Classical Liberalism

0:00This afternoon's lecture will concern classical liberalism itself. Now, either I think that you've been given free of charge in the usual generous tradition of the Mises Institute or somewhere along the line gotten a hold of a copy of Mises' book called Liberalism. in the original German, called just liberalism, in the current English version, liberalism in the classical tradition. This was translated from German in a really rather brilliant translation, compared by many to Chapman's Homer.

0:46And at the very beginning of the book, Mises talks about liberalism and says, Philosophers, sociologists and economists of the 18th and early part of the 19th century formulated a political program that served as a guide to social policy, first in England and the United States, then on the European continent, and finally in the rest of the world. This program was nowhere ever carried out in full, even in England, the homeland of liberalism. It says liberalism was never permitted to come to full fruition. Nevertheless, As brief and all too limited as the supremacy of liberal ideas was, it sufficed to change the face of the earth and goes on in that vein.

1:34Well, as I say, he uses the term liberalism, which for a long time was the word associated with this program that he's developing, but it may seem strange to you to associate liberalism with Laissez-Faire and the Liberal Program considering that liberalism, and not only in the United States, now in other countries as well, has come to mean something quite different. It is a rather well-known story how, in English-speaking countries first of all, and then elsewhere Around the turn of the century, that is the turn of the 19th into the 20th century, the term liberal was hijacked by people who were essentially social democrats.

2:24Joseph Schumpeter, and Schumpeter was an economist from Austria, though not what we would call a very famous social philosopher, well worth consulting, wrote a very big book that I think is still in print from Oxford called History of Economic Analysis and in the famous passage there, he ironically states that it was a kind of compliment if an unintended one, when And the enemies of the system of free enterprise confiscated the name liberal for what was basically the opposite of what liberalism had stood for from the start.

3:10And nowadays you can find writers, I swear, who express astonishment that free market economists still sometimes insist on calling themselves liberals rather than conservatives. Some might say, why argue over a name, why not just call your position anything at all and go on from there to argue the case for it. Stephen Holmes, a political scientist from Chicago, has called the dispute over the term liberal a matter of bragging rights. The right to brag, I'm the real liberal tradition and you're not. On the other hand, he insists that he's in the real liberal tradition and thinks it's worth arguing about. Seems to me there are good reasons to hold on to the name liberal from the point of view, say, of Ludwig von Mises and not of John Kenneth Galbraith.

4:03First, in order to preserve a conceptual coherence when dealing with intellectual history. How can you make sense of the history of ideas if you say there was an important school of thought called liberalism, and Kenneth Galbraith, John Maynard Keynes, John Rawls and Franklin Roosevelt are just as entitled to the name liberal as Mises, Hayek, Nozick and say Grover Cleveland. Second, there was demonstrably a very deliberate political aim when Hobhouse, Hobson, John Dewey and others, Germany Friedrich Naumann promoted the transformation of the term. There was a theory underlying the terminological change, a kind of ideological subtext, one might say, that is still operative.

4:55This is what the idea was. There was an old liberalism of laissez-faire that is now antiquated and obsolete, made so by massive changes in society. Those writers at the turn of the century who pioneered the new liberalism, as they sometimes called it, based their claims on a ridiculously inflated view of the power of business enterprise vis-a-vis the individual workers on the labor market and an equally inflated view of the business corporations alleged enormous power vis-a-vis the individual consumer. In any case, the hijacking of the term liberal imply that the old liberalism, liberalism of Mises, for instance, in his book was dead and certainly need not be considered a plausible candidate for support.

5:43Funny thing happened in this respect, funny relative to other things I might be saying this afternoon. And that is that after a while, some of the English old-fashioned liberals like Auburn Herbert and the extreme followers of Herbert Spencer and so on, started saying, Well, you know, let's call ourselves something else. Let's call ourselves individualists. Then, John Dewey, and I can cite chapter and verse for you, started saying, Well, you know, there was an old individualism that is now obsolete. The new individualism, which is the same thing as the new liberalism, calls on all of the powers of society to support the individual in his or her self-development and on and on and on in that vein.

6:36Finally, I submit that there is no intellectually honest reason to bestow the term liberal on those nowadays who favor a never-ending list of government-funded programs to deal with every real or imagined ill of society and who favor constantly expanding state apparatus to wage war on the traditional ways and values of civil society. Those are the people who are called liberal nowadays. Peculiarly enough, to complicate it even further, in some cases, the term liberal does retain its old meaning. In the case of France, for instance, which I know we all now agree with, Thomas Jefferson, who said that every man has two countries, his own in France.

7:30The term liberal or sometimes ultra-liberal means a believer in laissez-faire or an extreme believer in laissez-faire. So the French, unlike the English, the Americans, the Canadians, even the Germans to an extent, have preserved the older meaning. There is a name for the position that calls itself liberal or liberalism in these countries. It is called social democracy or democratic socialism. Perfectly legitimate names. Why do they want to take over the name liberal? The rationale of Hobhouse, Hobson and the others for their new liberalism is indistinguishable from the position, for instance, of Edward Bernstein, the founder of revisionist socialism in Germany, which has today become socialism all together in the modern world just as the position of American liberal intellectuals is indistinguishable from that of people who call themselves social democrats in Europe this is what Edward Bernstein said around 1920 or so the development and protection of the free personality is the goal of all socialist measures even of those which superficially appear to be coercive measures

8:46A closer examination will always show that it is a question of a coercion that increases the sum of freedom in society that gives more freedom into a wider group than it takes away. Now, I submit that this is what so-called liberals in America hold, that, yeah, we have to be coercive in this respect, forcing employers to behave in this way, forcing consumers to behave in this way, indoctrinating children in the public schools in this way, in order to promote a greater freedom and the total development of the human personality. Fine if that's what you believe. But Bernstein never called himself a liberal. He was a socialist. And he said that this is the socialist vision. Why in English speaking countries democratic socialists should shy away from calling themselves by their proper name is a matter of political expediency more than anything else. For some Some reason or other, political labels suggestive of socialism have not been very popular in countries of the English heritage, so that what is essentially a social democratic party

9:52in the United States, the democrats, or the people who call themselves liberals in Canada, or the labor party, or even the liberal social democrats in England call themselves liberals. Now it is sometimes maintained that underlying liberalism is a particular philosophical system, in the sense of a particular metaphysics and epistemology. Often this philosophical system is taken to be British empiricism from John Locke to Mill, but I don't find this satisfactory. There are simply too many divergent and conflicting philosophical traditions within the history of Liberalism, from Aristotelianism and Thomism, to Kantianism, to empiricism, and so on for this to be convincing.

10:45The working definition of liberalism that I will adopt is this, it is the ideology that holds that civil society, understood as the sum order of society, the sum of the social Social order minus the state by and large runs itself within the bounds of the principle of private property. So liberalism, as I'll be discussing it, is this. It believes that civil society, understood as the social order minus the state, by and large runs itself within the bounds of the principle of private property. Well, with the collapse of Marxism, especially, real existing socialist regimes, and Marxism, especially, liberalism has become enormously popular.

11:40It seems that everybody wants to call himself a liberal. And this reflects itself in the scholarly world. There's much more attention being paid to liberalism than there ever was before. Scholars appear to be waking up to a few facts, after decades concentrating on the history of socialism, especially of Marxism, after having examined over and over again in mind-numbing detail the minutia of the annals of socialist doctrine and agitation, They have finally, academics have finally woken up to the fact that the foundations of our own society are worthy of attention as much as the sterile dreams of socialist visionaries.

12:27That is certainly a hopeful sign. Well, let's take up the story where I more or less left it off last time, the end of the Middle Ages. And the first thing we might mention is the Renaissance. Often, especially in older histories of the liberal idea, a lot of attention was devoted to the Renaissance. There was even a certain novelist, well known in American libertarian circles, whose philosophy of history can be encapsulated as, first came Aristotle, then the Renaissance, and then came the railroads. I must confess that I am dubious of the contribution of the Renaissance in general and especially of Renaissance philosophy as it is ordinarily understood to the rise of liberalism.

13:23It used to be that great stress was placed on writers like Marsilio Ficino and Pico della Mirandola, Pico's famous oration on the dignity of man, God hails man as the maker and molder of thyself, who are free to fashion thyself in whatever shape thou shalt prefer. Well, this has more in common, it seems to me, with Marx's Promethean vision of man than it does with the liberal tradition, which has usually been based in one way or another on the view of a given nature of man as attainable by reason. And, as Acton, of course, who very much valued the Middle Ages, pointed out, the great political philosopher of the Italian Renaissance is Machiavelli.

14:13The contrast between the Middle Ages and the Renaissance can be illustrated by the example of what is sometimes called the School of Salamanca. Not entirely correctly, because it includes Spanish thinkers not connected with the University of Salamanca. and it also includes some Italian and Portuguese thinkers. These are better referred to as the late scholastics. Now, I don't know how far your own book budget can be stretched. I suppose if it's necessary you could photocopy, whatever, 1200 pages and save yourself 90 or 100 dollars, but maybe, as a matter of fact, you'd be able to get it used from Amazon.

14:59This is the History of Economic Thought in two volumes by Murray Rothbard. You're probably familiar with it. In any case, while you're here, you can consult the copies that are available at the Institute. It was Murray's last book. I never completed it. Never got into the Austrian School itself or the 20th century, which he'd planned to do. But still, as it stands, it's a magnificent work of scholarship, liberal education in itself, in my view. And Murray has an important chapter in the first volume of his book on the late scholastics, the so-called School of Salamanca and the others.

15:46The story of these writers is another example of anti-Catholic bias. They were consistently ignored or downplayed, And it was a conventional wisdom that the traditional Catholic position on economics was based on the prohibition of usury and the just price. In other words, a kind of reactionary, medieval view that runs totally contrary to basic economic thinking. This was the older view, and this is maybe the view that's come down to you. Then in the 1950s, Marjorie Grice Hutchinson, who I think just recently died, and Raymond de Ruver, a professor in New York, published books and articles that began to do justice to these remarkable thinkers. A good study of them is short, and a good study of them is by a friend of ours, Alexander or Alex Scheffwan, who is the president of the Atlas Foundations, in Fairfax, a book called Christians for Freedom. Now, briefly, these writers, and they include Luis de Molina, Juan de Mariana, Francisco de Vitoria, Suarez, and the others, presented a sophisticated analysis of many economic phenomena, starting off as a baseline

17:11with a subjective theory of value as based on utility as understood by the economic actor. Now, if you think about that a minute, this already, we're talking about the 15th century and in the case of some Italians, the late 15th century, basically the 16th century, early 17th century and already we have the germ of the modern theory of value that has nothing to do with the English schools theory of value based on labor, famous theory of value that became standard in Britain with Ricardo and then was accepted by Karl Marx. This is a totally different tradition and Murray emphasizes throughout his history of economic thought how this Iberian tradition then becomes the standard European tradition and Italian economic thought and especially in French economic in sharp contrast to what's happening in Britain.

18:12Economics and economic phenomena based then on a subjective theory of value, on the individual actor's sense of utility as against some so-called objective theory of value based on labor input. These writers maintained the legitimacy of private property. They were for low taxes and against using taxation for the redistribution of wealth, and they opposed the debasement of money. Most of them were Spaniards who lived at the time of the Spanish conquest of the New World and the influx of precious metals into Europe, which created a precious metals inflation. They were very sensitive to the issue of inflation and the debasement of money.

18:58The Mises Institute has a number of economists who know many, many times more about these issues than I do, but according to them, according to Murray, very sophisticated analysis of how inflation works. Here's one of the writers, the origin of poverty is high taxes. In continual fear of tax collectors, the farmers prefer to abandon their land so they can escape their vexations. That was the story of the late Roman Empire. In order to flee the tax collector, they simply fled the towns and went to put themselves into some local landlord, The landlord, as part of his clientele, set up little villages of their own because taxation had become so onerous.

19:55And what that man is saying, by the way, and I think that's Molina who says that, he says that's happening in Castile. Castillo was a very well developed, that is the heart of Spain, a very well developed part of Europe in the later Middle Ages. And what happened, again, because of their imperialism and their religious intolerance, the Spanish Habsburgs were able to impoverish Spain while they had their high taxes. In the course of that, by the way, they had to fight it out with Cortes, this medieval institution, and it actually came to battles between the Spanish towns and the Spanish crown where the towns were defeated. Cortes was rendered impotent, and then the Spanish kings could do anything that they wanted, and with time, Spain turned into what it became, The backwoods of Europe, the decadent power which had once been rich and powerful.

21:08Another writer, Villalobos, taxes severely weakened towns and impoverished farmers. We can see places which yesterday were flourishing and had many inhabitants and now lie fallow because of high taxes. By the way, all of these men were clerics. were monks or priests and I think it's clear that part of their concern here is the duty that such a person felt or a high-minded person of that calling felt towards the poor and towards productive working people that hear their suffering because of the bad policies of their rulers. Here's Albornoz, Buying and selling is the nerve of human life that sustains the universe.

21:55Sounds like Bastiat. By means of buying and selling the world is united, joining distant lands and nations, people of different languages, laws and ways of life. And that, you know, was part of the kind of, you could say, philosophical undergirding of the free trade position from the eighteenth century on. If you were of a religious mind, one of the things that occurred to you was that The earth is given differential resources, different climates, and so on, in order for the peoples to trade with one another, and in this way, it's a providential fact, in this way brought together in a universal harmony. The rule, of course, is late scholastics follower of Thomas Aquinas, who had written, any exchange is for the mutual benefit of both parties, with the result that they are better off than How long it took British political economy to learn this, when their idea was that exchange was an exchange of equal values, as if people sat around trading dollar bills with each other.

23:02In order for an exchange to take place, the two parties have to have a differential valuation of what is exchanged. and many other quotations along these lines could be queried and I suggest Alex Chevron's book, which I'm pretty sure is in the library here, as a kind of small compendium of many of these ideas. Well that Spanish or late scholastic school went into oblivion although with some of them Suarez was the most famous but Vitoria also and so on everybody admitted that they had a tremendous influence in their political theory on the line of Pufendorf and Grotius that winds up with John Locke everybody Now, the Dutch, interestingly enough, did produce a very close approximation of free society in the context of Europe of the time, but as far as I've been able to find out, not very much in the way of a political philosophy, but in the context of what I've been able to find out, not very much in the way of a political philosophy, but as far as I've been able to find out,

24:26that mirrored that freer kind of society. But I don't know what to say about this. Those of you who are not English-speaking, who don't come from English-speaking countries, I would urge you, as I do from time to time when I speak in European contexts, Please, you are able to easily read your own language, whatever it is, French or Italian or Danish or in this case Dutch, in a way that foreigners can, the way that I certainly can, simply skimming the literature. Delve into it. Find out who in the history of your own country was responsible for the free institutions that your people adopted.

25:18I remember in Copenhagen, talking to Per before, there's a statue, a monument, a small monument, very centrally placed, that I took a photograph of, on the emancipation of the Danish serfs. Well, I mean, that happened at a certain point. Somebody was responsible for that. What's the story behind that? As far as the French go, the greatest collection of free market thinking is contained in the Journal des Economistes, not the current one, but the older one, that began in 1846 or so, Joe, does that sound right? 1846, and lasted until June of 1940, when it was put a very Sudden End II by a certain occupying power that I'm not going to mention because Daniel is here, who closed down this great flagship of laissez-faire liberalism that had lasted for so long, almost a hundred years. Volume after volume, good old University of Chicago still has it in the hard copy, one volume after the other. At the Library of Congress In this case, it's in microfilm, and I think most places microfilm, but nonetheless, there are a number of different articles that could be mined from these doctoral dissertations by anybody who's very adept at the French language, and this goes also for Spaniards.

26:57The history of liberalism begins with the Levellers in the mid-17th century, one of Joe Stromberg's favorite One of Joe Stromberg's favorite groups also. And since they are an authentic product of the great English people, we will spell their name with the double L, which your spell check would reject if you're an American, the Levellers.

27:52Now, I mentioned that the attack on the traditional, inherited, chartered immunities and privileges of the Dutch people by the Spanish Habsburgs was the occasion for the revolt of the Dutch. In a parallel kind of way, at the beginning of the 17th century, a family, a dynasty comes to the throne of England that has similar absolutist ideas. You have to understand that the time we're talking about monarchical absolutism, the idea that the king owns the country, as Louis XIV thought, or stated at least, the idea that the king is above the law and so on, the idea that the country should be run by the king and his bureaucracy and his paid military mercenaries, this was considered the wave of the future.

28:44Just as, believe it or not, for a time in the late 20s and 1930s, fascism was considered a wave of the future. People sort of defensively apologized for not having a fascist regime because fascism was so obviously occurent and modern and so on. So, what happened is that this new regime, Scottish family, now in the throne of England, decided to introduce this, many of the continental ways that we know of collectively as royal absolutism, this was the House of Stuart. Like other rulers and their henchmen, the stewards and apologists and their apologists for absolutism considered it the modern form of government, more streamlined than the older form that was hedged around by limitations and restrictions and also consisted of these archaic sounding, funny as Mark Thornton would have it, funny sounding limitations of the kind that we find in the Magna Carta, a very old-fashioned They were going to change things. The students decided to rule on their own without the benefit of the representatives of the people, of the taxpayers in parliament.

30:09When the time came that Charles I needed to raise money, he did it on his own authority. He levied ship money on the towns of England that had never had to pay it before. This was a special tax in order to support the Navy. The Navy and the seacoast towns had traditionally paid it because they were assumed to have more to gain from the Navy than other people, but now the same tax was levied simply on royal authority on inland towns. It did not amount to very much, just as the stamp tax and the tax on tea in the American colonies did not amount to very much, but the principle was unacceptable to the people.

30:55Sometimes apologists for the first American war of secession, the Revolutionary War, say, you know, why did they go to war? Why did they risk their lives, their fortune and their sacred honor for a couple of pennies in the pound? It's trivial. It's ridiculous. Well, it really was the principle. That is, if the king can do this on the small scale, if we accept that principle, he can do anything. The leaders of the English resistance came to say that under this king, there is nothing a man can call his own. Which is, I think, more and more becoming the slogan of the modern democratic state.

31:41There's, in the end, nothing that you can really call your own, once the state demands it. So, the English Civil War came and the parliamentary forces eventually defeated the royalists. Charles was captured, put on trial and executed, and a new regime was set up under the military leader Oliver Cromwell and what remained of Parliament. However, there were radical ideas that had been let loose, and there were some people who began to say this Cromwell and this Parliament, or what's left of it, are beginning to act in the same way that the Stuarts did. It doesn't matter that the stewards were kings, that's not the important point.

32:27What matters is how the government acts. And a group of writers joined together. Their major spokesman was John Lilburn. and the Leveller Manifestos are available in a number of editions. Others included Richard Overton, William Walwyn, and so on. Lilburn had been arrested under Charles I for having violated the monopoly of the Stationer's Company by importing books from Holland. One of the characteristics of the absolute monarchs, and especially of the stewards, was the creation of monopolies.

33:15Monopolies, as they were understood in those days, were special privileged grants given to private individuals by the state. Monopolies were not considered a natural outgrowth of the free market. This was purely a state invention. And in this case, this particular stationer's guild, or printer's guild, had a monopoly of importing books. He tried to import books and he was arrested. For this he was whipped down the length of Fleet Street. I'd forgotten that it was Fleet Street. I wonder if there's any monument there. And thrown into prison. But, Littleburn noticed that the stationer's monopoly was not abolished by the new revolutionary government, but only renamed.

34:10So that it remained, and it was a thorn in his side, and it turned him to thinking about whether this new regime was really much different from the previous one. There was a monopoly of the Merchant Adventurers' Company in foreign trade. Now, what the Levellers demanded was, though this is a statement of theirs, that it shall not be in their power, shall not be in Parliament's power, not just the King's power, but now Parliament's power, to continue or make any laws to abridge or hinder any person or persons from trading or merchandising into any place beyond the seas where any of this nation are free to trade.

34:59That is the abolition of foreign trade monopolies. They favored the abolition of tithes for any religion whatsoever. There should be no coerced support of religion. They were the first to present a comprehensive program including the abolition of government monopolies, the total separation of religion in the state, Freedom of the Press, lower taxes, and a democratic reform of the franchise. They also believed that it was kind of mean of the English to try to exterminate the Irish. They were given the name levelers by their enemies, who accused them of advocating an egalitarian leveling of all economic and social distinctions, which is patently untrue.

35:47As a matter of fact, the Canadian McPherson maintained that the Levellers were a typical product of bourgeois liberalism and in fact favored restricting the franchise, extending the franchise but restricting it to those who pay taxes so that paupers could not vote and domestic servants could not vote because they were considered too much under the influence It is odd that Russell Kirk accepted the interpretation of the Levellers as egalitarians and grouped them together with the Diggers, who were in fact a communist sect of the time.

36:35The Levelers were important on two theoretical counts. First they opposed the infringement on individual rights that came now not from the King but from Parliament, and second they disconnected the ideas of liberty and right from the ancient matrix of historical privilege that characterized them in the Middle Ages. They did from time to time talk about the Norman yoke, to go back to what Joe said in the last session. That is that the Anglo-Saxon Britain had enjoyed basic freedom and then the Normans came over and imposed a centralized oppressive government.

37:26They did talk in that way. These are a transitionary group. However, they went beyond that, and as one level of manifesto famously put it, Magna Carta itself is but a beggarly thing. That is, we have to go beyond Magna Carta, which lists certain rights, to universal natural rights.

37:58Well, Richard Overton, one of the main leveler pamphleteers, the main one after Lilburn put it in a quotation, a very good quotation, which I'm afraid, yes, here we go, sorry. To every individual in nature is given an individual property by nature, not to be invaded or usurped by any. For everyone as he is himself, so he hath a self-property, property in your own self, else he could not be himself.

38:49And on this no second may presume or deprive to deprive any of without manifest violation and affront to the very principles of nature, making it kind of metaphysical, and to the rule of equity and justice between man and man. Mine and thine, that is private property, cannot be except this be. No man hath power over my rights and liberties and I over no man's. This is a kind of pre-echo of Herbert Spencer's law of equal freedom and you can see we're now in a different intellectual world from having recourse to ancient documents and promises of kings and pledges and so on. This is the world of abstract natural rights.

39:39Now, although they were defeated, the Levellers left an important legacy of radical liberal thought among the English-speaking people. They were defeated. Charles II returned, Cromwell died and Charles II returned in the Restoration. The Levellers tried to influence things through Through the New Model Army, but that is through actual gaining influence over the military personnel, but Cromwell and his people were able to thwart that, so they never got very far. However, they left this legacy. Murray Rothbard calls them the world's first self-consciously libertarian mass movement and he refers to Locke and his patron, the Earl of Shaftesbury, This is working out a neo-leveler synthesis.

40:38One of the levelers was named Richard Rumbolt, and he famously said, None comes into this world with a saddle upon his back, nor any booted and spurred to ride him. And that was later quoted by, nobody has ever heard that attributed, that was quoted by Jefferson. To Jefferson, Tom Paine and the American Revolution, Price and Priestley at the time of the French Revolution, the Jeffersonian and Jacksonian traditions in America, the anti-corn law movement in Britain, many other classical liberal and libertarian movements can be traced back to the Levellers.

41:25Now, a name that everybody knows in the history of classic liberalism is that of John Locke. Locke is the great fountainhead of liberal thought in the English-speaking world. His ideas were crucial in the American colonies, especially as spread through the writings of Gordon and Trenchard. And with Locke we have the conception of society as ruled by the law before the establishment of government, imagining government out of the picture. What would we have? Well, not a Hobbesian state of war of all against all, but a state ruled by the law of nature and the fundamental idea of the law of nature being the right of each individual to His Property. Property, if you read Locke carefully enough, or at least a little more carefully than some professors do, is the term that Locke gives not simply to material goods, but the collective term he uses for the individual's right to life, liberty and estates, material goods as well. But also his life, in the sense of Overton, you belong

42:41Liberty and Estates Governments are established for no other purpose than to secure these rights better than they can be secured in a state of nature. When instead the government becomes a violator of the rights of the people, the contract is broken and the people's right of resistance comes into operation. Something very familiar to us, right? This is the key conception in the first part of the Declaration of Independence. Jefferson said in writing the Declaration of Independence, he didn't consult any other works. Well, he didn't have to, because he knew Locke by heart on these points anyway. And this Lockean view of what government is and how it's related to protection of the rights of the individual The rights of the individual and what those rights are became standard for quite a while among English speaking people and I would say on some level still standard among the American people on some level.

43:47It is now known, through the work of Peter Laszlitt, that Locke had developed these ideas long before the Glorious Revolution of 1688, throughout James II and brought in William and Mary. What has come out of the work of Richard Ashcroft now is a better understanding of Locke as a radical. It turns out that Locke was deeply dissatisfied with the Glorious Revolution, the idol of so many Whig writers afterwards. In a letter to a close friend, he criticized the new government for busying itself with small matters when now they have an opportunity offered to find remedies and set up a constitution that may be lasting for the security of civil rights and the liberty and property of all the subjects of the nation.

44:37Well, there was, in other words, this more radical lock that has been buried for quite a while. A main consideration and a main thing to keep in mind in discussing the history of liberalism, unlike the way so many people do, especially philosophers do, is that liberalism was not simply a colloquy among talking heads, among philosophers over the century, over the centuries. I started this series of talks by discussing the miracle of Europe and the institutional arrangements that came into existence. Liberalism is an ideology, it's an intellectual product, however it developed over time, came into existence and developed over time in close People saw society as it operated around them, they reflected on it, they distilled their ideas, that is they went to a higher stage than what they saw prevalent in the society of their time, but it was a matter of a constant interaction.

45:47One of the best historians of this Anglo-American liberalism, although she certainly is not a great fan of the free market, is Joyce Appleby of UCLA. And Appleby wrote of England in the 17th century, It was then that people discovered the underlying regularity of free market activity, and in so doing they had come upon a possibility and a reality. The reality was that individuals making decisions about their own persons and property were the determiners of price in the market. The possibility was that the economic rationalism of market participants could supply the order to the Economy Formerly Secured Through Authority, that is, the mercantilist economy.

46:44She also wrote about America and the Jeffersonian tradition in America. This is of America in the later 18th century. She says, in the 18th century, two features of the market economy fascinated contemporaries. The Reliance upon Individual Initiative and the Absence of Authoritarian Direction A century and a quarter of economic development by the time the American Revolution came along had dramatically enhanced public opinion about voluntary human actions and society was the word that emerged to represent the uncoerced relations of people living under the same authority It is this vision which animated the Jeffersonians And this is easily illustrated by many authorities, the famous statement by Thomas Sopane that society under every condition is a good state, government on the other hand is at best a necessary evil.

47:50This contrast between society, the realm of individual, voluntary interaction, and the state, the realm of coercion. And she says it was the, since England was far away, and there was no standing army, and the coercive policies were very hard to put into effect, de facto, pretty much a laissez-faire society had come into existence in America. People saw that it worked, it worked real fine. Reflected on that, and then as I say, raised the reflection to a higher level in the works, The role of exemplary experiments in the development of liberalism in Europe was crucial. As Holland was the example to Europe, especially to England, so England became the example to Europe, especially to France and to Germany.

48:43Later, the example of America. The colonies and then the republic exerted a strong influence on Germany, France and elsewhere in Europe. In Poland, to take one example at random, pretty much. The final attempted reforms of Piotr Poniatowski and the Constitution of 1791 were affected by American ideas through Philippe Matzai, a friend of Jefferson's. and other examples could be given. Gradually, the observation and deduction distilled and refined the basic concept of liberal social theory, which I mentioned at the beginning of my talk. Laissez-faire. The idea that by and large civil society runs itself.

49:30It was put in precisely these terms by the French, laissez-faire, laissez-passer, le monde va de lui-même, The World Goes by Itself One of the prime advocates of this doctrine was the great Chergo. This is unusual in historical discourse, usually historians reserve the term great for mass murderers, people who murder, maim and blind their brothers and sisters, their brothers, so that nobody else should have a claim to the throne. People who serve whole classes of the population, as Catherine the Great helped in Russia, and so on. Or for people who unleashed world wars, in 18th century terms, as Frederick the Great did in Prussia.

50:23But Turgot was an actual benefactor of the people, and is sometimes, at least, called the Great. Let's read the chapter on to go in Murray's history of economic thought. Murray considers him a dazzling economist. I think that the chapter begins something along these lines at a chess tournament. Murray loved chess. They give prizes for the most brilliant play. Not necessarily the most successful or most smashing, but stylistically brilliant. Really chic, you might say, and Murray thought that Togo was such an economist, a short book on economic theory, long before, considerably before Adam Smith.

51:12This is one of the things to, now I hope that, well let's not assume anything. To go was one of the philosophs. He was not a militant anti-Catholic or atheist as some of the others were. He was the mentor of Condorcet. He was very highly thought of among the philosophs. And then for a very brief while, when Louis XVI became king, he was brought in as finance minister in order to try to save the very troubled French monarchy. And he brought in some reforms, very needed reforms. He was planning, doing away with the Corvée, for instance, forced labor, and was doing away with the guilds, and was planning others, such as toleration of the Protestants and regional representative institutions.

52:14But he was done in very clear public choice terms by the cabal at the court, headed by Marie Antoinette and probably the last chance for the Bourbon monarchy was gone and Louis XVI and his wife were going to be paying for that in a few years' time. Nonetheless, he was remembered very fondly by lovers of freedom in France, but to give an example of how social thought at the time and how liberal thought is being advanced, this is what Turgot wrote, The policy to be pursued by government should consist in following the course of nature and the course of commerce, not less necessary nor irresistible than that of nature, and without endeavoring to direct it.

53:05Because, in order to direct it without distorting it and without doing damage to yourself, it would be necessary to be able to follow all the changes in the needs and interests and the industry of mankind. To accumulate all this vast amount of knowledge, it would be necessary to know these in such detail as would be physically impossible to arrive at. Even if one had, concerning all the particulars, that massive knowledge, which it is impossible to gather, the result would only be to let things go precisely as they would have gone by themselves, by the simple action of men's interests, influenced by the balance of free competition. Those of you who are familiar with the history of the Austrian School, I think, can see that this rings a bell.

53:55This is Mises and Hayek's amplification of the theory of the role of knowledge in society and why central planning is ultimately impossible and futile. The decentralized, even tacit knowledge of the economy that exists everywhere, scattered, cannot be brought together and the central plan is a doom from the start. And here we have that central idea as expressed by Turgot. Now, in the 18th century, there was, of course, the French Enlightenment, much of which can be considered dubious. I'm going to be talking about Rousseau later on. There was also, however, something that has gotten more attention recently, and that is the Scottish Enlightenment. Well, The Chief Figures of which were Adam Smith, David Hume, Adam Ferguson, and there were others as well.

55:05Hayek was very fond of the Scottish school, loved Adam Smith in particular, Murray not nearly so fond, Murray could never really take some intellectual figure and say, well, this is where I disagree with the man, and he has a right to his own opinion. He had to totally smash him. And he He does, in regard to Adam Smith, thinks of him as a retrogression from what already even the Spanish scholastics, let alone French economists like Togo, had accomplished, bringing in, well, there's a debate whether Adam Smith believed in the labor theory of value, but certainly he gives us enough reason in Wealth of Nations to support the labor theory of value.

56:10In criticizing Smith, it's not that Murray was going in some crazy direction all by himself. Schumpeter pretty much says the same thing. So people who attack, as some of the reviewers did, Murray, for being too critical of Smith, should look up Schumpeter. What I would say is this, leaving aside Smith as an original economist and contributed to the development of economic theory, Smith's influence, the influence of his implied and sometimes made explicit social policy, political policy, was to the good.

56:57Little else is a requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and tolerable administration of justice, peace, low taxes, and the rule of law. and the rule of law, all the rest being brought about by the natural course of things. Now, if you think about it, and that was in fact quoted by this Australian economist I mentioned in the last lecture, in his book on the European miracle, that is the position of these European miracle institutional approach type economists, But what we have to explain is the lack of economic progress, and that's explained by the state acting, among other things, but the main thing, the state acting in its traditional role as predator on society.

58:04If instead of that we had what Smith recommended, that is, peace, easy taxes and the rule of of Law, then you would find some economic development at least everywhere. And this general view and his idea of the invisible hand, which lends itself to the laissez-faire idea, did help in a positive direction in the decades after. An example of this, an example of the power of ideas, is a man who wrote I guess the first The biography of Adam Smith, his own student, Dougal Stuart. Dougal Stuart occupied the chair of Moral Philosophy at the University of Edinburgh for 25 years, until 1810. He taught that a great part of the order which, quote, we are apt to ascribe to legislative sagacity is the natural result of the selfish pursuits of individuals. Practically the same The University of Edinburgh, the first editor of the Edinburgh Review The Edinburgh Review was the great review of Whig classical liberal thought in the first half of the 19th century in England.

59:43Macaulay, for instance, wrote almost all of his essays for the Edinburgh Review. Henry Broom, the famous Whig member of parliament. Henry Reeve, who was the first translator of Tocqueville's Democracy in America. Sidney Smith, Sidney Smith was a great Anglican clergyman, liberal politician, or liberal polemicist who favored Catholic emancipation and other liberal reforms And there's a great quotation that Murray liked from Sidney Smith, who was kind of a wit about all of the terrible, the unfortunate, deplorable consequences of England involving itself in everybody's troubles throughout the world.

1:00:33And he wrote to an aristocratic friend of his, please, I know all these things, all these terrible things are happening. The Tibetans are not happy. The Delta is in turmoil, and on and on and on. Don't force me to worry about all the rest of the world. I want peace, economy, retrenchment, contentment. So, an isolationist as well. Among the other students of Dugal Steward was a man named James Mill, Lord Palmerston, not that he was such a great liberal, and Lord John Russell. Palmerston and Russell, Two most influential Whig politicians of the middle 19th century. These people all had studied under Dougal Stuart, not necessarily that they learned all of liberal philosophy from him, but they were influenced, in some cases to a large degree, in some cases to a somewhat lesser degree.

1:01:34Well, then comes the French Revolution. And in discussing the history of liberalism, there are a number of distorting factors. And one is to consider the French Revolution even fundamentally, to my mind, even fundamentally a liberal revolution. Yes, in the end, there were some liberal reforms made, religious toleration, for instance, equality of classes before the law. But these were reforms that were in the cards. These were reforms that the French monarchy was edging toward.

1:02:20It was not going to happen in two years. On the other hand, what did the French Revolution do? It brought in 25 years of war that only ended in Waterloo. So it put back reform in many respects. You have to ask yourself whether the quickening of the pace of reform, of the necessary and liberal reforms, was worth what they had to go through. So that to consider this, or the declaration of the rights of man and of the citizen, as Joe said in his last lecture, In no way is it as unequivocal as the American Bill of Rights. They say, for instance, that there shall be freedom of thought even for religion within the limits of the law. They never got to the American point. Congress shall make no law and More, Regarding the Establishment of a Religion or Prohibiting the Free Exercise Thereof.

1:03:25Now, of course, this didn't mean the separation of church and state within the states, but it meant that the federal government could do nothing along these lines. And then, to my mind, you didn't need the 14th Amendment and incorporation, the 14th Amendment to the, using the Bill of Rights against states. would have happened along the lines of ordinary federalism. That is, if people of a certain denomination were discriminated against or taxed in a certain state, there'd be a tendency to move somewhere else. And the states that continued such discrimination or establishment of a religion to some degree or another would suffer for it, economically and otherwise, So that eventually, I don't know how long, but in a few decades, as it in fact happened, because even before the period of the time of the incorporation of the 14th, of the Bill of Rights into the 14th, through the 14th Amendment, the states, I think in virtually every case, Joe, would correct me about this, but even before the Civil War, the states

1:04:40abolished any kind of religious superiority among denominations as the Episcopal Church had at first been privileged in Virginia and as a congregationalist had been privileged in Massachusetts. That did fade away even without forcing the states to do it. So that in France we could have had these reforms eventually and peaceful organic reforms are always superior, it seems to me, unless we're talking about extreme cases to revolution and, especially, subsequent war. The French Revolution led to a series of disasters, one after the other.

1:05:28The Asegnat paper money inflation that then brought about price controls and other measures. The confiscation of the church land, which not only shook the principle of private ownership of land, but also presented the problem what to do about the church now. How was the church to be supported? That brought the state into the question. And the state, from then on, in France, as in most European countries, continued to support the Church, and not just the Catholic Church afterwards, but other denominations as well. The American principle was not learned by them. The American principle of there shall be no law. Congress shall make no law establishing a religion.

1:06:17Just total separation, leaving religion, among many other things, to society, rather than monopolizing the religious realm by the state. And the French Revolution, having been lived through and experienced and witnessed, things happened to liberalism itself. The liberals, by and large, had welcomed certain of the early reforms and the so-called first phase of the revolution. But there had also been the emergence of unexpected, of unheard of violations of individual liberty. The reign of terror of 1993-94, which claimed to be warranted by popular sovereignty.

1:07:08And then the reign of Napoleon, whose actions were confirmed by democratic plebiscites. and who brought centralization of government power to new heights. This was an important innovation of Napoleon's, followed then by his nephew, Napoleon III, and also by the dictators of the 20th century, to have their actions confirmed, okayed in a pseudo-democratic way by having elections, having plebiscites. Two things the liberals learned. First, the democracy,?the alleged rule by the people, may in fact represent the rule of a determined minority that aims to control society. And second, the liberals were infused with what has been called state hatred. Where the liberals Those before that, many of them, had felt that the state was essentially a neutral device that could be utilized in the favorable conditions to bring about many valuable reforms in society.

1:08:19Instead, now the state was looked on as a locus of constant threats to freedom and as There is a self-interested enemy, standing enemy, perpetual enemy of civil society. I hope that verbiage made clear what point I was trying to make, which is that even someone like Turgot, certainly someone like Voltaire, thought and said, how do you bring about these necessary reforms towards individual freedom in society, well, you whisper in the ear of The King now has all the power that's necessary and he will bring about the reforms so that society can be improved in this way. Afterwards, they understood that whoever controlled the state apparatus, whether they said that they were legitimized by democratic majorities, as the revolutionary governments did, or Napoleon, who said he was legitimized by plebiscite once in a while, whether control of the centralized state apparatus could use it to damage, seriously damage civil society.

1:09:30The state had to be looked on with suspicion. Well, I think I'll stop now and we'll entertain comments and questions as before. and welcome. Any questions you might have? Any comments you might have about this whole story? Yeah. I have a question about Locke, and it's kind of reflecting the level of stuff I don't know very much about. I know that in the case of Locke, when he talks about property in the second treaty on government, he does make provisions for national property or public property and for state intervention in private property. And I have no doubt that he was influential on later levels, but... Well, okay. You don't mean the Lockean proviso.

1:10:19Well, this is the situation. How does property, which in the state of nature originally was common to mankind when God created the world, how does it come to be private property? Well, how does an individual attach part of nature to himself? By mixing his labor with what he finds in nature. And that way, well, to give you an example, a person in his family finds some piece of land and clears the land and pulls out the tree stumps and creates The proviso that's been discussed by philosophers is this, people may in this way bring what is in the state of nature into private property, provided that as much and as good, he said, Locke says, is left over for others.

1:11:27Well, that could create problems. How do you know what's left over for others? How do you know what's necessary and good enough to be left over? How would anybody then begin to appropriate private property? Okay, but this was not what you meant. Okay, so scratch everything I said. There were specific references to state control over property and the difference... State control of a property. Okay. Well, that doesn't ring a bell. But what is the case is that in his other economic views, Locke sometimes interpreted as being a mercantilist, that is favoring government regulation of the economy and international trade and so on.

1:12:16I don't know enough about it. That's certainly not why Locke is famous in the history of liberalism. My question was, in the context of the 17th century, property as such included public property. It's not just in Locke, it's also in Hobbes and in Gorgias. But I was just wondering to what extent that affected the Leveller's program. Well, no, the Levellers did favor public support of indigent people, the kind of minimum welfare, but that was the policy in England all along, ever since the disestablishment of the Catholic Church. The English state took over the responsibility, as the state did in most of Protestant Europe, for support of indigent people.

1:13:08So that really is the extent of what you might want to call their deviations, or any way John Locke and his alleged mercantilism First of all, Karen Vaughan of George Mason University wrote a book on Locke as an economist and disputes the idea that he really was much of a mercantilist, he took over some of the international trade, mercantilist economic, international trade views of his time, but essentially not really a mercantilist thinker.

1:13:55The second thing to say would be that this is not why anybody would be interested in Locke. That is, his economic views or his mercantilist views to the extent they existed were pretty common. They're not anything that made very much of a difference or impression on the history of thought. What did make a difference in an impression on the history of thought were his liberal and his idea of the state of nature, the original, natural rights of individuals, predating civil society, the right of revolution and so on. So that on that basis I would consider him undeniably in the liberal tradition. Yes? was a lot of that original in this respect, because I think that Murray was some memorable watcher in the API of mixing labor and all that concept, wasn't it?

1:14:58Wait a minute. You're saying whether he was original in his idea of how property originates. No, I'm not saying he's original in that at all. What I'm saying is that that is considered by people who study the lock-in philosophy, called the lock-in proviso, and considered a problem, that is, and for the reasons I gave. But I have a specific question, and that was on the Bill of Rights.

1:15:35I didn't quite understand it, but wasn't the Bill of Rights originally drafted as against the federal government, as opposed to the states?

1:15:55It was interpreted that the states also were required to adhere to the Bill of Rights. Nobody's rights could be, as enumerated in the state, in the Bill of Rights, could be infringed on by any particular state. And it was the federal government's duty to see that the states adhere to that. What's that? Well, Joe, I'm sure knows a lot about this. There's a whole problem with the 14th Amendment to begin with, and it seems to me that even people who support it understand that there's a problem, whether it was legitimately passed.

1:16:44The problem was that a certain number of states, of course, have to pass any amendment to the Constitution. What happened in the case of the 14th Amendment was that the occupied southern states were forced to agree to the 14th Amendment, to the passage of the 14th Amendment, before they could be allowed into the Union. Right, but they were forced by the occupying power that erected the Reconstruction government to agree to the 14th Amendment, so that that was done under force majeure, and then afterwards, even given that, they barely had the two-thirds requirement to pass an amendment.

1:17:35to pass an amendment, and even after that, two or three of the states withdrew their agreement to the 14th Amendment, bringing it below the required number of states confirming the amendment, but nobody seems to care about that. So you might be interested in the details of the 14th Amendment. Harry? Yes, this may be a reiteration of the same question, but it's not a figure of answer. But in the same sense that you just brought up, is it possible for an understanding of the Bill of Rights as a directory for the Georgia Amendment, Is there some question as to whether both rights might authentically be interpreted as applying to the state as well as the federal government?

1:18:55A lot of detailed knowledge that I can't give you at the moment, but has been, there was a discussion in some libertarian publication a few years ago on this issue, and I think that the people, who's the man who's, George, what was his name, what was Healy's first name? Jean Healy, who's now at Cato, and a lawyer, maintained that it had not been validly agreed to. In any case, my own view is that the reconstruction amendments so expanded the power of the federal government that they're very dubious from a libertarian point of view.

1:19:45I guess I'm not sure I'm gonna have any occasion to bring this up, but the whole issue, if you've noticed, the people associated with the Mises Institute tend to be skeptical of American presidents in general, including, for some reason, our greatest presidents. for instance, Lincoln, and favor the southern cause, I wish that I'd noticed in the parking lot one or more cars with the bumper sticker that I've heard about but have not actually seen on a bumper, supposed to be common in South Carolina, if at first you don't secede try, try again.

1:20:32Now, there's a reason for this that is our, or my at least, and some of my friends, pro-Southern sympathies, and believe me, it has nothing to do with support of slavery. Lord Acton, whom I've mentioned before and I think you probably have heard of, was the greatest liberal historian of the 19th century, I would say, although he never wrote a full book. And he wrote, did everybody receive a copy of Costs of War? Huh? No? No? Hmm. Okay, I'll speak to some people about this.

1:21:18If you haven't, look, come on, Springfield, what is it, $30 or something. Get it for your mother for Christmas. The paperback edition is what you want, and that includes the correspondence between Lord Acton and Robert E. Lee after the war. And Acton said that his heart broke at Appomattox and the reason was that he had high hopes for America. However, he understood America was a democracy and history showed democracies have problems because democracy then puts total sovereignty into the people and the people's alleged representatives.

1:22:06And there's no limit to that power. An act that said states' rights was the limit to the power. Now the attempt to implement states' rights in the secession of the southern states has been crushed. And you have now a monopoly of power in the central government. And that's what's involved, not a defense of slavery. Just as when you talk about the actual soldiers who fought for the South in the war. As you know, the great majority never had a slave, the mountain boys of North Carolina and Tennessee and North Georgia and so on who really gave it good to the Yankees, outnumbered as they were, especially by these Irish and German Yankees who were brought in to fight on the side of the Republic.

1:23:01So, in general, I'm very suspicious of these reconstruction amendments and really everything that followed. Tom DiLorenzo has written not just on Lincoln, but about the consequences of war. If you haven't for some reason come across that, it's well worth consulting. And also Montesquieu, more in the direction of Turgot, but Montesquieu is a very, very

1:23:53is considered probably the most conservative of the major French philosophes, but then you get a left wing with Rousseau in a category by himself, but a left wing among the encyclopedists like Baron Dolbach and Helvetius and so on, Diderot, And you're getting beyond even anti-Catholicism into militant atheism. And that comes out in the later stages of the French Revolution. That is not just the idea that sure, we should have religious toleration, the Church should not be entitled to persecute. It goes beyond that, the persecution of the Catholic Church and of religion in general and the attempt to obliterate Christianity in France, as occurs during the Revolution.

1:24:46What do you attribute the misrepresentation of the Levellers? Is it politics at the time, or is that just something that's going into...

1:25:16If my memory is correct, there's a full set of the Journal of Economists in the University of Florida Library. And hardcover. I mean, hardcopies. I think the whole thing is there. Check on the Internet if you're in doubt, but I know some of the links are there. Well, what you should wait for is when the Library gets rid of it. Are any of the English economists who developed the labor theory of value familiar with either the Spanish or the French?

1:26:13with some of the French writers. He was close to the physiocrats and other leaders of the French economic thought at the time. But he was too eclectic, I think. Anyway, that's what Murray thought. That is, he couldn't take a certain point of view and follow it through consistently. He had to temper it by some other point of view, some other consideration. So that's why nobody really knows what his theory of value was, whether it was a labor theory of value, post-production theory of value. Yeah. I wanted to ask about what we perhaps see as some of the forms of classical liberalism that led to it being hijacked and somehow acquired by the socialists. Because, for example, we see that John Stuart Mill, sort of, I'm not sure if you... I think, yeah. Hans Hoppe has a chapter on democracy to go on and fail, where he criticizes classical liberalism. And I just wanted to ask if you have thoughts of what was going on. Being hijacked in some way by the socialists, because, for example, we've seen the John Stewart bill, sort of in the last year or two.

1:27:03Hans Hoppe has a chapter on democracy to go on the Fed, but he criticizes classical liberalism. And I just wanted to ask you if you have thoughts of what was going on. Hans Hoppe, the extremist? That's a great book, by the way. And let me just say, I think the Institute owes practically everything to Lew. We all owe, all of us owe a lot to Lew, among other things he came up with that title, and I think that title practically made the book. It's a take off on Arthur Kessler's, the book that Arthur Kessler wrote during the Cold War on Call the God that Failed about Communism. Anyway, I'm going to be talking about John Stuart Mill probably in my next talk. It's a very important point, and John Stuart Mill has a lot to answer for, and I think I think some of us are hoping that he's answering for it at this very moment.