Classical Liberalism Reconsidered: A Symposium

to mark the publication of a new edition of Liberalism by Ludwig von Mises FEE is pleased to announce a new publication of Liberalism: In the Classical Tradition by Ludwig von Mises. It is an important book, worthy of serious consideration in various aspects. We asked several authors to comment on different facets of classical liberalism. The result is the symposium which follows. The new edition of Mises' Liberalism is now available from FEE, in attractive paperback, at $9.95. For order details see page 683. 667 668 THE FREEMAN November The Meaning of Liberalism from the new preface by Bettina Bien Greaves THE TERM "liberalism," from the Latin "liber" meaning "free," re ferred originally to the philosophy of freedom. It still retained this mean ing in Europe when this book was written (1927) so that readers who opened its covers expected an analy sis of the freedom philosophy of clas sicalliberalism. Unfortunately, how ever, in recent decades, "liberalism"

has come to mean something very dif ferent. The word has been taken over, especially in the United States, by philosophical socialists and used by them to refer to their government in tervention and "welfare state" pro grams .... This view of liberalism was so prev alent in 1962, when the English translation ofthis book appeared, that Mises believed then that to translate literally the original title, Liberalis mus, would be too confusing. So he called the English version The Free and Prosperous Commonwealth. By the following year, however, Mises had decided that the advocates offreedom and free markets should not re linquish "liberalism" to the philo sophical socialists. In the Prefaces of both the second (1963)and third (1966) editions of his magnum opus, Human Action, Mises wrote that the advo cates ofthe freedom philosophy should reclaim "the term 'liberal' . . . be cause there is simply no other term available to signify the great political and intellectuai movement" that ush ered in modem civilization by foster ing the free market economy, limited government and individual freedom.

It is in this sense that "liberalism" is used throughout this book.... In Liberalism Mises not only offers brief explanations ofmany important economic phenomena, but he also pre sents, more explicitly than in any of his other books, his views on govern ment and its very limited but essen tial role in preserving social coopera tion under which the free market can function. Mises' views still appear fresh and modern and readers will find his analysis pertinent .... In fact, the only hope of keeping the world from plunging still further into international chaos and conflict is to convince the people to abandon gov ernment intervention and adopt lib eral policies. ~ Mrs. Greaves, a member of FEE's Senior Staff, attended Mises' NYU Seminar for many years. She is also the translator ofthe Mises works included in On the Manip ulation ofMoney and Credit.

1985 CLASSICAL LIBERALISM RECONSIDERED 669 The Place of Mises' Liberalism Ralph Raico THE great intellectual and political movement known as liberalism has been one of the prime shapers of the modern world. As Ludwig von Mises wrote, it "changed the face of the earth," creating for the peoples who shared in it a life of freedom and abundance unexampled in previous history. Given this, the paucity of general works on the history and philosophical bases of liberalism and the mediocrity of most of the readily accessible ones is curious indeed. (This does not hold, however, for works of more limited scope. The Decline of American Liberalism, (1955) by Arthur A. Ekirch, Jr., for example, combines fine scholarship with a seasoned understanding of the true meaning of liberalism.) The best known book in the field is doubtless the History ofEuropean Liberalis~ by Guido de Ruggiero, originally published in 1925. Still useful in some respects, it suffers from a conceptual haziness and a lack of cutting edge perhaps attributable to the neo-idealist philosophy popular in Italy at the time, of which the author was a follower. Moreover, although himself a liberal in a very broad sense, Ruggiero had little knowledge of economics or appreciation of the functioning of the free market. His vulnerability to anticapitalist arguments may be gathered, for instance, from his treatment of the Industrial Revolution in Britain.

Here he repeats the common socialist interpretation of that great process as a catastrophe for the working class, in terms scarcely differing from those of Friedrich Engels. The basic flaw in Ruggiero's work, as in most of the others we will consider, is that it accepts and even enshrines a change that was occurring at the time in the usage of the word "liberal" itself. Instead of implying, as it had previously, a rigorous belief in private property and the free market, "liberal" came, first, to be compatible with adher ence to a wide range of interven tionist and welfare-state measures and then even, in the United States and elsewhere, to designate pre cisely such adherence. As Joseph Schumpeter shrewdly observed in his monumental History ofEconomic Analysis, "As a supreme, if unin tended, compliment, the enemies of the system of private enterprise have thought it wise to appropriate its label." If the underlying conception of Ruggiero's book manifests this distortion, an earlier work, L.T.

Hobhouse's Liberalism (1911) played 670 THE FREEMAN November a significant role in bringing it about. This short book, despite its promising title, is of little value today except as a landmark in the accommodation of what John Gray has perceptively called ·turn-of-the century revisionist liberalism to socialism and social democracy. The amalgamation of genuine liberalism with the strand of inter ventionism that today is often called by that name is also the disabling error of two books by the American scholar J. Selwyn Schapiro, Con dorcet and the Rise of Liberalism (1934) and Liberalism and The ofFascism (1949). It is characteristic of the confusion of these once well known volumes that the authentic, classical version is demeaned by the label "bourgeois liberalism," there by consecrating that bit of Marxist propaganda as accepted scholarly terminology. Even less sympathetic to the spirit of true liberalism are the writings on the subject oftwo British socialists, Harold Laski's The Rise of European Liberalism (1931) and Kingsley Martin's The Rise of French Liberal Thought (1926). As with·Schapiro's works, some useful information is provided, especially by Martin, but their overall value is vitiated by a warped perspective. It must be considered a cause of deep regret that the history of liberal ideas was never undertaken by one of the great historians of the liberal age, for example, by Lord Acton, Lecky, or John Morley, the superb biographer of Cobden and Gladstone.

In a class by itself is a brilliantly edited anthology, Western Liberal ism: A History in Documents from Locke to Croce, by E. K. Bramsted and K. J. Melnuish (1978). There have, of course, been numerous col lections on the subject. What distin guishes this one is not only the com prehensiveness and richness of the selections, but the intelligence and perceptiveness of the commentary. Again, however, the enterprise suf fers from the futile attempt to en compass Herbert Spencer and Fred eric Bastiat in the same general movement as John Maynard Keynes and even Lord Beveridge, the ide ologist of the cradle-to-the-grave British welfare state. A similar flaw· undermines a recent general treat ment, David Manning's Liberalism (1976), which adds a diffuseness and numerous confusions of its own. Mises' Liberalism stands in bold contrast to the mass of other works in the field. In clean, clear lines it sets out what it meant to be a liberal when liberalism was the spectre haunting Europe and, indeed, much of the rest of the world. Liberalism is shown, in Mises' exposition, to be a coherent theory of man and society and of the institutional arrange ments that are required to promote social harmony and the general wel fare. In particular, the social philos phy is placed squarely on the secure 1985 CLASSICAL LIBERALISM RECONSIDERED 671 foundation of private property in the means of production. No attempt is made to accommodate the concept of liberalism to standpoints intrinsi cally incompatible with it, such as socialism or any variety of interven tionism. On the contrary, starting from the principle of private prop erty, Mises demonstrates how the other elements of the liberal world view-personal freedom, peace, dem ocratic government, tolerance, and equality before the law-are linked to it in a dissoluble whole.

Especially noteworthy is Mises' emphasis on peace as one facet of the classical liberal philosophy, an as pect too often neglected in treat ments of the topic. Mises is solidly in the tradition ofthe makers of the lib eral ideology when he states that Heraclitus was wrong, "not war, but peace, is the father of all things." His condemnation of war, imperialism, and jingoistic hysteria reiterates and develops that of Condorcet and Ben jamin Constant, Cobden and Bright, Spencer and William Graham Sum ner, and virtually all the others. In Mises' Liberalism we have a timeless statement of classical lib eralism by the thinker who is ac knowledged as its greatest twen tieth century champion. Lucidly and unflinchingly he shows it"to be the only system consonant with individ ual freedom and personal autonomy, as well as with modern industrial ized society. It is the work we must consult and ponder if we wish to un derstand what liberalism means and where it stands in the struggle of ideologies that will continue to shape the future. @ Dr. Raico originally translated Liberal ism from the German. He is associate pro fessor of history at the SUNY College at Buffalo.

Liberalism and Capitalism Hans F. Sennholz To SEEK freedom as an organizing principle of society and a way of life for the individual is to strive for the freedom to speak his mind, to ex press and discuss his views, to or ganize in groups and parties, to choose and change his government, to elect his agents and representa tives, and arrange his social and eco nomic life in any way he pleases as long as it is peaceful. For man to en joy freedom is to work as he pleases, to give and find employment as he sees fit, to buy and sell his products freely and keep the rewards. To be free is to be unhampered and un impeded in his peaceful economic pursuits. The ideology and political program for individual freedom is liberalism. At least that's what it was called 672 THE FREEMAN November throughout most of its history, and what Ludwig von Mises called it in his prodigious writings. It was the dominant ideology in England be tween the Glorious Revolution (1688) and the Reform Act of 1867, and a broad social and political trend throughout the Western world. Its primary demands were religious lib erties and toleration, constitution alism and individual rights, which in turn gave great impetus to the the ory and practice of economic liberty.

The French physiocrats and the English liberal economists erected the economic postulate of laissez faire, that is, unhampered private property in the means of production and self-regulating markets, unre strained by political intervention. For Ludwig von Mises, the private property order, commonly called cap italism, was the only practical social and economic order. It gave rise to modern civilization and economic conveniences unknown in the past. "There is only the choice between communal ownership and private ownership of the means of produc tion," he assured us. "All interme diate forms of social organization are unavailing and, in practice, must prove self-defeating. If one further realizes that socialism too is un workable, then one cannot avoid ac knowledging that capitalism is the only feasible system of social orga nization based on the division of la bor. This result of theoretical investigation will not come as a surprise to the historIan or the philosopher of history. If capitalism has succeeded in maintaining itself in spite of the enmity it has always encountered from both governments and the masses, if it has not been obliged to make way for other forms of social cooperation that have enjoyed to a much greater extent the sympathies of theoreticians and of practical men of affairs, this is to be attributed only to the fact that no other system of social organization is feasible." (Lib eralism, p. 85) No matter how much or how little we may know about the workings of capitalism, we cannot help admiring it for its enduring and resilient qual ities. Professors denounce it for caus ing exploitation and inequality, for breeding monopolies and oligopo lies, for contributing to unemploy ment and waste as a result of its lack of mechanism assuring full employ ment. And yet, capitalism lives on unperturbed by such charges.

Preachers and priests disapprove of it on moral and cultural grounds; and yet, it endures despite their damnation. Politicians talk about the urgent needs of the public sector; and yet, capitalism persists despite all the exactions on behalf of the de pendent sector. The basic features of capitalism endure, even in the dark est corners of the world, despite all the laws legislators may pass against it and all the brute force govern1985 CLASSICALLffiERALISMRECONSIDERED 673 ments may use against the people. Could it be that private property and the social order based on it are deeply rooted in the very nature of man? It is difficult to find an unham pered capitalistic order anywhere in the world. Governments, which are the political apparatus of coercion and compulsion, interfere with near ly every manifestation of eco nomic life. They levy confiscatory taxes on production and distribu tion; and yet, entrepreneurs and cap italists manage to produce goods and render services with the leftovers.

Governments regulate and restrict output; and yet, the property order, although shackled and mutilated, perseveres in producing goods and services. Governments set wage rates and interfere with the struc ture of prices; and yet, the market order lives on in black markets and underground activity. Governments indulge in inflation and credit ex pansion and resort to legal tender legislation; and yet, capitalistic pro duction goes on in the darkness of monetary destruction. Governments bestow economic privileges and le gal immunities on labor unions and permit them to disrupt production; and yet, in the end, economic pro duction resumes although labor ceases to function efficiently. Gov ernments engage in war and de struction; and when the killing ceases, and nothing is left for gov ernment to plan, ration anddistribute by force, there is capitalism. It produces miracles of reconstruction and marvels of recovery.

In most parts of the world, capi talism is the system of last resort. When the communal order has brought poverty and hunger, when every measure of political coercion has failed repeatedly and the polit ical mind is incapable of concocting another economic folly, when the po lice are exhausted from regulating economic production and the courts are paralyzed by immense case loads of economic crimes, the time has come for the private property order. It needs no political plan, no eco nomic legislation, no economic po lice, only freedom. @J Dr. Sennholz is Chairman ofthe Econom ics Department at Grove City College. He is well known to Freeman readers. Liberalism and Individualism Anne Wortham INDIVIDUALISMhas many meanings and represents a complex of ideas, val ues, and doctrines that are asso ciated with classical liberalism. These ideas are addressed in Mises' Liberalism. They are the corner stones of his conception and defense 674 THE FREEMAN November of liberalism. Moreover, the method of his defense is itself an exercise in the application of methodological in dividualism's theory of society.

Mises' brand of individualism is known as utilitarian individualism. Although he makes no explicit ref erence to utilitarianism or individ ualism in Liberalism, this doctrine is implicit in every aspect of Mises' argument. Elsewhere he has defined the essence of utilitarianism to be "the cognition that action pursues definite chosen ends and that con sequently there can be no other stan dard for appraising conduct but the desirability or undesirability of its effects ... By its recognition that so cial cooperation is for the immense majority a means for attaining all their ends, it dispels the notion that society, the state, the nation, or any other social entity is an ultimate end and that individual men are the slaves of the entity. It rejects the phi losophies of universalism, collectiv ism, and totalitarianism. In this sense it is meaningful to call utili tarianism a philosophy of individu alism." (Theory and History, pp. 57 58) One finds Mises' utilitarian indi vidualism at work throughout his discussion of the connection between liberalism's advocacy of private ownership of the means of produc tion and its demand for limited func tions of government, and in his anal ysis of the relation of the state to the individual. But his perspective is most evident in his refutation of the charge by anti liberals that capital ism is a threat to social cooperation.

Mises was aware of the claim that individualism pits the individual against society; he was also aware of the antiliberal progression from an attack on autonomy and privacy to an attack on private property. Thus, he begins the section on "Property" with an assertion that is the under lying theme of his entire enterprise: "Human society is an association of persons for cooperative action. As against the isolated action of indi viduals' cooperative action on the basis of the principle of division of labor has the advantage of greater productivity. If a number of men work in cooperation in accordance with the principle of the division of labor, they will produce (other things being equal) not only as much as the sum of what they would have pro duced by working as self-sufficient individuals, but considerably more. All human civilization is founded on this fact." (p. 18) He boldly argues that "private property creates for the individual a sphere in which he is free of the state. It sets limits to the operation of the authoritarian wilL" As an in termediary between the individual and the state, "it allows other forces to arise side by side with and in op position to political power. It thus be comes the basis for all those activi1985 CLASSICAL LIBERALISM RECONSIDERED 675 ties that are free from violent interference on the part of the state.

It is the soil in which the seeds of freedom are nurtured and in which the autonomy of the individual and ultimately all intellectual and ma terial progress are rooted." (pp. 67 68) Certain doctrinaire individualists take the view that any social coop eration entails the compromise of in dividual autonomy and the sacrifice of self-interest to the interests of so cial groups and institutions, and is therefore altruistic, hence immoral. Actually, what Mises describes is not a sacrifice at all. Sacrifice in volves the renunciation of a greater value for a lesser one. While indi vidualism does not pit self-interest against social cooperation, as anti liberals claim, it does assign a greater value to self-interest than to social cooperation. But it recognizes that in certain social contexts coop eration may be in the individual's interest, while in others it would not be. If it is in the interest of the in dividual's well-being and prosperity, then no sacrifice is involved. The an tiliberal interventionist state cer tainly does require sacrifices of the individual which it justifies in the name of social cooperation. But as Mises demonstrates in his discus sion of price controls and minimum wage legislation, this kind of gov ernment interference in the market not only requires the sacrifice of the interests of merchants, manufactur ers, employers and employees; it also creates social disorganization and is therefore self-defeating.

Many defenders of liberalism try to make their case either by obscur ing individualism's value of auton omy or by bypassing it altogether. When they do address it, they too often concede to antiliberals their typical contrast of individualism with the ideal of cooperative social order. The significance of Liberalism for advocates of individualism is that it is an exemplification of how one can make the case for individualism without making this concession. As Mises' argument demonstrates, an tiliberal ideologies have no monop oly on the goals of association, social cooperation and harmony. In fact, in Mises' view, antiliberal ideologies often mask profoundly an tisocial assumptions. There is no need at all to defend liberalism's value of autonomy by placing the .self-sufficient individual in opposi tion to man as a social being. Thus, in Mises' approach to autonomy and privacy, he makes a valuable contri bution to the conceptualization of in dividualism by presenting an expo sition of the proposition that individualism is the best basis for a cooperative social order. @ Dr. Wortham is Assistant Professor of Public Policy at the Kennedy School of Government, Harvard University.

676 THE FREEMAN November Liberalism and Religion Edmund A. Opitz CLASSICALliberalism created a rev olutionary new view of the political State, its nature and proper func tions. We may better understand this sea change in political thought if we contrast the secular state of liber alism with it polar opposite found in the ancient world. The great au thority on the ancient city, Fustel De Coulange, tells us that "the state was a religious community, the king a pontiff, the magistrate a priest, and the law a sacred formula." The Greek polis was Church and State in one, Julius Caesar was Pontifex Maximus; the citizen was bound to the State body and soul. When civic and religious obligations are com bined and owed to the same insti tution we have that absolute power dreaded by Lord Acton. It was the great achievement of classical liberalism, with its roots in the post-Reformation era and mood, to desacralize the political order, thus stripping the State of its reli gious and moral pretensions. Holy empires and sacred monarchies claiming transcendent sanction have prevailed throughout history, and the State was venerated as an order of salvation. From now on, however, the sanctions of the State were to be much more modest, its objectives limited to constabulary functions; "the night watchman State," as a critic dubbed it.

No longer would the State assume responsibilities beyond its compe tence for the mo:!"aland spiritual re generation of men and women. "It is not for a disdain of spiritual goods that liberalism concerns itself exclu sively with man's material well being," writes Mises in Liberalism, "but from a conviction that what is highest and deepest in man cannot be touched by any outward regula tion." (p. 4) The tutoring and re newal of the human mind and spirit would, from now on, be the task of Church and Schoolin the broadest sense-so these institutions were pried out from under the State's um brella and assumed the autonomy they must have ifthey are to achieve their purposes. "Separation of Church and State" is repeated endlessly and mindlessly among us, so that the idea of a sec ular State is now commonplace. But it was a novel idea in the 17th cen tury, and it has not taken root any where in the world except in regions responsive to the influence of clas sical liberalism. What was the seed idea which eventually germinated as the concept of a secular State? And what was the milieu in which the seed took root? It was a milieu in which an aura of sanctity might be 1985 CLASSICAL LIBERALISM RECONSIDERED 677 attached to virtually anything; trees, rivers, stones, animals, as well as to the social order itself. And of course there were priest-kings, divine mon archs and holy emperors.

The Old Testament records a sharp break with this mentality, a new de parture which removes the idea of the holy from nature and society and rests it exclusively with the tran scendent deity: "I am the Lord, your Holy One, the Creator of Israel, your King." H. Frankfort, in his Kingship and the Gods, elaborates: "In the light of Egyptian, and even Meso potamian, kingship, that of the He brews lacks sanctity. The relation between the Hebrew monarch and his people was as nearly secular as is possible in a society wherein re ligion is a living force." The distinc tion between civic and sacred is sharpened in the New Testament, es pecially in Jesus' rejoinder to a trap question: "Render unto Caesar that which is Caesar's, and unto God that which is God's." The realm of Cae sar, the State, is now shorn of its lofty conceits. The State is a necessary and useful institution, but there's nothing divine or sacred about it.

Only God is holy, and there is some thing of the divine in persons; but not in the social order-the State is secular. There is a private domain in man, touched by the sacred, to which only the individual has rightful access. Invasion of this Self by any other constitutes a violation, and the State's apparatus of compulsion is set up precisely to punish trespasses of this sort. Wanton killing is the most flagrant of violations and it is the law's business to punish murder. Stealing is a violation of the bonds of ownership and is the ground for laws against theft. And because no person can be held accountable for his actions, nor realize his potential, unless he is free, the law seeks to se cure equal freedom for all persons. In short, each person has inherent rights, derived from a source beyond nature and society, to his life, his lib erty and his property; and it is the function of the Law to secure these rights.

The State's ability to punish evil should not create any expectation that the State can enforce good. Goodness must be voluntary, and the most the State can do on behalf of goodness is to curb evildoers and thus create "a free field and no fa vor" where right thinking and well doing of every variety can take root. The State began to get out of the religion business ~arly in the mod ern era; the press got free, and speech was unfettered. Adam Smith dem onstrated that the economy did not need political controls, but only the Rule of Law, which preserved social cooperation under the division of la bor. The best things in life began to flourish in regions outside the do main of politics: family, friendship, 678 THE FREEMAN November fellowship, conversation, work, hob bies, art, music, worship. . .. It was a noble vision, but it did not promise utopia and thus disap pointed those who demanded a heaven on earth. A little more re alism on this point and the vision may yet take hold again. @ The Reverend Mr. Opitz is a member of FEE's Senior Staff.

Liberalism and Limited Government Israel M. Kirzner AT FIRST glance the role of limited government in Mises' system of clas sical liberalism appears as a some what uneasy compromise between two conflicting goals: on the one hand to achieve the advantages of a free market; on the other hand to benefit, in certain respects, by co ordinated central direction. Indeed this compromise might appear to dif fer only in degree from the kind of compromise enshrined in those "mixed economic systems" that have become so dear to the hearts of the economists and politicians of our time. But such a view of the role of limited government in Misesian lib eralism would be utterly incorrect. For Mises, limited government is in no sense a compromise; and the possibility of any viable, stable kind of "mixed" system was categorically rejected by Mises: "There is simply no other choice than this: either to abstain from interference in the free play of the market, or to delegate the entire management of production and distribution to the government ... there exists no middle way." (p.

79) The truth is that for Mises' liber alism the appropriate and important functions of government, as well as the severely circumscribed limits to government are both directly and consistently implied by the very es sence of liberalism itself. "The pro gram of liberalism . . . if condensed into a single word, would have to read: property, that is, private own ership of the means of produc tion .... " (p. 19)It is the preservation of the institution of private property that most emphatically renders gov ernment a necessity for the liberal society; it is the preservation of pre cisely that same institution that makes it essential to prescribe strict and definite limits to government. That government is necessary for liberalism was forthrightly empha sized by Mises. Government is de fined as "the organs charged with the responsibility of administering the apparatus of compulsion." (p. 35) And "the liberal understands quite clearly that without resort to com pulsion, the existence of society would be endangered ... One must 1985 CLASSICAL LIBERALISM RECONSIDERED 679 be in a position to compel the person who will not respect the lives, health, personal freedom, or private prop erty of others to acquiesce in the rules of life in society." (p. 37) And, again, "For the liberal, the state is an absolute necessity, since the most important tasks are incumbent upon it: the protection not only of private property, but also of peace, for in the absence of the latter the full benefits of private property cannot be reaped." (p. 39) Recognition of the necessity of the state apparatus of compulsion does not, however, lead the liberal to as cribe special nobility, virtue, or es teem to the exercise of state func tions. On the contrary, the liberal is thoroughly sensitive to the enor mous potential for evil and corrup tion that inheres in the exercise of government. "Nothing corrupts a man so much as being an arm of the law and making men suffer. The lot of the subject is anxiety, a spirit of servility and fawning adulation; but the pharisaical self-righteousness, conceit, and arrogance of the master are no better." (p. 58) It is because for Mises the exercise of state functions carries with it no inherent nobility or dignity, that he sees the merits of democracy in a manner entirely free of the mystique with which it is invested in current political ideology. There is, for the liberal, no special glory attached to the task of governing, and no indignity attached to being subject to (limited) governmental rule. The rule of government is a practical ne cessity; that is all. Division of labor then exercises its claims. "One can not be an engineer and a policeman at the same time. It in no way de tracts from my dignity, my well being, or my freedom that I am not myself a policeman."

It then follows that there is noth ing particularly glorious about a sys tem that seeks to replace govern ment by the few by self-government by the whole people-even were such a goal in fact a possible one. The only reason for endorsing democracy for the liberal society is a pragmatic one. "Democracy is that form of political constitution which makes possible the adaptation of the government to the wishes of the governed without violent struggles ... By means of elections and parliamentary ar rangements, the change of govern ment is executed smoothly and with out friction, violence, or bloodshed." (p.42) But if the preservation of private property was the basis for liberal ac knowledgment of a vitally impor tant role to government, that same essential element in liberalism im plies a severely circumscribed set of functions for government. Liberal ism reflects the teachings of econom ics concerning the enormous bene fits that society reaps from the institution of private property in the 680 THE FREEMAN November means of production. But the very concept of private ownership in volves "for the individual a sphere in which he is free of the state. It sets limits to the operation of the au thoritarian will." Every attempt by the state to go beyond its function of "guaranteeing life, health, liberty and private property against violent attacks" is then seen by the liberal as "evil." (p. 52) No matter how well meaning paternalistic acts of gov ernment may be, such acts neces sarily invade the domain of private property. Consistent paternalism cannot but lead to complete author itarianism, stifling all progress and innovation. "The wielding of powers of this kind even by men imbued with the best of intentions must needs reduce the world to a grave yard of the spirit." (p. 54) Here then we have the single goal and raison d'etre of limited govern ment in the Misesian system: The pragmatic lessons of economic sci ence' joined with a passionate re gard for individual freedom, point unequivocally to the liberal system of private ownership of the means of production. Preservation of this fun damental framework of individual rights calls for government that pro tects these rights against potential enemies; the concern that such pro tection emphatically refrain from it self invading those very rights is not the expression of any kind of com promise-it is merely the other side of the very same coin, the essential ity to liberalism of a protected, in violate sphere of individu~l rights.

@ Dr. Kirzner is Professor of Economics at New York University as well as a Trustee of The Foundation for Economic Education. Liberalism and Change David Boaz THE UNITEDSTATESis a society based on change. We have no cultural memory of generations or centuries when life remained much the same. The one constant to which Ameri cans have become accustomed is change. Many explanations can be adduced for this phenomenon-our society's relative youth, constant new fron tiers, continual immigration. But the fundamental explanation is that the United States is the world's most liberal society in the classical sense of the term. It was founded by lib erals, on explicit liberal principles, and it has remained largely true despite many deviations-to those principles. The benefits of change are obvious. We can point to new developments from the cotton gin to the automo bile to the computer chip that have made our lives better. The clearest 1985 CLASSICAL LmERALISM RECONSIDERED 681 way to understand the benefits of change is to recognize that our so ciety supports more than 200 million people at the highest standard of liv ing in the history of the world, in a land area that once provided mere subsistence to only a few million.

But change has costs. As consumer preferences shift or new competitors arise, some people lose their busi nesses or their jobs. Their skills be come outmoded. When an industry or even a firm shuts down, a whole way of life may disappear. Millions of Americans have had to give up farm life. Millions more are faced with the loss of their lifetime jobs as smokestack industries decline. Some people find this change too much to bear. Many of us today may think of the 1920s-when Mises wrote Liberal ism-as the good old days, even a golden age, and certainly a time well before the harrowing pace of modern life. Yet even then people were com plaining about the need to adjust to change. They argued, said Mises, that "the material advances of re cent generations ... have, of course, been really very agreeable and ben eficial. Now, however, it is time to call a halt. The frantic hustle and bustle of modern capitalism must make way for tranquil contempla tion." (p. 189) Few people today are so explicit in their hostility to change. They don't want to stop all change, just the particular changes that infringe on their patterns of life. Modern "liberals"

and leftists find a receptive audience among displaced workers and others beset by economic change for their programs of stagnation: Rent con trol, farm parity, plant closing re strictions, limits on automation. Similarly, New Right conservatives appeal to middle Americans fearful about today's lifestyle changes with their programs to "restore tradi tional moral values." There are, it would appear, few things that Ludwig von Mises and George Will would agree on, but one of them is this point, as phrased by Will: "The essential aim of liberal ism, and the central liberal value, is the maximization of individual choice." Mises wrote about the max imization of choice primarily as a means to achieve greater wealth for everyone in society. But he did not limit his liberal principles to what George Will would call the "merely economic" sphere of life. Here is Mises on liberal policy toward what we might today call lifestyle issues: "If the majority of citizens is, in prin ciple, conceded the right to impose its way of life upon a minority, it is impossible to stop at prohibitions against indulgence in alcohol, mor phine, cocaine, and similar poisons.

Why should not what is valid for these poisons be valid also for nico tine, caffein, and the like? Why should not the state generally pros682 THE FREEMAN November cribe which foods may be indulged in and which must be avoided because they are injurious? ... We see that as soon as we surrender the principle that the state should not interfere in any questions touching on the indi vidual's mode of life, we end by reg ulating and restricting the latter down to the smallest detail." (pp. 53 54) The problem for conservatives like Will is that capitalism means indi vidual choice. And, as Mises noted, when people are allowed to be free, some of them will choose courses of action that others disapprove. When that happens, some want the gov ernment to step in. Whether it is to control rents, prevent disinvestment in farming, or keep women in the home, they are willing to use the state to keep society from changing.

This is a fundamentally reaction ary view of the world, a lingering im pulse from pre-capitalist times. Be fore capitalism, and in a few parts of the world still largely untouched by capitalist society, life did stay much the same for generations. Men and women knew that they would grow up, live, and die just as their fathers and mothers did. This was not a pas toral ideal; it was a life that was nasty, brutish, and short, and the subsistence society could support only a few people compared to to day's population. Into this stagnant world came lib eralism. By freeing people from an cient bonds, it showed them that progress was possible. They could change their lives, they could have more material comforts, their pow ers of creation and achievement were liberated. And with the coming of liberalism came an end to settled so ciety. Change became the only constant. Liberalism gave people the free dom to make choices. Economic free dom created prosperity, which gave more people the wherewithal to take advantage of the new choices avail able to them. This process of choice and change is the distinguishing characteristic of capitalism.

Liberals must recapture the pro gressive spirit that characterized liberalism in its early days. We must make it clear that liberalism, and only liberalism, is the political phi losophy of progress, and that those who seek to resist change stand in the way of what Mises called "an ever progressing improvement in the satisfaction of human wants." (p. 192) @ Mr. Boaz is vice president for public policy affairs at the Cato Institute.

Ludwig von Mises LIBERALISM: IN THE CLASSICAL TRADITION FEE is pleased to announce the reprinting of Liberalism. This new edition, prefaced by Bettina Bien Greaves, offers the philosophy of classical, nineteenth-century liberalism: the great political and in tellectual movement that promotes free men, free markets and lim ited government. /IAn indispensable book." - Henry Hazlitt /lMises' views still appear fresh and modern and readers will find his analysis pertinent." - Bettina Bien Greaves 230 pages • $9.95 paperback Order from: The Foundation for Economic Education, Inc. Irvington-on-Hudson, New York 10533 (Postage paid on prepaid orders; othenvise add $2.00 per order for billing.) Joseph S. Fulda DeclarativeLaw THELAW is imperative, it commands. Criminal law is a series of "Thou shalt nots." Regulatory law, a rela tively new area of statutory en deavor though it has ancient roots, is a series of "Thou shalt nots" and "Thou shalts." Regulatory law of this sort often infringes the natural rights of the parties, often presumes guilt in those regulated and requires them to prove themselves innocent, and often has perverse results, even results opposite from those intended.