An Introduction to the Libertarian Tradition

In fact, that is untrue. Contemporary libertarianism is only the latest manifestation of an intellectual, cultural, and political phenomenon that is as old as modernity, if not older. It is the movement earlier described as liberalism. The great problem with contemporary usage of the term liberal, at least in the Anglo-​Saxon world, is that in the United States (and to a lesser extent in the British Commonwealth), it has come to refer to a body of ideas known in the rest of the world as social democracy or even simply as socialism. It is this shift in terminology that has led to the term libertarianism being used in English-​speaking countries for what elsewhere is still called liberalism. The important thing to realize, however, is that contemporary libertarianism, in the United States and elsewhere, is only the most recent chapter in a long story that, in the Anglo-​Saxon world, traces itself back to classical liberalism.

In what does libertarianism consist? This question is more difficult and profound than one might at first suppose. It is easy to think of political philosophies as concrete, reified entities handed on from one generation to another like the baton in a relay race. The reality is more complex. The major ideologies of modernity—the most prominent of which are liberalism, socialism, conservatism, and nationalism—can be thought of differently, and each can be analyzed in distinct ways. One approach might look at the various political movements that share similar goals or have some other form of affinity, which would involve focusing on the history of political parties, on pressure groups, and on political biography. A second approach might concentrate on the development of philosophical concepts and abstract ideas. A third approach might center on the exploration of distinctive vocabularies or languages in which public affairs are discussed and debated. Yet another might examine the texts central to the specific ideology and try both to unearth the original meaning or intention of the authors and to relate them to their social and political contexts. Finally, one can explore the distinctive cultural content and consciousness, or mentalité, associated with a particular political label.

The intention of all such approaches is to construct a cogent analysis that explains how ideas, movements, and philosophical systems that exist in the present have come about and how they have changed over time. These analyses trace the origins of ideas, movements, and philosophical systems and relate them to other historical phenomena that they have influenced and by which they have been shaped. The aim is to avoid the problem of anachronism, of reading the present into the past and so misunderstanding both past and present. We should be careful to avoid the Whig form of intellectual history, which interprets past ideas only in terms of their connection to the present. What emerges, with libertarianism as much as any other system of thought, is a narrative in which we discover neither a timeless, ahistorical object, nor a progressive discovery of truth, but the slow growth and unfolding of a particular way of thinking. We also discover, in the case of libertarianism/​liberalism, a pattern of elaboration in which these ideas flourished, followed by a period in which they were disregarded, only to revive again more recently.

The word liberalism refers to a distinctive set of beliefs and an associated political movement that appeared in the early 19th century. The first recorded occurrence of the term was in Spain in 1823 when the term liberales, or freedom lovers, was used to describe supporters of the constitutional regime established after the Napoleonic wars. (The liberals’ opponents, supporters of the absolute rule of the Bourbons, were known as the serviles, or servile ones.) In France, the economist Jean-​Baptiste Say and his followers began to use the adjective liberal to mean “in favor of freedom” following the Restoration of the Bourbons in 1815. In England, the word entered popular discourse at about the same time; one prominent early example was the name given to the journal The Liberal, published by Leigh Hunt and Lord Byron. The term liberal was well known in the 18th century, but was generally associated with its older meaning of “generous, open hearted” and so referred only to qualities of character. However, to adapt an expression of Byron’s, although the word had not yet taken on its later meaning, the thing it came to describe had already come into existence.

Beginning with the later 17th century, the West has witnessed the gradual appearance of a way of thinking about the world and human society that has provided a perspective radically different from the providential approach that preceded it. This change grew partly out of intense political conflict and generated a particular political program. All of those developments came together in the later 18th century and the early part of the 19th century. Conservatism was to appear at the same time, as a reaction to the emerging liberal worldview, whereas socialism, both the word and the phenomenon, appeared only later.

The origins of classical liberalism lie in the great turmoil and upheaval of the period 1549 to 1688. In that terrible century and a half, Europe was torn by a series of wars larger and more devastating than anything experienced since the 14th century. Two forces had worked to produce that state of affairs. The first was the clash of Reformation and Counter Reformation, which had a profoundly destabilizing effect on the politics of every European state. The second was the “military revolution,” a transformation in the nature and scope of war that took place in the first part of the 16th century, which made war vastly more expensive and damaging than it had ever been in the Middle Ages. The result of both developments was the rise of absolutism, both as it was explicated in the philosophies of authors such as Jean Bodin and Thomas Hobbes and in the practice of government. During this period, a weakening of representative institutions and the growth of central power occurred, not least in the area of taxation. This growth of centralized power did not happen without resistance. Throughout Europe, scholars defended the older ideas of mixed or limited government, and rebels took up arms to uphold established constitutional settlements against the innovations of reforming monarchs and their ministers. The military power of the new monarchies was such, however, that any opposition to the growing power of strong central governments was defeated throughout Europe, with two exceptions: the Dutch Republic and Britain. There, constitutional government survived and became the established form of government. In Britain, the climactic event was the Glorious Revolution of 1688–1689.

The clash of ideas in those years led to a change in the arguments used to defend limited government against absolutism. As a consequence, new ideas emerged and were vigorously articulated. These ideas were then advanced in new ways by some authors to yield surprising conclusions. Two issues had emerged as central by the later 17th century: (1) constitutional versus absolute government, and (2) religious toleration, or freedom of conscience, versus the confessional state. Originally, the case for constitutionalism and (relative) toleration had been made on the basis of tradition and conservative, or historical, arguments. Those arguments proved inadequate, and there was a gradual shift toward arguments based on autonomy and ideas of natural right. Such new formulations were expressed in England during the Civil War, between 1637 and 1653. A political faction known as the Levellers emerged in London and became a significant minority in the New Model Army. In a series of essays, manifestos, petitions, and other documents, the Levellers argued the case for a constitutional government with strictly limited powers and complete religious toleration. The argument used to support their program was partly historical, but rested in the main on the connected ideas of property in one’s own person (or self-​ownership) and natural rights. Individuals, they argued, were sovereign, and government derived

its powers by delegation from the individuals over whom it ruled—hence, a strict limitation on its powers. Those ideas did not disappear with the restoration of the monarchy in 1660, but remained alive—among exile circles on the Continent, particularly in the Netherlands, and in underground groups in London.

The unresolved political crisis in Britain came to a head in the later 1680s and led to the creation of a political settlement usually known by the name contemporaries gave it—the Glorious Revolution. This settlement involved the creation of a consensus between the two main political factions of the time, Whigs and Tories, so as to avoid the prospect of a second Civil War. The outcome was a limited constitutional government and a limited (and contested) degree of religious toleration, supported by a mixture of arguments, some of which incorporated both progressive and more conservative and retrospective elements. The more radical ideas that had appeared in the 1640s had not disappeared, however, and found expression in what was to become one of the key texts of liberal thought, Two Treatises of Government by John Locke. In that and other works, especially Letter on Toleration and On the Reasonableness of Christianity, Locke put forward an argument for a system of government withdrawn from most religious matters and dedicated to the protection of individual rights, or property—a term that then had a different and wider meaning (“Lives, Liberties, and Estates, which I call by the general Name, Property”) than it has today.

For about 100 years, Locke’s ideas remained somewhat marginal. They were taken up and developed by the so-​called true Whigs or Commonwealthmen, including such figures as John Trenchard and Thomas Gordon, who jointly published a series of essays under the pseudonym Cato, which were to have a great impact on the thinking of colonial America. The Commonwealthmen constructed a critique of the emerging modern state as it appeared under Walpole and the Old Corps Whigs. Walpole, the British prime minister from 1721 to 1742 and the first holder of that office, was responsible for several of the institutions of the modern state, particularly the cabinet government and modern public finance. His followers, the Old Corps Whigs, remained in office after he fell from power.

The arguments put forward by the Commonwealthmen also drew heavily on the ideas and language of civic humanism, or classical republicanism, which were a central medium of public argument at that time. Early American thought also drew on ideas circulating on the Continent. The author who played the greatest part in transmitting those ideas over the Atlantic was the Swiss writer Jean-​Jacques Burlamaqui, now almost forgotten, but at one time a best-​selling author.

In retrospect, the 18th century can be seen as the formative period of liberalism. Although a self-​conscious movement and associated set of ideas did not yet exist, a number of intellectual developments took place that, when combined with the ideas that had come out of the earlier period in Britain, produced a distinctive style of reasoning. That, in turn, led to the appearance of an intellectual and, increasingly, political movement for reform of existing institutions in a number of countries. Two important sets of ideas took shape that played a central part in the gradual emergence of the liberal worldview. The first centered on the critical rationalism that grew out of both the Newtonian revolution in science and the skeptical reaction against religious enthusiasm of the 17th century. This way of thinking found expression in deism, Unitarianism, and even atheism, all of which were commonly, although not invariably, associated with the earlier ideas of a limited contractual state and freedom of opinion and expression. When critical reason was applied to existing institutions and beliefs, many—among them slavery, an established church, and the existing systems of law and government— were subjected to radical criticism and analysis (in today’s language, deconstructed). The second was the gradual emergence of a new way of thinking about wealth, production, and exchange, which came to be called political economy. It involved a more abstract way of thinking about economic relations, rather than limiting itself to the more concrete and specific notions of trade and manufacture. It led to an emphasis on the beneficial effects of trade and commerce and stressed the connection between them and a civilized way of life. This view of commerce was in sharp contrast to the republican notion that luxury led to a corruption of the manly qualities and a degradation of manners. Political economy also produced, in the writings of Adam Smith and others, the belief that it was possible to expand wealth and output almost indefinitely, thus undermining the traditional view of economic life as a zero-​sum game in which the greed of the few was the cause of the poverty of the many.

As the 18th century progressed, the British constitution became an object of admiration and envy for the growing critical philosophical movement on the continent. The government and politics of Britain were increasingly used as a point of contrast with the defects of the systems found elsewhere in Europe. After Britain’s decisive victory over the French, ratified by the Peace of Paris in 1763, continental observers increasingly saw Britain as more advanced than her rivals. The irony, of course, was that the British constitution was more medieval (i.e., limited) than those on the Continent. By being more old-​fashioned, the British were more modern. Not everyone saw emulation of British models as the way forward, however. A rival strategy focused on the way an enlightened ruler could reform and modernize the state. By the late 18th century, European thinking had been overtaken by the ideal of improvement, not quite the same thing as the later belief in progress but a related notion, deriving from the belief that it was possible to both discover what was best for human beings and bring about beneficial change by conscious action.

The apparently stable world of the ancien régime was torn apart in the great crisis of what the historian R. R. Palmer has called the age of the democratic revolution. The central events in this process were the two contrasting revolutions of France and America. For some, the events of 1776–1783 were not a revolution at all, but the secession of 13 self-​governing colonies from the British Empire and their combining together to establish a common government with delegated powers. Others see the same events differently, as a Lockean revolution in which the political bonds of obligation were severed and a new contract and government established. This division of views was present from the beginning, as the near-​contemporaneous historiography of the event reveals. In either case, however, the American Revolution did not seek to reshape the entire social, legal, and political order. Rather, the participants aimed to protect an established order and traditional liberties from the innovations of a British government facing a fiscal crisis as a result of the Seven Years’ War. One result was to give fresh expression to the more radical individualist ideas of the Levellers, Locke, and the Commonwealthmen both in the writings and publications of the time, such as Paine’s Common Sense, and in the principles articulated in the Declaration of Independence and, more debatably, the Constitution. There was no question, however, of overturning the entire social order partly because many of the institutions of the European ancien régime did not exist in the American colonies.

What did emerge in the writings of both the Federalists and Anti-​Federalists was a much more elaborate version of the older ideas, of a constitutional regime with a government having limited and enumerated powers. The controversy over ratification of the new Constitution also led directly to a specific enumeration and protection of rights held by individuals in a free state, in the first eight amendments to the Constitution, whereas the 9th Amendment made explicit the doctrine of unenumerated rights—“The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people”— and the 10th Amendment unequivocally expressed the doctrine of enumerated powers—“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Events took a different course in France. An attempt to reform and restructure the government of the kingdom led to a sudden unraveling of the entire political fabric and a political and social revolution of a kind the modern world had not previously seen. Even now, more than 200 years later, there is a good deal of controversy regarding why the French Revolution developed as it did. The view that commands increasing acceptance is that it sprang from a combination of fortuitous circumstances, the influence of particular ideas, and the impact of war on internal French politics. Among the most significant events were two decisions taken by the Constituent Assembly—to nationalize the property of the Church as a solution to public debt, followed by the rapid printing of new money. The acute political crisis of 1791–1792 witnessed the appearance of a new political phenomenon, the attempt to sweep away all of the existing social and political institutions and replace them with something fundamentally different from what had gone before. Even more significant for the future history of Europe was the appearance of the modern nation-​state, single and indivisible, along with its ideological offspring, the mass army. The period also saw the terror and, in the shape of the Napoleonic regime, the first modern despotism.

If the period before 1789 was a formative one in the history of liberalism, the mid-​19th century was its classical period. During this period, most of the political vocabulary we now use came into being, with new terms created and the meanings of older ones altered. It was then that liberal ideas were fully worked out and a consistent set of ideas were created.

Much of this work was in response to the intellectual and political challenge posed by the events of 1789–1815. For those who neither supported the reactionary or conservative policies of Metternich and the Holy Alliance nor espoused the revolutionary ideals of Jacobinism, it was necessary to work out a more explicit understanding of what it was they believed and sought to achieve. By that time, it also had become apparent that a process of profound social change was underway in Britain, and by 1830, that process had already started to spread outside its country of origin. These events were later to be misleadingly referred to as the Industrial Revolution.

Its central phenomenon was the appearance of sustained, long-​term economic growth and a rapid rise in the total amount of wealth and the living standards of the great mass of the people. This material progress was accompanied by rapid and widespread urbanization that brought about an alteration in the nature of society that still continues and is more profound in its nature than anything since the rise of agriculture in the later Neolithic period. The great intellectual challenge for 19th-​century thought was to explain and understand this revolutionary process. Classical liberalism came about by building on the ideas already developed in the 18th century, which provided the language to both give an account of what was happening and to advocate a specific kind of society, government, and public policy.

By the 1830s, there were recognizable liberal political movements in every European state except Russia, and the term had widely entered the political discourse of the great European languages. In the United States, in reaction to the Federalist period, we can discern a series of movements that pushed for greater liberty: Jeffersonian Republicanism, the Jacksonian movement of the 1820s and 1830s, and the growing abolitionist and “free soil” movements after 1840. In Britain, the 1820s saw the appearance of a new generation of reformers, men such as Henry Brougham, Sydney Smith, James Mill, Jeremy Bentham, and the Philosophic Radicals. Richard Cobden and John Bright, the great figures of a growing liberal movement, became prominent in the 1830s, and in 1846, liberalism gained perhaps its greatest triumph with the repeal of the Corn Laws and the conversion of the British state to a policy of free trade. A recognizable British Liberal party came into being in 1857, which included among its ranks the man who was to be the dominant figure of 19th-​century British liberalism, William Ewart Gladstone. In France, there were politicians such as François Guizot and the “Doctrinaires” and intellectual figures such as Antoine Louis Claude Destutt de Tracy, Benjamin Constant, and Madame Germaine de Staël. Germany had perhaps the most active and successful liberal movement outside Britain, including individuals such as Karl von Rotteck, Karl Welker, and Friedrich Dahlman. Much of that movement was influenced by such great figures of the Enlightenment as Immanuel Kant and Wilhelm von Humboldt. Italy, Spain, Hungary, and the Netherlands each had its own leading figures and movements. This proliferation was not a matter of separate, distinct, national movements. Rather, there was a genuinely transnational movement with a flourishing exchange of ideas among writers in the three major linguistic cultures, English, French, and German. The existence of a “transatlantic persuasion” in Britain, the United States, and Canada is well known, but many of its ideas and arguments came from France or Germany via multilingual scholars such as J. S. Mill and Lord Acton. British liberalism, in turn, had a powerful effect on continental Europe.

What set of beliefs and arguments united those individuals and movements? Some authors, examining the robust arguments among liberals over issues such as land ownership, the franchise, intellectual property, and education, have argued that there was no coherent liberal political movement, nor a systematic set of beliefs and arguments. Liberalism, in their view, amounted to little more than a style of argument or vocabulary, which could be used to advocate a bewildering variety of ends. Undoubtedly, there was great diversity, but this point should not be overstated: The ideas of classical liberalism were not so diverse as to be incoherent. In fact, despite much variation (such as the importance of utilitarianism for British liberals and romanticism for Germans), there was a marked degree of agreement regarding a number of common themes, even when those were given a distinctively American, French, or German accent. Many of these ideas figure prominently in contemporary libertarian thought; others, although still of marginal concern, have faded in importance.

In the first, although not always the most important, place are a set of ideas about economic life and public policies conducive to prosperity and harmony. The conventional intellectual genealogy of those ideas regards them as having been originally formulated by Adam Smith and developed by classical economists such as David Ricardo, Thomas Malthus, and J. S. Mill. In fact, in much popular and public argument, a second line of descent from Smith was equally important, including such figures as Jean-​Baptiste Say. The underlying idea was that the economic life of the community is a dynamic yet self-​regulating system that, given the correct framework of laws and then left to itself, will produce wealth and convert the pursuit of individual, self-​regarding ends into public benefits. A number of principles for public policy followed, notably a general principle of noninterference by the state in the outcome of private decisions (laissezfaire), the abandonment of protectionism and other restraints on trade, and support for free trade, low taxation, and government frugality, hard money, and freedom of contract. All of those principles are interconnected and were often summarized under the general heading of free exchange. It is significant that, although these are economic arguments, they were not generally advocated solely or even primarily on the grounds of economic efficiency. The usual arguments were moralistic and emphasized such themes as autonomy, personal responsibility, and the connection between free exchange—particularly free trade across national borders—and peace.

Another significant point is that these ideas were not in any sense conservative. Instead, they were profoundly radical and had implications reaching far beyond the straightforwardly economic, including implications for the relation between the sexes and the status of different races and ethnic groups. In particular, they combined with, and led to, a sharp attack on state-​sanctioned privilege, social inequality, and unjust class divisions.

An almost forgotten element of classical liberalism is its theory of class and social divisions. Nowadays, this kind of analysis is associated primarily with Marxism, but it actually originated in the writings of liberal thinkers—something that Marx freely acknowledged. Classical liberal class theory was, however, different from that put forward by Marx and his epigones. Its fundamental premise is that there are only two ways to obtain wealth: either through production and exchange or by plunder (i.e., by using force). It followed that the basic division in society is that between the industrious or productive classes, on the one side, and the parasitic or exploitative classes, on the other. Classes are defined by their relation to the coercive institutions of political power, rather than productive or exchange relations. The exploitative ruling classes are those who use their access to political power and force to enrich themselves at the expense of the industrious classes who create wealth. The former group includes, according to most liberal accounts, aristocrats, the clergy of established churches, state bondholders and rentiers, slaveholders, and also ablebodied paupers who are on relief. The exploited class includes peasants, artisans, proletarians, merchants, middlemen of all sorts, and entrepreneurs. Liberal class theory originated in Scotland, in the writings of authors such as James Millar, but it found its fullest expression in France, where it was developed and refined by Charles Comte, Charles Dunoyer, and Augustin Thierry. Their analysis involved a theoretical account of the origins and nature of the state and political power leading to the formulation of a historical sociology. Their analysis also was intimately connected with a distinctive theory of historical development, which originated in the writings of the Scottish Enlightenment authors, among them Adam Smith, but which was more fully elaborated by Comte and Dunoyer. According to this theory, history consisted of a succession of stages or levels of economic and social development, culminating in the final stage of commercial or industrial society. Each stage was marked by distinctive kinds of social and political relationships. The English liberal Herbert Spencer elaborated this historical account as the movement from militant societies, dominated by relations based on force, exploitation of the productive classes, and hierarchy, to industrial society, marked by voluntary, contractual relations. This evolution was described by another classical liberal, Sir Henry Sumner Maine, as the movement in social relations and law “from status to contract.” All these thinkers agreed that as society progressed, the sphere of compulsion, and hence of the state and power, would shrink, just as the area of voluntary cooperation expanded. The end result would be a minimal state or even, according to some radical thinkers such as the economist Gustave de Molinari and the young Herbert Spencer, no state at all.

Classical liberals had a clear set of ideas about political arrangements. Their main goal was to reduce the scope of power and compulsion in society. Political power, they maintained, should be used only to protect and sustain individual rights. The two central political ideals of liberalism, constitutional government and the rule of law, were limited. These ideals were combined in Germany in the idea of the Rechtsstaat (the term Recht in German means both “law” and “right”), an idea influential throughout Europe. This conception implied that the law would recognize and protect a whole range of personal rights, such as the rights of assembly, free association, contract, and conscience and belief. Perhaps most important, it implied that the state was governed by law.

A compelling reason for restraining or reducing the scope of government was the intimate connection between state power and war. A major goal of most liberal movements and politicians was the replacement of war by arbitration as a means of settling international disputes. The abolition of identification papers and restrictions on the free movement of individuals was, therefore, an important goal.

Another important idea was the privatization of religious belief, or the separation of church and state. Religious persuasion, it was argued, is a matter of private choice and of no more concern to the government than one’s choice of clothes or food. Living as we do in a largely secular age, it is difficult to realize how radical this demand was and what a revolutionary change it would produce. It remains, in some parts of the world, particularly in many Islamic countries, a controversial issue. Its underlying contention, that the state has no business in promoting a particular vision of the good life, continues to find expression in a whole range of intense political debates. It is often said that anticlericalism and secularism were features of continental European or Latin American liberalism, as opposed to the Anglo-​Saxon variety, but that interpretation is not sustained by a reading of the writings of both American and British authors of the 1820s and 1830s. One should not think, however, that, because these thinkers wished to separate church and state, classical liberalism was intimately linked with atheism or free thought. Although some liberals were atheists, the majority were not, and indeed the connection between organized liberalism and certain religious denominations was close in some countries.

Another complex idea, often related to particular religious beliefs, was voluntarism, which refers both to a theory of social action and an account of the ideal form of social organization. Voluntarism implied that the only appropriate form for collective action was the free association of individuals, all of whom enjoyed a right of withdrawal. In the Protestant countries of Europe and in the United States, this idea derived from the form of church governance espoused by dissenting Protestant churches: The Church was a free association of self-​governing congregations, each of which was, in turn, a free association of believers. However, the idea also was to be found in certain sections of Catholic Europe and was perhaps most fully elaborated in Spain, where its advocates looked back to the brotherhoods of medieval Spain. This way of thinking had radical implications for the political arrangements compatible with liberalism and implied a marked degree of decentralization. Its other principal application was in the area of social policy. Here it led to support for mutual aid or collective self-​help as the solution to social problems, such as the need for protection against loss of income or ill health and old age. This notion found expression in a wide variety of mutual or friendly societies throughout Europe and North America, most of which have now been destroyed by the rise of the welfare state. Another application that has shown greater powers of survival was that of “people’s banks,” or credit unions, which were advocated by one of the great theoreticians of voluntarism, the German liberal Hermann Schulze-​Delitzsch.

The last main element of classical liberalism, which in many ways united the other ones, was a particular conception of human individuality and the value and uniqueness of each human being. This individualism led to great emphasis on a particular kind of culture and human character compatible with one’s full humanity. The idea of character was in fact central for most 19th-​century liberals; Acton’s famous remark about the corrupting effect of power referred to its impact on the character of those who held it. Although this notion played a central role in liberal thought throughout Europe and North America, as an element of liberal discourse it came in the first instance from Germany and the idea of Bildung, variously translatable as formation, development, cultivation, or self-​realization. It led to strongly libertarian conclusions about the impropriety of restricting individual choice by coercion or even through social pressure. The two classic works in this area are Wilhelm von Humboldt’s The Limits of State Action and, later, John Stuart Mill’s On Liberty, which was strongly influenced by Humboldt’s work. A further aspect of this element of liberal thinking was its emphasis on personal responsibility, independence, and self-​help, expressed in a multitude of works, of which Samuel Smiles’s Self-​Help was one of the best known.

Democracy, understood in terms of an extreme franchise and majority rule, is prominently absent from the basic tenets of liberalism. Certainly, as the 19th century progressed, many classical liberals came to stress the need for a democratic form of government and the extension of the franchise. Some had advocated this idea even earlier, as was the case with the Jacksonians and the British Philosophic Radicals. The attitude of classical liberals toward democracy was always ambivalent, however. They were aware of the potential in an unbridled democracy for oppression of minorities by majorities. The franchise was seen not so much as a right as a responsibility, bringing duties and obligations, one reason that many, among them J. S. Mill, opposed the secret ballot. The main argument used by liberals in favor of extending the franchise was that governments exercised only a delegated authority (this idea had been put forward as early as 1647 by one of the Levellers, Thomas Rainborough) and that democratic political institutions served as a protection against the use of political power by exploitative minorities. Rousseauian arguments of popular sovereignty and the general will were not generally used by liberals. Moreover, 19th-​century liberals, precisely because they had an elevated vision of politics, argued that certain preconditions must prevail for democracy to function properly: a wide diffusion of property, economic independence, education, independence of mind on the part of voting citizens, and an elevated public culture. Those considerations, rather than disdain for the masses, led them to advocate that the franchise only be gradually extended and that it be linked to economic independence and, frequently, the bearing of arms.

These liberal arguments were partly defined by what they opposed or sought to refute. Until the last third of the 19th century, the main opponents of classical liberalism were conservatives of various sorts: royalists and “ultras” in France, traditional Tories in Britain, Federalists and Whigs in the United States, and defenders of “throne and altar” in most parts of Europe. A persistent locus of opposition to liberalism does not clearly describe this category of conservative; they are best described as populist or republican. This group included such figures as Thomas Carlyle, John Ruskin, Orestes Brownson, and Jean Simonde de Sismondi, and political movements such as Chartism. What all of those thinkers and movements had in common was a critical or hostile view of modernity. Whereas liberals saw the economic and social transformations of modernity as on balance beneficial, their critics saw them as darkly destructive. Against liberal values of reason, liberty, individualism, and cosmopolitanism, they upheld tradition, authority, and particularism. Socialism is best understood as a middle-​way doctrine; its central thesis, especially in its Marxist variety, was that while accepting the populist critique of modernity it was not necessary to abandon modernity in its entirety. The contradictions and tensions could be resolved by advancing to a higher level of social and political organization in which it was possible to have the benefits of modernity without the perceived costs, understood as economic exploitation, alienation, social disruption and distortion, and loss of community.

Two other significant doctrines appeared in the 19th century that had a complex relationship with classical liberalism. The first was nationalism. Although national consciousness had existed from an early date, it had few political implications until the French Revolution. The political doctrine of nationalism— that each nation should have its own state and that the nation was the only proper basis for the state— appeared in fully fledged form soon after 1815. Initially, there was a close relationship between liberalism and nationalism, whereas conservatives, committed to upholding dynastic states, were generally hostile. Some figures such as Giuseppe Mazzini fall in both the nationalist and the liberal traditions. In the United States, nationalism, which tended toward a particular view of the nature of the American state and the constitutional compact, was first formulated and articulated by Alexander Hamilton and further developed by Whig politicians such as Henry Clay and Daniel Webster. Generally speaking, classical liberals embraced national self-​determination as a part of their ideology. It was consonant with their opposition to imperialism and colonialism, and national self determination was seen as the collective counterpart to individual liberty. In Germany and central or eastern Europe, national self-​determination was regarded as a prerequisite for the achievement of liberty. Increasingly, classical liberals became aware of the practical problems inherent in nationalism, but saw the solution as lying in minimal government, individual rights, and autonomy for minorities through some form of federalism. There was a minority view among liberals that was hostile to conventional nationalism. It was put forward by Lord Acton and by the Hungarian liberal Jozsef Eötvös. As both of those authors realized, nationalism became problematic for liberals when coupled with the idea that there could be only one sovereign power within a state. Unfortunately, their warnings were not heeded, and the combination of nationalism with the sovereign territorial state was to prove deadly to liberal ideals and hopes. That proved to be the case in many places, but particularly in Germany and the United States.

The other doctrine that occasioned theoretical problems for liberalism was feminism. “The woman question,” as it was called, became one of the central debates of the 19th century. The critical rationalism and individualism associated with liberalism entailed questioning the traditional views of women, as did liberalism’s emphasis on individual rights and choice. When an organized feminist movement appeared by the mid-​19th century in Europe and America, some organizations were hostile to liberalism. However, the majority were strongly committed to liberal ideas on the grounds that the adoption of liberal goals would lead to the liberation of women. An almost forgotten fact is that many prominent 19th-​century feminists such as Harriet Martineau, Elizabeth Cady Stanton, and Josephine Butler were, in some respects, militantly individualist.

In the period up to 1860, liberal movements gained a series of victories. Free trade was progressively extended, its high point being the Cobden–Chevalier trade treaty between Britain and France in 1860. Generally speaking, there was a movement everywhere from mercantilism and government control to market economy, from absolutism toward representative constitutional government, from confessional monopoly toward freedom of expression and conscience, and from hierarchy toward social and legal equality. Slavery, until then widespread, was abolished, as were serfdom and other forms of unfree labor. There was a reaction against colonialism and imperialism, which were now seen as backward relics and part of the old system. A true world economy came into being through the free movement of goods, capital, and labor and through technological advances such as the transoceanic cable, the steamship, and the railway. It was at precisely that moment of triumph that classical liberalism suffered a series of critical defeats, which were to lead, in another generation, to a sharp reversal in its fortunes.

Some of the setbacks took the form of apparent victories. The year 1861 saw the final triumph of the movement for Italian unification, the Risorgimento, a long-​standing liberal cause, under the leadership of Camillo di Cavour, one of the century’s great liberal statesmen. However, the outcome was not solely the unification of the rapidly developing, liberal, northern half of Italy, as Cavour had intended, but the creation of a state including the backward and reactionary south due to Giuseppe Garibaldi’s conquest of the Kingdom of the Two Sicilies. The result was to reduce Italian liberals to the status of a permanent minority in a population deeply hostile to liberalism, and liberal politicians were able to remain in power only by increasingly corrupt and desperate expedients. Cavour died immediately after the unification, and there was no one of his quality to replace him.

More significant in both the short and long run were contemporaneous events in Germany. After 1815, Prussia was the great hope of German liberals—the Rhenish provinces of Prussia were the heartland of liberalism. However, the 1850s saw a policy of reaction by the increasingly insane King Frederick William IV. Nevertheless, in 1859, the liberals gained a clear majority in the Prussian parliament, or Landtag. The liberal goal of Kleindeutschland, a united, liberal Germany excluding reactionary, absolutist Austria, seemed about to be realized. Then in 1862, the new Prussian ruler, William I, appointed his arch-​conservative ambassador to Paris as Prussia’s minister president. Otto von Bismarck gained a crushing victory over the Austrians in the Seven Weeks War of 1866. This military success united northern Germany under Prussian control and completely outmaneuvered and divided the Prussian liberals. They split into two parties, one of which supported Bismarck, and liberalism in Germany suffered a defeat from which it never recovered. In 1871, Germany was indeed united, but under Bismarck’s terms and in a way that marked the total defeat of his liberal opponents.

The same period also saw critical turning points in the Anglo-​Saxon countries. In 1874, Gladstone’s first great reforming government suffered an unexpected electoral defeat, with the conservatives gaining a parliamentary majority for the first time since 1846. The liberals had run on a platform that included abolishing the income tax—they opposed it on the libertarian grounds that government had no right to know how much people earned—and its replacement by a duty on alcohol. The Tories owed their success to a revived imperialism, symbolized a short time later by Benjamin Disraeli’s proclamation of Queen Victoria as Empress of India in 1876. Even more significant were events in America. The Civil War led to the long-​sought emancipation of slaves, but at a terrible cost, not only in terms of casualties of war, dreadful though those were in the first “total war,” but in the transformation of the nature of the American republic. The view of the state articulated by Hamilton, Clay, and Webster had triumphed completely, and although there was a considerable “rollback” of government power in the aftermath of the war, a whole range of precedents had been set, including the rudiments of the welfare state in the form of Civil War pensions. The common thread uniting all of those defeats for liberty—in Germany, Britain, and the United States—was nationalism, the idea of a sovereign, national state acting to achieve a collective national purpose or destiny.

The last third of the 19th century saw the decline of classical liberalism as both a body of ideas and a political movement. The period, described variously as the Gilded Age or La Belle Epoque, appears in retrospect as a kind of Indian summer of liberal civilization. In reality, the foundations of that civilization were being steadily eroded. Many states saw a movement in policy away from liberal prescriptions that had been instituted earlier—a crucial event in Britain was the first Gladstone government’s creation of compulsory state education in the Education Act of 1870. By the 1870s, the growth of interventionist legislation had become marked enough for Herbert Spencer to mount a vigorous attack in The Man versus the State, declaring that “those now passing as liberals are tories of a new type” and forecasting “the coming slavery.” After 1870, liberal arguments lost much of their radical content and cutting edge and became increasingly defensive and conservative. Liberal ideas no longer set the agenda. One aspect of this development was an evergrowing focus on economic matters and arguments at the expense of other areas of debate. Another was a dramatic change in the content of culture. Most early and mid-​19th-​century artists, composers, and writers had been sympathetic to classical liberalism, and these views were reflected in their work. Verdi, Stendahl, Hugo, Trollope, Beethoven, Brahms, and Manzoni were all ardent liberals. The major artistic figures of the later part of the century, including Zola, Ibsen, and Wagner, were almost without exception hostile to liberalism and bourgeois civilization.

One aspect of the decline of classical liberalism as a doctrine was a change in the content and form of much of what passed as liberal argument. In every country, liberalism bifurcated into two distinct but related discourses, described variously as moderate/​radical as in Italy and Scandinavia or classical/​new as in England and North America. The 1890s saw the rise of new liberalism in Britain and progressivism in the United States. In Germany, the new variant of liberalism, articulated by authors such as Friedrich Naumann, almost completely replaced the older form put forward by Eugen Richter and Ludwig Bamberger. New liberalism was a collectivist variant of liberalism that retained the commitment to freedom as the highest political good, but redefined the term as positive liberty or capacity, rather than negative liberty, which referred only to the absence of coercion. New liberalism gave a much larger role to the state in both economic and social matters and defined social development not in terms of increasing freedom, but as growing sociability and collective cooperation. This change did not go unchallenged. The 1880s and 1890s saw a vigorous debate in all countries, but particularly in Britain and the United States, between self-​styled individualists and collectivists. In Britain, the case for limited government was put by organizations such as the Liberty and Property Defense League and the Personal Rights Association, ably supported by the older generation of feminists such as Helen Blackburn, Jessie Boucherett, and Josephine Butler. In the United States, a major individualist liberal was William Graham Sumner, a severe critic of the move to imperialism after 1896 in essays such as “The Conquest of the United States by Spain.” The debate is best understood as centering on the meaning of key terms such as liberty and progress. The shift in the meaning of these ideas was described in 1900 by

E. L. Godkin in The Nation:

The outcome of this debate was a decisive victory for the collectivists. In the United States, the turning point was probably the depression that followed Grover Cleveland’s second victory in 1892. It led to the crushing defeat in 1894 of the Democrats, at that time the party of free trade, limited government, and laissez-​faire, and the start of a prolonged period of Republican domination of Congress. One feature of the later 19th century was the appearance of a new kind of conservatism, founded on an alliance between government and big business. It was that alliance, forged in the United States by Republican “fixer” Mark Hanna, that lay behind much of the move toward a more collectivist and interventionist state. The Progressive Era saw further significant moves in the direction of statism in 1913, with the ratification of the 16th and 17th Amendments, which introduced a federal income tax and the direct election of senators. In Britain and Europe, the defeat of classical liberalism cannot be so clearly dated, but there is no doubt that by the 1890s, a definite movement away from its ideas and programs occurred.

The last 3 decades of the 19th century saw a sudden upsurge of a wide range of antiliberal ideas. Socialism, formerly a minor doctrine with limited support, suddenly became a major political force. Imperialism was revived on a massive scale; militarism grew and gave rise to an unprecedented arms race that turned Europe by 1900 into an armed camp of mutually hostile states. Other ideas that gained ground at the time were eugenics and racism. Socialism, nationalism, racism, and imperialism were all closely connected and frequently supported by the same people. There also was a marked growth in movements for the use of compulsion to reform people’s behavior, particularly sexual activity and drinking. The leaders in those campaigns for social purity and prohibition were often leaders of feminist movements, which had moved away from their earlier libertarianism.

The most significant change, however, was in the economic and social policies of governments. The pacesetter here was Germany. In 1879, Bismarck abandoned free trade and instituted a policy of economic nationalism based on the ideas of the German economist, Friedrich List. This program involved large-​scale government support for and encouragement of industrialization, a pattern soon imitated throughout the world, notably in Russia. The United States, which had already pursued a policy of protection before the Civil War, also adopted it wholesale after 1860, abandoning the argument that tariffs were merely a revenue-​raising device. Government support for the railroads led to the Interstate Commerce Act of 1887, the first significant piece of regulatory legislation, passed under the guise of protecting consumers. Imperial Germany led the way in social policy as well with the adoption by Bismarck of the policy of sozialpolitik, or state welfare, in 1883, providing yet another model that was to be emulated throughout Europe and, ultimately, America. The protectionist policies of the major states, together with a mistaken monetary policy, caused the Panic of 1893, but, as so often happens, that actually redounded to the benefit of interventionists. More serious was the impact of the changed economic policies of major states on international relations. The growing economic and fiscal problems of imperial Germany led the German elite to adopt increasingly risky policies until, in 1914, they took the insane gamble of fighting a war on two fronts. The Great War of 1914–1918 destroyed the liberal civilization that had been built in the previous century. Among its consequences were not only 10 million dead, but the collapse of the international monetary system, a communist revolution in Russia, and, a short while later, a national socialist revolution in Germany, and ultimately a Second World War that saw even greater and more terrible suffering. The totalitarian regimes that grew out of the world war killed millions of their own subjects and millions of others who fell under their yoke. The years between 1914 and 1945 were truly the dark night of liberalism in all its forms. There were some brave individuals who continued to argue for liberty, toleration, free trade, limited government, and peace, but in one country after another, they were defeated by the advocates of collectivism and statism. In Britain, the decisive turning point was the move toward a welfare state by the liberal government in 1909, followed by the massive restrictions on civil liberties contained in the Defense of the Realm Act of 1914. In 1931, Britain finally abandoned free trade. In the United States, there was a sharp move toward statism under President Herbert Hoover, a move that accelerated after 1932 with the introduction of President Franklin D. Roosevelt’s New Deal.

These two examples demonstrate that, although liberalism faced a mortal challenge from radical socialism, fascism, Nazism, and communism, the political agenda in the surviving democracies was increasingly set by collectivist new liberals and social democrats. Political scientists and economists came increasingly to demand widespread action by government to guide the economy, with the result that liberalism underwent a change of meaning. By the 1950s, liberalism had come to refer almost exclusively to its collectivist variant. Following the defeat of fascism in World War II, the challenge from communism, radical socialism, and fascism was successfully contained in most Western countries, and collectivist social liberalism became the dominant political discourse—as it still is today. The surviving classical liberals were increasingly driven to ally themselves with conservatives to oppose the predominant statist forms of politics. For various reasons, that was much easier in the Anglo-​Saxon countries, to such a degree in fact that after 1945 classical liberals were commonly described as conservative, a label many of them adopted. However, the underlying differences between the two doctrines of conservatism and liberalism remained, and increasingly in English-​speaking countries classical liberals turned to the term libertarian to define their identity in a way that distinguished them from both conservatism and collectivist liberalism.

In the late 1940s, the remaining libertarians were, in the words of one of their number, Albert J. Nock, a “scattered remnant.” Their ideas had little purchase in academic and political debate, and many of the policies they had advocated were lost to sight entirely. This marginalization also reflected the dramatic narrowing of the scope of political debate and the range of ideological options that took place after about 1930. Yet it was at this point that the ideas and the movement that embraced them began to revive. The intellectual revival emerged largely as a result of the work being done in the discipline of economics. One intellectual development that took place in the late 19th century that lent support to liberal policies was the transformation of the science of economics by the “marginal revolution,” which removed a number of fundamental weaknesses in economic analysis and put liberal ideas in this area on a much sounder footing. In the 1920s and 1930s, the Austrian School of Economics, especially its leading figures Ludwig von Mises and Friedrich A. Hayek, made two vital contributions to liberal thought. The first was Mises’s demonstration that a pure socialist economy was literally impossible because of its inability to engage in effective economic calculation. Mises and Hayek both contributed to the second, the development of an explanation for the business cycle and the origins of economic depression in government monetary policy. Following World War II, libertarian economists based at the University of Chicago and elsewhere developed an effective critique of the policy of demand management put forward by John Maynard Keynes and his followers, which had become the central policy of the postwar social democratic consensus. The figure most associated with this school is Milton Friedman, who was to become an effective popularizer of free markets in general. During the prolonged economic boom that followed the Second World War, Keynesian ideas remained predominant, but by the later 1960s, it had become clear that policies based on these conclusions led to severe problems. By the end of the 1970s, they were entirely discredited in the minds of all but a few diehards. Even more spectacular was the vindication of Mises’s original analysis with the collapse of Soviet communism and the “revelation” of just how incredibly wasteful, exploitative, and cruel the Soviet economy had actually been.

After surviving and then flourishing in economics, libertarian analysis began to infuse other academic areas. Hayek became one of the 20th-century’s most important social and political philosophers, well known for his elaboration and application of the notion of spontaneous order and his study of institutional solutions to the problem of knowledge. James Buchanan and Gordon Tullock used economic reasoning to explain the political process and, with other scholars, created the new discipline of public choice analysis. Buchanan’s work built on the foundations laid before the Great War by liberals such as Vilfredo Pareto, Luigi Einaudi, and Knut Wicksell, while Hayek’s arguments were in many ways an elaboration of the ideas originally formulated by Scottish enlightenment figures in the 18th century. Murray Rothbard extended and elaborated the ideas of Mises and Hayek, pushing them to radical conclusions. In philosophy, Lockean ideas became a part of debate once more mainly because of the work of Robert Nozick, especially Anarchy, State and Utopia. Perhaps the biggest impact on popular culture came through the work of Ayn Rand, who made the case for individualism through her best-​selling novels and essays.

This revival constitutes a continuation and development of longstanding classical liberal thinking. That is not to say, however, that contemporary libertarianism is simply classical liberalism risen unchanged from the dead. The events of the last 150 years have left their mark on libertarian discourse. Most notably, the belief in the inevitability of progress, which was such a prominent feature of 19th-​century liberalism, is now muted: What survives is something much more like the older notion of improvement. The understanding of politics and the nature of the political process is now much deeper. On the other side, there has been little revival yet of classical liberal ideas in such disciplines as history, sociology, or anthropology, although there are signs that this is starting to change.

The years after 1945 also saw the reappearance of an organized libertarian movement. Perhaps the most important initiative was the formation of the Mont Pelerin Society in 1948, which was followed by the growth of a plethora of organizations, societies, think tanks, and research institutes. There has not been a revival of organized politics to compare with the intellectual revival, but liberal ideas and analysis have had a growing impact on public debate and policy. The three major areas where libertarian arguments have once again emerged as important are, first, the old question of free trade versus protectionism, nowadays apostrophized as “the globalization question,” second, the welfare state, currently in the ascendant politically but facing an acute fiscal crisis in the near future, and, third, environmental matters where libertarians are confronting the intellectual descendants of 19th century anti-​modernists such as John Ruskin and William Morris. Alongside those areas lies the central question for anyone who is concerned about liberty: What is the role of political power and how can it be effectively limited? In fact, despite all of the changes that have taken place in the last 250 years, the underlying intellectual and political issues are still the same: What is the nature of modernity and what kind of civilization is it to be?