative and socialistattacks on liberalism have a vital role in alerting us to the shortcomingsof liberal thought and society. Above all, they should help us resist thetemptation to suppose that liberal society is ever to be identified with itscontingent historical forms. If conservative reflection teaches us to be cau-tious in our attitude to our inheritance of moral and cultural traditions,socialist thought compels recognition of the truth that the moral defenseof liberty requires rectification of past injustices by a renegotiation of es-tablished rights. The defense of liberal society requires, in short, that liberalthought and practice be ready to adopt conservative and radical perspec-tives when these may be demanded by liberal goals and by the historicalcircumstance in which liberal societies find themselves.

from: John Gray, Liberalism, Milton Keynes 1986, S. 82 89 (by permis¬sion of Open University Press)

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111

John Prince Smith:THE FREEDOM

OF TRADE

112

John Prince Smith

John Prince Smith (1809 1874), although bornin England, became a Prussian citizen in 1830; ul-timately, he became a member of the Prussianparliament. From 1871-73 he was a member ofthe new German Reichstag. As the spiritual fore-father of the Free Trade Party, which he founded,and of the Congress of German Economists, hewas probably the most influential exponent of freetrade ideals in 19th century Germany. It was therethat his works (such as his book 'Trade Wars',which appeared in 1843) were widely read. Mostnotably, he made the thought of the English Man-chester School, and the writings of Bastiat andSay, the leading French exponents of free trade,popular in Germany. The following text was takenfrom a speech he delivered in Cologne in 1860.

Therefore, the issue of the importance and theauthority of state power with regard to interna-tional economic life is actually part of the issue offree trade. The view concerning this issue that isso widespread and established must of necessityhave a central effect upon views concerning stateinstitutions and international policy. The questionof free trade is a question of international politicalsignificance. To thoroughly answer this question,we must first consider the economic system in itsprimary simplicity; and in spite of all complexity

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of economic life, its principle is of sublime sim-plicity. The economic purpose, increase of themeans of satisfying needs, is achieved through di-vision of labour. And division of labour is broughtabout through the opportunity for exchange. Theestablishment of a market, by which of course ismeant every facilitation of exchange, is the greatstep through which all other economicdevelop¬ment is set in motion. The market is theone great economic institution that determinesand governs all economic life; it assigns to eachhis branch of work, measures to each the compen-sation for his work; it creates a community amongthose who conduct business independently; itbrings about unity in freedom, and it preservesfreedom in unity. The market is the central organ,the heart, which powers the circulation of eco-nomic life, which takes in a stream of nutritionand speeds it on to all the limbs. But the life prin-ciple of the market, the condition for its organicplay, is freedom. Division of labour is the separa-tion of the producer from the consumer. It enablesevery product to be produced not by him who hap-pens to wish to consume it, but by those who arebest able to produce it, by those who continuouslypractice a single action to develop a special skill,who acquire the suitable tools, machines andother equipment for the one business, and who aremost favourably positioned in terms of naturallocal conditions. Now when each person works forthe market, he must also draw on the market forhis own needs, as a compensation for that whichhe, as it were, has delivered to a common store-house.

The Freedom of Trade

But where does he have the guarantee that this compensation will be ajust one, that the measure of his enjoyments will exactly correspond tothe measure in which he has contributed to the market's stockpile of themeans of enjoyment? How is it even possible to determine the extent towhich a single action has contributed to the overall result? For example,how should the relationship be calculated between the work of one manwho, using his savings, manufactured a plough and the work of him whoused the plough to plough the furrow? To which extent each of the twocontributed to the achievement of the harvest, and which respective share,accordingly, each is then due? The market answers this question both easilyand unerringly. In the market, each ware or bit of work is sold at the bestpossible price. The seller receives the greatest amount that anyone is will-ing to pay him voluntarily.

The buyer, on the other hand, pays thesmallest amount for which anyone willgive him the ware in question. The com-pensation for every bit of work is regu-lated by means of a voluntary agreementbetween the producers, who need to sellcertain stocks, and the consumers, whowish to satisfy their needs as plentifully aspossible. Of course, the compensation forvarious bits of work, which is normed bythe market, can prove to be very differentin different cases. But it is each person'sresponsibility to choose, from among allthe activities available to him, that one forwhich the market compensation is therichest. If a person has knowledge, skilland the required equipment, then he canput all his energies towards one of the

best paying production branches and be successful.

114

Of course, the compensationfor various bits of work,which is normed by the mar-ket, can prove to be very dif-ferent in different cases. Butit is each person's responsi-bility to choose, from amongall the activities available tohim, that one for which themarket compensation is therichest. If a person hasknowledge, skill and the re-quired equipment, then hecan put all his energies to-wards one of the best payingproduction branches and besuccessful.

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If he lacks these things, then his choices are limited; he must be satisfiedwith a less wellpaid form of work, less well paid because it is simply therefuge of the many who have few resources. But if, as is often said, a pro-ducer is unable to succeed with his business – if, namely, the customarymarket replacement for his product does not suffice to replace the invest-ment expended in production – then this proves that his work is uneco-nomical, for his work consumes things worth more than what it produces;it thus reduces the sum of the market values, rather than increasing it.But the free market does not permit this. The free market does not givesuch a person the means to continue with work that is damaging to thepublic as a whole. Such a producer will be forced to change his method ofwork; he must expend greater effort and use better equipment in order toproduce more products with the same investment, or he must take up an-other business; or, if he is unable to do either of these things, he must ap-propri¬ately reduce his consumption, and endure neediness as the naturalconsequence of his limited production capability. This, gentlemen, is thebasic law of economic organisation, the only possible condition underwhich the economic purpose, increase and just distribution of the meansof satisfying needs, can be secured. All solidarity is basically foreign to theeconomic community; it cannot, and must not, guarantee subsistences. Itcannot provide anyone with any other right than free access to the market,for the market is the only common thing that it possesses. Everything inthe market is individual property.

The economic community could subsidise individuals who wish to consumemore than the market compensation for their work only by curtailing thecompensation it gives others for their work, and this would violate its pri-mary basic law. To introduce coercion into economic traffic would meanputting arbitrariness in the place of justice, toppling the balance betweenproduction and consumption – violating the economic life principle, whichis freedom. And yet some individuals are greatly tempted to employ stateauthority to falsify the play of economic traffic. For example, if certainproducers are able to have competitors excluded from the market, throughmandatory licensing, trade ordinances or fines, under the name of protec-


tive tariffs, then the market will suffer an artificial lack of the products ofthe monopo¬lists, and the consumers will have to pay more for these prod-ucts than they otherwise would. The injustice of such state interventionin order to provide advantage to the one; at the expense of the other, isglaring enough. But the economic inefficiency of this is even more glaring.For in order to forcefully provide a larger share of the market to certainindividuals, the market's overall supply must be reduced. Such injusticecan occur only at public expense. And in general, state authority has noother means at its disposal to divert economic traffic from its free coursethan the creation of scarcity.

The economic purpose, namely the greatest possible increase and thejustest distribution of the means of satisfying needs, is ensured most com-pletely through unconditional freedom of trade, and no state interventionis required to achieve this. State authority can change the economy's freecourse only by prohibiting that which is economically efficient, and man-dating that which is economically inefficient. We have found the truth ofthis confirmed everywhere we have examined the effect of state interven-tion in economic movement; in limitation on trades, in taxes on interest,in limitations on banks, in limitation on freedom of movement, and in thelimitation of free authority over property. We will also find such confir-mation when we examine the restrictions on trade. The demand for free-dom of trade is, as already stated, the demand for unlimited division oflabour between the inhabitants of different states.

Now since the division of labour, this basic source of economic plenitude,is greatest in relationship to the diversity of production capabilities of theinhabitants of different states, it should hove been expected that everyonewould have recognised the overwhelming benefit of the division of labourbetween the inhabitants of different climates and localities, whose respec-tive productivity has been developed in manifold ways through particu-larities of customs, habits and natural capabilities. It should have beennatural for this obvious economic moment of unification of peoples sep-arated by state to result in the recognition that the economic commu¬nity

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is basically completely separate from the community of nations, and thatit has its own independent basis; that, while the state simply has the taskof protecting property and persons, of repressing violent disturbanceswithin its own borders, the economic community, under the protection ofstate order, should encompass all those who, no matter in which statethey live, can contribute to the increase of the means of satisfying needs.

80 Then for which conceivable reasonshould exclusion take place? If it is ab-solutely to our own advantage to permitall those who say "ja" to provide us thedesired means of satisfying needs, in re-turn for a compen¬sation we freely pro-vide, shall this basic economicrelationship be completely reversed withregard to those to say "oui" or "yes"? Andshall the economic community's basic re-lationship be so modified through simpledifference of nationality that exchangewith foreign countries is to be avoided forthe very reason that these countries sellcheaply; i.e. that for a given compensationthese countries offer us more of a means of satisfying needs than we couldproduce for the same amount of compen¬sation in our own country? It ishardly understandable why members of enlightened nations who devotetheir entire lives to economic traffic, and who also concern themselvesextensively with affairs of state, should for only a moment fail to recognisethe harmfulness of trade limitation; why they should have so little insightinto the economic system and the state's task, that they are unable to dis-tinguish more clearly the actions and provinces of the two; this wouldhardly be comprehensible, were not people, unfortunately, so caught upin state antagonism, and so blinded by national jealousy that they are un-able to see clearly into circumstances.


Why they should have so lit-tle insight into the economicsystem and the state's task,that they are unable to dis-tinguish more clearly the ac-tions and provinces of thetwo; this would hardly becomprehensible, were notpeople, unfortunately, socaught up in state antago-nism, and so blinded by na-tional jealousy that they areunable to see clearly into cir-cumstances.

The concept of common economic interests with hated foreigners, withstate enemies and political rivals, is so repellent to the national mood thatpassion closes reason to it; yes, so completely is reason benighted by pas-sionate national aversion that people permit themselves to be misled con-cerning their most obvious own benefit, by reasons that cannot standbefore unprejudiced criticism. Let us briefly examine some of the main ar-guments that have been advanced to justify restriction of trade throughthe so called protective tariff system. The attempt is made first of all topresent trade restriction as a punishment against "foreigners", and to con-vince us that the matter is simply a conflict between the interests of do-mestic and foreign producers. In truth, however, the conflict is betweenthe interests of domestic producers and domestic consumers. If certaindomestic producers wish to cut off foreign competition, then the moreplentiful supply from abroad is in the interest of all domestic consumers.It is said that a tariff is applied to foreign iron, foreign wool etc. But whatdoes this mean other than that a tariff is erected directly in front of thedomestic consumers of the foreign iron or wool? But restriction of tradeis said to be necessary in order to keep domestic labour at work. But keep-ing domestic labour at work depends only on the amount of domestic cap-ital. When the protective tariff is used to artificially inject capital intocertain branches of business, the capability of those branches to employworkers is not increased. But since consumption must be made more ex-pensive in order to bring forth these artificial branches of business, the re-sult is a hindering of the growth of capital, and of the increase of work forthe labour force.

Nothing is more misguided than the idea that the state should be able todevelop its national industry by means of so called protection of non com-petitive business; for what is lacking is not business for our capital, whatis lacking is capital for our business. To develop their business, our com-petitive industries would be gladly invest any amount of capital they couldbe provided with, and to employ the appropriate numbers of workers todo so. The more expensive consumption resulting from the protective tariffis said to be only a temporary sacrifice, an educative tool. Under the so

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called protection, the artificially fostered industry is supposed to be ableto develop natural roots and to become competitive in time – to be ableto do without the protective tariff after a while. This would then becomea purely commercial speculation in which initially the costs must be com-pared with the purpose.

But this occurs so seldomly that we have no protected industry in whichthe sacrifice made by the consumers is not many times the amount of allthe capital invested in the industry in question, and still the time is un-foreseeably far off when additional sacrifice will no longer be required.There is no worse tool for educating an industry to competitiveness, i.e. toefficiency, thriftiness and activity, than to give it prices with which it cancontinue to exist without developing such characteristics. Sometimes it isadmitted that only freedom of trade is truly economically efficient; butthen it is stated it should be introduced only if it is proclaimed simultane-ously by all states. This is an unattainable goal, as is well known. But theimpossibility of attaining freedom of trade all at once is not a reason fornot giving ourselves as much of it as possible. Even if we do not yet havecomplete freedom to sell abroad what we want to sell, this is still no reasonfor denying ourselves the freedom to at least buy what we want fromabroad. When we lift an import tariff, wemake an economic concession to our-selves first and foremost, and not simplyto foreign countries. Freedom of trade canbe brought about only when each nationstops demanding concessions of others,and decides to make such concessions it-self; freedom of trade can become generalonly through unilateral action. Then it isalso said that one must produce every-thing in one's own country, so that sup-plies will be ensured during time of war;i.e. the calamities of severed trade and ofmore expensive consumption, which are


This is an unattainable goal,as is well known. But the im-possibility of attaining free-dom of trade all at once isnot a reason for not givingourselves as much of it aspossible. Even if we do notyet have complete freedomto sell abroad what we wantto sell, this is still no reasonfor denying ourselves thefreedom to at least buy whatwe want from abroad.

among war's greatest evils, should be imposed voluntarily in peacetime aswell! On the contrary, in peacetime the cheapest possible supply must besought, so that in time of war the means will be available to endure theprice increases.

What is more, the international web of re-lationships occurring through freedom oftrade is the most effective means of pre-venting wars. If we would only attain thepoint at which people would see a goodcustomer in every foreigner, then peoplewould be much less inclined to shoot atforeigners. There are many other argu-ments for tariff protection; I will not de-vote further time to counting them uphere. All of them, like the ones mentioned,are calculated in the interest of unclearprejudice. But now, gentlemen, the pur-pose and striving of the men of free trade,who have understood the matter in itsbasic implications, is to moderate the na-tional antipathies, to protect reason from

the slavery of blind passion, to educate the nations to recognition of theircommon economic interest, and, thereby, to dull the sword of unhappystate conflict; in general, to strengthen the economic interest of unifica-tion and peace, as a counterweight to the divisive and antagonistic na-tional principle; to elevate this interest to the governing force in thecoexistence of civilised nations, to so regulate and strengthen the rela-tionships of enlightened neighbouring peoples through mutual bonds thatthey cannot be arbitrarily torn at any moment; to redeem the civilisedworld, wherever possible, from the infinitely mounting pressure of perma-nent arming for war; to overcome a world political condition that is cur-rently as unbear¬able as it is unmaintainable in the long run. For obviously,gentlemen, in the current state of affairs, the national powers are distanc-

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All of them, like the onesmentioned, are calculated inthe interest of unclear preju-dice. But now, gentlemen,the purpose and striving ofthe men of free trade, whohave understood the matterin its basic implications, is tomoderate the national an-tipathies, to protect reasonfrom the slavery of blind pas-sion, to educate the nationsto recognition of their com-mon economic interest, and,thereby, to dull the sword ofunhappy state conflict;

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ing themselves more and more from their purpose: instead of providingsecurity to their territories, they are eliciting attacks through their mutuallyantagonistic stance, attacks against which their defence institutions affordonly unreliable protection. Instead of guaranteeing peace to the economiccommunity placed under their charge, a peace which is an absolute re-quirement for that community's flourishing, they subject that communityto a laming concern. To an ever greater extent, they absorb capital andlabour.

They call for sacrifices from the economic community which would be ex-cessive even if they truly served the purpose for which the state actuallyexists: the strengthening of peaceful order and freedom for the protectionof the economic community. Strengthening of peaceful international re-lationships, which must be brought about through freedom of trade, ismuch more important than the direct economic gain of cheap supply ofmeans of satisfying needs. Political reform throughout the world, muchmore than simple economic reform, is the great goal the principle men offree trade also strive for and for which they wish to enthuse the public.The greatness of this goal also increases their courage, in comparison withthe difficulty of achieving it. The goal is not unattainable; for it lies on thepath of necessary progress. And its realisation does not lie in the far offfuture; for recognition of it is being propagated more strongly each day.It simply requires, like all great things, untiring effort, the effort whichcomes from deep conviction. We are well aware that a reshaping, now, inthe current deadlocked stance of the states toward each other, could beachieved only through an extraordinary motive power – that a quite ex-traordinary lever would be required to divert the state powers to anotherpath. But I ask you, gentlemen, what power is it then that shapes humaninstitutions? It is human perception.

And what is the lever that reshapes even the most powerful institutions?It is widely changing perception. Well, gentlemen; we are working onchanging the general perception of the stance of the nationally separatedpeoples to each other. Let us work to promulgate a generally clear per-


ception of the world economic community, whose unity cannot be dividedup by national boundaries, if each person's economic well being, if thewell-being of the general culture, is not to be violated. Let us promulgatethe view that with peaceful trade, nations competing in economic pro-duction cannot do otherwise than to be mutually beneficial; that the ad-vantage of exchange, in its very nature, can never be one sided; thatthrough free trade one people can never become rich at the expense ofanother; and even that the profit, relatively seen, is always most importantfor the economically weaker party, i.e. for the people least advanced in in-dustry.

If we promulgate this view, then we gain a strong counterweight to thenational antipathies; we dispel many a passionately held prejudice andmotivate the nations to view each other with new eyes, with the eyes ofreason, with a proper appreciation of common economic interests as op-posed to the supposed special interests of the state. Let us, therefore, el-evate the spirit of the people to the height of our economic principle. Fromthere we will give it a view of wide open spaces, of the open air. The worldseems much more beautiful, much richer, much more peaceful from theheights. The panoramic view from a raised standpoint clears the perception– and cleanses the mood! (Thunderous Applause.)

Cited from: Karl Diehl / Paul Mombert (ed.), Ausgewählte Lesestücke zum Studiumder politischen Ökonomie, 3rd edition, Vol. IX, Gera 1923, p. 191 199. (Translation:Sabrina Ferrari Frankland & Co.)

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