by Peter Franklin
Thursday, 22
September 2022
Response
11:09

What the IEA gets wrong about liberalism

In practise, the ideology always leads to welfarism
by Peter Franklin
Credit: Getty

Taking Liberties by Jamie Whyte is a new discussion paper from the Institute of Economic Affairs, a free market think tank. It is a defence of classical liberalism against ‘post-liberal’ thinkers like Philip Blond and Nick Timothy. 

Whyte’s key point is that the post-liberals are wrong to blame liberalism for the contemporary ills of the western world. He acknowledges problems like family breakdown, but pins the blame on government intervention.

He claims that post-liberals make a fundamental error by conflating the classical liberalism of free markets with the progressive politics of the bloated welfare state. Post-liberals argue that the former leads to the latter, because the state has to expand in order to help individuals satisfy their desires. Whyte’s key objection to this linkage is that classical liberalism was never about government intervening to supply what people want, but rather allowing people to make their own decisions so that they can take responsibility for themselves.

Ideologically, it’s a coherent position; but in the real world it doesn’t work. Look back over the modern history of every western nation and classical liberalism always turns into social liberalism, often followed by full-on social democracy. The size of the welfare state may vary somewhat — from Singaporean parsimony all the way up to Scandinavian levels of largesse — but in all cases welfarism expands far beyond its starting point.

In theory, it doesn’t have to be this way, but in practice it invariably does. Unless the classical libs want to adapt the Left-wing excuse that ‘real communism has never been tried’, they need to accept that liberalism inevitably leads to welfarism.

And no wonder. Whyte is correct in stating that capitalism has massively enriched the world, but the enrichment of a society is precisely what makes deprivation among the have-nots increasingly intolerable. The state therefore expands to fill the gaps that the market leaves behind. 

It also expands to regulate markets. For all of Whyte’s talk of the “spontaneous order” of a liberal society, there is also a tendency towards chaos. Does he really imagine that we could make our traffic laws voluntary? Or allow the global banking system to meltdown, as it would have done in 2008 if governments hadn’t intervened? So the neat distinction between a state that merely allows individual decision-making and one that indulges individual desires is much messier in the real world. 

From Singapore to Sweden, state intervention is required to provide the order that enables individual decision making. And furthermore how the state intervenes goes well beyond pure pragmatism. Every intervention has moral content — i.e. it should be informed by judgments as to how things ought to be, not just how they need to be.

Whyte makes some questionable claims about post-liberalism. For instance, he asserts that both Marine Le Pen and Theresa May “espouse roughly the same ideas as the intellectual post-liberals” — a sentence in which the word “roughly” does an awful lot of work. However, he’s spot on when he says that “postliberals reject the liberal idea that the state should be neutral about the nature of ‘the good life’”.

We do indeed. However, because we’re not anti-liberals, we would regard a conception of the good life as being integral to a truly liberal society. Without this moral sense the alternatives are a state of total anarchy, absolute tyranny or complete capture by vested interests. 

Join the discussion


To join the discussion, get the free daily email and read more articles like this, sign up.

It's simple, quick and free.

Sign me up
Subscribe
Notify of
guest
20 Comments
Most Voted
Newest Oldest
Inline Feedbacks
View all comments
Peter B
Peter B
11 days ago

I find this critique of classical liberalism unconvincing. Amongst the reasons, the fact the Bismarck effectively founded the German welfare state. I don’t think anyone considers him to have been a liberal.
I actually suspect the main reason why some countries and societies have gone over to “welfarism” (the author’s term) is cultural and not necessarily linked to political parties or whichever alphabet soup variety of liberalism you choose to pick on. I don’t think labels like “post-liberal” have any real meaning or utility.
Until we can get a majority of people (and lift the dead weight of the media) to revisit their assumptions and beliefs (about personal responsibility amongst other things) and ditch the magical thinking about “fairness” and “equality”, I think we shall be stuck with welfarism. Sadly. Regardless of political parties or labels.

Richard Pearse
Richard Pearse
11 days ago
Reply to  Peter B

I agree (Peter B. ) to an extent, but the article makes a lot of sense (perhaps we can dispense with “post-liberal” etc. and the idea that free-markets destroy Religion and families all by themselves).

For example, the fact always seems to surface in “free” economies that some people (most) do well, and some do not. Perhaps those that do well exhibit the old “Bourgeois” virtues – grounded in equal rights and opportunities, of:

Responsibility/Self-Reliance
Industriousness (and deferred gratification
Civility, and
Tolerance of other religious views.

However, some people inevitably lack those virtues, or reject them and don’t do as well.
Then the issue becomes – do we let them rot or control (re crime) and provide for them?

The point of the article, i think, was that, in such situations, the fact of the VERY rich will make the VERY poor less able to be tolerated by the middle.

That said, the great waves of governments intrusions (in the US- the waves of progressives: FDR, Lyndon Johnson and Obama-Biden, have resulted in families and poor people becoming more dependent on government and less on family (eg, the notorious welfare mothers with 5 children and no husbands, gangbangers).

Short of undoing progressive overreach and reversing the rot of bourgeois virtues, the poor will always be with us, and liberal (and other systems) will always try to “help” them (rather than relying on charities and good will of the great mass of mankind.

Steve Murray
Steve Murray
11 days ago
Reply to  Richard Pearse

I agree with much of that, except that the very definition of poverty has now become in-built into the welfare system, as a percentage of the median income. In effect, that should mean there are almost no “VERY poor” since the welfare state should keep everyone’s heads above the waterline. Of course, there’s homelessness and that might be seen as an indictment of the failures of the welfare state; left-leaning political parties would certainly think so, but the causes of such poverty are far more complex than simply welfarism, meaning that more welfare would be unlikely to make much headway.
Are we to start forcing the homeless off the streets and shop doorways into refuges? We did something akin to this during lockdowns, and the hope was expressed that it might bring an end to the problem. I don’t have the figures but i suspect we’re pretty much back to where we started pre-pandemic.

Andrew McDonald
Andrew McDonald
11 days ago
Reply to  Steve Murray

Nov 2021 DLUHC claim was that 26,000 of 37,000 rough sleepers picked up under pandemic arrangements had been moved on into long term housing arrangements. I haven’t seen anything more recent on this particular data.

Richard Pearse
Richard Pearse
11 days ago
Reply to  Steve Murray

Excellent point (we allow them to “rot” on the streets of San Francisco). Btw, Phill Gramm (phd economist and former Texas Senator) and others have a new book out: The Myth of American Inequality (ordered it, but haven’t read yet – but they wrote an article explaining key points in the WSJ and in various podcasts)

The key point is that the governmental data collectors (since WWII) decided to omit information about in-kind transfers (food stamps, Medicare) and taxes and other transfers, and conclude that the 16+% “ poverty rate is actually much, much lower (more like 4%) and the range of inequality between top quintile and bottom quintile are much, much lower than than published (they spend a chapter on Bezos and Musk et al, which I’ll be interested to read).

Counting ALL transfers, the poorest of the poor receive (direct cash and benefits) about $45k per year – more than many can make if they work. The bottom 50% receive about and extra 16% (will have to check this) then they pay in taxes, while the top 50% “lose” about 50% of what they earn, through taxes.

So the poor are doing fine, receiving free needles in San Francisco, plus the costs of cleaning up after them (including after they use the sidewalks and streets as a private “bathroom”. )

Tony Buck
Tony Buck
10 days ago
Reply to  Richard Pearse

No one volunteers to become one of the poor, despite your dishonest pretence that being poor is a good deal.

They are betrayed into poverty either by personal weaknesses (such as drug taking), poor mental health, poor education or mere bad luck.

Mr Sketerzen Bhoto
Mr Sketerzen Bhoto
10 days ago
Reply to  Steve Murray

That relative view of poverty is twice bad. The rich 1% can get richer than us all and it’s not included, the median could collapse and relative poverty would decline.

Brian Villanueva
Brian Villanueva
10 days ago
Reply to  Steve Murray

The homeless crisis is a blight on our society, not because they’re inconvenient, but because civilized people would not treat their fellow citizens this way. Civilized people would not allow their fellow men to run around half clothed screaming at the voices they can’t silence in their own heads when we have simple and cheap pharmacological means to help quiet those voices,

However, it is liberalism that says coercive mental health treatment is wrong. It was liberals who closed the insane asylums, perhaps with good intentions. It is liberals who now demand “housing first” so as to not violate the autonomy and free will of the crazy people they want to put into those houses.

Tony Buck
Tony Buck
10 days ago
Reply to  Richard Pearse

If you rely on the “good will of the great mass of mankind” you’ll freeze to death on the streets.

Tony Buck
Tony Buck
10 days ago
Reply to  Peter B

Fairness isn’t magical thinking. It’s a virtue that society can’t flourish without.

polidori redux
polidori redux
10 days ago
Reply to  Tony Buck

Neither, it would seem, does it automatically flourish with it. We are living in the fairest and most compassionate societies that have ever existed, and yet I get the impression that you are still not satisfied.

Mr Sketerzen Bhoto
Mr Sketerzen Bhoto
10 days ago
Reply to  Peter B

Every time you create a liberal right it has to be policed, generally by the state. Make homosexuality legal and made it more visible then the next step is clearly for the state to make harassment of homosexuals illegal. Be more liberal on women’s rights and then companies have to be legislated to not fire women when they are married, and then to include anti discrimination policies on executives and boards. Same with race. Patrick Dineen has written about this fairly exhaustively.

Last edited 10 days ago by Franz Von Peppercorn
Brian Villanueva
Brian Villanueva
10 days ago
Reply to  Peter B

Classic liberalism is about “liberating” people from constraints. The same impetus that that questions serfdom and slavery also questions the biological reality of sex — all are constraints to be overcome. This same ideology will embrace transhumanism shortly, again, another constraint to liberate people from. Liberalism seeks maximal personal autonomy — it MUST break all constraints on individual behavior.

You want people to “revisit their assumptions and beliefs about personal responsibility”, but that posits some universal standard of “responsibility” or “normalcy” or “social rules”, all of which are forms of constraint on human autonomy, and are therefore incompatible with liberalism. Patrick Deenen wrote a book illustrating this in great detail with innumerable examples. If you don’t feel like reading 350 pages though, Rod Dreher today has an article on the same subject: https://www.theamericanconservative.com/fed-up-with-the-ruling-class/

The West survived the Enlightenment on 1700 years of shared Greco-Judeo-Christian cultural inertia. (If you don’t see how Enlightenment liberalism requires Judeo-Christianity, try to prove that “all men are created equal” or “humans have rights” without starting from some kind of divine source.) But America & Europe both have now run that down and are suddenly realizing that, sans a shared cultural heritage, secular liberalism can’t hold society together because it doesn’t permit a social contract to exist beyond “my rights only stop at your nose”. This is maximal individual autonomy in 1 sentence or less, and while it sounds good at first, it ends in an ever larger state policing an ever growing number of conflicts between rights and noses.

I am a post-liberal for the same reason I voted for Donald Trump — lousy other options. I would prefer to live in a broadly tolerant and liberal society with basic Judeo-Christian norms, but that’s not on the table today nor will it be again for a long time. We face the same choice the Spaniards did in the 30’s: totalitarian Left vs authoritarian Right. The Left is terrifying to me, thus I will take the Right. If someone can show me a way back to a stable, tolerant, liberal republic, I’ll jump at it. But I don’t see one.

Last edited 10 days ago by Brian Villanueva
joe hardy
joe hardy
9 days ago

Thank you for this.

Roy Mullins
Roy Mullins
11 days ago

Absolutely right but I don’t see how EU countries and the UK can keep generous social models in the globalised world. I have always wondered what ‘value added’ our countries can ultimately provide to support our social models but have not found a satisfactory answer. I wonder whether different countries social models ( which I’m sure the vast majority of people would like to at least some degree ) will tend to converge to a lower level than we typically have in Western developed countries at the moment.

Last edited 11 days ago by D M
James Jenkin
James Jenkin
11 days ago

Such an interesting article. Love the provocative idea that empirical evidence shows liberalism always leads to welfarism.

But is it true? What about Thatcher, Reagan, Menzies…

Roy Mullins
Roy Mullins
11 days ago
Reply to  James Jenkin

Sure. The level of ‘welfarism’ changes a bit with change of government and differs a lot between countries but pure ‘classical liberalism’ as one might argue was tried in UK in 18th / 19th centuries has not proved to be stable and has not survived

Last edited 11 days ago by D M
Cassander Antipatru
Cassander Antipatru
11 days ago
Reply to  James Jenkin

The welfare state was much bigger under any of them than it had been in, say, 1900.

Martin Layfield
Martin Layfield
11 days ago
Reply to  James Jenkin

Not so sure about Reagan and Menzies, but under Thatcher the amount of spending on welfare barely budged, and until well into her second term unemployment was very high. Mrs Thatcher would later say Blair and New Labour were her greatest achievement, which is curious given the welfare state expanded significantly under Blair. Perhaps more proof that economic liberalism is soon followed by welfarism!

Brian Villanueva
Brian Villanueva
10 days ago
Reply to  James Jenkin

Look at total budgets. None of them shrank government, in either absolute or per capita terms.