Which Liberalism? T. Cowen

by Tyler Cowen F riedrich A. Hayek, in his famous essay "Individualism: True and False" (Hayek, 1948), draws a distinction be tween two differing strands in Western thought: skeptical individualism and rationalist con structivism. As Hayek points out, at one time in history or another, each strand has claimed to be spokesman for liberal principles. Hayek argues that the two strands are irreconcilable, as rationalist constructivism will almost invari ably lead to centralized planning and state dom ination. If the prevalent philosophy of an era grants man the ability to consciously redesign institutions in accordance with a priori prin ciples, it is only a matter of time before such ,'rationalist" dictates are enforced through the state. Since the state is the "planner" par ex cellence, a belief in planning usually leads to a belief in extensive state power. Constructivist doctrines are primarily attributed to the French rationalists and are traced back to early seven teenth-century Cartesianism.

According to Hayek, skeptical individualism allows each person to pursue his own self-in terest in light of the fact that the "best alterna tive" for this individual is unknown. Self seeking behavior within a market framework will ultimately result in socially desirable out comes. Hayek attributes this tradition to the Scottish Enlightenment and several other thinkers from the British Isles (e.g., Burke). This raises the question: which liberalism? Tyler Cowen is a postdoctoral fellow at the Center for the Study of Market Processes, George Mason University, Fairfax, Virginia. Are the two strands of Western thought that Hayek discusses irreconcilable? If so, which are we to choose? If not, how are they to be integrated? Hayek makes most of his points with refer ence to intellectual history-it is in this field that I find a different answer to Hayek's ques tions. The two traditions of liberalism (ratio nalism and skeptical individualism) are related differently than Hayek suggests. For instance, Hayek attributes the idea of spontaneous order almost exclusively to the British Isles (Mande ville, Hume, Burke, Ferguson, Smith, etc.).

However, the notion of spontaneous order finds both its roots and its highest development (at least through the nineteenth century) in France -often in the hands of the rationalists. Hayek attributes the idea of "the result of human action and not of human design" to Mandeville's "Fable of the Bees" (1705). As Hayek would admit, these notions are ulti mately rooted in Judaic, Christian, Hellenic, and Roman culture. However, their more prox imate origins can be traced back to sixteenth century France, before Mandeville's time. French Individualism Nannerl Keohane (1980, p. 83) has noted that "Individualism dominated French ethics and psychology from the end of the sixteenth century well into the seventeenth . . ." Keo hane documents this statement not by exam ining Hayek's "false individualists" (the ratio nalists) but rather the skeptical French civic humanist tradition that descended from the Roman Stoics. (See chapters 3-13 of Keohane.) Montaigne is portrayed as the leader of this tra dition-not only does he glorify freedom and individual virtue throughout his Essays but he also has a critique of "rationalist constructi vism" that resembles Hayek's argument. Mon taigne ascribes the ills of the world to man's attempt to know more than he is capable of-"If it is true, that man alone of all the an imals has this freedom of imagination and this unruliness of thought . . . it is an advantage that is sold him very dear, and in which he has little cause to glory, for from it spring the prin cipal source of the ills that oppress him: sin, disease, irresolution, confusion, despair."

(Montaigne, vol. II, 12, p. 336) Montaigne argues that reason is only a pri vate guide to action (not a public guide) and should be tempered with extreme skepticism in order to avoid forcing one's will upon other people through coercion. (Essays, vol. III, 11, pp. 786-790) Instead, we should rely upon custom and accident for men are like ". . . ill matched objects, put in a bag without order, find of themselves a way to unite and fall into place together, often better than they could have been arranged by art." (Essays, vol. III, 9, p. 730) Such notions were not a brief episode in French thought which perished with the on slaught of Cartesian rationalism-"In these observations Montaigne inaugurates a long and fruitful tradition in French social theory, fore shadowing the libertins of the early seventeenth century, the Jansenists, and their English dis ciples such as Mandeville. Montaigne makes explicit the idea that private vices knit society together, that selfish motives lead men to serve the public good." (Keohane, p. 112) A strong interest in spontaneous order char acterized post-Reformation French thought especially such thinkers as Pierre Nicole and Pierre Boisguillebert. Even before the Enlight enment this tradition was fairly well en trenched. Under Louis XIV, such thinkers as the Marquis d' Argenson developed ideas quite similar to Hayek's. (See Ogle on d' Argenson.) Not only was d' Argenson a strong critic of mercantilism and an advocate of laissez-faire but he also predated Hayek's later work on 299 competItIon as a discovery process. Since overall or general political truths cannot always be immediately known, d' Argenson argues that the monarch should allow each individual to pursue his own interests in the hope that the resulting patterns of interaction will disclose or "contain" the sought truths. (See d' Ar genson's Considerations sur le gouvernment ...) Despite the growing sophistication of French thought, there was still a serious weakness in French liberalism-the lack of a well-devel oped theory of natural law. However, with the growth of science, rationalism, and the on coming of the Enlightenment this defect was remedied. Such thinkers as Gournay, Turgot, and Condorcet constituted the apogee of eigh teenth-century liberalism. These intellectuals and their disciples combined an understanding of the spontaneous development of free institu tions and a belief in the ability of reason to know that liberty is the only moral and practical alternative.

British Thinkers While the British Isles produced many no table liberals during the eighteenth century as well, many of these thinkers were plagued by a sense of overall skepticism that moderated their liberal beliefs. Hume, for instance, thought that reason was incapable of judging the efficacy of legal institutions; therefore a free society was to be justified on the grounds that it had evolved through time and exhibited strong survival traits. This notion may have been plausible in Hume's day when liberalism was advancing, but it is far more difficult to justify in the twen tieth century. Edmund Burke had the same problem-after having rejected natural law he was forced to fall back upon tradition for his justification of a liberal order. Of course, the British had many thinkers who did not adhere to such views. Richard Price, Joseph Priestley, Thomas Paine, and James Macintosh were all strong advocates of natural law and laissez faire. Yet, almost as a rule, these individuals had direct links to the French, considered themselves rationalists, and were strong opponents of Burke. While another group of English rationalists, the Benthamites, 300 THE FREEMAN. AUGUST 1987 did eventually become collectivists, this out come can just as easily be attributed to the form of utilitarianism they advocated, rather than to their rationalism.

It was the nineteenth century that saw the full flowering of the French spontaneous order tra dition in such liberals as DeStutt· de Tracy, Charles Comte, Jean-Baptiste Say, Frederic Bastiat, and Gustav de Molinari. These figures found the proper mix of rationalism and a belief in the spontaneous order. Most of the nine teenth-century French liberals were consistent opponents of state power and defenders of in alienable rights. The case against state interfer ence was explicitly grounded in a rationalist conception of the benefits of human freedom. Yet, at the same time such rationalists were developing the theory of spontaneous order. For instance, the French economist Jean-Bap tiste Say had fairly sophisticated notions of the spontaneous origin of money, money as a market institution, and the dangers of state in terference with the money supply (see Say, 1855). Say and his followers had a theory of the market which was far richer and detailed than the arid Ricardianism of the British Isles.

Bastiat-with his explanation of the "eco nomic harmonies" of a market economy - was perhaps the leading spokesman for the sponta neous order. When asked how the market could manage to feed all of Paris, Bastiat simply re plied that it was only necessary that each man attempt to feed himself. Eighteenth-and nineteenth-century French rationalism led to laissez-faire liberalism. While many nineteenth-century totalitarians were also inspired by rationalism, Hayek over estimates the importance of this connection. The more critical intellectual relationship that Hayek does not examine is the intertwining of socialist and feudalist thought. For instance, nearly all of the nineteenth-century socialist cri tique of capitalism and the industrial revolution is taken directly from conservative, feudalist inspired thinkers. In England, these feudal, an ticapitalist thinkers included not only Southey and Coleridge, but go at least.as far back as the Bolingbroke circle of the early eighteenth cen tury. In addition, there were numerous six teenth-and seventeenth-century critics of the market economy who argued that it disrupted the order, harmony, and justice of the feudalist system.

The situation in France was similar, as Kingsley Martin (1962, p. 236) has noted that "Eighteenth-century socialism sprang from a moral objection to the theory that luxury is so cially beneficial. It was in origin a Puritan at tack on economic hedonism." For instance, Morelly, the first French socialist to outline his collectivist utopia in detail, explicitly envi sioned a feudal conception of society. Hayek's thesis does not square with this evi dence. To the extent that socialism springs from feudalism, the rationalist attitude must be viewed as strongly antisocialist since the ratio nalists were stringent opponents of feudalism. While many later socialists were strongly im bued with a rationalistic spirit, this is simply another aspect of the liberal tradition that so cialism borrowed (and perverted). European socialists such as Saint-Simon, Auguste Comte, and Marx altered liberal rationalism in the same manner that they twisted the classical liberal concepts of class analysis, progress, and industrialism. It is not rationalism but lingering feudalism - the belief that the market economy is inherently unjust and inharmonious-that is at fault for this transformation.

Both rationalism and an understanding of spontaneous order are an integral part of the liberal tradition. Just as rationalism finds its sphere in choosing the legal order for a society, spontaneous order finds its sphere within this legal order. If the rules we choose are just, then free institutions will develop in an orderly, har monious way which is conducive to peace and prosperity. This view can be considered the central message of Ludwig von Mises' s Human Action. Mises, one of the greatest classical liberals of the twentieth century, embraced the best of both the British and French tradi tions. D d' Argenson, Marquis, Considerations sur le gouvernment ... Amsterdam, 1765. Hayek, F. A. Individualism and Economic Order. New York, 1948. Keohane, N. Philosophy and the State in France. Princeton, 1980. Martin, Kingsley. French Liberal Thought in the Eighteenth Century. New York, 1962.

Montaigne, Michel de. Complete Essays. Stanford, 1958. Ogle, Arthur. The Marquis d'Argenson. London, 1893. Say, J. B. Treatise on Political Economy. New York, 1855.