LEFT, RIGHT, AND THE PROSPECTS FOR LIBERTY by Murray N. Rothbard
The conservative has long been marked, whether he knows it or not, by long-run pessimism,
by the belief that the long-run trend, and therefore time itself, is against him.
Hence the inevitable trend runs toward left-wing statism at home and communism abroad.
It is this long-run despair that accounts for the conservative's rather bizarre short-run
optimism.
For since the long run is given up as hopeless, the conservative feels that his only hope
of success rests in the current moment.
In foreign affairs, this point of view leads the conservative to call for desperate showdowns
with communism, for he feels that the longer he waits, the worse things will ineluctably
become.
At home, it leads him to total concentration on the very next election, where he is always
hoping for victory and never achieving it.
The quintessence of the practical man, and beset by long-run despair, the conservative
refuses to think or plan beyond the election of the day.
Pessimism, however, both short-run and long-run, is precisely what the prognosis of conservatism
deserves.
For conservatism is a dying remnant of the Ancien Régime of the pre-industrial era,
and as such, it has no future.
In its contemporary American form, the recent conservative revival embodied the death throes
of an ineluctably moribund, fundamentalist, rural, small-town, white Anglo-Saxon America.
But however of the prospects for liberty?
For too many libertarians mistakenly link the prognosis for liberty with that of the
seemingly stronger and supposedly allied conservative movement.
This linkage makes the characteristic long-run pessimism of the modern libertarian easy to
understand.
But this paper contends that while the short-run prospects for liberty at home and abroad may
may seem dim, the proper attitude for the libertarian to take is that of unquenchable long-run optimism.
The case for this assertion rests on a certain view of history, which holds first that before
the 18th century in Western Europe there existed, and still continues to exist outside the West,
an identifiable old order.
After the old order took the form of feudalism or oriental despotism, it was marked by tyranny,
exploitation, stagnation, fixed caste, and hopelessness and starvation for the bulk of
the population.
In some, life was nasty, brutish and short.
Here was Maine's society of status and Spencer's military society.
The old order was and still remains the great and mighty enemy of liberty, and it was particularly
mighty in the past because there was then no inevitability about its overthrow.
When we consider that basically the old order had existed since the dawn of history, in
all civilizations, we can appreciate even more the glory and the magnitude of the triumph
of the liberal revolution of and around the 18th century.
Part of the dimensions of this struggle has been obscured by a great myth of the history
of Western Europe, implanted by anti-liberal German historians of the late 19th century.
The myth held that the growth of absolute monarchies and of mercantilism in the early
modern era was necessary for the development of capitalism, since these served to liberate
the merchants and the people from local feudal restrictions.
In actuality, this was not at all the case.
The King and his nation-states served rather as a super feudal overlord, re-imposing and
re-enforcing feudalism just as it was being dissolved by the peaceful growth of the market
economy.
The King superimposed his own restrictions and monopoly privileges onto those of the
feudal regime.
The absolute monarchs were the old order writ large and made even more despotic than before.
Capitalism indeed flourished earliest and most actively precisely in those areas where
the central state was weak or non-existent, the Italian cities, the Hanseatic League,
the confederation of 17th century Holland.
Originally the old order was overthrown or severely shaken in its grip in two ways.
One was by industry and the market expanding through the interstices of the feudal order,
for example, industry in England developing in the countryside beyond the grip of feudal,
state and guild restrictions.
More important was a series of cataclysmic revolutions that blasted loose the old order
and the Old Ruling Classes, the English Revolutions of the 17th Century, the American Revolution
and the French Revolution, all of which were necessary for the ushering in of the Industrial
Revolution and of at least partial victories for individual liberty, laissez-faire, separation
of church and state, and international peace.
The society of status gave way, at least partially, to the society of contract.
The military society gave way partially to the industrial society.
The mass of the population now achieved a mobility of labor and place, and accelerating
expansion of their living standards for which they had scarcely dared to hope.
Some had indeed brought to the Western world not only liberty, the prospect of peace, and
the rising living standards of an industrial society, but above all, perhaps, it brought
hope, a hope in ever greater progress that lifted the mass of mankind out of its age-old
sinkhole of stagnation and despair.
In their developed in Western Europe two great political ideologies centered around this
new revolutionary phenomenon.
One was liberalism, the party of hope, of radicalism, of liberty, of the industrial
revolution, of progress, of humanity.
The other was conservatism, the party of reaction, the party that longed to restore the hierarchy,
liberalism, theocracy, serfdom and class exploitation of the old order.
Since liberalism admittedly had reason on its side, the conservatives darkened the ideological
atmosphere with obscurantist calls for romanticism, tradition, theocracy and irrationalism.
Political ideologies were polarized, with liberalism on the extreme left and conservatism on the
and the extreme right of the ideological spectrum.
That genuine liberalism was essentially radical and revolutionary, was brilliantly perceived
in the twilight of its impact by the great Lord Acton, one of the few figures in the
history of thought who, charmingly, grew more radical as he grew older.
Acton wrote that liberalism wishes for what ought to be, irrespective of what is.
In working out this view, incidentally, it was Acton, not Trotsky, who first arrived
at the concept of the permanent revolution.
As Gertrude Himmelfarb wrote in her excellent study of Acton, his philosophy developed to
the point where the future was seen as the avowed enemy of the past, and where the past
was allowed no authority except as it happened to conform to morality.
To take seriously this liberal theory of history, to give precedence to what ought to be over
what is, was, he admitted, virtually to install a revolution in permanence.
The revolution in permanence, as Acton hinted in the inaugural lecture and admitted frankly
in his notes, was the culmination of his philosophy of history and theory of politics.
This idea of conscience, that men carry about with them the knowledge of good and evil,
is the very root of revolution, for it destroys the sanctity of the past.
Liberalism is essentially revolutionary, Acton observed, facts must yield to ideas, peaceably
The Liberal, wrote Acton, far surpassed the Whig.
The Whig governed by compromise.
The Liberal begins the reign of ideas.
One is practical, gradual, ready for compromise.
The other works out a principle philosophically.
One is a policy aiming at a philosophy.
The other is a philosophy seeking a policy.
What happened to liberalism?
Why then did it decline during the 19th century?
This question has been pondered many times, but perhaps the basic reason was an inner
rot within the vitals of liberalism itself.
For with the partial success of the liberal revolution in the West, the liberals increasingly
abandon their radical fervor, and therefore their liberal goals, to rest content with
a mere defense of the uninspiring and defective status quo.
Two philosophical roots of this decay may be discerned.
First is the abandonment of natural rights and higher law theory for utilitarianism,
where only forms of natural or higher law theory can provide a radical base outside
the existing system from which to challenge the status quo.
And only such theory furnishes a sense of necessary immediacy to the libertarian struggle
by focusing on the necessity of bringing existing criminal rulers to the bar of justice.
Utilitarians, on the other hand, in abandoning justice for expediency, also abandon immediacy for quiet stagnation, and inevitably end up as objective apologists for the existing order.
The second great philosophical influence on the decline of liberalism was evolutionism or social darwinism, which put the finishing touches to liberalism as a radical force in society.
For the social darwinist erroneously saw history and society through the peaceful rose-colored glasses of infinitely slow, infinitely gradual social evolution,
Ignoring the prime fact that no ruling caste in history has ever voluntarily surrendered
its power, and that therefore liberalism had to break through by means of a series of revolutions,
the social Darwinists looked forward peacefully and cheerfully to thousands of years of infinitely
gradual evolution to the next supposedly inevitable stage of individualism.
An interesting illustration of a thinker who embodies within himself the decline of liberalism
in the 19th century is Herbert Spencer.
Spencer began as a magnificently radical liberal, indeed virtually a pure libertarian.
But as the virus of sociology and social Darwinism took over in his soul, Spencer abandoned libertarianism
Liberalism as a dynamic historical movement, although at first without abandoning it in
pure theory.
In short, while looking forward to an eventual ideal of pure liberty, Spencer began to see
its victory as inevitable, but only after millennia of gradual evolution, and thus,
in actual fact, Spencer abandoned liberalism as a fighting, radical creed, and confined
and his liberalism in practice to a weary rear-guard action against the growing collectivism of
the late 19th century.
Interestingly enough, Spencer's tired shift rightward in strategy soon became a shift rightward
in theory as well, so that Spencer abandoned pure liberty even in theory, for example in
and repudiating his famous chapter in social statics, The Right to Ignore the State.
In England, the classical liberals began their shift from radicalism to quasi-conservatism
in the early 19th century.
A touchstone of this shift was the general British liberal attitude toward the national
liberation struggle in Ireland.
This struggle was two-fold, against British political imperialism and against feudal landlordism,
which had been imposed by that imperialism.
By their Tory blindness toward the Irish drive for national independence and especially for
peasant property against feudal oppression, the British liberals, including Spencer,
symbolize their effective abandonment of genuine liberalism, which had been virtually born
in a struggle against the feudal land system.
Only in the United States, the great home of radical liberalism, where feudalism had
never been able to take root outside the South, did natural rights and higher law theory and
consequent radical liberal movements continue in prominence until the mid-19th century.
In their different ways, the Jacksonian and abolitionist movements were the last powerful
radical libertarian movements in American life.
Thus, with liberalism abandoned from within, there was no longer a party of hope in the
Western world, no longer a left movement to lead a struggle against the state and against
the unbreached remainder of the old order.
Into this gap, into this void created by the drying up of radical liberalism, there stepped
a new movement, socialism.
Libertarians of the present day are accustomed to think of socialism as the polar opposite
of the libertarian creed, but this is a grave mistake, responsible for a severe ideological
disorientation of libertarians in the present world.
As we have seen, conservatism was the polar opposite of liberty, and socialism, while to
the left of conservatism, was essentially a confused middle-of-the-road movement.
It was, and still is, middle-of-the-road because it tries to achieve liberal ends by the use
of conservative means.
In short, Russell Kirk, who claims that socialism was the heir of classical liberalism, and
Ronald Hamowy, who sees socialism as the heir of conservatism, are both right.
For the question is on what aspect of this confused centrist movement we happen to be
focusing.
Socialism, like liberalism and against conservatism, accepted the industrial system, and the liberal
All goals of freedom, reason, mobility, progress, higher living standards for the masses, and
an end to theocracy and war.
But it tried to achieve these ends by the use of incompatible, conservative means, statism,
central planning, communitarianism, etc.
Or rather, to be more precise, there were from the beginning two different strands within
and Socialism.
One was the right-wing authoritarian strand, from Saint-Simon down, which glorified statism,
hierarchy and collectivism, and which was thus a projection of conservatism trying to
accept and dominate the new industrial civilization.
The other was the left-wing relatively libertarian strand, exemplified in their different ways
by Marx and Bakunin, revolutionary and far more interested in achieving the libertarian
goals of liberalism and socialism, but especially the smashing of the state apparatus to achieve
the withering away of the state and the end of the exploitation of man by man.
Interestingly enough, the very Marxian phrase, the replacement of the government by men by
by the Administration of Things can be traced by a circuitous route from the great French
radical laissez-faire liberals of the early 19th century, Charles Comte, no relation to
Auguste Comte, and Charles Du Noyer.
And so too may the concept of the class struggle, except that for Du Noyer and Comte, the inherently
The antithetical classes were not businessmen versus workers, but the producers in society,
including free businessmen, workers, peasants, etc., versus the exploiting classes, constituting
and privileged by the state apparatus.
Saint-Simon, at one time in his confused and chaotic life, was close to Comte and Du
in the process, characteristically getting the whole thing balled up and converting businessmen
on the market as well as feudal landlords and others of the state privileged into exploiters.
Marx and Bakunin picked this up from the Sansemonians, and the result gravely misled the whole left
Socialist Movement.
For then, in addition to smashing the repressive state, it became supposedly necessary to smash
private capitalist ownership of the means of production.
Rejecting private property, especially of capital, the left socialists were then trapped
in a crucial inner contradiction.
If the state is to disappear after the revolution, immediately for Bakunin, gradually withering
for Marx, then how is the collective to run its property without becoming an enormous
state itself in fact, even if not in name?
This was a contradiction which neither the Marxists nor the Bakuninists were ever able
to resolve.
Having replaced radical liberalism as the party of the left, socialism, by the turn
of the 20th century, fell prey to this inner contradiction.
Most socialists, Fabians, Lasallians, even Marxists, turned sharply rightward, completely
abandoned the old libertarian goals and ideals of revolution and the withering away of the
and became cozy conservatives permanently reconciled to the state, the status quo and
the whole apparatus of neo-mercantilism, state monopoly capitalism, imperialism and war that
was rapidly being established and riveted on European society at the turn of the 20th
century.
For conservatism too had reformed and regrouped to try to cope with a modern industrial system
System and had become a refurbished mercantilism, a regime of statism marked by state monopoly
privilege in direct and indirect forms to favored capitalists and to quasi-feudal landlords.
The affinity between right socialism and the new conservatism became very close, the former
advocating similar policies but with a demagogic populist veneer.
Thus the other side of the coin of imperialism was social imperialism, which Joseph Schumpeter
trenchantly defined as an imperialism in which the entrepreneurs and other elements woo the
workers by means of social welfare concessions, which appear to depend on the success of export
monopolism.
Schumpeter, incidentally, realized that far from being an inherent stage of capitalism, modern imperialism was a throwback to the pre-capitalist imperialism of earlier ages, but with a minority of privileged capitalists now joined to the feudal and military castes in promoting imperialist aggression.
Historians have long recognized the affinity and the welding together of right-wing socialism with conservatism in Italy and Germany,
where the fusion was embodied first in Bismarckism and then in fascism and national socialism,
the latter fulfilling the conservative program of nationalism, imperialism, militarism, theocracy,
and a right-wing collectivism that retained and even cemented the rule of the old privileged
classes.
But only recently have historians begun to realize that a similar pattern occurred in
England and the United States.
Thus Bernard Semmel, in his brilliant history of the social imperialist movement in England
at the turn of the 20th century, shows how the Fabian society welcomed the rise of the
When in the mid-1890s the Liberal Party in England split into the radicals on the left
and the liberal imperialists on the right, Beatrice Webb, co-leader of the Fabians, denounced
the radicals as laissez-faire and anti-imperialists, while hailing the latter as collectivists and
imperialists.
An official Fabian Manifesto, Fabianism and the Empire, 1900, drawn up by George Bernard
Shaw, who was later, with perfect consistency, to praise the domestic policies of Stalin
and Mussolini and Sir Oswald Mosley, lauded imperialism and attacked the radicals who
who still cling to the fixed frontier ideals of individualist republicanism and non-interference.
In contrast, a great power must govern a world empire in the interests of civilization as
a whole.
After this, the Fabians collaborated closely with Tories and liberal imperialists.
Indeed, in late 1902, Sidney and Beatrice Webb established a small secret group of brain-trusters called The Coefficients.
As one of the leading members of this club, the Tory imperialist, Leopold S. Amery, revealingly wrote,
Sydney and Beatrice Webb were much more concerned with getting their ideas of the welfare state put into practice by anyone who might be prepared to help, even on the most modest scale, than with the early triumph of an avowedly socialist party.
There was, after all, nothing so very unnatural as Joseph Chamberlain's own career had shown
in a combination of imperialism in external affairs with municipal socialism or semi-socialism
at home.
Other members of the coefficients, who, as Amory wrote, were to function as brain trusts
or general staff for the movement were the liberal imperialist Richard B. Haldane, the
geo-politician Halford J. McIntyre, the imperialist and germanophobe Leopold Maxey, publisher
of the National Review, the Tory socialist and imperialist Viscount Milner, the naval
imperialist Carleon Bel-Aires, the famous journalist J. L. Garvin, Bernard Shaw, Sir
Sir Clinton Dawkins, partner of the Morgan Bank, and Sir Edward Gray, who, at a meeting
of the club, first adumbrated the policy of Entente with France and Russia that was to
eventuate in World War I.
The point, of course, is not that these men were products of some Fabian conspiracy, but
on the contrary, that Fabianism, by the turn of the century, was socialism so conservatized
as to be closely aligned with the other dominant neoconservative trends in British political
life.
The famous betrayal during World War I of the old ideals of revolutionary pacifism by
the European socialists and even by the Marxists should have come as no surprise that each
socialist party supported its own national government in the war with the honorable exception
of Eugene Victor Deb's Socialist Party in the United States, was the final embodiment
of the collapse of the classic socialist left.
From then on, socialists and quasi-socialists joined conservatives in a basic amalgam, accepting
the state and the mixed economy equals neo-mercantilism equals the welfare state equals interventionism
equals state monopoly capitalism, merely synonyms for the same essential reality.
It was in reaction to this collapse that Lenin broke out of the Second International to reestablish
classic revolutionary Marxism in a revival of left socialism.
In fact, Lenin, almost without knowing it, accomplished more than this.
It is common knowledge that purifying movements, eager to return to a classic purity shorn
of recent corruptions, generally purify further than what had held true among the original
classic sources.
There were, indeed, marked conservative strains in the writings of Marx and Engels themselves,
which often justified the state, western imperialism and aggressive nationalism.
It was these motifs, in the ambivalent views of the masters on this subject, that provided
the fodder for the later shift of the majority Marxists into the social-imperialist camp.
Lenin's camp turned more left than had Marx and Engels themselves.
Lenin had a decidedly more revolutionary stance towards the State, and consistently defended
and Supported Movements of National Liberation Against Imperialism.
The Leninist shift was more leftist in other important senses as well.
For while Marx had centered his attack on market capitalism per se, the major focus
of Lenin's concerns was on what he conceived to be the highest stages of capitalism, imperialism
and monopoly.
Hence Lennon's focus, centering as it did in practice on state monopoly and imperialism rather than on laissez-faire capitalism, was in that way far more congenial to the libertarian than that of Karl Marx.
Fascism and Nazism were the local culmination in domestic affairs of the modern drift toward right-wing collectivism.
It has become customary among libertarians, as indeed among the establishment of the West, to regard fascism and communism as fundamentally identical.
But while both systems were indubitably collectivist, they differed greatly in their socio-economic content.
Communism was a genuine revolutionary movement that ruthlessly displaced and overthrew the old ruling elites,
Science, while fascism, on the contrary, cemented into power the old ruling classes.
Hence, fascism was a counter-revolutionary movement that froze a set of monopoly privileges
upon society.
In short, fascism was the apotheosis of modern state monopoly capitalism.
Here was the reason that fascism proved so attractive, which communism, of course, never
did, to big business interests in the West, openly and unabashedly so in the 1920s and
early 1930s.
Of the fascist economy, Gaetano Salvimini perceptively wrote, In actual fact, it is
the State, that is, the taxpayer, who has become responsible to private enterprise.
In fascist Italy, the state pays for the blunders of private enterprise. Profit is private and
individual. Loss is public and social.
We are now in a position to apply our analysis to the American scene. Here we encounter a
contrasting myth about recent American history which has been propagated by current conservatives
and adopted by most American libertarians.
The myth goes approximately as follows.
America was, more or less, a haven of laissez-faire until the New Deal.
Then Roosevelt, influenced by Felix Frankfurter, the intercollegiate socialist society, and
other Fabian and communist conspirators, engineered a revolution which set America on the path
to Socialism, and further on, beyond the horizon, to Communism.
The present-day libertarian who adopts this or a similar view of the American experience
tends to think of himself as an extreme right-winger, slightly to the left of him, then, stands
the conservative, to the left of that, the middle of the road, and then leftward to Socialism
and Communism.
Hence the enormous temptation for some libertarians to red-bait, for since they see America as
drifting inexorably leftward to socialism and therefore to communism, the great temptation
is for them to overlook the intermediary stages and tar all of their opposition with the hated
red brush.
One would think that the right-wing libertarian would quickly be able to see some drastic flaws
in this conception.
For one thing, the income tax amendment, which he deplores as the beginning of socialism
in America, was put through Congress in 1909 by an overwhelming majority of both parties.
To look at this event as a sharp leftward move toward socialism would require treating
President William Howard Taft, who put through the 16th amendment, as a leftist, and surely
The New Deal was not a revolution in any sense.
Its entire collectivist program was anticipated, proximately by Herbert Hoover during the Depression
and beyond that by the war collectivism and central planning that governed America during
World War I.
Every element in the New Deal program, central planning, creation of a network of compulsory
industry cartels for industry and agriculture, inflation and credit expansion, artificial
raising of wage rates and promotion of unions within the overall monopoly structure, government
regulation and ownership, all this had been anticipated and adumbrated during the previous
two decades.
And this program, with its privileging of various big business interests at the top
The kinship of the collectivist heap was in no sense reminiscent of socialism or leftism.
There was nothing smacking of the egalitarian or the proletarian here.
No, the kinship of this burgeoning collectivism was not at all with socialism-communism, but
with fascism or socialism of the right, a kinship which many big businessmen of the
The 20s expressed openly in their yearning for abandonment of a quasi laissez-faire system
for a collectivism which they could control.
And surely William Howard Taft, Woodrow Wilson and Herbert Clark Hoover make far more recognizable
figures as proto-fascists than they do as crypto-communists.
The essence of the New Deal was seen far more clearly than in the conservative mythology
by the Leninist movement in the early 1930s, that is, until the mid-30s, when the exigencies
of Soviet foreign relations caused a sharp shift of the world communist line to popular
front approval of the New Deal.
Thus, in 1934, the British Leninist theoretician R. Palm Dutt published a brief but scathing
The Roosevelt policy, wrote Dutt, was to move to a form of dictatorship of a war type.
The essential policies were to impose a state monopoly capitalism through the NRA, to subsidize
business, banking and agriculture through inflation and the partial expropriation of
the mass of the people through lower real wage rates, and to the regulation and exploitation
of labor by means of government-fixed wages and compulsory arbitration.
In the New Deal, wrote Dutt, is stripped of its social reformist progressive camouflage,
the reality of the new fascist type of system of concentrated state capitalism and industrial
servitude remains, including an implicit advance to war.
Dutt effectively concluded with a quote from an editor of the highly respected Current
History Magazine.
The New America, the editor had written in mid-1933, will not be capitalist in the old
sense, nor will it be socialist.
If at the moment the trend is towards fascism, it will be an American fascism, embodying
the experience, the traditions, and the hopes of a great middle-class nation.
Thus, the New Deal was not a qualitative break from the American past.
On the contrary, it was merely a quantitative extension of the web of state privilege that
had been proposed and acted upon before, in Hoover's administration, in the war collectivism
of World War I, and in the progressive era.
The most thorough exposition of the origins of state monopoly capitalism, or what he calls
Political Capitalism in the United States is found in the brilliant work of Dr. Gabriel
Kolko.
In The Triumph of Conservatism, Kolko traces the origins of political capitalism in the
reforms of the progressive era.
Orthodox historians have always treated the progressive period, roughly 1900 to 1916,
As a time when free-market capitalism was becoming increasingly monopolistic, in reaction
to this reign of monopoly and big business, so the story runs, altruistic intellectuals
and far-seeing politicians turned to intervention by the government to reform and to regulate
these evils.
Kolko's great work demonstrates that the reality was almost precisely the opposite
of this myth.
Despite the wave of mergers and trusts formed around the turn of the century, Colco reveals,
the forces of competition on the free market rapidly vitiated and dissolved these attempts
at stabilizing and perpetuating the economic power of big business interests.
It was precisely in reaction to their impending defeat at the hands of the competitive storms
of the Market, that big business turned increasingly after the 1900s to the Federal Government
for aid and protection.
In short, the intervention by the Federal Government was designed not to curb big business
monopoly for the sake of the public wheel, but to create monopolies that big business
as well as trade associations of smaller business had not been able to establish amidst the
and the competitive gales of the free market. Both left and right have been persistently
misled by the notion that intervention by the government is ipso facto leftish and anti-business.
Hence the mythology of the new fair deal as read that is endemic on the right. Both the
The big businessmen led by the Morgan interests and Professor Kolko, almost uniquely in the
academic world, have realized that monopoly privilege can only be created by the state
and not as a result of free market operations.
Thus Kolko shows that beginning with Theodore Roosevelt's new nationalism and culminating
in Wilson's New Freedom, in industry after industry, for example, insurance, banking,
meat, exports and business generally, regulations that present-day rightists think of as socialistic
were not only uniformly hailed but conceived and brought about by big businessmen.
This was a conscious effort to fasten upon the economy a cement of subsidy, stabilization
and monopoly privilege.
A typical view was that of Andrew Carnegie, deeply concerned about competition in the
steel industry, which neither the formation of U.S. Steel nor the famous Gary Dinners
sponsored by that Morgan Company could dampen.
Carnegie declared in 1908 that it always comes back to me that government control and that
alone will properly solve the problem.
There is nothing alarming about government regulation per se, announced Carnegie.
Capital is perfectly safe in the gas company, although it is under court control.
So will all capital be, although under government control.
The Progressive Party, Kolko shows, was basically a Morgan-created party to re-elect Roosevelt
and punish President Taft, who had been overzealous in prosecuting Morgan enterprises.
The leftish social workers often unwittingly provided a demagogic veneer for a conservative
statist movement.
Wilson's new freedom, culminating in the creation of the Federal Trade Commission,
far from being considered dangerously socialistic by big business was welcomed enthusiastically
as putting their long-cherished program of support, privilege and regulation of competition
into effect.
And Wilson's war collectivism was welcomed even more exuberantly.
Edward N. Hurley, chairman of the Federal Trade Commission and formerly president of
The Illinois Manufacturers Association happily announced in late 1915 that the Federal Trade
Commission was designed to do for general business what the ICC had been eagerly doing
for the railroads and shippers, what the Federal Reserve was doing for the nation's bankers,
and what the Department of Agriculture was accomplishing for the farmers.
As would happen more dramatically in European fascism, each economic interest group was
being cartelized and monopolized and fitted into its privileged niche in a hierarchically
ordered socio-economic structure.
Particularly influential were the views of Arthur Jerome Eddy, an eminent corporation
lawyer who specialized in forming trade associations and who helped to father the Federal Trade
Commission.
In his magnum opus, fiercely denouncing competition in business and calling for governmentally
controlled and protected industrial cooperation, Eddie trumpeted that competition is war and
war is hell.
What of the intellectuals of the progressive period, damned by the present day right as
socialistic?
Socialistic in a sense they were, but what kind of socialism?
The conservative state socialism of Bismarck's Germany, the prototype for so much of modern
European and American political forms, and under which the bulk of American intellectuals
of the late 19th century received their higher education.
As Kolko puts it, the conservatism of the contemporary intellectuals, the idealization
Idealization of the State by Lester Ward, Richard T. Eli or Simon N. Patton was also
the result of the peculiar training of many of the American academics of this period.
At the end of the 19th century, the primary influence in American academic, social and
economic theory was exerted by the universities.
The Bismarckian idealization of the state with its centralized welfare functions was
was suitably revised by the thousands of key academics who studied in German universities
in the 1880s and 1890s.
The ideal of the leading ultra-conservative German professors, moreover, who were also
called socialists of the chair, was consciously to form themselves into the intellectual bodyguard
of the House of Hohenzollern, and that they surely were.
As an exemplar of the progressive intellectual, Colco aptly cites Herbert Crowley, editor
of the Morgan-financed New Republic.
Systematizing Theodore Roosevelt's new nationalism, Crowley hailed this new Hamiltonianism as
a system for collectivist federal control and integration of society into a hierarchical
structure.
Looking forward from the progressive era, Gabriel Kolko concludes that
A synthesis of business and politics on the federal level was created during the war in
various administrative and emergency agencies that continued throughout the following decade.
Indeed, the war period represents the triumph of business in the most emphatic manner possible.
Big business gained total support from the various regulatory agencies and the executive.
It was during the war that effective working oligopoly and price and market agreements
became operational in the dominant sectors of the American economy.
The rapid diffusion of power in the economy and relatively easy entry virtually ceased.
Despite the cessation of important new legislative enactments, the unity of business and the
Federal Government continued throughout the 1920s and thereafter, using the foundations
laid in the Progressive Era to stabilize and consolidate conditions within various industries.
The principle of utilizing the Federal Government to stabilize the economy, established in the
The context of modern industrialism during the progressive era became the basis of political capitalism in its many later ramifications.
In this sense, progressivism did not die in the 1920s, but became a part of the basic fabric of American society.
Thus, the New Deal.
After a bit of leftish wavering in the middle of the late 30s, the Roosevelt administration
re-cemented its alliance with big business in the national defense and war contract economy
that began in 1940.
This is an economy and a polity that has been ruling America ever since, embodied in the
permanent war economy, the full-fledged state monopoly capitalism and neo-mercantilism,
The Military-Industrial Complex of the Present Era.
The essential features of American society have not changed since it was thoroughly militarized
and politicized in World War II, except that the trends intensify and even in everyday
life men have been increasingly molded into conforming organization men serving the State
and its Military-Industrial Complex.
William H. White Jr. in his justly famous book, The Organization Man, made clear that
this molding took place amidst the adoption by business of the collectivist views of enlightened
sociologists and other social engineers.
It is also clear that this harmony of views is not simply the result of naivete by big
Businessmen, not when such naivete coincides with the requirements of compressing the worker
and manager into the mold of willing servitor in the great bureaucracy of the military industrial
machine.
And under the guise of democracy, education has become mere mass drilling in the techniques
of adjustment to the task of becoming a cog in the vast bureaucratic machine.
Meanwhile, the Republicans and Democrats remain as bipartisan in forming and supporting this establishment as they were in the first two decades of the 20th century.
Me tooism, bipartisan support of the status quo that underlies the superficial differences between the parties, did not begin in 1940.
How did the corporal's guard of remaining libertarians react to these shifts of the ideological spectrum in America?
An instructive answer may be found by looking at the career of one of the great libertarians of 20th century America, Albert J. Nock.
In the 1920s, when Nock had formulated his radical libertarian philosophy,
philosophy, he was universally regarded as a member of the extreme left, and he so regarded
himself as well.
It is always the tendency in ideological and political life to center one's attention on
the main enemy of the day, and the main enemy of that day was the conservative statism of
the Coolidge-Hoover administration.
It was natural, therefore, for Nock, his friend and fellow libertarian H. L. Mencken and other
radicals to join quasi-socialists in battle against the common foe.
When the New Deal succeeded Hoover, on the other hand, the milk and water socialists
and vaguely leftish interventionists hopped on the New Deal bandwagon.
On the left, only the libertarians, such as Nock and Macon, and the Leninists, before
the popular front period, realized that Roosevelt was only a continuation of Hoover in other
It was perfectly natural for the radicals to form a united front against Roosevelt with the older Hoover and Al Smith conservatives, who either believed Roosevelt had gone too far or disliked his flamboyant populistic rhetoric.
But the problem was that Nock and his fellow radicals, at first properly scornful of their newfound allies, soon began to accept them, and even don cheerfully the formerly despised label of conservative.
With the rank-and-file radicals, this shift took place, as have so many transformations of ideology and history, unwittingly, and in default of proper ideological leadership.
Partnership. For Nock, and to some extent for Mencken on the other hand, the problem
cut far deeper. For there had always been one grave flaw in the brilliant and finely
honed libertarian doctrine hammered out in their very different ways by Nock and Mencken.
Both had long adopted the great error of pessimism. Both saw no hope for the human race ever adopting
in the System of Liberty, despairing of the radical doctrine of liberty ever being applied
in practice, each in his own personal way retreated from the responsibility of ideological
leadership, making joyously and hedonically knock haughtily and secretively.
Despite the massive contribution of both men to the cause of liberty, therefore, neither
Neither could ever become the conscious leader of a libertarian movement.
For neither could ever envision the party of liberty as the party of hope, the party
of revolution, or, a fortiori, the party of secular messianism.
The era of pessimism is the first step down the slippery slope that leads to conservatism,
and hence it was all too easy for the pessimistic radical knock, even though still basically
It is fascinating that Albert J. Nock thus followed the ideological path of his beloved
spiritual ancestor, Herbert Spencer.
Both began as pure radical libertarians.
Both quickly abandoned radical or revolutionary tactics as embodied in the will to put their
theories into practice through mass action, and both eventually glided from Tory tactics
to at least a partial Toryism of content.
And so the libertarians, especially in their sense of where they stood in the ideological
World War II reinforced and cemented this alliance, for in contrast to all the previous
Since American wars of the century, the pro-peace and isolationist forces were all identified
by their enemies, and subsequently by themselves, as men of the right.
By the end of World War II, it was second nature for libertarians to consider themselves
at an extreme right-wing pole, with the conservatives immediately to the left of them, and hence
The Great Error of the Spectrum that persists to this day.
In particular, the modern libertarians forgot, or never realized, that opposition to war
and militarism had always been a left-wing tradition that had included libertarians.
And hence, when the historical aberration of the New Deal period corrected itself, and
The right wing was once again the great partisan of total war.
The libertarians were unprepared to understand what was happening, and tailed along in the
wake of their supposed conservative allies.
The liberals had completely lost their old ideological markings and guidelines.
Given a proper reorientation of the ideological spectrum, what then would be the prospects
for Liberty.
It is no wonder that the contemporary libertarian, seeing the world going socialistic and communistic,
and believing himself virtually isolated and cut off from any prospect of united mass action,
tends to be steeped in long-run pessimism.
But the scene immediately brightens when we realize that that indispensable requisite of
of Modern Civilization, The Overthrow of the Old Order, was accomplished by mass libertarian
action erupting in such great revolutions of the West as the French and American revolutions,
and bringing about the glories of the Industrial Revolution and the advances of liberty, mobility
and rising living standards that we still retain today.
Despite the reactionary swings backward to statism, the modern world stands towering
above the world of the past.
When we consider also that in one form or another, the old order of despotism, feudalism,
theocracy and militarism dominated every human civilization until the west of the eighteenth
century, optimism over what man has and can achieve must mount still higher.
It might be retorted, however, that this bleak historical record of despotism and stagnation
only reinforces pessimism, for it shows the persistence and durability of the old order
and the seeming frailty and evanescence of the new, especially in view of the retrogression
of the Past Century.
But such superficial analysis neglects the great change that occurred with the revolution
of the new order, a change that is clearly irreversible.
For the old order was able to persist in its slave system for centuries precisely because
it awoke no expectations and no hopes in the minds of the submerged masses.
Their lot was to live and eke out their brutish subsistence in slavery, while obeying unquestioningly
the commands of their divinely appointed rulers.
But the liberal revolution implanted indelibly in the minds of the masses, not only in the
West, but in the still futilely dominated undeveloped world, the burning desire for
of Liberty, for land to the peasantry, for peace between the nations, and, perhaps above
all, for the mobility and rising standards of living that can only be brought to them
by an industrial civilization.
The masses will never again accept the mindless serfdom of the old order, and given these
demands that have been awakened by liberalism and the industrial revolution, long-run victory
Industry for Liberty is inevitable.
For only liberty, only a free market can organize and maintain an industrial system, and the
more that population expands and explodes, the more necessary is the unfettered working
of such an industrial economy.
Laissez-faire and the free market become more and more evidently necessary as an industrial
System Develops, Radical Deviations Cause Breakdowns and Economic Crises.
This crisis of statism becomes particularly dramatic and acute in a fully socialist society,
and hence the inevitable breakdown of statism has first become strikingly apparent in the
countries of the socialist, that is, communist camp.
Where socialism confronts its inner contradiction most starkly, desperately it tries to fulfill
its proclaimed goals of industrial growth, higher standards of living for the masses
and eventual withering away of the state, and is increasingly unable to do so with its
collectivist means, hence the inevitable breakdown of socialism.
This progressive breakdown of socialist planning was at first partially obscured.
For in every instance the Leninists took power not in a developed capitalist country as Marx
had wrongly predicted, but in a country suffering from the oppression of feudalism.
Second, the communists did not attempt to impose socialism upon the economy for many
years after taking power.
and Soviet Russia until Stalin's forced collectivization of the early 1930s reversed the wisdom of
Lenin's new economic policy, which Lenin's favorite theoretician, Bukharin, would have
extended onward towards a free market.
Even the supposedly rabid communist leaders of China did not impose a socialist economy
on that country until the late 1950s.
In every case, growing industrialization has imposed a series of economic breakdowns so
severe that the communist countries, against their ideological principles, have had to
retreat step by step from central planning and return to various degrees and forms of
a free market.
The Lieberman Plan for the Soviet Union has gained a great deal of publicity, but the
The inevitable process of desocialization has proceeded much further in Poland, Hungary
and Czechoslovakia.
Most advanced of all is Yugoslavia, which, freed from Stalinist rigidity earlier than
its fellows, in only a dozen years has desocialized so fast and so far that its economy is now
hardly more socialistic than that of France.
The fact that people calling themselves communists are still governing the country is irrelevant
to the basic social and economic facts.
Central planning in Yugoslavia has virtually disappeared.
The private sector not only predominates in agriculture but is even strong in industry,
and the public sector itself has been so radically decentralized and placed under free pricing,
and Loss tests and a cooperative worker ownership of each plant, that true socialism hardly
exists any longer.
Only the final step of converting workers' syndical control to individual shares of ownership
remains on the path toward outright capitalism.
Communist China and the able Marxist theoreticians of Monthly Review have clearly discerned
the situation and have raised the alarm that Yugoslavia is no longer a socialist country.
One would think that free market economists would hail the confirmation and increasing
relevance of the notable insight of Professor Ludwig von Mises a half century ago, that
socialist states, being necessarily devoid of a genuine price system, could not calculate
economically, and therefore could not plan their economies with any success.
Indeed, one follower of Mises, in effect, predicted this process of desocialization
in a novel some years ago.
Yet neither this author nor other free market economists have given the slightest indication
of even recognizing, let alone saluting, this process in the communist countries.
Perhaps because their almost hysterical view of the alleged threat of communism prevents
them from acknowledging any dissolution in the supposed monolith of menace.
The novel in question is by Henry Hazlitt, The Great Idea, 1951.
Communist countries, therefore, are increasingly and ineradicably forced to desocialize and
will therefore eventually reach the free market.
The state of the undeveloped countries is also cause for sustained libertarian optimism.
For all over the world the peoples of the undeveloped nations are engaged in revolution
to throw off their feudal old order.
It is true that the United States is doing its mightiest to suppress the very revolutionary
We are left with the United States and the countries of Western Europe.
Here the case for optimism is less clear, for the quasi-collectivist system does not
present as stark a crisis of self-contradiction as does socialism.
And yet, here too, economic crisis looms in the future and gnaws away at the complacency
of the Keynesian economic managers, creeping inflation reflected in the aggravating balance
of payments breakdown of the once almighty dollar, creeping secular unemployment brought
about by minimum wage scales and the deeper and long-run accumulation of the uneconomic
distortions of the permanent war economy.
Moreover, potential crises in the United States are not merely economic.
There is a burgeoning and inspiring moral ferment among the youth of America against
the fetters of centralized bureaucracy, of mass education in uniformity, and of brutality
and Oppression, exercised by the minions of the state.
Furthermore, the maintenance of a substantial degree of free speech and democratic forms
facilitates, at least in the short run, the possible growth of a libertarian movement.
The United States is also fortunate in possessing, even if half forgotten beneath the statist
What the Marxists would call the objective conditions for the triumph of liberty exist
then everywhere in the world, and more so than in any past age.
For everywhere the masses have opted for higher living standards and the promise of freedom,
and everywhere the various regimes of statism and collectivism cannot fulfill these goals.
What is needed then is simply the subjective conditions for victory, that is, a growing
liberty cannot be fully achieved unless libertarians exist in number to guide the peoples to the proper path, but perhaps the greatest stumbling block to the creation of such a movement is the despair and pessimism, typical of the people of the world, and not of the people of the world, but of the people of the world, and of the people of the world, and of the people of the world.
of the libertarian in today's world.
Much of that pessimism is due to his misreading of history and his thinking of himself and
his handful of confrères as irredeemably isolated from the masses and therefore from
the winds of history.
Hence he becomes a lone critic of historical events rather than a person who considers
The Modern Libertarian has forgotten that the liberal of the 17th and 18th centuries
faced odds much more overwhelming than those which face the liberal of today.
For in that era, before the Industrial Revolution, the victory of liberalism was far from inevitable.
And yet, the liberalism of that day was not content to remain a gloomy little sect.
Instead, it unified theory and action.
Liberalism grew and developed as an ideology, and, leading and guiding the masses, made
the revolution which changed the fate of the world.
By its monumental breakthrough, this revolution of the 18th century transformed history from
from a chronicle of stagnation and despotism to an ongoing movement advancing toward a veritable
secular utopia of liberty and rationality and abundance.
The old order is dead or moribund, and the reactionary attempts to run a modern society
and economy by various throwbacks to the old order are doomed to total failure.
The liberals of the past have left to modern libertarians a glorious heritage, not only
of ideology but of victories against far more devastating odds.
The liberals of the past have also left a heritage of the proper strategy and tactics
for libertarians to follow, not only by leading, rather than remaining aloof from, the masses,
but also by not falling prey to short-run optimism.
For short-run optimism, being unrealistic, leads straight away to dissolution and then
to long-run pessimism.
Just as, on the other side of the coin, long-run pessimism leads to exclusive and self-defeating
concentration on immediate and short-run issues.
Short-run optimism stems, for one thing, from a naïve and simplistic view of strategy.
And liberty will win merely by educating more intellectuals, who in turn will educate opinion
molders, who in turn will convince the masses, after which the state will somehow fold its
tent and silently steal away.
Matters are not that easy.
For libertarians face not only a problem of education, but also a problem of power.
And it is a law of history that a ruling caste has never voluntarily given up its power.
But the problem of power is, certainly in the United States, far in the future.
For the libertarian, the main task of the present epoch is to cast off his needless
and debilitating pessimism, to set his sights on long-run victory, and to set out on the
road to its attainment.
To do this, he must, perhaps first of all, drastically realign his mistaken view of the
ideological spectrum.
He must discover who his friends and natural allies are, and above all, perhaps, who his
enemies are.
Armed with this knowledge, let him proceed in the spirit of radical, long-run optimism
that one of the great figures in the history of libertarian thought, Randolph Bourne, correctly
identified as the spirit of youth.
Let Bourne's stirring words serve also as the guidepost for the spirit of liberty.
Youth is the incarnation of reason pitted against the rigidity of tradition.
Roth puts the remorseless questions to everything that is old and established.
Why?
What is this thing good for?
And when it gets the mumbled evasive answers of the defenders, it applies its own fresh,
clean spirit of reason to institutions, customs and ideas, and finding them stupid, inane
or poisonous, turns instinctively to overthrow them and build in their place the things with
Youth is the leaven that keeps all these questioning, testing attitudes fermenting in the world.
If it were not for this troublesome activity of youth, with its hatred of sophisms and
glosses, its insistence on things as they are, society would die from sheer decay.
It is the policy of the older generation, as it gets adjusted to the world, to hide
read away the unpleasant things where it can, or preserve a conspiracy of silence and an
elaborate pretense that they do not exist.
But meanwhile the sores go on festering just the same.
Youth is the drastic antiseptic.
It drags skeletons from closets and insists that they be explained.
No wonder the older generation fears and distrusts the younger.
Youth is the avenging nemesis on its trail.
Our elders are always optimistic in their views of the present, pessimistic in their
views of the future.
Youth is pessimistic toward the present and gloriously hopeful for the future.
And it is this hope which is the lever of progress.
One might say, the only lever of progress.
The secret of life is then that this fine youthful spirit shall never be lost.
Out of the turbulence of youth should come this fine precipitate, a sane, strong, aggressive
spirit of daring and doing.
It must be a flexible, growing spirit, with a hospitality to new ideas and a keen insight
into experience.
To keep one's reactions warm and true is to have found the secret of perpetual youth,
and perpetual youth is salvation.