Classical liberalism was, at its core, a transitional philosophy: a necessary step in the historical evolution away from the absolutism of monarchy and toward the only consistent vision of liberty— anarchy.
Early liberals—still entangled in monarchy’s remnants—advocated a minimal state, believing it necessary to secure an order more consistent with human nature. But they failed to grasp the inherent contradiction: even the most minimal state runs contrary to human nature, and every state, by its nature, carries the seed of its own expansion.
To be fair, their thinking was shaped by their era: the urgent task of curbing the divine right of kings and securing basic individual freedoms. Classical liberalism, for all its virtues, was a clever device—an attempt to lure faltering tyrants into restraint through constitutional promises and liberal rhetoric.
But history has only confirmed what human action already made inevitable: the compromise with the state was doomed from the start. From the mid-19th century onward, even the most restrained liberal states have revealed their true character as instruments of tyranny, their violence expanding, their reach ever-extending. The result has not been liberty, but its systematic erosion; the so-called “night-watchman” state collapses the moment one confronts the nature of coercive monopoly.
This flaw was not lost on Gustave de Molinari, perhaps the first to push liberalism to its logical end. As Ralph Raico summarizes:
The tendencies of modern society are deeply disappointing to Molinari. In the middle of the nineteenth century it appeared that peace and free trade would “rule the civilized world.” Now it is evident that “the parliamentary and constitutional regime has ended up in socialism.” Molinari feared the coming of the “socialist Mardi Gras”—the confiscation of the wealth created by capitalism—to be followed by the depletion of that wealth, and then “a long Lent.” He noted that, in order to disarm socialism, “certain states have had recourse to philanthropy,” i.e., the welfare state. Freedom of labor has practically disappeared, as the workers, after winning the right to organize, went on—“such is the protectionist nature of man”—to employ violence against employers and non-unionized workers; in this way, “the unionized workers taught fraternity to the non-unionized.” And on the eve of the First World War Molinari declared that “the interests of the most influential classes”—state functionaries, military and civilian, and armaments makers—“are pushing towards war.”
In this last work, Molinari continues to voice “conservative” and even “reactionary” views out of keeping with the customary profile of the nineteenth-century laissez-faire liberal. Seeing rather further than many other French liberals, Molinari was no supporter of the Northern side in the American Civil War; here, too, he perceived class interest at work. The war “ruined the conquered provinces,” but permitted the industrialists of the North to impose the protectionist policy that led ultimately “to the regime of trusts and produced the billionaires.”
No one demonstrated this logic more clearly than Murray Rothbard. He said,
I became an anarchist and I can remember exactly what happened. It was pure logic that did it. I used to argue with my very close friends who were very intelligent liberals.
We had sessions, sitting around, arguing constantly. We had a similar session at my house talking till two or three in the morning. That’s usual for me because I’m a night person. Three in the morning is just about average for breaking up an evening.
I said to myself I think something important happened tonight, what the hell was it? Because it wasn’t just like the usual argument.
I thought the thing over and I realized what it was because one of them said, at one point, because I was in favor of laissez-faire, a pure minarchist at that point, and they were just regular liberals, he asked, “Look, why do you favor government-supplied police force and courts? What’s your justification for that?”
I said something like, “Well, the people get together and they decide that they can have this monopoly court system, and monopoly police.”
They said, very intelligently, “Well if the people can get together and say that, why can’t they get together and set up a steel plant and a dam and all the rest of it, all sorts of other government industries?”
I thought to myself, “By God, they’re right!” I came to the conclusion that laissez-faire was inconsistent.
Either you had to go over to anarchism and scrap government altogether, or else you had to become a liberal, and, of course, that was out of the question for me to become a liberal. That was it. That was my conversion.
The real danger today is that many treat classical liberalism, not as a stage, but as a destination. They reify its principles as if they were the final word on liberty, rather than a transient phase in the larger evolution. Follow classical liberalism to its logical conclusion, and it leads, not to a minimal state, but to no state at all.
Ultimately, the choice is not between a larger or smaller state; it is between liberty and slavery. It is a choice between peace and voluntary exchange, or violence and servitude. There is no halfway house. Every concession is a retreat. Every compromise corrodes the very principles that make prosperous human life possible.
