Whose Liberalism?

The curious career of two ideas and one word.

There is a great deal of argument on the subject of capitalism that could be superseded by coming to some agreement about what we talk about when we talk about capitalism. If by “capitalism” we mean (a) what happens when a few million grocers and the mind-bendingly complex chains of production behind them compete for the custom of a few hundred million hungry Americans, that’s one thing; if by “capitalism” we mean (b) bank bailouts and General Electric’s defense-contracting division, that’s another thing. There are critics of capitalism who argue that (a) leads inevitably to (b); one need not necessarily take a position on the merits of that claim to understand that (a) and (b) are nonetheless different things, and that if we take “capitalism” to mean (b) then we need another term — “free enterprise,” “laissez-faire,” etc. — to denote (a).

Across a not-insubstantial spectrum of political debate, the common term for (a) is “economic liberalism,” but in the contemporary context — particularly the contemporary American context — that presents some difficulty, too, as evidenced by Katrina Forrester’s new essay in The Nation, “Liberalism Doesn’t Start With Liberty.” Forrester, a lecturer in the history of political thought at Queen Mary University, London, begins with a strange assertion: that the idea of liberalism as a consent-oriented view rooted in the work of John Locke and based on “toleration, private property, and individualism” is in effect a propaganda coup, “a recent invention. It is, in fact, largely a product of the Cold War. . . . Before the 1930s, histories of liberalism told a different story.” The claim is false on its face: We find that conception of historical liberalism fully developed as early as Ludwig von Mises’s Nation, State, and Economy, published in 1919, to say nothing of Adam Smith’s attention to “liberal” policy in a rather more well-known work in 1776. (If you would like a few charts illustrating the historical use of the word “liberal,” Daniel B. Klein obliges in The Atlantic here.) Mises was writing not in the context of the Cold War but in the context of the trauma of the First World War; the book’s original title was Imperialism, and that tendency, rather than socialism, is the evil to which Mises addresses his criticism. The French use of libéral to denote political ideas emphasizing individual liberties dates to the 18th century, its adoption by critics of the English proponents of those ideas at least to the first year of the 19th. That the common understanding of “liberalism” and its origins is a Cold War invention surely would come as a surprise to the ghosts of Peel and Gladstone.

Forrester would be correct if she were arguing that what we now commonly call “liberalism” is a very different phenomenon from the one Smith and Locke had in mind, one with its origins in the early 19th century and heavily influenced by Bismarck’s social-welfare state and the experiments of so-called pragmatists in the United States. But unless I am grievously misreading her, that is not her argument; rather, her assertion is that our contemporary understanding of liberalism is a fraud perpetrated by opponents of socialism who invented for themselves an intellectual pedigree that “harked back to an imaginary nineteenth-century laissez-faire liberalism.”

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