2. Classical Liberalism

Mises’ book, Liberalism, states that liberalism sufficed to change the face of the earth. The term liberal has since been hijacked by social democrats, so they don’t have to use the tainted word socialism. Raico defines liberalism to be civil society, minus the state, running itself within the bounds of private property. After the end of the Middle Ages, the Renaissance created the late scholastics – the School of Salamanca. Their legitimate theory of value had nothing to do with labor as it did in England. They saw that buyer and seller are each better off by an exchange, not equal. The Dutch produced a fairly free society, but not a political philosophy. The French felt the period 1846-1940 to be almost a hundred years of true laissez-faire policy. During the English Civil War, the Levellers began the history of liberalism by their demands to free John Lilburne from prison. The Leveller cause was effectively crushed in 1649. Their legacy was abstract natural rights. Rothbard called them the world’s first self-consciously libertarian mass movement. John Locke is a fountainhead of crucial ideas about society being self-ruled with property being the fundamental right to life, liberty, and estates. Government was meant only to protect that right. Such an uncoerced vision animated Jeffersonians. The laissez-faire society worked well. Adam Smith, David Hume, and Adam Ferguson were chief thinkers of the Scottish Enlightenment. They held that the fundamental importance of human reason should be combined with a rejection of unreasonable authority. Lecture 2 of 10 from Ralph Raico's History: The Struggle for Liberty. Transcript [This transcript is edited for clarity and readability. The Q and A at the end of the lecture has been omitted. Annotations have been added by Ryan McMaken.] This lecture will concern classical liberalism itself. Now, I think that you’ve been given—free of charge in the usual generous tradition of the Mises Institute—or somewhere along the line, gotten hold of a copy of Mises’ book called Liberalism. In the original German it’s called just Liberalism, and in the current English version, Liberalism in the Classical Tradition.The English version of Liberalism was translated by Raico himself and in an aside Raico jokes that the “rather brilliant” English translation has been “compared by many to Chapman’s Homer.”  At the very beginning of the book, Mises talks about liberalism and says, The philosophers, sociologists, and economists of the eighteenth and early part of the nineteenth century formulated a political program that served as a guide to social policy first in England and the United States, then on the European continent, and finally in the other parts of the inhabited world as well. Nowhere was this program ever completely carried out. Even in England, which had been called the homeland of liberalism…Ludwig von Mises, Liberalism: In the Classical Tradition (Irvington-on-Hudson, NY: The Foundation for Economic Education, 1985) p. 1.  Mises says Liberalism was never permitted to come to full fruition: “Nevertheless, brief and all too limited as the supremacy of liberal ideas was, it sufficed to change the face of the earth.”Ibid. And it goes on in that vein. Well, as I say, he uses the term “liberalism” which for a long time was the word associated with this program that he’s developing. But it may seem strange to you to associate liberalism with basically laissez-faire and the other elements of the liberal program, considering that liberalism—not only in the United States, but now in other countries as well—has come to mean something quite different. There’s a rather well-known story how, in English-speaking countries first of all and then elsewhere, around the turn of the century—that is, the turn of the nineteenth to the twentieth century—the term liberal was hijacked by people who were essentially social democrats. What Is Liberalism, and Why Do Social Democrats Call Themselves Liberals? Joseph Schumpeter is an economist from Austria—but not what we would call an Austrian economist—and a very famous social philosopher and well worth consulting. He wrote a very big book that I think is still in print from Oxford called History of Economic Analysis. In a famous passage there, he ironically states that it was a kind of compliment, if an unintended one, when the enemies of the system of free enterprise confiscated the name liberal for what was basically the opposite of what liberalism had stood for from the start.The famous passage reads: “[T] the term has acquired a different—in fact almost the opposite—meaning since about 1900 and especially since about 1930: as a supreme, if unintended, compliment, the enemies of the system of private enterprise have thought it wise to appropriate its label.” See Joseph A