A False Distinction

by Alan Wolfe (from The New Republic)

13.04.2009

On a recent trip to the Twin Cities to give a lecture, I was invited to write something by the editors of Contexts, a snappy journal associated with the American Sociological Association designed to bring sociological knowledge to the informed reading public. The magazine runs a feature called "One Thing I Know." Tell us one thing you know, the editors asked.

Accepting their invitation, the one thing I claimed to know is that there is no such thing as a distinction between "classical" and "modern" liberalism. I felt I needed to say as much because everywhere I go, the moment I tell people that I have written a book about liberalism, I am invariably asked which of the two I mean. Classical liberalism, my interlocutors patiently explain to me, is that wonderful notion of the free market elucidated by Adam Smith that worships the idea of freedom. The modern version, by contrast, is committed to expansion of the state and, if taken to its logical conclusion, leads to slavery. One must choose one or the other. There really is no such thing, therefore, as modern liberalism. If you opt for the market, you are a libertarian. If you choose government, you are a socialist or, in more recent times, a fascist.

I try to explain to people that in my book I reject any such distinction and argue instead for the existence of a continuous liberal understanding that includes both Adam Smith and John Maynard Keynes. But so foreign is this idea to them that they stare at me in utter disbelief. How could I have possibly written a book on liberalism, I can almost hear them thinking, when this guy doesn't know a thing about it?

The idea that liberalism comes in two forms assumes that the most fundamental question facing mankind is how much government intervenes into the economy. To me, perhaps because so little of the means of production lies under my control, this is a remarkably uninteresting subject. I think of the whole question of governmental intervention as a matter of technique.

Sometimes the market does pretty well and it pays to rely on it. Sometimes it runs into very rough patches and then you need government to regulate it and correct its course. No matters of deep philosophy or religious meaning are at stake when we discuss such matters. A society simply does what it has to do.

When instead we do discuss human purpose and the meaning of life, Adam Smith and John Maynard Keynes are on the same side. Both of them possessed an expansive sense of what we are put on this earth to accomplish. Both were on the side of enlightenment. Both were optimists who believed in progress but were dubious about grand schemes that claimed to know all the answers. For Smith, mercantilism was the enemy of human liberty. For Keynes, monopolies were. It makes perfect sense for an eighteenth century thinker to conclude that humanity would flourish under the market. For a twentieth century thinker committed to the same ideal, government was an essential tool to the same end.

The liberal tradition is about far more than questions of economics, as important as those questions are. Modern liberalism did not start with the New Deal and end with The War on Poverty. What my critics call modern liberalism is instead the logical and sociological outcome of classical liberalism. That is why Adam Smith is a liberal and twentieth century libertarians such as Hayek are not. The latter seek to straighten out the crooked timber of humanity by forcing everyone into a mold established by the market. We know what Keynes thought of such an idea. I am certain that Smith, had he seen what contemporary Smithians are about, would have agreed with him.