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Classical Liberalism: Elements, Theories and Revival!
Liberalism as a political doctrine or ideology is in the process of change or evolution. The society, its material or environmental atmosphere, the attitude of people etc., all are changing and liberalism, for the sake of its own survival, is trying hard to accommodate itself with these changes and the process of adjustment is continuous. We have already noted that liberalism originated out of the breakdown of feudalism.
The vacuum created by the collapse of feudalism was immediately filled up by the rise of capitalism and in the capitalist era of economy there arose liberalism. This, liberalism, we call, classical liberalism. The classical liberalism is not a separate form of liberalism or quite different from the basic nature and elements of liberalism —we call it a stage of liberalism.
Elements of Classical Liberalism:
Some of the basic elements of classical liberalism are stated below:
(1) The classical liberalism emphatically stresses the extreme form of individuals’ interests or individualism. It treats each individual as a separate unit which seeks to maximise his interests laboriously. Political scientists have called it a type of egoistical individualism. It is the atomist interpretation of society. It is based on certain presumptions. Atomist individualism believes that individuals are rational and reasonable and these two qualities lead them to take decisions which are sufficient to protect their interests perfectly.
It also says about the self-reliance of individuals. They need not be dependent on state for the realisation of interests. Classical liberalism further says that individuals are self-interest seeking units no doubt but since they are rational and reasonable they do not intentionally inflict injury or harm on others. The defenders of classical liberalism viewed individuals in this light.
(2) Classical liberalism fiercely argued for independent activities in economic field which is called economic liberalism or laisez-faire. It says that it would never be the policy of government to impose restrictions upon the economic activities of individuals. They will have absolute freedom to frame economic policies and to adopt them. If they are obstructed in the name of better management of economy or further greater benefit of society that may create chaos in economic sphere and lead economy to degeneration.
There are large number of proponents of this view and Adam Smith perhaps ranks first. His Wealth of Nations, published in the year of American independence, confidently argued for economic liberalism. Though Adam Smith’s views were subsequently challenged by many up to the middle of nineteenth century its progress was rampant. T.H. Green, J.S. Mill and many others were very disturbed by the growing miseries of the working class and abnormal disparities in income and wealth between the classes. To save the society from these the state must interfere. Economic liberalism was, however, not rejected.
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(3) Negative freedom was another hallmark of classical liberalism. Classical liberalism advocated that for the all-round development of the qualities of individuals it would be prudent to leave them alone. State would not impose unnecessary restrictions on the activities of them. Negative liberty means absence of restrictions. External constraints would curb the freedom of individuals.
The liberalism in its classical formulation thus advised the state to refrain from interfering with the liberty of individuals. Negative liberty is generally called the extreme from of liberty.
(4) Classical liberalism viewed the state with a different outlook. Thomas Paine (1737-1809) was a noted advocate of classical liberalism and he believed that the “state is a necessary evil”. He admitted that the importance of the state is undeniable but this does not mitigate its evil nature. He argued that the state would be allowed to perform minimum functions and beyond this the state would have nothing to do. Paine and many others have specified the functions of the state which include the maintenance of law and order and to hinder the hindrances which stand on the way of the development of individuality.
Some others have added one or two to this short list. The fact is that according to the classical liberalism that state is best governed which is least governed. The central idea of classical liberalism about state is it is minimal state and it respectfully remembers Locke’s famous phrase (and nowadays it is frequently used) state is night watchman.
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(5) In classical liberalism civil society has a very crucial place. It is a society comprising free and independent individuals who pursue their own varied interests and in such society voluntary organisations are formed with individual’s initiative. These are engaged in moulding the character of the individuals. Both individuals and organisations pursue their policies and discharge responsibilities keeping themselves free from state interference.
In fact, classical liberalism cannot be imagined without any reference to civil society. Marx was quite aware of it and he in several places of his writings mentioned about it. Later on, Gramsci threw light on it. Our point is, classical liberalism believes that civil society will be allowed to act without outside interference.
(6) We, in this section, have noted that one important part of classical liberalism is economic liberalism whose core idea is to allow the market forces to act freely. Today we call it market economy. Government activities in respect of economic matters have nothing to do with the operations of business houses, industries, export- import agencies.
In the opinion of the advocates of classical liberalism restrictions would destroy the spontaneity of investors and operators. The moot point is economy will have freedom of activities and it is the broadest way for the progress of economy. Several authors in latter periods pointed out the devils of unrestricted economy but they never stood for state controlled economic system.
Theories of Classical Liberalism:
Theory of Natural Rights:
Classical liberalism harbours upon several theories and one of such theories is natural rights. Classical liberalism believed that the natural rights are inalienable and the inalienability forced the authority to protect them. The chief exponents of the natural rights theory are great contractualist John Locke of England and Thomas Jefferson of America. Locke said that people in the state of nature enjoyed some rights such as right to life, liberty and property and the main objective of the civil government is to protect these rights.
Certain inconveniences of the state of nature blocked the realisation of these natural rights and the promoters of the civil society did not want the repetition of non-realisation of rights. Locke also supported the English Revolution and the Bill of Rights. Any violation of natural rights would greatly inconvenience the citizens. Jefferson (1743-1826) was a great admirer of natural rights theory.
He once said, “That government is best which governs least.” The minimum governance means the maximum realisation of natural rights. The most important aspect of the natural rights, theory is inalienability. It is never the business of the state to curb these rights, rather to foster them. Even Hobbes, an important protagonist of absolute power, forcefully advocated for natural rights and this placed him on the same row of liberal thinkers. Right to take food, medicine etc., are natural rights and the state cannot abrogate them.
Utilitarianism:
Utilitarianism or utilitarian philosophy provides another foundation of liberalism. Before analysing how it happens we seek to define it. A very well-known definition of utilitarianism is, “That action is best which produces the greatest happiness of the greatest number.” It is perhaps a standard definition. It is generally observed that when Jeremy Bentham (1748-1832) and James Mill (1773-1836) first propounded the theory it was treated as a moral philosophy. Relevance of utilitarianism in liberalism can be viewed from several angles.
In the first place, the justifiability or non-justifiability of an action can be decided by its ability to promote happiness. If an action fails to do it, the same cannot be imposed upon the person and to do this is immoral. Secondly, it is the individual who is the best judge of what is good and what is bad for him because he is rational and reasonable. To do something against his will/ opinion is unjustified.
Thirdly, it would never be the business of a government to ignore the opinion of individuals while it is going to adopt a policy. If we go through these basic tenets of utilitarianism we shall find that all these are simultaneously the principles of liberalism. Both liberalism and utilitarianism give precedence to the opinion and judgment of the individual.
This doctrine considerably influenced the growth of liberalism. The three stalwarts of utilitarianism Bentham, James Mill and J.S. Mill carefully built up the basis of a state which took the task of propagating liberalism.
Application of Darwin’s Theory:
Several ideas of Charles Darwin (1809-1882) found their place in social science in general and political science in particular. Some of these ideas are “Survival of the fittest”—every individual (as well as other animals) has his own ability and he should be allowed to develop that for his own survival, nothing should be imposed on him. Darwin’s The Origin of the Species (1859) developed these ideas in various forms.
All these ideas combinedly constitute a popular concept known as Social Darwinism. Towards the end of the nineteenth century several social scientists including political scientists applied his survival of the fittest doctrine to political science and liberalism started to explain that best development of the capacities of individuals could be achieved if they were left alone, that is, if there were no outside interference Needless to say that classical liberalism enthusiastically propagated the same doctrine.
Herbert Spencer (1820-1903) was a well-known figure of nineteenth century. His The Man Versus the State was published in 1884 where he argued that state intervention should be kept at minimum level and he forcefully defended the doctrine of laissez- faire introduced by Adam Smith. If we join all these threads of views, we shall find a conclusion which runs as follows: Every individual possesses certain amount of natural ability and reason and he should be given maximum liberty to develop it.
Modern Liberalism:
Classical liberalism was faced with a powerful challenge in the mid-fifties of the nineteenth century. The Industrial Revolution which started in the second-half of the eighteenth century created fabulous amount of wealth in the form of both consumers’ goods and capital goods and, at the same time, cash circulation increased considerably. Before this there was a general expectation that poverty and misery, of which common, people were the victims, would go into the background and all sections of people will come to enjoy comfort and higher standard of living.
But all these could not happen, on the contrary, common people were deprived of income and wealth and their poverty and misery remained as it was. Many people began to think that uncontrolled liberalism and absolute non-interference of the state in economic affairs were primarily responsible for this miserable state of affairs.
The laissez-faire doctrine was vehemently criticised. Though many scholars did not think in terms of abandoning it, they felt the necessity of controlling it. Many people arrived at the conclusion that liberalism would stay but it would be a liberalism in chains and this was thought as a grand solution. Revision of old or classical liberalism started in the hands of John Stuart Mill.
Commenting on the revision of classical liberalism John Gray says: “Whereas Mill never altogether abandoned the classical liberal commitment best expressed in On Liberty, his attitude to trade unions, to nationalism and to socialist experimentation represent the decisive breach in the intellectual fabric of the liberal tradition”.
Besides Mill several philosophers were active in revising classical liberalism and among them Green, Hobhouse and Bernard Bosanquet were prominent. All of them strongly opposed the negative character of freedom which was the main pillar of classical liberalism. Particularly Green’s frontal attack (Green was a great idealist and leading member of Oxford idealism) was really fierce.
He said that in the face of growing poverty, increasing inequalities of income and wealth among several sections of population and growing miseries of the common people the state cannot play the role of a helpless onlooker of all these heart-burning events. It must play a positive role to alleviate poverty and misery.
In the fag end of his life J.S. Mill felt that liberty or individualism were no doubt important concepts (these are basic tenets of classical liberalism) but more important was the general improvement in the economic condition of the ordinary mass and this could not be done without the interference of state. This he noted in his autobiography. Thus, we find that the voice against classical liberalism was gaining more and more importance.
In Britain and some other European countries political atmosphere was not quite favourable for the uninterrupted advance of classical liberalism and all these precipitated its amendment which created modern liberalism.
Revival of Classical Liberalism:
Main Personalities:
In our just concluded analysis we have seen that classical liberalism declined mainly because of the reason that it failed to deliver the goods required to meet the demands of the new age and changed society and this made way for the arrival of modern liberalism. But modern liberalism was also faced with a new challenge which was not possible for it to withstand and the consequence was that the old or classical liberalism again appeared. This we call Revival of classical liberalism.
During war time the aggressive role of state in the sphere of economy was highly applauded and many believed that this would continue for some more because full employment and stability in economy were highly desirable. J.M. Keynes (1883-1946) was the chief protagonist of this new role of state. In the hands of Keynes and many others, classical liberalism was killed.
John Gray has said, “It seemed clear that classical liberalism if it had been wounded by the catastrophe of the First World War had been killed off by the Second”. F.A. Hayek’s The Road to Serfdom (1944) argued for revival of classical liberalism. His another work the Constitution of Liberty (1960) argued more forcefully in favour of revival. John Rawls’ A Theory of Justice (1999) and Nozick’s Anarchy, State and Utopia (1974) followed (more or less) the argument of F.A. Hayek. These three leading personalities caused the revival of classical liberalism.
Background of the Revival:
There is a well-known view that behind the emergence of most of the political and economic doctrines there are a number of material conditions and forces. (At least George Sabine and Ebenstein think so). The revival of classical liberalism is no exception. Number of incidents took place in the years between the end of Second World War (1945) and the collapse of the Cold War in the mid-seventies of the last century.
In the present short analysis we intend to focus on some of these events:
(1) The victory of the Allied Powers (U.S.A., Britain, France and formerly U.S.S.R.), the defeat of the Axis powers (Japan, Germany and Italy), and the rise of Soviet Union created a new political atmosphere in the political world of the West which compelled the intellectuals to rethink some political concepts in the light of the new situation. In Soviet Russia the state assumed gargantuan nature.
The influence of the state was so pervasive that no aspect of individual’s life was free from the inspection and control of state. The liberal thinkers were apprehensive of this development because this appreciably curtailed the freedom and spontaneity of individuals. Even the states of the liberal democracies were becoming more and more powerful after the Second World War. Hayek and others felt that this tendency was inimical to individual freedom and ought to be reversed. So they wanted the revival of classical liberalism.
(2) The emergence of Cold War and its meteoric rise made a profound impact on the functions of state. The state in the Cold War period was no longer considered as a night watchman or minimal state. It was the ‘considered judgment’ of some that in order to face the communist challenge and fight the exigencies of Cold War more and more power should be at the hands of state.
This posed a great danger to the freedom of individual, and at the same time cornered the long-cherished liberalism. People in many countries began to think in terms of classical liberalism because it was thought that liberalism was far better than collectivism or socialism.
(3) Keynesian scheme of full employment, central planning, economic planning etc. had exhausted their sharpness or utility by the end of fifties and it was thought that all these did not possess durable capacity to fight economic depression. New schemes had to be devised so that the liberty of the individuals is protected. Justice is achieved and, simultaneously, economy is rejuvenated.
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(4) F.A. Hayek, Rawls and Nozick began to compare loss of liberty for the sake of economic progress and justice and attainment of justice, protection of liberty without appreciably affecting adversely the economic growth. They felt that the state should have power but not at the cost of person’s freedom. They gave priority to liberty. Hayek, Rawls and Nozick—the three architects of revived liberalism—began to throw light on it from different angles.
End of Cold War and Liberalism:
The end of Cold War provided a powerful impetus to the revival of liberalism. It has been beautifully explained by Michael Mandelbaum in his thought-provoking book The Ideas that Conquered the World (2004). The recession of Cold War means the end of fierce power struggle between two superpowers-USA and erstwhile Soviet Union. This led to the normalisation in relationship among various powers and end of tension which previously surcharged world politics. Moscow could hardly find any buyer of Soviet brand socialism in any country of the world.
All the independent states of former USSR and the communist states of Eastern Europe abandoned their affiliation to communism and adopted market economy and liberal economic policies.
Mandelbaum says, “The role of the government in economic management shrank, while that of the market principles in decisions about production and distribution expanded. Liberal economic ideas penetrated even those parts of the world that had been, at the height of the Cold War, most hostile to them”. Mandelbaum says that it is undoubtedly the victory of liberal economic policies and specifically liberalism.
We know that free trade, market economies, minimum state interference in the economic and political affairs of individuals and other nongovernmental organisations became the characteristic features of the post Cold War period. In international arena the victory of liberalism was established.