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What is Liberalism?

Phil Badger guides us through the varieties of liberalism, historical and philosophical.

The big ideas of political philosophy are often hard to get clear in our minds, and there is no better example of this than when we try to pin down the meaning of ‘liberalism’. The slipperiness of this concept is bound up with its history, and its complex role in the political culture of Europe and North America. In the UK, we have recently witnessed the coming to power of a Conservative/Liberal Democrat coalition government, while in Barack Obama the United States has its most ‘liberal’ president in a generation. Moreover, liberals can be ‘classical’ (great fans of free trade and the minimal state), ‘new’ (proto-social democrats who see a big role for the state), ‘neo’ (which is definitely not the same thing as ‘new’), or ‘progressive’ (which might or might not turn out to mean the same thing as ‘new’ but which certainly isn’t the same thing as ‘classical’). Faced with all of this, it might be tempting to suggest that from the point of view of political philosophy, the usefulness of the term ‘liberalism’ is fatally compromised (a view taken by Skidelsky in Prospect magazine, June 2010). However, this would be a mistake, because teasing out the threads of this tangled concept can help us think more clearly about the nature of society and the role of the state.

Let’s begin with a moment of conceptual history. In the nineteenth century, liberalism was an economic and political doctrine associated with free trade and limited government. These two things were closely connected because Government had often raised revenue through importation tariffs, thus interfering in trade. In Britain the landed classes defended these tariffs because they helped maintain the price of agricultural produce. Ultimately, this situation resulted in a humanitarian and political crisis – the poor were starving, and something had to be done about it. This led to the repeal of the so-called Corn Laws. The ‘free-traders’ triumphed, and the result was the formation of a political party which was committed to free trade – the Liberal Party.

Historians might quibble about some of the details of this account, but it is important to give it because it is apt to create a kind of intellectual vertigo amongst those who associate ‘liberals’ with quite different attitudes to the state and to trade. Although at that time there were very few supporters of the ‘big state’ in any modern sense, it tended to be the Tories who were associated with protectionism and intervention. In fact, ‘free trade’ and all that went with it, was then seen as a radical idea. Its early theorists, including Adam Smith in his Theory of Moral Sentiments (1759) and Wealth of Nations (1776), applauded the idea of workers becoming free of the almost serf-like status that traditional arrangements dictated. As I’ve noted, the same radical spirit later drove the arguments mounted by political economists, including J.S. Mill, against the Corn Laws.

Historical insight therefore presents us with a view of the origins of liberal thought and the liberal/conservative distinction which is more nuanced than one which sees conservatism as the natural upholder of free markets, the small state and, in David Cameron’s phrase, ‘the big society’. To some extent, there is continuity between modern conservatism and its origins in the work of Edmund Burke. For example, in their distrust of grand plans, and faith in ‘intermediate’ institutions (churches, charities etc), modern conservatives have a Burkian basis for shunning the activist state. However, this characterisation begs two questions. Firstly, how was the modern fit made between free-market economics and social conservatism? Secondly, why did liberalism take its pro-state turn in the twentieth century?

The first question can be dealt with fairly quickly. Neo-liberals, who from the 1970s onward combined economic liberalism and social conservatism, tended to see the conservatism as a necessary brake upon the socially disruptive tendencies of the free market. In this they were building upon the pragmatism of earlier conservatives. For Thatcherite neo-liberals, social liberty, meaning the legal endorsement of alternative lifestyles, sexual preferences etc, was to be rejected in favour of an exclusively economic understanding of freedom. Whether this combination of economic liberty and social authoritarianism is coherent is left for the reader’s consideration.

Mill and the New Liberals

The answer to the second question is intimately connected to the first, and involved dissatisfaction on the part of many liberals with the purely economic definition of liberty I’ve just linked to neo-liberalism. These issues were already live for many nineteenth century liberals, including Mill and the so-called ‘new’ liberals who came after him. It is a fact forgotten by Mill’s modern free market admirers, that his view of the benefits of unrestricted capitalism was neither absolute nor unchanging. Mill amended later editions of his Principles of Political Economy (1848) to be more sympathetic to socialist ideas. He even gave financial support to the co-operative movement.

There are two main reasons why Mill developed a sceptical take on the free market. Firstly, a persistent influence in Mill’s intellectual life was utilitarianism. Utilitarianism is a ‘consequentialist’ moral theory, which means it sees the rightness or wrongness of systems and policies in terms of the good or bad consequences they produce. In the words of Jeremy Bentham, the founder of utilitarianism, and Mill’s godfather, the right thing to do would be whatever would bring about ‘The greatest happiness for the greatest number’. Therefore any economic system’s worth was ‘contingent’ (dependent) upon its results, rather than being ‘necessary’ (automatic). Mill’s thinking differed from Bentham in many ways, but he never denied his utilitarian roots, and his attachment to the free market was therefore always provisional.

Secondly, Mill’s adaptations of Bentham’s ideas make him more amenable to ‘new liberal’ thinking. Specifically, Mill had real problems with what, borrowing de Tocqueville’s phrase, he called ‘The tyranny of the majority’. This might seem puzzling, because one understanding of utilitarianism is that the ‘greatest good’ can be defined as ‘meeting the preferences of the greatest number’, ie, of the majority. Thus democracy itself can be seen as the political embodiment of utilitarianism. But in fact, in Mill’s greatest work, On Liberty (1859) [see Issue 76], he firmly sets out his case against the power of the majority, on the liberal grounds that our freedom of action should only be limited in order to prevent us doing harm to others. Any opinion of the majority that we ought not to do a particular thing is irrelevant. This begs questions about the coherence of combining utilitarianism with liberalism, which Mill resolved by what might be considered a philosophical sleight-of-hand. He argued that liberty was essential for what he termed ‘utility in its widest sense’. By this he meant that all happiness (‘utility’) was ultimately dependent on the ability of the individual to grow and develop according to his or her own nature. Since liberty was thus essential to happiness, there could be no real conflict between liberalism and utility.

Even if we are convinced by Mill’s efforts to square liberty and utility, the question has to be answered about what social conditions are necessary for individual development to best take place. If our answer is that all that is needed is for others to leave an individual alone, we get ‘classical’ liberalism. If however the developing individual needs access to things like free education, we are well on our way to ‘new’ liberalism.

In fact, although Mill wanted to avoid the authoritarian consequences of the state dictating the content of education, he was not at all adverse to the state funding it, especially in cases where parents could not afford to do so themselves. If this was true of Mill, it was all the more so of the liberals who followed him. Like him, the new liberals saw liberty as more than the simple absence of restraint, and instead as involving the development of what we might term ‘autonomy’ or ‘self-government’. Liberal philosophers including T.H. Green (1836-1882) and later L.T. Hobhouse (1864-1929) further argued that the unequal starting points of individuals in society meant that any notions of individual freedom were abstract and meaningless without significant state intervention. These men built upon Mill’s doubts about the free market and were the progenitors of the ‘big state’ liberalism. Indeed, the foundations of the Welfare State in Britain were not laid by socialists, who tended to value greater social equality for its own sake, but by liberals, such as Lloyd-George, and later Lord Beveridge, who believed that ‘self-government’ implied that everyone had to have access to certain resources previously only available to the wealthy.

Hedonism and Anarchy

The rest is of course history; and the modern Western world is a consequence of the way that the argument between different kinds of liberals has developed over the last century. In the United States, John Rawls kicked debates about ‘new liberalism’ back to life in his Theory of Justice (1972). Here, Rawls combined an absolute commitment to social liberty with a significant nod in the direction of judging social inequalities by their consequences – his so-called ‘difference principle’. (The difference principle says that social and economic inequalities should be limited so that they provide the greatest benefit to the least-advantaged members of society.) In the face of his analysis, the classical liberal counter-critique of new liberalism has involved two increasingly interwoven strands.

Firstly, there has been what we could call an ‘empirical’ critique, answering the utilitarian strand in new liberal thinking. This critique says that, despite huge effort and investment the welfare state has failed in its goals, and has done so because its provisions have been based on an inaccurate view of human psychology and motivation. According to Charles Murray in The Emerging Underclass (1990), ‘welfarism’ has created a dependency culture which, far from empowering the disadvantaged to take control of their lives as the new liberals hoped, has created a disincentive to work or to participate positively in the life of the community: the welfare state has created significant opportunities for free riders who are content to live off welfare handouts, and a wider group of people who see the state’s provision as absolving them from any responsibility to get involved. This has led to a breakdown of civil society and the weakening of the intermediate organisations which make it up.

Secondly, there has been a more purely conceptual or philosophical critique of new liberalism, which has been less concerned with its consequences, and more focused on its a priori injustices. This critique, firmly rooted in classical liberalism, reached its full expression in the work of Robert Nozick, especially Anarchy, State and Utopia (1974) – a direct attack on the work of Rawls. For Nozick (also for Frederick Hayek in The Road to Serfdom, 1944), the redistribution of wealth in the form of taxation involves a tyrannical act of theft from those who hold it legitimately, in order to benefit those who have done nothing to contribute towards its creation. The supposed empirical failure of welfare is not the issue for Nozick. Indeed it is irrelevant because, as G.E. Moore had argued half a century earlier, it remains an open question whether a course of action which produces beneficial consequences is necessarily good. In other words, for Nozick, even if welfare had worked as the new liberals hoped it would, that would not justify its coercive impact on the lives of those who had to pay for it.

Some readers might be willing to turn a blind eye to Nozick’s objections if the consequences of doing so were unambiguously positive. In fact, in many liberal societies we do just that – trade minor acts of coercion for apparently huge social benefits. In Britain, for example, we fine people for not wearing seatbelts. However for Nozick, this is very dangerous. To illustrate why, we might consider one of his most famous thought experiments: that of ‘The Experience Machine’.

This experiment was devised to demonstrate the limitations of hedonism – the notion that the purpose of life is pleasure. It involved contemplating throwing a switch which would immerse us in a kind of perfect virtual world in which we would be blissfully happy yet oblivious to the unreality of our experience. The big question for Nozick was whether we would be prepared to throw the switch. He thought not. He believed that we would prefer to live undeceived in everyday life than live a life of illusory pleasure. But his argument can easily be adapted to reveal the moral limitations of an apparently enlightened despotism. Thus, would it be okay for another person to throw the switch for us? Alternatively, we could ask, would it be justified to add some happy chemical to the water supply without our consent, but seemingly for our own good? The answer seems fairly obviously ‘no’, and that’s exactly the conclusion that Nozick would reach. In any conflict between freedom and welfare, freedom will always win because ignoring people’s liberty, even to benefit them – let alone to benefit others – is tyrannical.

However, faced with the fact that seatbelt laws have had a huge impact on reducing suffering, and that most of us don’t think people ought to be able to buy cocaine in supermarkets, we might not want to fully sign up to Nozick’s libertarian conclusions. Indeed, most of us do feel that consequences do have something to do with morality, and that moral theory ought to acknowledge this. This has direct relevance to the debate between liberalisms we’ve been discussing because it turns out that there is copious evidence that more equal societies really are places where there is significantly less suffering in terms of crime, infant mortality, premature death, educational failure and drug addiction, than in more unequal ones – see eg, R. Wilkinson and K. Pickett’s The Spirit Level, 2009. Interestingly, the benefits of greater equality seem to be felt by the rich as well as the poor. If you’re a utilitarian, this kind of data is hard to ignore and is likely to drive you in the direction of welfare and taxation policies that would give classical liberals apoplexy.

Reconciling Freedoms

In fact, as I’ve argued elsewhere (see Philosophy Now Issue 53), there are ways to defend the aspects of autonomy we want to jealously guard – religious freedom, choice of life partner, etc (I called these our ‘large-scale concepts of the good’) – and simultaneously accept that certain other choices might be curtailed on the grounds of preventing suffering or promoting the autonomy of others (taxation to subsidise support for disabled people, for example). Rawls pointed the way to this kind of position by ‘lexically ordering’ his two principles in a way which prioritised liberty without negating his secondary ‘difference’ principle.

What is really at question here is whether two apparently contradictory understandings of justice, espoused by two different liberal traditions, can be successfully reconciled. On the one hand, we have the ‘classical’ notion that justice has to be connected to desert. Hard-working and talented people are entitled to the fruits of their labours, while the work-shy condemn themselves to their inferior position. The beginnings of the contrary position are not hard to predict: is it always our moral merit which determines where we end up in the pecking order? Do the less talented deserve to have a poor life? Do we really think that an equal chance is granted to people who have very different starting positions in life? (Mill didn’t like the idea of income tax much, but was very much in favour of taxing the unearned income of inheritance.) Is it reasonable for those who owe their high position in society partly to state-funded education to refuse to subsidise the same opportunities for others? Finally, do we trust the ‘invisible hand’ of the free market, as Smith called it, to distribute rewards according to genuine social worth and contribution, rather than, for instance, according to the superficialities of celebrity or trivial talents?

For new liberals, the answers to these questions mandate intervention to remedy the inequities of the free market. But this begs the question of what form this intervention should take. At the risk of bringing down the curses of new liberals upon my head, I suggest that we have to accept some of what I’ve called the ‘empirical’ critique even if we reject the ‘conceptual’ one. Welfare does produce dependency and weaken civil society, and the idea that more of the same will eventually bring about a better society is deeply implausible. However, dismantling the welfare system and leaving the disadvantaged to the caprice of charity is also a deeply unattractive option.

One constant refrain from neo-liberals is that is that welfare creates a perverse incentive for laziness. Sometimes they even seem to suggest that unemployment is a function of the fluctuating level of collective laziness rather than the product of the instabilities of the famously ‘self-regulating’ market. However, an alternative incentive, increasing the minimum wage, is hardly ever considered. Logically, the incentive to work would be as well served by this increase as it would by reducing welfare. Indeed, in the midst of global recession, it is good Keynesianism (Keynes was another liberal) to recapitalise the poorest (ie, make them richer) in order to increase consumer demand. (By contrast, middle class people tend to use extra cash to pay off debt.) Additionally, the costs of new liberal schemes by which the state subsidises the incomes of the poorest, like tax credits in the UK, would be hugely reduced by increasing the minimum wage.

A general reduction in inequality helps from a utilitarian point of view because, as Wilkinson and Pickett argue, it is not the absolute standard of living of the poor which produces social ills, but their relative disadvantage. Rawls’ second, conspicuously consequential principle of justice, the difference principle, allows our assessment of what amount of inequality most benefits the worst-off to be revised in light of Wilkinson and Picket’s evidence. The so-called ‘trickle down’ effect from tax incentives for ‘wealth creators’ has failed the empirical test. In the face of the evidence, utility instead dictates smaller gaps between rich and poor, and the abandonment of the classical liberal assumption that when it comes to economic growth, a rising tide lifts all boats.

What is beginning to emerge here is a progressive liberal view which addresses the failings of new liberalism without demonising the state, neo-liberal style. In this progressive view, the state becomes a regulator which intervenes only in order to promote the capacity of individuals to control their own lives. This opens up the possibility of using the state to facilitate our involvement in civil society rather than curtail it. In the UK we have a culture of excessive working hours (partly because poor hourly wage rates mean workers have to work overtime), and while this is inefficient and damaging to the community (more hours for some doesn’t aid productivity, unemployment rates or family life), nothing has been done about it because of our pervasive faith in the benefits of deregulated labour markets. We could go further and suggest enhanced welfare payments for unemployed people who agree to take part in community and environmental work. This is a liberal measure because it is based on voluntary participation – unlike measures proposed by some neo-liberals and communitarians. We might even co-opt children into this kind of activity as part of the school curriculum (children aren’t autonomous beings in the same way as adults, and one might argue that experience of such work empowers them to choose from a greater range of values).

Neo-liberal readers may need to lie down for a while, before denouncing me as a raving communist; but there is an important philosophical point here. The above argument flows from rejecting the conceptual critique of liberalism by philosophers such as Nozick, while accepting certain elements of the empirical critique proposed by other neo-liberals. These are not socialist suggestions – they do not propose that ‘total equality’ is either desirable or possible. Neither have I denied that incentives matter – but I would argue for incentives on the basis of the liberal idea that giving individuals more power over their own lives is a good thing that need not be damaging to civil society. Furthermore, I’d suggest that progressive liberalism offers a psychologically plausible mechanism to explain social findings such as those of Wilkinson and Pickett: more equal societies do better because there is a synergy between citizens feeling empowered to control their own lives and things like improved health and higher levels of community participation. This contradicts the common conservative and communitarian view, that individualism is almost always antithetical to community.

What then is liberalism? As I said at the start, it is many things. Some libertarians remain wedded to ‘classical’ free market theories, while those who are ‘neo’ add a taste for conservative and authoritarian social policy. ‘New’ liberals want to knock the rough edges of social inequality, and ‘progressives’ might be offering something distinct from all the rest. What is clear is that liberalism is a vibrant perspective in twenty-first century political philosophy, and is set to remain so .

Phil Badger teaches philosophy and social science in Sheffield.