The history of liberty and prosperity is inseparable from the practice of free enterprise and respect for the rule of law. Both are products of the spirit of classical liberalism. But a correct understanding of free enterprise, the rule of law, and liberalism (rightly understood) is greatly lacking in the world today.
Historically, liberalism is the political philosophy of individual liberty. It proclaims and insists that the individual is to be free to think, speak, and write as he wishes; to believe and worship as he wishes; and to peacefully live his life as he wishes. Another way of saying this is to quote from Lord Acton’s definition: “By liberty I mean the assurance that every man shall be protected in doing what he believes his duty against the influence of authority and custom, and opinion.” For this reason, he declared that the securing of liberty “is the highest political end.”
Lord Acton did not say, you will notice, that liberty is the highest end, but rather the highest political end. In the wider context of a man’s life, political and economic liberty are means to other ends. What ends? Those that give meaning and purpose to man’s sojourn on earth. Classical liberalism does not deny that there may be or is one ultimate Truth, or one moral “right,” or one correct conception of “the good” and “the beautiful.”
Personal Liberty and Human Humility
What classical liberalism has argued is that even the wisest and best men are mere mortals. They lack God’s omniscience, omnipresence, and omnipotence. Mortal men look at and understand the world within the confines of their own imperfect knowledge, from the perspective of their own narrow corner of existence, and with extremely limited mental and physical powers compared to those possessed by the Almighty.
As a result, since no man may claim access to an understanding of man and his world equal to God’s, no man can claim a right to deny any other person the freedom to follow his conscience in finding answers to these profound and ultimate questions. They are so crucial to man’s very being as a spiritual and moral person that they must be removed from the arena of politics and political control. They must be left to the private and personal confines of each man and his conscience.
The reason for this should be evident. Political control is fundamentally the power of physical force. It is the right to demand obedience from the citizenry either to do or not do something under the threat of the use of coercion. Political power can be used to command people regarding how they may live, how or what they may read or write, and how they may act. It is one man bending the will of another to his wishes under the threat of physical harm.
Some men have faced such threats or uses of force and not given up their faith or beliefs or ideas. But classical liberalism argues that no man should be confronted with torture or death because of where his conscience leads him. Furthermore, once political power is used to dictate what men may believe and how they may peacefully act, society is faced with an endless struggle as those with conflicting faiths, beliefs, and ideas battle for control of the reins of political authority. It becomes a life-and-death confrontation to determine whose conception of the good, the beautiful, the right, and the just shall be imposed on all. In such a battle over truth and virtue man’s world becomes an earthly hell of human and material destruction.
But how was the political authority—the government—to be prevented from overstepping its boundaries and encroaching on such individual rights as freedom of conscience and other elements of personal liberty? How were men with political power to be restrained from abridging other men’s rights? All law is man-made, regardless of the source of the inspiration for the law. It is men who articulate and agree on the law, who codify it, and who establish and enforce the procedures and mechanisms for its respect and enforcement. Man, therefore, can never be separated from law and the legal process.
The Rule of Law and Public Accountability
A way to assure that society lives under a rule of law and not a rule of men is to insist that even those who implement and enforce the law be held accountable under certain clearly defined procedures in their dealings with the citizenry. Or as the English legal philosopher Albert Venn Dicey expressed it in the late nineteenth century: “With us every official, from the Prime Minister down to a constable or a collector of taxes, is under the same responsibility for every act done without legal justification as any other citizen.”
An essential element of the rule of law is that it specifies what government may not do to the citizenry. For example, neither the government nor its various legal agents may hold an individual without bringing charges against him before a judge within a specified period of time. The writ of habeas corpus assures that no man is physically seized and held for an indefinite duration without charges being brought against him in a court of law. If it is not demonstrated to the court that a breach of the law has occurred and that there is sufficient evidence for holding the accused, he must be let go. Or as Dicey explained it, “Liberty is not secure unless the law, in addition to punishing every kind of interference with a man’s lawful freedom, provides adequate security that everyone who, without legal justification, is placed in confinement shall be able to get free.”
A distinctive quality and merit of the rule of law is that it attempts, if not completely eliminate, to reduce as much as possible all arbitrary power in the hands of those who administer the political regime and the legal order. Friedrich Hayek, for example, has emphasized that the rule of law refers to laws of an abstract and general nature equally applied to all men independently of any particular circumstance.
Freedom and End-Independent Rules
Since this may seem rather nebulous, it can be better understood through the expression end-independent rules. We can think of this, for example, in terms of the rules of road. These rules specify whether cars are to be driven on the right or left side of the road; that all cars must stop and wait while the traffic light is red, and may go when the light turns green; that posted speed limits must be followed; and that if a police car or an ambulance is coming down the road, all other drivers are to pull over and stop until it has passed.
These rules of the road are general and uniform, in that they apply equally to all drivers and do not privilege or burden anyone. Furthermore, as long as every driver follows these rules, he is free to travel on the roads whenever he desires, for whatever purpose he may have in mind. Nor can any driver be pulled over by police patrolling the roads and highways for a traffic violation unless there is an infraction of these general and uniform rules of the road.
The general and abstract rules are “end-independent” because they do not imply or require any particular outcome or result from the actions and interactions of the citizenry, as long as they follow the rules. Thus, whether people follow the rules of the road to get to work, or to visit the family dentist, or simply to get out of the house for a while and just drive around is immaterial. The very nature of a free society under the rule of law is that the society, itself, has no purpose, or “manifest destiny” or “historical role” that it is called upon to play. A free society has no plans or purposes separate from the particular plans and purposes of its individual citizens.
Private Property and Individual Freedom
Classical liberalism has always emphasized the inseparable connection between individual liberty and the right to private property. Partly it has been based on the idea of justice: that which a man produces honestly and peacefully through his own efforts, or which he acquires through voluntary acts of exchange with others, should be considered rightfully his. The case for private property has also been made on the basis of utilitarian efficiency: when men know that the rewards from their work belong to them, they have the motives and the incentives to apply their industry in productive and creative ways.
But in addition, the classical liberal has defended the institution of private property because it provides the individual with a degree of autonomy from potentially abusive political power. Private property gives the individual an arena, or domain, in which he has the ability to shape and design his own life, free from the control of political force.
As a private owner of some of the means of production—even if it were only his own labor—he can search out the employment for himself that he considers most attractive and profitable, given his own personal purposes and plans. A community of individuals, each of whom owns varieties of property that he is at liberty to apply and utilize in various ways, provides a network of potential relationships of production, trade, and association among men outside and independent of the orbit and control of government. Private property gives reality to the ideal of individual freedom.
The networks of voluntary, peaceful, and private association form the elements of what has been called “civil society.” They are the “intermediary institutions” that stand between the power of the state and the single, isolated individual; they supply support and give assistance to the individual in the economic, social, cultural, and spiritual needs of life. But they also offer protection and strength to the lone individual who otherwise would face the power of government on his own.
It is not surprising, therefore, that historically the more the power and intrusive reach of the government extends into the affairs of the citizenry, the more the state attempts in various ways to undermine and replace these voluntary associative institutions of civil society with its own bureaucratic structures. The weakening or elimination of the intermediary institutions of civil society leaves the individual increasingly dependent on the political caprice and largess of those who manage the agencies of government.
The Rule of Law and Free Market Economy
Where the rule of law is practiced and respected, the creative energies of man are set free. Each man is at liberty to utilize his own knowledge for his own purposes, but the very nature of the free-market economy is that he must apply that knowledge and his abilities in ways that serve the ends of others in society as well.
Since no man can attain all his goals, beyond some of the more primitive ones, through his own labor and the particular resources that may be in his ownership and control, he enters into exchange relationships with others in society. Men begin to specialize in producing things for which they have a comparative advantage over their neighbors to extend their trading opportunities with others in the growing community of men. The interdependency that a division of labor creates makes each member of society increasingly conscious that he must serve his fellow men in order to accomplish his own ends.
The individuals form connections, relationships, and associations with those around them as they discover opportunities for mutual improvement. Societal patterns take form; configurations of human interconnection take shape. But these patterns are not planned or designed; they emerge from the relationships that men choose to establish among themselves, with no conscious intention of generating much of the institutional order and structure that result from their market and social interactions.
The Benefits of the “Unplanned” Society
As Hayek pointed out, drawing on the insights of some of the political economists of the eighteenth century, the social order that develops in a free society is to a great extent “the results of human action, but not of human design.” And, as Hayek emphasized, it is all to the better that this is the case. Why? Because the emergent social patterns, order, and institutional arrangements incorporate the knowledge, ability, and creativity of the multitudes of human participants.
No single mind or group of minds—no matter how wise and well-intentioned—could ever know, understand, and appreciate all the fragmented knowledge, insight, and ability that exist as divided knowledge and creative potential in the minds of all the members of humanity as a whole. If all that man knows, that he can do or might imagine, is to be taken advantage of and brought into play for the general good of all mankind as well as primarily for himself, then every individual must be left free to use what he knows, and do what he wants to do, according to his own design.
What irks the social engineer when he looks around at the free society is that it appears to be a world without a “plan,” a jumble of social chaos. What the classical liberal sees is a world of multitudes of plans, each one being the plan given by an individual to his own life. There is order, pattern, and structure to this world, but an order, pattern, and structure generated out of the interconnections that individuals have formed among themselves through their voluntary market and social relationships.
The rule of law provides the societal rules of the road within which those individuals may freely move about as they see fit. The rules for the free society are fairly simple and straightforward: thou shall not kill; thou shall not steal; thou shall not bear false witness—no fraud or deception in relationships with others. Beyond these types of simple rules, each individual is free to follow his own conscience and interests in practically all other matters.
An Increasingly Lawless World
The world in which we live today is to a growing extent a lawless world, if by lawless we mean circumstances in which the rule of law is increasingly not respected or even understood. The law, in practice, is more and more end-dependent in its purpose and application. Some in society do not like the pattern of relative income shares that results from the interactions between employers and employees, so they use the power of the state to redistribute income and wealth according to their conception of material justice and fairness.
Others do not approve that some in society still like—indeed enjoy—smoking, especially while they are having a drink and after a meal, so they restrict or ban private establishments from setting their own rules on the basis of what they consider the preferences and desires of their customers, by totally prohibiting smoking in what they declare to be “public” places.
Still others believe that the citizenry cannot be trusted to make sufficiently wise choices concerning their own retirement planning or their medical-insurance coverage, so they enact laws and regulations that impose rules that will guarantee the creation of the social engineer’s preferred patterns for such social behavior on the part of those whose choices and decisions he considers less enlightened than his own.
Unfounded Fears of Global Trade
Another trend in this direction is the growing fear that the new global economy threatens the livelihood and material standards of living of the American people. A chorus of special-interest groups and politicians are warning that investment opportunities and many relatively well-paying jobs are being lost to other countries around the world. They conjure up nightmare visions in which America buys everything from the rest of the world, where labor is cheaper and production costs are much lower, and that America is left with nothing to manufacture at home. International trade and investment will leave the United States an economic wasteland of poverty and dependency on cheap products made in China and outsourced labor services supplied by India.
What we are hearing is the twenty-first century’s version of the early nineteenth-century Luddites, who at that time raised the alarm that the Industrial Revolution would soon result in unemployment for the vast majority as the emerging machine age made human labor redundant. The industrial machine age did indeed result in the replacement of a wide variety of human labor. But this freed tens of millions of hands to then do new and different work with the assistance of more and better tools, so that the quality, variety, and quantities of goods and services available to all were expanded beyond anything that could be imagined at the time. Our modern standard of living began with the Industrial Revolution and the machine age that it introduced.
After thousands of years of appalling poverty, more and more parts of the world are beginning to join and catch up to the West in terms of standards and quality of living. We should be hailing this as one of man’s greatest hours in his long existence on this earth. This great transformation will, of course, bring changes, even dramatic changes, in the structure and patterns of the global system of division of labor, as billions of people on other continents find new and more productive and profitable niches in the world’s network of trade, commerce, and industry.
America’s Role in the World
Inevitably, this will change, as well, America’s role and place in the global community of nations. Some industries and service sectors will diminish or be entirely replaced by producers and suppliers in other parts of the world. But trade is a two-way street. Imports are paid for with exports. In fact, the only reason a nation exports anything is to use those foreign sales as the means of paying for goods and services that can be purchased from abroad less expensively than if they were to be made at home.
Other industries and service sectors will emerge or expand in America, instead, as the citizens of the United States discover in the arena of international commerce and competition their better and more efficient niches to serve their neighbors at home and their fellow human beings around the world. When the next generation looks back at our present time, say, 25 years from now, they will be able to see the market processes by which these new patterns and trading relationships emerged and took shape. And they will see the improvements and gains that resulted from these processes in a way that we cannot yet imagine, any more than those who feared the machine age in the early decades of the nineteenth century could imagine the wondrous improvements in the human condition that were visible when one looked back at the beginning of the twentieth century.
We can never possess tomorrow’s knowledge today. We can never know what innovations, creative ideas, and useful improvements will be generated in the minds of free men in the years to come. That is why we must leave men and their minds free. The man of system, the social engineer, who sees only the apparent problems from these global changes, wants to plan America’s place in the new, emerging global economy. But to do so, he must confine and straitjacket all of us to what his mind sees as the possible, profitable, and desirable from his own narrow perspective with the knowledge he possesses in the present.
Soviet-style central planning may seem to have been cast into the dustbin of history (to use a Marxian phrase), but in fact the underlying idea is alive and well around the world, including the United States. Ideological elites and voting majorities not only do not recognize the individual rights of others to live their lives in ways of their own choosing, but they increasingly do not even show tolerance for any range of difference of opinion and action. They are determined to plan our lives and our futures—and indeed even our thoughts in this increasingly anti-liberal age.
If we are to regain the liberty that we have lost, and the fully and consistently applied rule of law that once was the guardian of our liberty and freedom of enterprise, we must reawaken in our fellow citizens an understanding of what liberty, the rule of law, and individual self-responsibility mean. But this cannot come about unless each of us is willing to participate in a process of self-education in which we become knowledgeable about liberty and its opposite. And we must be willing and courageous enough to consistently defend freedom, self-responsibility, and all of their implications.
None of us who care about liberty can avoid in good conscience our responsibility in this matter. I will close with the words of the Austrian economist Ludwig von Mises, who was one of the greatest voices for liberty in the twentieth century: “Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction . . . What is needed to stop the trend towards socialism and despotism is common sense and moral courage.”
This article was published by the Future of Freedom Foundation.
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