Feature 02.06.2023 10 minutes

Which Way, Classical Liberals?

Changes Ahead In London

Classical liberalism’s future depends on reinvigorating the moral foundations for its core ideas.

In 1972, Irving Kristol was invited by Milton Friedman to address the Mont Pelerin Society, an organization founded by F.A. Hayek in 1947 to rescue classical liberalism from the political and economic margins to which it had been consigned. Kristol’s six pages of remarks were entitled “Socialism, Capitalism, Nihilism.” I have been informed by two people who knew him, however, that Kristol initially considered striding to the podium and saying seven words—“Man does not live by bread alone”—then departing the stage.

I was reminded of this tale when reading Inez Stepman’s essay, “Two Cheers for Milton Friedman.” Stepman admires Friedman’s courage in opposing collectivist planning when it was unfashionable to do so and regards many of Friedman’s ideas like school choice as pertinent for our time. She also affirms that markets are the best way known to humanity for generating wealth and has no illusions about the problems of state economic interventionism.

Nonetheless, Stepman does not think that Friedman’s faith in markets suffices for dealing with the wokeism, gender ideology, identity politics, CRT, ESG, DEI, and so forth presently sweeping their way through American culture. Combatting such problems may require, she believes, a “vision of government too energetic to fit comfortably into the vision described in Capitalism and Freedom,” though she does not specify the form such energy might take.

More fundamentally, Stepman wonders whether, quoting Kristol, the “self” that is “realized under the conditions of liberal capitalism is a self that despises liberal capitalism, and uses its liberty to subvert and abolish a free society?” She then argues that “the free market alone cannot muster any defense against the self-destructive and nihilistic impulses that threaten, not just the capitalist system, but the entirety of the American project.” To paraphrase Kristol: free marketers can easily refute Marxist economics, but capitalists qua capitalists have nothing to say when confronted by Friedrich Nietzsche and his disciples on the Left and Right.

I’m not sure that the relationship between the hedonistic self and capitalism is as clear as Kristol supposed. Practical and philosophical expressions of hedonism, nihilism, and skepticism can be traced as far back as those Greek philosophers who pitted themselves against Socrates, Plato, and Aristotle. Indeed, for much of its history, skeptics and sophists dominated what had been Plato’s Academy in Athens. In other words, the self that perturbed Kristol has emerged and flourished even in the context of decidedly non-capitalist arrangements.

But Kristol is on firmer ground in his broader argument about the normative foundations of markets—a topic to which he believed his audience had either devoted insufficient thought or produced unpersuasive answers.

Some classical liberals maintain, for example, that a concern for liberty is the primary normative end around which the case for markets revolves. But liberty in itself tells us nothing about what is right and wrong, good and evil—about the ends of different human choices. Following Aristotle, Aquinas, Edmund Burke, and Lord Acton, I would argue that liberty from unjust coercion ultimately matters, because it is the sine qua non for the exercise of free choice through which we become virtuous or vice-ridden, good or evil.

This presupposes our ability to be certain that, for instance, pursuing the truth is good in itself, and falsehood is never a worthy object of our free choices. In short, the liberty from unreasonable coercion that classical liberalism emphasizes is important because as it enables us to 1) pursue those goods that we know make us distinctly human and 2) be held accountable for how we do so. Liberty is thus something that opens our way to higher goods, but not the ultimate good in itself.

A similar observation can be made about the rule of law. Many classical liberals argue that rule of law’s importance lies in the fact that it protects us from arbitrary behavior, thereby promoting liberty and the possibilities that our freedom opens for us. Rule of law certainly realizes these ends. But rule of law itself is more fundamentally grounded on the recognition that everyone—especially state officials—should act in accordance with the demands of reason rather than the urgings of sentiment. From this standpoint, we see that while freedom is protected and enhanced through the rule of law, liberty alone cannot serve as its primary foundation.

Sincerely, Me

You won’t find this type of thinking expressed in Milton Friedman’s writings. That is mainly because his area was economics, not ethics. But to the extent that Friedman did engage such matters, he appeared to believe that markets, left to themselves, will generally lead to people behaving well. As the historian of ideas Angus Burgin observes in his book The Great Persuasion, markets for Friedman “remained a generator of self-sufficient virtue rather than materialistic vice.” Herein, Stepman points out, was Kristol’s core critique of Friedman’s thought. Friedman believed, according to Kristol, that “one must not interfere with dynamics of ‘self-realization’ in a free society.”

It’s not hard to find such arguments expressed in some free market and classically liberal circles. But if self-realization means expressive individualism—as it usually does—then we have indeed entered into the realm of moral subjectivism. It is not clear that free societies can be sustained on that foundation.

The sources of expressive individualism range from the eighteenth-century Enlightenment philosopher Jean-Jacques Rousseau to Friedrich Nietzsche, the psychologist Sigmund Freud, and the French feminist Simone de Beauvoir. But whatever the source, a key tenet of expressive individualism is that what matters in life is “authenticity.” For people to be authentic, they must be free to pursue and satisfy their deepest desires, for our essence as individuals concerns what we desire. That is how one realizes one’s true self.

From an expressive individualism perspective, the type of morality articulated by classical philosophers such as Cicero, medieval scholars like Aquinas and Maimonides, or Scottish Enlightenment thinkers like Thomas Reid unjustly inhibits individuals’ abilities to live out their desires. Why? Because such a morality posits that good and evil is not a matter of subjective opinion and that ethics cannot be reduced to desire-fulfillment. Rectifying that situation, the argument goes, means that society should make as much space as possible for individuals to pursue their desires, and affirm individuals for doing so.

In this context, the primary standard by which one assesses the rightness or wrongness of an individual’s free choice is not whether it is a virtuous decision. Questions of virtue and vice disappear entirely from the horizons of moral reasoning. What matters is being genuine or sincere. “Be your true self!” “Live authentically!” That is the essence of the gospel of self-realization.

In such a world, one can no longer say that, for instance, prostitution is an inherently degrading activity. What counts is, first, whether you freely chose to be a prostitute and, second, if you are living out your authentic self through making such a choice. This isn’t an argument about whether prostitution should be legal or illegal. It’s an argument about whether some things are intrinsically wrong in themselves and thus ought never to be freely chosen by individuals, whatever the law permits.

The Road Not Taken

Classical liberals who embrace self-expression and liberationist outlooks live in the same moral universe as those on the contemporary Left who adhere to the same vision of the ultimate significance of our choices. One major problem with this perspective is that it generates a type of relativism that is powerless in the face of will-to-power types. If sincerity is the ultimate criterion for assessing the rightness of a person’s stance, who am I to judge the choices of, say, the sincere Communist seeking to take away our property or the true believer woke activist who uses government schools to indoctrinate our children in CRT or gender ideology? More broadly, how can sincerity or authenticity possibly serve as a stable foundation for things like constitutionalism or the rule of law, the very workings of which depend upon subordinating desires and sentiment to the requirements of practical reason?

Such ideas are also out of step with older traditions of liberty, many of which embodied views decidedly at odds with contemporary conflations of freedom with self-expressions of authenticity and sincerity. You will struggle, for instance, to find any of the American Founders articulating authenticity and sincerity arguments. All of them, albeit in different ways, grounded their arguments for freedom and limited government in things that went way beyond feelings and desires.

Closer to our own time, from the 1930s until the late-1960s, many classical liberals and market-orientated economists found themselves writing as much about the non-economic preconditions needed to sustain societies characterized by markets, rule of law, vibrant civil societies, and limited government as they did about economic questions. Such topics increasingly preoccupied many of those market liberals who came together at gatherings like the Colloque Walter Lippmann in Paris in 1938 or the first Mont Pelerin Society meeting in 1947. In some instances, this arose from their experience of living in societies in which many of the institutions and expectations that protect liberty had been severely compromised or even destroyed. They discovered that when societies abandon belief in the virtues or deny moral absolutes which prohibit certain acts, the consequences for freedom are calamitous.

Similar concerns informed their critique of Keynesian economic policies and the rise of welfare states after World War II. Such policies, they believed, were not only economically problematic; they also severed some of the crucial links between liberty and personal responsibility, the effects of which we see today in the large numbers of young American men incentivized by the state not to work. When the German market economist Wilhelm Röpke listed Keynes alongside Marx and Rousseau as among the “great ruiners” of history, this is partly what he had in mind. Some market liberals subsequently concluded that free societies needed to be grounded on a type of deontological ethics which embodies strong commitments to moral absolutes and rigorously contests consequentialist morality.

This thinking influenced what came to be called fusionism in the United States. But it eventually experienced an eclipse in parts of the classical liberal world from the later-1960s onwards, primarily because of two factors.

The first was the triumph of the social movements of the 1960s which emphasized the priority of self-expression over what they regarded as conventional morality. For these movements, any talk of virtue, categorical imperatives, or natural law and natural rights articulated by (for want of a better expression) “conservative classical liberals” was at best quaint and more likely repressive. The effort to ground markets and limited government upon moral norms with deep roots in Western culture thus conflicted sharply with the liberationist mindset that came to dominate the Left and most of the intellectual class.

A second factor was a drift among many classical liberals away from attention to those questions that was a major focus of their interwar and postwar forebears’ attention. The story of this shift is a central theme of Burgin’s book but has also been underscored by historians of twentieth-century liberalism like Kenneth Dyson. The latter illustrates how things like the growing predominance of the efficient markets hypothesis among free marketers and a single-minded focus upon public policy (both of which were central to Friedman’s mode of thought) tended to marginalize questions of moral culture and its relationship to liberty to the peripheries of some classical liberal circles.

This excursion into the past helps us grasp the character of some choices now facing anyone in America anxious to defend free markets and the free society more generally. Obviously, it will be key for such people to address the pressures for more economic interventionism coming from both Left and Right. The negative economic and social effects of such policies are well-documented. Dissemination of the knowledge of such effects also matters if Americans want to think—rather than emote—about how to address the very real problems associated with woke capitalism to which Stepman directs attention.

But a different dilemma facing those who believe in market economies and free societies is where they chose to root their normative case for such things. That was Kristol’s challenge to Friedman and many market economists of his time. The same question arises from Stepman’s reflections in ours.

Put simply, the choice is this: Will those whom Alexis de Tocqueville called “friends of liberty” line up on the self-expression and liberationist side of the equation, the philosophical schools and social movements that support it, and the policy agendas associated with them? Or will they seek to ground the case for freedom upon those parts of the Western tradition that regard virtue and vice as real things, insist that morality cannot be reduced to subjective desires, and maintain that free societies depend upon people recognizing that certain actions should never be chosen?

Granted, such a choice doesn’t always translate into specific policy differences among those who believe in free societies. But what is at stake are very different conceptions of human nature, reason’s capacities, what constitutes the good life, and the ends of liberty and civilization itself. Moreover, whatever choice is made by classical liberals will have consequences for their future relationships with groups ranging from traditionalist conservatives to left-liberal progressives. That process will also be played out in highly dysfunctional settings as varied as colleges overrun by woke ideologues, who see racism and oppression everywhere, to media outfits where subtlety and nuance count for little and ego trumps everything else.

I know where I stand. Others will have to decide where they do.

The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.

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