by Dr. Jimmy T. (Gunny) LaBaume
We are told that the genius of America is the absence of ideology and our “pragmatism” (a polite way of saying “grabbing money and jobs from the hapless taxpayer”). But, Americans have not always been pragmatic and non-ideological. Indeed, the American Revolution was ideological and resulted from the creed of libertarianism. The revolutionaries saw no conflict between moral and political rights and economic freedom. They viewed civil and moral liberty, political independence, and the freedom to trade and produce as simply being parts of a single unblemished system. This was what Adam Smith called the “obvious and simple system of natural liberty.”
The libertarian creed came out of the “classical liberal” movements of the 17th and 18th centuries. This movement ushered in the Industrial Revolution by freeing industry from restrictions of the State and government-supported guilds. It was, in effect, a “revolution” against the Old Order—the ancien régime— that had imposed an absolute State, with a king ruling by divine right, on top of feudal land monopolies and urban guilds. Monopoly privileges to produce and sell were conferred by governments. It was an alliance of the State with privileged merchants (called “mercantilism”) and a class of ruling feudal landlords
The object of the classical liberals was economic and individual liberty. Taxes were to be reduced, regulations eliminated, markets set free and control lifted from land, labor and capital. Personal freedom and civil liberty were to be guaranteed and religion set free from State interference. Foreign policy was to be one of peace and free trade and, since military power always seeks expansion, a standing army was to be replaced by voluntary local militia. In short, the State was to be extremely small with a negligible budget.
In the late 17th century, John Locke set forth the natural rights of each individual to his person and property and that the sole purpose of government was to defend such rights. In fact, Locke was the inspiration for the words in the Declaration of Independence, “to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it…”
Then in the 18th century, radical Lockeans applied Locke’s basic philosophy to the concrete problems of the government in an impassioned manner. The most important of these writings was “Cato’s Letters”—a series of newspaper articles published in London in the early 1720s. According to Cato, “human history is a record of irrepressible conflict between Power and Liberty, with Power (government) always standing ready to increase its scope by invading people’s rights.” Thus, Cato declared, government must be kept small and watched with eternal vigilance and hostility. The American colonists eagerly accepted such warnings.
Americans attempted to constrain their new governments with limits spelled out in constitutions and bills of rights. The remnants of feudalism were eliminated by the abolition of the feudal privileges of entail (whereby a dead ancestor can entail landed estates in his family forever) and primogeniture (whereby property can be inherited only by the oldest son).
The new government under the Articles of Confederation was not permitted to levy any taxes. Furthermore any extension of government powers required unanimous consent. And, first and foremost, all war-making power was restrained and held as suspect because the founders understood that war had long been the main method for aggrandizing State power. Thus classical liberal thought reached its most radical development in America.
The rulers in America were British colonial officials and a few privileged merchants. These were swept aside by the Revolution with relative ease. As a consequence, classical liberalism had more popular support and met less entrenched resistance in America than it did at home in England. In addition, due to geographic isolation, the American rebels did not need to worry about the armies of neighboring, counterrevolutionary governments.
After the Revolution
However, from the beginning there was a powerful elite consisting of large merchants and planters who wanted to keep British “mercantilism.” These groups wanted a strong central (even imperial) government. These were the people who later formed the Federalist party.
The libertarian impetus continued during the 19 th century. The Jeffersonian and Jacksonian movements explicitly strived for the virtual elimination of government. But, the Jeffersonian drive toward virtually no government foundered on concessions to the Federalists and then with the unconstitutional purchase of Louisiana. But most of all, it foundered with the imperialist drive toward war with Britain which led to a one-party system which established virtually the entire statist Federalist program.
While Jefferson brooded he inspired Martin Van Buren and Thomas Hart Benton to found the new Democratic Party with the purpose of taking back America from Federalism. The two latched onto Andrew Jackson.
The plan was for eight years of Jackson, followed by eight years of Van Buren, then eight years of Benton. Jackson got his eight years during which he managed to destroy the central bank and retire the public debt. Although Van Buren only got four, he still managed to separate the federal government from the banking system. But, in 1844 he was defeated by demagogic campaign tactics that put the Whig, General William Henry Harrison, into office. The Democratic party was split on the issue of the expansion of slavery into the new territories and Van Buren’s re-nomination foundered on that split.
In addition, the War for Southern Independence was used by what was essentially a one-party Republican regime to drive through its statist (formerly Whig) program of “national governmental power, protective tariffs, subsidies to big business, inflationary paper money, federal government control over banking, large-scale internal improvements, high excise taxes, conscription and an income tax.
And this is how America came to have a libertarian tradition and ultimately lost it. However, a remnant of this tradition still remains rendering America as far more fertile soil for a resurgence of libertarianism than any other country. (Editor’s Note: We are liberty’s last hope.)
Resistance to Liberty
The modern libertarian movement is rooted in the legacy of the American Revolution. But what happened? Why do we need a new movement to reclaim America?
First, it is important to remember that classical liberalism was a profound threat to the political and economic interests of the ruling classes. There had been three revolutions (the English, American and French). But, the victories in Europe were only partial. The ruling classes managed to maintain their landed monopolies, religious establishments, and warlike foreign policies. They also managed to keep suffrage restricted to the wealthy elite. However, the economic and political interests of the mass clearly lay in individual liberty.
By the early 19 th century laissez-faire forces were known as “liberals” and conservatism had began as an attempt to undo the classical liberal spirit of the revolutions. By the end of the century, conservatives realized that their cause was doomed if they persisted in calling for repeal of the Industrial Revolution (and its rise in the living standards for the masses) and their opposition to the widening of suffrage.
So, the Old Order shifted gears and jettisoned their opposition to industrialism and democratic suffrage. The new conservatives substituted duplicity and demagogy for their old contempt of the masses. They snowed the masses with the line, “We, too, favor industrialism and a higher standard of living. But, to accomplish that, we must regulate industry, substitute organized cooperation for competition and, above all, we must substitute war, protectionism, empire and military prowess for peace and free trade.” Big government, rather than minimal government, was required for all of these changes.
Out of this the New Right fashioned a collectivism based on “war, militarism, protectionism, and the compulsory cartelization of business and industry.” This consisted of a huge network of controls, regulations, subsidies, and privileges, which forged a partnership between Big Government and favored elements in big business. But, something had to be done about the “proletariat.”
Until the late 19th century, workers favored laissez-faire and the free competitive market. But the New conservatives weakened their position by shedding crocodile tears about the “condition of the industrial labor force.” Then finally, in the early 20th century, the new conservative “corporate state” incorporated trade unions as junior partners to big government and big businesses in the new statist decision-making system.
This New Order was really nothing but a modernized, dressed-up version of the ancien régime. Thus, the ruling elites had to perform a gigantic con job on the deluded public (a con job that continues to this day). The existence of every government depends on the consent of the public. But, a democratic government must engineer such consent every day. And to do so, the masses “had to be convinced that tyranny was better than liberty, that a cartelized and privileged industrial feudalism was better for the consumers than a freely competitive market, that a cartelized monopoly was to be imposed in the name of antimonopoly, and that war and military aggrandizement for the benefit of the ruling elites was really in the interests of the conscripted, taxed, and often slaughtered public. How was this to be done? “
The intellectual classes in all societies determine public opinion. Despots and ruling elites have always had much greater need for the services of intellectuals than have peaceful citizens in a free society. Up until modern times these services were usually provided by churchmen. The Church informed its deluded charges that the king ruled by divine right and, in return, the king funneled tax revenues into the coffers of the Church. (Hence, the importance of separating Church and State.)
But, for modern times, the new conservatives had to forge a new alliance between intellectual and State—one with secular intellectuals rather than divines. This re-forging came in two parts. In the early 19 th century stress was placed on the virtue of tradition and irrational symbols in order to gull the public into continuing to go along with privileged hierarchical rule and the worship of the nation-state and its war-making machine. Then, in the latter part of the century, “science” was adopted. This was a “science.” that required rule of the economy and society by “experts.” In exchange for spreading the message, the new intellectuals were rewarded with jobs and prestige as apologists, planners and regulators.
To insure their dominance of over public opinion, Western governments seized control of education through public schools and compulsory attendance laws. Furthermore, this insured that teachers and professional educators would be one of the biggest vested interests in expanding statism.
One of the ways these intellectuals did their work was to change the meaning of old labels. For example, laissez-faire libertarians had long been known as “liberals” or “progressives.” But the new statist intellectuals appropriated the terms for themselves and, they were also able to appropriate the concept of “reason” as well. They also tarred their opponents with the charge of being old-fashioned—they even pinned the name “conservative” on the classical liberals.
The growth of socialism was another reason for the decay of classical liberalism. Socialism is a confused, hybrid movement, influenced by both liberalism and conservatism. From the classical liberals it took acceptance of industrialism, glorification of “science” and “reason,” and a rhetorical devotion to peace, individual freedom, and a rising standard of living. Further, it topped the classical liberal adherence to democracy by calling for an “expanded democracy” where “the people” would run the economy.
From the conservatives it took a devotion to coercion and the statist means for achieving these liberal goals. It would install rule by scientists and workers of everyone else—or more accurately rule by politicians, bureaucrats and technocrats in their name. The goal was equality or uniformity of results. It would create a new privileged elite in the name of achieving this impossible equality.
It tried to achieve the liberal goals (which can only be achieved through liberty) by using the old conservative means of statism, collectivism, and hierarchical privilege. The ultimate outcome was, of course, unprecedented despotism, starvation, and grinding poverty.
The worst thing about socialism was that it outflanked the classical liberals “on the Left.” It allowed the liberals to be put falsely into a confused middle-of-the-road position with socialism and conservatism as the polar opposites. But this happened only because classical liberals had allowed themselves to decay from within.
Decay From Within
The classical liberals lost their fervor for change and for purity of principle. They became content with just safeguarding their victories and therefore turned themselves into “conservatives” in the sense of being content with the status quo.
The degeneration of liberalism was not only one of strategy but one of principle as well. Liberals became content to leave control of war-making, education, money and banking, roads, etc.—e.g. dominion over all the crucial levers of power—in the hands of the State.
Any and all aspects of statism should be abolished as quickly as possible. While unlikely in practice, this is the only possible moral position. To prefer a gradual whittling away over immediate abolition of an evil and coercive institution is to ratify and sanction that very evil. In the case of liberals, for example, their devotion to “abolitionism” waned as their acceptance of “gradualism” waxed.
There were two important changes in the philosophy of classical liberalism.
First, was the abandonment of the philosophy of natural rights and its replacement by technocratic utilitarianism. In turn there were two consequences to this change. First, it eliminated the idea of “consistency of the principle.” Second, it is rare to find a utilitarian who is on fire about immediate abolition of evil and coercion. The classical liberal utilitarians abandoned radicalism and became gradualist reformers. They put themselves into the position of advisers and efficiency experts to the State and, in doing so; wound up as the image of the thing they had fought. To this day so-called “free-market” economics appeals to gradualism, scorns ethics, justice, and consistent principle and stands ready and willing to abandon free-market principles “at the drop of a cost-benefit hat.” These economists are nothing but apologists for the status quo.
The second change in classical liberal philosophy was the adoption of the doctrine of social evolution. As logical as the theory may seem, the crippling aspect was the idea that species only change very, very slowly. This, in turn, led the social Darwinist liberal to abandon the idea of revolution or radical change.
Utilitarianism, supported by social Darwinism, was the primary active cause of decay in classical liberalism. However, the most important reason for its demise was the abandonment of its principles against war, empire, and militarism and its joining of conservatives and right-wing socialists in the imperialism and collectivism of World War I.
The Democratic party had been the party of personal and economic liberty. It opposed Prohibition, Sunday blue laws, and compulsory education. It was a champion of free trade, hard money, and minimum government. It was the party of peace, anti-militarism, and anti-imperialism. All these were abandoned by Woodrow Wilson with an intervention and war that would usher in death and devastation, wars and despotisms, a new corporatist statism, a welfare-warfare State run by an alliance of Big Government, big business, unions, and intellectuals for the next century.
In recent years, there has been a resurgence of libertarian thought in the united States. Why? Rothbard postpones answering that question until the end of the book. First, he examines the libertarian creed and how it can be used to solve today’s leading problems.