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Sunday, September 12, 2004

How Socialists Stole Liberalism

The political and economic concept of liberalism originally meant the exact opposite of what it is taken to mean today. 

Reviewing how liberalism was transformed from the free-market economic and political ideas of Adam Smith into the Kerry-Edwards’ campaign theme of “Two Americas” will provide perspective on the cultural civil war now raging in our society.

Originally, at the time that the United States came into existence as an independent nation, liberalism meant literally freedom: freedom for individuals to pursue their own economic aims and plans, with the least possible government regulation and interference.  This was the concept of “laissez-faire” economics. 

Think of society metaphorically as millions of individuals working on PCs, each free to experiment and invent new ways to maximize his output and to do things never before imagined.  The internet became a fundamental part of modern communications and every-day life in this way.  In contrast, present-day liberal-socialism metaphorically wants to take away the PCs and restrict all computer capacity to great main-frame computers scheduled and regulated by intellectual planners, who presumably know better than you what is in your best interests.

Today liberalism means that the national state must regulate economic activity and individual behavior in ways that will promote equal distribution of all of society’s goods and services.  This brand of liberalism is a collectivist concept.  Like a pot-luck dinner, whatever individuals produce is really the common property of society.  Liberal regulators therefore will be the ones to decide how much of what you produce you will be permitted to keep and how much you must share with other people whom you don’t know and with whom you have no ties of family or friendship. 

This is what requires liberalism to think in terms of collective classes of people: by race, ethnicity, sex, sexual orientation, and economic status.  Liberalism is thus in the contradictory position of claiming that the individual has primacy, but always subordinating individuality in the economic realm to what intellectuals decree to be the collective good.

The original version of liberalism as a political and economic concept came into existence in the mid-18th century.  Its most famous exposition was Adam Smith’s “Wealth of Nations,” published coincidentally in 1776.  The message of that work is that the true wealth of any nation is its productive capacity and output of useful goods and services.  Thus the wise political society is structured to permit and to reward maximum personal freedom, energy, and inventiveness of its individual citizens.

Smith saw that high protective tariffs to favor English farmers were distorting the flow of capital into less than fully productive activity.  If wheat and other commodities could be imported and made available at lower prices than the tariff-protected local farm products, lowering or eliminating tariffs would have two beneficial results.  First, the general public in all levels of economic wealth would have larger quantities of healthful food available at the same cost.  Second, capital tied up in local farming, when faced with import competition that would lower farming profits, would be redeployed into more profitable and therefore more productive new uses.  From this came the industrial revolution that created our modern world.

That is the meaning of the generally misunderstood aphorism in the “Wealth of Nations” about the “invisible hand” that guides a free-market economy. Present-day liberal-socialists caricature Smith’s “invisible hand” to mean that a conspiracy of privileged, wealthy, Big Business monopolists controls everything behind the scene.

The quote is important enough to give it in full context. In Book IV, Chapter II, Smith explains:

“But it is only for the sake of profit that any man employs a capital in the support of industry; and he will always, therefore, endeavor to employ it in the support of that industry of which the produce is likely to be of the greatest value, or to exchange for the greatest quantity either of money or goods. 

“But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value.  As every individual, therefore, endeavors as much as he can both to employ his capital in support of domestic industry, and so to direct industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can.  He generally, indeed, neither intends to promote public interest, nor knows how much he is promoting it.  By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.  Nor is it always the worse for the society that it was no part of it.  By pursuing his own interest he frequently promotes that of society more effectually than when he intends to promote it.” 

Adam Smith’s original liberalism, or individual economic freedom, and present-day liberal-socialism are polar opposites.  Since the early decades of the 20th century, the United States has gradually abandoned the fundamental principles of our founding generations.  Those founding principles were summed up in the War of Independence slogan, “No Taxation Without Representation,” that is, individual property rights are part of fundamental natural law.  And any government infringing upon such inalienable individual rights will, in doing so, have forfeited its right to rule.

To give but one example in the news today,we have now reached the point at which the public hardly bats an eye when Senator Kerry suggests that he will impose price controls on the pharmaceutical industry in order to lower health-care costs.  He proposes to do this by importing more drugs from Canada, where Canada’s socialistic government has already imposed price controls.

We don’t need Einstein to see that price controls will reduce profits in the pharmaceutical industry, making it a less attractive place for new investment in research and production capacity.  Thus, as patent rights on existing drugs expire, we will have fewer new drugs becoming available each year.  As Adam Smith correctly noted, “... every individual, therefore, endeavors as much as he can both to employ his capital in support of domestic industry, and so to direct industry that its produce may be of the greatest value…”

The “Two Americas” theme of the Kerry-Edwards campaign is simply the latest packaging of the liberal-socialist doctrine that increasingly has dominated political discourse for the past century.  As Senator Edwards expressed it in his standard stump speech in Des Moines, Iowa, last December 29, 2003:

“....there are two Americas, not one:  One America that does the work, another America that reaps the reward.  One America that pays the taxes, another America that gets the tax breaks.  One America that will do anything to leave its children a better life, another America that never has to do a thing because its children are already set for life.  One America—middle-class America - whose needs Washington has long forgotten, another America - narrow-interest America - whose every wish is Washington’s command.  One America that is struggling to get by, another America that can buy anything it wants, even a Congress and a President.”

Liberals, seeing the world in this perspective, have a burning religious faith that socialism is the answer.  A good political society will socialize all that wealth, that is, bring it all under government regulatory control and redistribute it “fairly.”  Fairly for socialists means equally, without regard to individual circumstances, individual effort or creativity.  Everything belongs collectively to socialistic society, therefore political leaders are both empowered and obligated to redistribute it fairly.

How did we come to this head-on conflict?

The seminal exposition of 20th century American liberal-socialism is to be found in Herbert Croly’s 1909 “The Promise of American Life.”  In addition to writing the book, Mr. Croly became the founding editor of The New Republic, the most influential journal of liberal religious philosophy in the first half of the 20th century.

To understand where Croly was coming from, you need to know that his father had been a founder of New York City’s church of the Religion of Humanity, the materialistic and secular philosophical religion propounded by France’s Auguste Comte in the first decades of the 1800s.  Comte was a colleague of and major contributor to Henri de Saint-Simon when Saint-Simon first articulated the theory of socialism.  Young Herbert Croly was raised in the church of The Religion of Humanity.

“The Promise of American Life” has been characterized as the classic statement of the Progressive, liberal movement in America.  It starts with the original definitions of American individualism founded on personal property rights, then introduces a new definition of America’s national purpose. 

Said Croly, “The men who were responsible for this great work [founding the United States] were not, perhaps, entirely candid in recognizing the profound modifications in their traditional ideas which their constructive political work had implied; but they were at all events fully aware of the great importance of their addition to the American idea.  That idea, while not ceasing to be at bottom economic, became more than ever political and social in its meaning and contents.  The Land of Freedom became in the course of time also the Land of Equality…......In case the majority of good Americans were not prosperous, there would be grave reasons for suspecting that our institutions were not doing their duty.”

To justify this transition from the Land of Freedom to the Land of Equality, Croly asserts a Marxian, materialistic thesis that, “The implication was, and still is, that by virtue of the comfortable and less trammeled lives which Americans were enabled to lead, they would constitute a better society and would become in general a worthier set of men…....In our favored land political liberty and economic opportunity were by a process of natural education inevitably making for individual and social amelioration….....The moral and social aspiration proper to American life is, of course, the aspiration described by the word democratic….A numerous and powerful group of reformers has been collecting whose whole political policy and action is based on the conviction that the “common people” have not been getting the Square Deal to which they are entitled under the American system….The automatic fulfillment [that is, the free-market laissez-faire policy of Adam Smith’s original liberalism] of the American national Promise is to be abandoned, if at all, precisely because the traditional American confidence in individual freedom has resulted in a morally and socially undesirable distribution of wealth.” 

This is the theory of the French revolutionary philosophers, enlarged by Karl Marx, that, while humans were naturally good in the state of nature before the advent of private property, when people lived in a sort of Garden of Eden, people’s character in modern life is entirely determined by the physical, materialistic conditions under which they live and work.  In other words, the Protestant Christianity on which the colonies and the United States were founded is to be scrapped.  It’s not the morality of our Judeo-Christian heritage that makes individuals better people, but the redistribution of wealth as equally as possible.

In a nut shell, Progressives, now called liberals, sincerely want to perfect society and improve the lot of every citizen.  But that requires us to give up individual liberties so that they can organize society properly. 

As Mr. Croly put it, “The Promise of American life is to be fulfilled - not merely by a maximum amount of economic freedom, but by a certain measure of discipline; not merely by the abundant satisfaction of individual desires, but by a large measure of individual subordination and self-denial…..In becoming responsible for the subordination of the individual to the demand of a dominant and constructive national purpose, the American state will in effect be making itself responsible for a morally and socially desirable distribution of wealth.” 

Needless to say, that “certain measure of discipline” is to be determined and administered by Mr. Croly and his liberal-socialist cohort.  Equally obviously, there will no longer be a place for Christianity and the age-old traditions of personal responsibility and individual morality.

Stand back and make way for the ACLU.