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Liberalism Misunderstood

Summary:
Liberalism was born in an effort to escape oppression and dogma -- a critique of the alignment of the Crown and the Altar that was enforced by the Sword. True radical liberalism is a foundational critique, and seeks to set in place constraints and establish extreme limits on the scale and scope of the Crown, Altar and Sword.  In operational terms this led to constitutionally limited government, religious toleration, and peaceful relations between nations through the free flow of labor, capital and goods.  I have not raised the issue of the abolition of the Crown, the Altar and the Sword, I am just limiting the discussion to the constraints and the machinery of establishing and enforcing those constraints -- the institutions of Liberalism. The intimate relationship between the

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Liberalism was born in an effort to escape oppression and dogma -- a critique of the alignment of the Crown and the Altar that was enforced by the Sword. True radical liberalism is a foundational critique, and seeks to set in place constraints and establish extreme limits on the scale and scope of the Crown, Altar and Sword.  In operational terms this led to constitutionally limited government, religious toleration, and peaceful relations between nations through the free flow of labor, capital and goods.  I have not raised the issue of the abolition of the Crown, the Altar and the Sword, I am just limiting the discussion to the constraints and the machinery of establishing and enforcing those constraints -- the institutions of Liberalism.

The intimate relationship between the evolution of liberalism in political, social and economic affairs is critical to understanding various important basic facts in human history.  This is a theme highlighted in Lionel Robbins's The Theory of Economic Policy in English Classical Political Economy (1952).  But this understanding of liberalism came under severe criticism throughout the late 19th and throughout the 20th century.  Many intellectuals argued that due the inherent tendencies of unhampered capitalism toward monopolistic power, microeconomic inefficiency and macroeconomic instability, liberal political values and freedoms would be threatened by the powerful and indifferent to human suffering.  They had to be socialists in their economics, they insisted to remain liberals in their politics.

It is against this line of argument that F. A. Hayek wrote in The Road to Serfdom, and why his dedication in that book to socialists of all parties is not ironic in the least.  He was trying to persuade his fellow liberals that this move would introduce a new era of oppression and dogma.  His message is a warning of the possibility of a tragic ending -- liberals who fought so hard to overcome the oppression and dogma of an earlier age only to usher in a new era of oppression and dogma.  But tragedy could be avoided, if -- and only if -- the warning was heeded and the socialist path was rejected.

The intellectual world in large part scoffed at Hayek, though the practical world in large part heeded the warning and thus the most dire consequences where reserved for those countries who had already suppressed liberal political and economic institutions in the name of communism.  The history of the communist experience speaks clearly to the human tragedy of oppression and dogma, and these societies terrorized their own populations and are responsible for 100 million lost souls.  But intellectuals still scoff at Hayek's thesis.

And, in fact, the way the history is being written today, the claim is that it was Hayek who ushered in a new age of oppression and dogma in the global market economy, whose institutions supposedly unleashed markets and constrained local populations from using democratic means to regulate the market tendencies toward monopolistic power, microeconomic inefficiency, and macroeconomic instability.

The bottom line -- students of economics and political economy must be aware of this literature, turn their attention to exploring the claims being made, and address the arguments they find wanting.  In reading some of the presentation one is left wondering where to start as conceptual confusion and factual innocence is combined within a conspiratorial narrative. But I think students of economics should resist the easy temptation to dismiss, and instead engage in the laborious  effort to clarify the argument, critically examine the data, and straighten out the narrative.  The stakes are quite high.

True radical liberalism correctly understood remains an emancipation project -- emancipating human beings from oppression, dogma, and I should add crushing poverty.

For a different view see Jordan Ecker's essay in The American Prospect.  I think this piece gets Hayek wrong, Buchanan wrong, and the economic history implicit throughout is either high contested or downright wrong.  Instead of a nuanced and subtle engagement with the liberalism of Hayek and Buchanan, and the economic history of Globalization and the 'Great Escape' we get time-hop weaving and blending of misreading of theoretical arguments, neoliberalism name-calling and efforts at guilt by association, and 'analysis' of recent ugly efforts in US at real politik that the author finds repugnant (and which this liberal would agree are repugnant).

My sincere hope is that scholars and intellectuals will get past name-calling and mood affiliation team choosing, and critically engage with one another as true liberals and with the tools of reason and evidence.  I fear we are still far away from that era due to the contemporary craziness in the political culture and growing pains of learning how to discourse in the age of social media.  But we will get there ...  ... ... 

Peter Boettke
Peter Joseph Boettke (January 3, 1960) is an American economist of the Austrian School. He is currently a University Professor of Economics and Philosophy at George Mason University; the BB&T Professor for the Study of Capitalism, Vice President for Research, and Director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at GMU.

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