History: The Struggle for Liberty

3. John Stuart Mill

History the Struggle for Liberty 2003
Ralph Raico

Mill played a crucial, but inflated, role in liberalism. Rothbard did not like Mill much. Mill was a disaster on economic freedom and international issues. Mill rejected that workers and capitalists shared interests. Mill was anti-capitalist.

Mill’s On Liberty addresses the nature and limits of legitimate power by society over individuals. Mill’s relationship with Harriet Taylor, a married woman, twisted his own mores. Mill’s liberalism had little regard for the past. John Maynard Keynes also contributed to liberalism meaning almost anything including Nazism. Keynes felt his system was more adapted to socialism and Stalinism.

But the hallmark of liberalism is that society can run itself with voluntary agreements based upon private property rights.

French liberalism involved the idea of class conflict which led to totalitarianism. This doctrine is generally associated with Marxism, but predated Marx. The French made all government offices open to all citizens. That was the essence of the French Revolution. Two main conflicting classes are producers and plunderers.

The British tradition of liberalism, as F.A. Hayek espoused, leaves out the tradition of natural rights.

Transcript: Lecture 3 of 10 from Ralph Raico’s History: The Struggle for Liberty.

[This transcript is edited for clarity and readability. The Q and A at the end of the lecture has been omitted. Annotations have been added by Ryan McMaken.]

John Stuart Mill played a crucial role in the transition from the older liberalism—the laissez-faire liberalism—to the new liberalism, a type of democratic socialism.

Now, it is, to my mind, a disservice when a typical college course that deals with the history of political thought does this: as an example of eighteenth-century liberalism they’ll maybe have Adam Smith. As an example of nineteenth-century liberalism, they will have John Stuart Mill. They’ll present it as John Stuart Mill versus Karl Marx or Friedrich List, and use the idea that Mill is the exemplary liberal of the nineteenth century. One reason that he’s very attractive to people is that he had a very good writing style. There’s no doubt about that. And his writing style is superficially very logical and rational. But, there are very serious problems with Mill from an authentic liberal point of view that I’ll be pointing out. Much of the confusion prevailing in the whole problem of defining and understanding liberalism can be traced to Mill.

To my mind, he occupies a vastly inflated position in the conception of liberalism entertained by English-speaking people. This is an example of Anglo-centrism, you might say. It is a scandal how few American social-scientific university professors cannot easily read even modern European languages like French and German. I happen to know this is a fact in connection, for instance, with the Stanford University history department, although they have great scholars. On the other hand, there is this lack of having access to works of continental writers that have not been already translated.

James Buchanan, when he undertook his study of public finance, learned Italian—which I think must be a very rare accomplishment among American economists—in order to read the rich treasury of economic thought among the Italian economists of the late nineteenth century and early twentieth century. The lack of the ability to access some of the most important continental political figures, leads to ridiculous overemphasis on the British tradition, to my mind.

A man that I’ll be mentioning a number of times, I think from now on, is one of my favorite authors altogether: Benjamin Constant. Constant wrote an enormous amount on political philosophy and other subjects. It was only a few years ago, in the Cambridge “blue” series of political thinkers, that some of his major writings on political philosophy became available in English. George Sabine’s history of political thought doesn’t even mention Constant, although I would be prepared to argue that he was the most important liberal philosopher of the nineteenth century.1  He was worlds ahead of Mill, as far as I’m concerned, and Mill was a disaster on a number of fronts.

In economics, Mill held that, “The principle of individual liberty is not involved in the doctrine of free trade.”2  He is using “free trade” in the sense of economic freedom: freedom of trade, not just internationally. But for Mill in On Liberty, in general, the principle of freedom is not involved in economic affairs. In contrast, Milton Friedman quotes a great letter that Benjamin Franklin sent to one of the French physiocrats where Franklin said that he thought that liberty of exchange, liberty of contract, liberty to work, and the liberty of buy and sell, is even more important than any civil liberty; than freedom of expression, for instance, because it deals with the freedoms people need every single day of their lives and the freedom that everyone needs. This is not just the intelligentsia and the publishers, but everyone.3

So here we have Mill going in the opposite direction and saying that economic freedom is not really part of the concept of freedom he’s going to be dealing with. Mill provided ammunition for the protectionist arsenal. Richard Cobden, the great free trader of the mid-nineteenth century, complained of one of Mill’s writings, that this has undone any good he might have done in any other respect by providing arguments in favor of protection for infant industries.4  Mill rejected the liberal notion of the long-run harmony of interests of all social classes, including entrepreneurs and workers, on the grounds that “to say that they have same interest . . . is to say that it is the same thing to a person’s interest whether a sum of money belongs to him or to someone else.”5

Following that reasoning, in arguing that anti-capitalism is one of the hallmarks of liberalism, the well-known English political philosopher Alan Ryan invokes none other than John Stuart Mill, who wrote in the middle of the nineteenth century, “The generality of laborers in this and most other countries have as little choice of occupation and freedom of locomotion . . . as they could . . . on any system short of actual slavery.”6

This at a time when English and other serfs were migrating in the millions, to towns, cities and even to foreign countries. It has to have been someone like Mill—who spent his life as a philosopher and writer but otherwise made his living as a bureaucrat for the British East India company—not to have noticed what was going on around him. There was this vast migration, when Mill says that it’s virtually impossible for working people to move from one place to another. As I’ll discuss this afternoon, Mill was a disaster in international affairs, where he repudiated the liberal principle of nonintervention.

Mill’s Novel Definition of “Liberty”

Worst of all was Mill’s deformation of the concept of liberty itself. His most famous work On Liberty tends in that direction. Liberty, it seems, according to Mill, is a condition that is threatened not only by physical aggression on the part of the state or other institutions or individuals. Rather, society often poses even worse dangers to individual freedom. For example, Mill believes society threatens liberty with “the tyranny of the prevailing opinion and feeling,”7  and the tendency “to impose by other ways than civil penalties, [society’s] own ideas and practices as rules of conduct on those who dissent from them.”8  Society “compel[s] all characters to fashion themselves upon the model of its own.”9

This is non-aggressive, non-coercive in the ordinary sense, “tyranny,” according to Mill. This is in On Liberty, the great liberal manifesto, supposedly. A true liberty, according to Mill, requires autonomy because adopting the traditions or customs of other people is simply to engage in “ape-like … imitation.”10  Whereas others see individuals choosing goals laid out for them by what they freely accept as authoritative institutions—this is the real liberal position—Mill perceives the extinction of freedom. In other words, for instance, if you’re a Roman Catholic and accept the authority of the Catholic Church, the Magisterium, you’re not exercising your freedom, you’re engaging in ape-like imitation. The situation is similar for a member of any other church, for that matter. In a striking and preposterous illustration, Mill writes, in On Liberty, “An individual Jesuit is to the utmost degree of abasement, a slave of his order.”11  One wonders what is supposed to follow from this. Must we form abolitionist associations to emancipate the willing slaves of the Society of Jesus? One wonders also how Mill and his alter-ego, Harriet Taylor, could ever have imagined themselves entitled to legislate on the status of members of the Catholic or Orthodox orders, the status of Orthodox Jews, devout Muslims and of other believers.

His comment on the Jesuits illustrates a facet of Mill too rarely noticed. He was, in the words of Maurice Cowling, “one of the most censorious of nineteenth-century moralists.” Mill constantly passed judgment on the habits, attitudes, preferences and moral standards of great numbers of people of who he knew nothing. As Cowling dryly observes, “Bigotry and prejudice are not necessarily the best descriptions of opinions which [August] Comtean determinism has stigmatized as outdated.”12

Now there’s beginning to be a literature on Mill, the authoritarian, Mill the secret duplicitous authoritarian. I mentioned Maurice Cowling, who has a short book on the subject. Joseph Hamburger of Yale published a posthumous work on the subject.13  Recently Linda Raeder, who teaches at a Florida University, wrote Mill and the Religion of Humanity. The book outlines in detail, not just in On Liberty but in his other works, what Mill’s secret agenda was.14  But, as I say, in the shorter work by Hamburger, he examines the dark side of John Stuart Mill and Hamburger, like most anybody else, said he long entertained the view that John Stuart Mill was a true believer and an exemplary proponent of individual freedom. But, like Raeder does in more detail, Hamburger examines not only On Liberty, but Mill’s other writings and letters and the personal testimony of his friends. Hamburger’s conclusion is that the freedom of opinion espoused by Mill in On Liberty was largely part of a grand strategy. The strategy was to implement total freedom of opinion in England in order to demolish religious things, especially Christianity and the received mores.

Now, I don’t want to engage in ad hominem arguments—except I will later in the week in regards to people who certainly deserve it like Jean-Jacques Rousseau. But, this I will say, that when an individual has “lifestyle problems,” that’s up to the individual, and it’s a private matter. That’s fine. However, when these problems fuel and provide the basic impetus behind one’s political philosophy, then it becomes a problem. John Stuart Mill had this problem with Harriet Taylor, who was a married woman. I discussed this once with John Gray, who’s not now my favorite guy, but he’s a smart guy, a political philosopher, and knows a lot about Mill and has taught at Oxford and now at the University of London. Gray agreed with me: if Mill had been French at the time, it would not have been this big problem that Mill had an affair with Harriet Taylor. He would not have felt the need to erect this assault on society and its mores into the cornerstone of his political thought.

Someone like Benjamin Constant, for instance, had the mores of the eighteenth century and did that kind of thing, but it’s a different for someone with Constant’s background. Mill, I think, felt pretty agonizingly constrained by his heritage. His father was an atheist, but from a Scottish Calvinist background, through and through. The moral values were still there, so that Mill had to lash out against society, I think, for what basically was his own particular problem. In any case, Hamburger—and Raeder in more detail—showed that in Mill’s view, once Christianity and the mores of English Victorian society were destroyed, then true individuality would be incarnated in the future “Millian man”. Mill uses the term on the model of “Soviet man.” The Millian man dreamt of by Mill and the lady who became his wife, Harriet Taylor, is the exemplar of someone in whom selfishness and greed would be replaced by altruism and the cultivation of the higher faculties.

Now we understand that in economics and international relations, Mill was a problem for people dealing with liberalism, but I think mainly in this area. The fateful linking of liberalism to an adversarial stance, vis-à-vis tradition and social norms, stems from Mill. It has unfortunately become standard. Owen Chadwick is a famous historian of religion and Dixie Professor Emeritus at Cambridge, and this is what he wrote about liberalism:

A liberal was one who wanted more liberty, that is, more freedom from restraint; whether the restraint was exercised by police, or by law, or by social pressure, or by an orthodoxy of opinion which men assailed at their peril. … The liberal thought that men needed far more room to act and think than they were allowed by established laws and conventions in European society.15

Note how in this statement no distinction is made between state coercion on the one hand and social pressure, orthodox opinion, and conventions on the other. A famous British historian of political thought is a man named John Dunn. Dunn wrote, “If the central dispositional value of liberals is tolerance, their central political value is perhaps a fundamental antipathy towards authority in any of its forms. … Dispositionally, liberalism has little regard for the past.”16

So much for Thomas Babington Macauley, Augustin Thierry, W. H. Lecky, Lord Acton, and all the other liberal historians we could mention. Descriptions of Chadwick’s and Dunn’s are much more expressive of the antinomian, lawless, normless mentality of contemporary Western academics and the contemporary Western chattering classes, than of liberalism historically.

Mill’s view tends to erase the rather critical distinction, I would say, between “incurring social disapproval and incurring imprisonment.”17  It leads to pitting liberalism against innocent, non-coercive traditional values and arrangements, especially religious ones. It also forges an offensive alliance between liberalism and the state—even if contrary to Mill’s intentions—since it is hard to see how one can be sure of uprooting traditional norms, except through the massive use of political power. Contemporary writers connected to the Millian project of enjoining autonomy as the highest possible good, do not shrink from advocating this course, presumably unaware of its totalitarian implications.

Paul Gottfried has illustrated this in his two small books After Liberalism and Multiculturalism and the Politics of Guilt.18  In this new liberalism, autonomy becomes the guiding star—autonomy understood as the rejection of tradition, the rejection of inherited social norms, the rejection of religion. The people who take this position then feel perfectly free, as you can see everywhere in America today and Western Europe, to use the state, its educational institutions, and its various other institutions to, as much as possible, erase the inherited traditions and values of the past and replace them with Mill’s idea of what is supposed to be autonomy.

The Mill-Keynes Distortion of Liberalism

Now, I want to mention one other famous writer whose point of view has also distorted the meaning of liberalism. This other writer has added to this conceptual mayhem where liberalism can mean virtually anything—anything, of course, except Nazism— and that’s John Maynard Keynes.

Keynes is another troubled individual. You’d think on the face of it that there’d be a prima facie case not to call him a liberal, since the hallmark of liberalism is the idea that society can run itself. That’s how liberalism started: in the rejection of mercantilism and state authoritarianism in every respect in the eighteenth century—or the seventeenth century with the Levellers. Society runs itself; voluntary agreements based on the principle of private property pretty much take care of everything.

Keynes is most famous for rejecting this idea in the core area of classical liberalism, and in economics. Keynes maintained that an unregulated market economy cannot achieve full employment and is subject to regular depressions and business fluctuations very damaging to the masses of people. This is his economic theory which has been exploded many times now. However, beyond that, he was also a social philosopher and, I think as with Mill, first of all, the fact that he’s in the British tradition, gives him a head start in the minds of many people. But Keynes also benefits from his style and tone, which is generally very calm, rational, civil in expression, and reserved. This appeals to people. But, I would submit to you that tone and style should not be definitive of what a true, authentic liberal is. That measure should be based more on the content of the person’s thought.

One thing that’s odd about Keynes is his sympathy for totalitarian experiments in the 1920s and 1930s. Oh sure, on his visits to the Soviet Union in the 1920s he didn’t like the suppression of thought and of dissenters. This was very typical, again, of his kind of liberalism—the emphasis on the problems encountered by the intelligentsia. These were the people who liked to talk and think and publish their views. There were other people who suffered in the Soviet Union and suffered much more massively.

I don’t know if you’ve ever noticed, but very often people began complaining about Stalinism at the time of the purge trials. The purge trials were directed against the leaders of the Communist party, Stalin’s rivals. The masses of people who’d been oppressed and killed by the millions, the peasants and small business people and working people? The intellectuals seemed to take that in stride: “well, that’s kind of the price for building up socialism.” But when an intellectual like Leon Trotsky is put on trial and condemned to death in absentia, the intellectuals get very excited and John Dewey sets up an international commission to investigate the case of Leon Trotsky.19

What about the case of “Ivan Smirnoff”—or whoever—and his family and his kids that have died of starvation in some Ukrainian village? That wasn’t too much of a problem for many of these so-called liberals.

Keynes, in his visits to the Soviet Union, was critical of this aspect. On the other hand, he made very strange statements about the Soviet leadership. He claimed we have to at least give credit to the Soviet leaders for extricating the crazy love of money—which is a hallmark of our own civilization and the worst moral failing of our civilization. In Keynes’s mind, in the Soviet Union, the communist cadres worked for the sake of the community. Here Keynes was in prefect harmony with his good friend Beatrice Webb, who said the same thing at the time and remained a good friend of Keynes. She was one of his best friends up until the time she died in 1943.

There’s a famous essay of his that appeared in The Yale Review in June 1933. It’s also in his collected works, but the collected works does not contain everything he says in that Review article. Keynes praises the “experiments” now going on in Italy, Germany and the Soviet Union.20  Keynes says he doesn’t agree with everything that they’re doing, and the Nazis especially. They are wild crazy people. On the other hand, Keynes, continues, they at least have the courage to experiment, which is something that nobody in the West is prepared to do. We’re stuck with this old laissez-faire system and the people of the establishment—he meant the Treasury and the British government and the Bank of England—think that laissez-faire is going to save us. Keynes says it won’t, and instead Keynes says he wishes these experimenters well. After all, Keynes says he has experiments of his own—this is almost a quote—that he wants to carry out. Keynes also, by the way, wrote the preface to the 1936 German edition of the General Theory, which is very questionable. He talks about how his system is more adapted to a country like Germany than it is to a country like England or America. By the way, that is not due to any mistranslation, that’s what appears in the English draft.

What I want to mention now is a statement that Keynes makes in a radio broadcast of June of 1936.21  He reviews books and here he reviews a massive tome that has just come out from Sydney and Beatrice Webb called Soviet Communism: A New Civilisation? Famously, the first edition of that had a question mark after “New Civilisation,” but later editions dropped the question mark.22  This book of theirs is noted as probably the most notorious and really infamous act of any fellow travelers in the whole sordid history of fellow traveling with Stalinism, during the 1930s and 1940s. Most of the information comes directly from the Soviet sources and the book is an apologia for what Stalin is doing. This is 1936. The book was published in Russian translation in the Soviet Union, as the Webb’s note, very nicely produced with paper and so on. The Soviet authorities welcomed it. So, you would expect then, a liberal like Keynes in his radio review, to attack this book. That’s not what he does. He says, “Soviet Communism is a book which every serious citizen will do well to look into”:

Until recently events in Russia were moving too fast and the gap between paper professions and actual achievements was too wide for a proper account to be possible. But the new system is now sufficiently crystallised to be reviewed. The result is impressive. The Russian innovators have passed, not only from the revolutionary stage, but also from the doctrinaire stage. There is little or nothing left which bears any special relation to Marx and Marxism as distinguished from other systems of socialism. They are engaged in the vast administrative task of making a completely new set of social and economic institutions work smoothly and successfully over a territory so extensive that it covers one sixth of the land surface of the world.23

That also, I guess, is supposed to make him a liberal: that he is against any kind of principles and in favor of “constant adjustment to experience”:

The largest scale empiricism and experimentalism which has ever been attempted by disinterested administrators is in operation. Meanwhile the Webbs have enabled us to see the direction in which things appear to be moving and how far they have got. It leaves me with a strong desire and hope that we in this country—in Britain—may discover how to combine an unlimited readiness to experiment with changes in political and economic methods and institutions while preserving traditionalism and a sort of careful conservatism…24

That’s very typical of Mill. Try and make sense of that: “unlimited desire to experiment and change things, combined with a careful conservatism…” What is he saying?

Now, it happens that some famous authors like T.S. Eliot and H.L. Mencken, for instance, and a number of others, made unfortunate comments in regard to Jews and sometimes in regard to national socialism in Germany in this period. These comments were unfortunate and mistaken and deplorable, sometimes. However, the whole world resounds with that fact, that all of these authors are somehow guilty of antisemitism and helped along the road to Auschwitz and so on. You never stop hearing about that, if you follow these things as I do.

Why don’t we hear about Keynes’s defense of Stalinism? You may know that the man who’s just finished the third and last volume of his great biography of Keynes, Robert Skidelsky. Lord Skidelsky has been raised to the peerage I think because of this great biography. Well, in the second volume where he should have mentioned this radio talk by Keynes—which can be found in Keynes’ collected works—it’s not there.25  I wrote Lord Skidelsky and I asked him how come this did not appear. How come it didn’t appear in a major article he wrote on Keynes and the Fabians?26  Sydney and Beatrice Webb were the leaders of the Fabian Society. Skidelsky wrote back and said, “Well, there are reasons that explain why Keynes wrote this. He was friendly with the Webbs and he wanted to promote their book. He was afraid that some Russian friends of his, who had relatives in the Soviet Union, would feel the repercussions, if he wrote negatively about the Soviet Union. Skidelsky said he’d try to put this in somehow in the third volume. He didn’t put it into his third volume.27  As far as history goes, Keynes’s defense of Stalin has disappeared. What explains that? This is an outrageous thing for Keynes to have written. By that time, anybody who wanted to know could find out what was happening in the Soviet Union and find out about the Ukrainian terror famine that claimed—we don’t know for sure—six, seven, or eight million people with cannibalism in the villages. People in Keynes’s time could find out about the gulag that had been set up by Lenin. They could find out about the constant executions that were going on so, producing killing fields containing tens of thousands of bodies. Anybody could have found out about this. It was in the anarchist press. It was in the socialist press. It was in the Catholic press. It was in some of the conservative press, also. So he didn’t have to go by the lies of the Webbs to judge what was happening in the Soviet Union. Well, I want to say that this is a very odd thing for a model liberal to have written, not only a model liberal. But, there are anthologies of liberal thought that say, “liberalism from John Locke to John Maynard Keynes,” as if he were the culmination of liberalism.

The Classical Liberal Theory of Class Conflict

Let’s go on from there to a major subject I want to cover now and that is the classical liberal theory of class conflict. The greatest interpreters of this theory were French, so I want to say something about French liberalism to begin with. I mentioned to you that Murray Rothbard in his History of Economic Thought tends to place French economic thought ahead of British economic thought—French and continental in general. As I mentioned to you, Murray’s especially annoyed by Adam Smith and his reputation. Murray said Adam Smith’s “reputation almost blinds the sun.”28 And then this view that Adam Smith was somehow the father of economics, continuing with Malthus, Ricardo, Mill, Marshall, and of course, culminating in Keynes. Rothbard much prefers the continental tradition of Turgot, including Frédéric Bastiat, whom Rothbard considered a very fine economist. There was a very interesting article in The Quarterly Journal of Austrian Economics by Professor Jörg Guido Hülsmann on Bastiat as a precursor of Austrian Economics.29

Hayek has not helped the cause along because Hayek wrote a famous essay called “Individualism: True and False.”30  And here, rather bafflingly, I think, Hayek attempts to distinguish two traditions of individualism. That was a term that he was using at the time for liberalism or classical liberalism. The first is basically a British and empirical line of thought, and according to Hayek, represents genuine liberalism. He believes the second type, in the French and continental tradition, is not liberal really at all. Rather, it is a rationalistic deviation that leads “inevitably,” as he says, to collectivism. This follows, Hayek claims, from the contrasting social theories underlying the two doctrines. Where the British tradition appreciates the truth regarding social institutions, that they originate and develop spontaneously, the French and continental tradition holds them to be products of deliberate human contrivance or design.

Hayek was the head of my dissertation committee in Chicago many years ago. I’ve always had very great respect for him and he was a person who probably was as good a scholar that is learned in the history of thought as he was an economist. But here in this denigration of the continental and French liberal tradition, I really cannot follow him. For one thing, there’s a kind of funny game that he plays because in the British tradition, he lists not only David Hume, Smith and Burke, but also Alexis de Tocqueville and Benjamin Constant, who were not exactly British subjects. And among the French, he mentions the physiocrats, the encyclopedists, Jean-Jacques Rousseau and Henri de Saint-Simon. It’s a peculiar thing, it seems to me, if you’re talking about liberal tradition, to bring in the French encyclopedists who are a bundle of baggage of their own. Some people do consider them liberals, but Denis Diderot and Baron d’Holbach and so on, were hardly liberal in my view. Certainly not Rousseau. Certainly not Henri de Saint-Simon, one of the utopian socialists. So, this is how the French get burdened with the idea of being in some tradition that leads inevitably to totalitarianism.

Hayek goes so far as to speak of the absence of a truly liberal tradition in France. What can you say? It’s obvious that there was an immense liberal tradition in the nineteenth century. He traces of all of these French problems back to Descartes, who Hayek thinks somehow hatched the idea of social engineering and scientism, as Hayek discusses it. But if you want to select somebody, it wouldn’t be Descartes who wrote practically nothing about social theory. I think a much more likely candidate would be the English philosopher Francis Bacon, who thought that in the future, society ought to be recreated on the model of science. Well, more could be said about this, but just want to point out that there are very serious problems with Hayek, if you ever come across his essay on true and false individualism. For one thing, this distinction—individualism or liberalism based upon the idea of spontaneous order created by voluntary interaction, on the one hand, versus the idea of order being created by social engineering—leaves out a very central liberal tradition which is a tradition of natural rights. Natural rights were not the sort of thing that David Hume and Burke and Adam Smith were not really centrally concerned with. Certainly these French people like Rousseau and Saint-Simon were not concerned with it. But there was this whole tradition of natural rights among the French liberals, and the French kept going with it long after the English had given them up.

Turning now to the doctrine of class conflict—which as I say, is best developed by the French—the idea that the classes are in conflict is almost inevitably and invariably associated with Marxism. I don’t know if you know the name Hirschman—Albert O. Hirschman— an economist, you might have come across him. He’s an economist and he has a reputation of being an economist who’s thoroughly familiar with the history of thought, with intellectual currents of the modern period. In one of his books, Hirschman comes across a statement by the famous Italian economist, Vilfredo Pareto, where Pareto talks about class conflict. Hirschman is obviously at a loss when confronted by this because, as he says, it “sounds at first curiously—perhaps consciously—like The Communist Manifesto.”31  But, as Hirschman says, Pareto distanced himself from Marxism by talking about spoliation.32  Now, what is obvious from this— what is clear as day from this—is that this celebrated expert in intellectual history has not got the first notion of a classical liberal class conflict theory. The term “spoliation”—spoliazione in Italian—was a term used by innumerable classical liberal writers including Bastiat, for instance, to refer to the exploitation of one part of society by another part of society using the state.33  This was commonplace in this whole intellectual tradition, and maybe you can understand sometimes why people of our point of view get a little annoyed at their intellectual adversaries for simply not doing their homework; for not acknowledging our own tradition and not acquainting themselves with our own thinkers.

Hirschman is famous for knowing everything about intellectual history and Pareto is a very big name in the history of economic thought. This is what Hirschman was talking about, from the beginning of The Communist Manifesto, 1848: “The history of all hitherto existing society is a history of class struggles. Freeman and slave, patrician and plebeian, lord and serf, yield master and journeyman, in a word, oppressor and oppressed stood in constant opposition to one another.”34

That was 1848. In 1837, one of the French liberal school, a man named Adolphe Blanqui, who was a protégé of Jean-Baptiste Say, wrote what is probably the first history of economic thought. Blanqui wrote, “In all the revolutions, they have always been but two parties opposing each other, that of the people who wish to live by their own labor and that of those who would live by the labor of others. Patricians and plebians, slaves and freemen, Guelphs and Ghibellines, red roses and white roses, cavaliers and round heads, liberals and serviles are only varieties of the same species.”35

There’s no doubt that Marx read everything on economics, and read Blanqui’s history of economic thought. Blanqui quickly makes clear, what he understands to be at issue in these social struggles that permeate history: “So, in one country, the fruit of labor is taken from the workman by taxes, under pretense of the welfare of the state; in another, by privileges, declaring labor a royal concession, and making one pay dearly for the right to devote himself to it.”36

This is done through the guilds, for instance, or government monopolies. Blanqui continues: “The same abuse is reproduced under forms more indirect, but not less oppressive, when, by means of custom-duties, the state shares with the privileged industries the benefits of the taxes imposed on non-privileged classes.”37

So here we have, in a nutshell, the liberal theory of class conflict, predating the Marxist theory, stated in terms probably nearly copied by Marx at the beginning of The Communist Manifesto. Few mention this, and with very few exceptions such as myself, Joe Stromberg, Hans Hoppe, and now you, are acquainted with. So if you thought that whatever you had to pay to come to this gathering was questionable, now you know it wasn’t because you have this secret knowledge and in fact it’s going to remain secret. It doesn’t matter that we publish these things in publications of the Mises Institute. Hirschman is not going to learn anything from it. Skidelsky didn’t change his mind about mentioning Keynes’ rave review for Soviet Communism: A New Civilisation. Well, we do what we can. By the time that Blanqui wrote in 1837, this idea of classical liberal class conflict theory was commonplace in classical liberal thought.

The State’s Capture of the Middle-Class Bourgeoisie

I want to quote from something that should be known by intellectual historians, and that is from Alexis de Tocqueville’s Recollections. Tocqueville writes about the middle class, which historians tell us came to power in France in 1830, under the bourgeois monarchy of Louis Phillipe. This is supposed to be the period of liberalism in the first part of the nineteenth century in France. Tocqueville says, “[the middle class] entrenched itself in every vacant government job, prodigiously augmented the number of such jobs, and accustomed itself to live almost as much upon the Treasury as upon its own industry.”38

So, he’s talking about a bourgeoisie or middle class very different from what we understand and what we understood in America in those days—or Britain in those days. This is a middle class that has many similarities to the middle classes in other European countries. They send their sons to university to be university educated in order to get government jobs and never have to work again. Tocqueville says this is a great victory of the so-called liberal bourgeoisie in France. Under Louis Philippe, they expanded government bureaucracy and created jobs for their own kind. If you look up “The Declaration of the Rights of Man and of the Citizen” of the French Revolution and the Constitution of 1791, it doesn’t bear comparison with the American Bill of Rights. There are so many loopholes for government action against individual liberty. But I think that the section that the revolutionaries felt most strongly about, that really was heartfelt, was this: the part where they say all government offices shall be open to all citizens regardless of what class they come from, whether nobility or commoner, and should have equal access to all the awards and positions and functions that the government has to offer.39

There were some French liberals of our sort—authentic liberals—in the later part of the century. I’ll mention, in fact, some of these French class conflict theorists, who described what they viewed as the essence of the French Revolution: it was the commoner’s—the Third Estate’s— revolt against the aristocracy because the aristocracy and the French monarchy had limited access to government positions and civilian and military bureaucracies in the church, and so on. The Third Estate was kept out of those and had to crush the power of the privileged orders in order to get those jobs. That’s a possible and fruitful interpretation of the revolution, I believe.40

Now, I want to direct your attention to some authors of the very early part of the century, right after the overthrow of Napoleon under the Bourbon restoration. A group of then-young liberals founded a journal, which happened to be called Le Censeur Européen and began publishing their views. Their views were a synthesis of some somewhat earlier French thinkers like Constant, Destutt de Tracy, and Jean-Baptiste Say. In this journal, which just lasted for a few years, they outlined a philosophy of history that includes, embedded in it, a theory of class conflict. They gave the best, clearest interpretation of this classical liberal view that I’m aware of.

Jean-Baptiste Say was a very important influence. Let me mention who these men were at Le Censeur. There was Charles Dunoyer and Charles Comte, who was no relation to August Comte. (August Comte was one of the founders of sociology and a deeply evil man.) The group also included Augustin Thierry. Thierry became the most famous, he was a well-known historian in the nineteenth century. Say was the father-in-law of Charles Comte. Also, everybody met each other socially in the salons of the time, so there was a close interconnection.

Now, according to Say, the different ways of producing all consist of taking a product in one state and putting it into another in which it has more utility and value. (Meanwhile, Malthus and Ricardo are talking about the labor theory of value.) According to Say, all members of society who contribute to the creation of values are deemed productive, but Say awards a pride of place to the entrepreneur, which is one of his major contributions. Murray Rothbard talks about that in his History of Economic Thought. This is in contrast to Smith, for instance, who had no place there for the entrepreneur. Smith talks about the “capitalist” instead. Say understands the contribution of the entrepreneur to dynamic free enterprise, and to the free-market economy that he believes is coming into existence. In other words, we have the opposite of the pessimism of the English school.

However, there are flies in the ointment. Say says and talks about the value of personal interest in fueling the economy, “[b]ut personal interest is no longer a safe criterion, if individual interests are not left to counteract and control each other. If one individual, or one class, can call in the aid of authority, to ward off the effects of competition, it acquires a privilege and at the cost of the whole community...”41

 This is the origin of class conflict, the state entering into market relations. Say continues:

[An individual or class] can then make sure of profits not altogether due to the productive services rendered, but composed in part of an actual tax upon consumers for its own private profit. … The legislative body has great difficulty in resisting the importunate demands of this kind of privileges; the applicants are the producers that are to benefit thereby, who can represent, with much plausibility, that their own gains are a gain to the industrious classes, and to the nation at large, their workmen and themselves being members of the industrious classes and of the nation.42

This is an important point about the private producers “who can represent, with much plausibility, that their own gains are a gain to the industrious classes, and to the nation at large.” In other words, ordinarily, if we’re talking about manufacturers or merchants, businesspeople in general, well, they’re the good guys. They help society along. The product is utility for society. And that leads us to sort of misdirect our attention from the fact that they’re the ones who are now coming asking for government privileges. In other words, Say was saying that if it were the members of the Catholic church, or if it were noblemen, or if it was state functionaries who came and asked for special privileges, right away we could see that they’re suspect and they are people who are trying to live now at the expense of others.

It’s more difficult to see in the case of businessmen, which helps us to understand how it was possible for a noted author to write a book about American businesses as “the most persecuted minority.” Rothbard responded to this claim, talking about the history of American business and the unfortunate connection between big business and government.43

The Italian Industrialist School

Now, these authors that I’m talking about invented a philosophy they called industrialism. In any given society according to them, a sharp distinction may be drawn between those who live by plunder—and they don’t hesitate to use the word—and those who live by production.

The first are characterized in several ways: the plunderers. They are the idle, the devouring, the hornets. The second are, among other things, the industrious, the bees. Those who attempt to live without producing are the savages. The producers are the civilized men, no matter what the appearance might be. Cultural evolution has been such that whole societies may be designated as primarily plundering and idle, or as productive and industrious. They follow or they prefigure Adolphe Blanqui in this: the history of hitherto existing society is a history of the struggles between the plundering and the producing classes. They have the view of Benjamin Constant that the ancients, the Greeks and the Romans, for all their achievements, were basically societies that were founded on war and on constant war making, which included of course, imperialism and plunder of other societies.44

These scholars were also concerned with the German invasions, the invasions of the Franks, and then in England, the Invasion of the Normans and the creation of feudalism. Now, I would say that they had a somewhat one-sided view of feudalism, but nonetheless, this followed their typology. The feudalism represented “a kind of subordination that subjected the laboring men to the idle and devouring men, and which gave to the latter the means of existing without producing anything or living nobly.”45

They’re talking mainly about the robber barons particularly, the rapacious nobility that eventually succeed the equally rapacious kings. I’m summarizing hundreds and hundreds of pages that are written along these lines, and I’m quoting kind of promiscuously from Constant and Comte. Comte speaks of the plunderers whose “thefts with violence, alterations of the coinage, bankruptcies, confiscations, hindrances to industry” are the common stuff of the history of France.46  He continues: “When the lords were the stronger, they viewed as belonging to them, everything they could lay hold of. As soon as the kings were on top and defeated the nobility, they thought and acted in the same way.”47

With the growth of the wealth of the commoners, and of the towns, additional riches became available for expropriation by the parasitic classes. These writers are particularly severe on the royal manipulation of money and legal tender laws. In modern times, the main types of the idle classes have been the professional soldiers, the clerics of the state established religion, the nobles, and the bourgeois who were ennobled—that is, those who left the status of bourgeois in order to become nobles and government officials.

These authors had a lot to say about war and peace. In fact, the journal’s motto—on every issue printed in the top was the phrase, paix et liberte—”peace and freedom.”

One of the main categories of plunderers and exploiters of the present day, according to the Censeur Européen group, were state functionaries. In fact, I could even cite an article for you on them as Precursors of the School of Public Choice.48  For them, and for Europeans during the early nineteenth century—this is before the War of the Southern Secession and everything that followed that—America was a promised land. They cite the virtual nonexistence of any kind of federal bureaucracy in the United States compared to France. With the number of bureaucrats they had in France, Americans could have staffed thirty United States federal governments. Yet, at the time, the United States was rapidly approaching the population of France.

Marx and Liberal Class Theory

Let’s go back to Professor Hirschman and his kind, who said class conflict sounded like Marxism. Well, Marxism sometimes sounds like liberal class conflict theory. There are in fact two theories of social conflict in Marxism. One is the one everybody knows about, that is the present day, of the bourgeoisie expropriating surplus value from the proletariat and therefore being its natural enemy. There’s another Marxist conflict theory. This is from Marx’s description of France in the third quarter of the nineteenth century. It’s a longish quote, but I’ll try to shorten it:

The executive power, the French state, with its enormous bureaucracy and military organization, with its ingenious state machinery embracing white strata with a host of officials numbering a half a million besides an army of another half a million, this appalling parasitic body which enmeshes the body of French society like a net and chokes all of its pores, sprang up in the days of the absolute monarchy. … The [Legitimist] Monarchy and the July Monarchy added nothing to it but a greater division of labor, increasing at the same rate as the division of labor inside the bourgeois society created new groups of interests, and therefore new material for the state administration.49

This is Karl Marx: “Every common interest [that is, every common interest of society apart from the state] was immediately severed from the society, countered by a higher, general interest, snatched from the activities of society’s members themselves and made an object of government activity.”50

Now I submit to you that that sounds very much like classical liberalism in its opposition to the state and state action with the rest of society. Marx is not talking about capitalists and workers here. He’s talking about the rest of society which was willing to see to these various tasks and do what had to be done while the state bureaucracy snatches it away from them. Marx continues: “All revolutions perfected this machine instead of smashing it. The parties that contended in turn for domination regarded the possession of this huge state edifice as the principal spoils of the victor.”51

Marx is often very shrewd, especially when he dealt with concrete historical episodes and not his general economic theory. This, you could say, was the secret history of revolution in the nineteenth century and afterwards: the attempt of one group to seize state power and everything that went with it—all the jobs, especially—from another group.

  • 1George H. Sabine, A History of Political Theory (New York, NY: Holt, Rinehart and Winston, 1961). First published 1937. 
  • 2John Stuart Mill, On Liberty, (London : Longman, Green, Longman, Roberts & Green,1864) p. 171
  • 3The source appears to be a letter to the Abbe Morellet, April 22, 1787, in which Franklin writes: “I am of the same opinion with you respecting the freedom of commerce … Nothing can be better expressed than your sentiments are on this point, where you prefer liberty of trading, cultivating, manufacturing, etc., even to civil liberty, this being affected but rarely, the other every hour.” Found in The Works of Benjamin Franklin XI, ed. John Bigelow (New York: G.P. Putnam’s Sons, 1904) p. 326
  • 4Quoted in A.V. Dicey, Lectures on the Relation between Law and Public Opinion in England during the Nineteenth Century (London: MacMillan, 1963) p. 429 and n.2. Specifically, Cobden says “I believe that the harm which Mill has done to the world by the passage of his book on Political Economy in which he favors the principle of Protection in young communities has outweighed all the good which may have been caused by his other writings.”
  • 5Richard Ashcraft, “Class, Conflict, and Constitutionalism in J.S. Mill’s Thought” in Liberalism and the Moral Life, ed. Nancy L. Rosenblum (Cambridge, MA: Harvard University Press, 1989) p. 114
  • 6Alan Ryan, “Liberalism” in A Companion to Contemporary Political Philosophy, eds. Robert E. Goodin and Philip Pettit (Oxford, UK: Blackwell, 1993) p. 209
  • 7John Stuart Mill, On Liberty, (London : Longman, Green, Longman, Roberts & Green,1864) p. 13
  • 8Ibid., p. 13
  • 9Ibid., p. 14. 
  • 10Ibid., p. 106
  • 11Ibid., p. 202
  • 12Maurice Cowling, Mill and Liberalism (Cambridge, UK: Cambridge University Press, 1963) pp. 143-44 
  • 13Joseph Hamburger, John Stuart Mill on Liberty and Control (Princeton, NJ: Princeton University Press, 1999).
  • 14Linda C. Raeder, John Stuart Mill and the Religion of Humanity (Columbia, MO: University of Missouri Press, 2002)
  • 15Owen Chadwick, The Secularization of the European Mind in the Nineteenth Century (Cambridge, UK: Cambridge University Press, 1975) p. 22
  • 16John Dunn, Western Political Theory in the Face of the Future (Cambridge, UK: Cambridge University Press, 1979) p. 29
  • 17T. Patrick Burke, No Harm: Ethical Principles for a Free Market (New York, NY: Paragon House, 1994) p. 30
  • 18Paul Gottfried, After Liberalism: Mass Democracy in the Managerial State (Princeton, NJ: Princeton University Press, 2001); Paul Gottfried, Multiculturalism and the Politics of Guilt: Towards a Secular Theocracy (Columbia, MO: University of Missouri Press, 2002)
  • 19Raico is referring to the Dewey Commission (officially the “Commission of Inquiry into the Charges Made against Leon Trotsky in the Moscow Trials”) which was initiated in March 1937 by the American Committee for the Defense of Leon Trotsky. 
  • 20John Maynard Keynes, “National Self-Sufficiency” in The Yale Review 22, no. 4 (June 1933): 755–69.
  • 21John Maynard Keynes, Social, Political, and Literary Writings, Volume 28 of The Collected Writings, ed. Donald Moggridge (London, UK: Macmillan, Cambridge University Press, and St. Martin’s Press for the Royal Economic Society, 1982)
  • 22Sidney Webb and Beatrice Webb, Soviet Communism: A New Civilisation? 2 (New York, NY: Charles Scribner’s Sons, 1936) 
  • 23Beatrice Webb, (1985) The Diary of Beatrice Webb, 4: 1924–1943, eds. Norman and Jeanne MacKenzie (Cambridge, MA: Harvard University Press, 1985) p. 370
  • 24John Maynard Keynes, Social, Political and Literary Writings, p. 333–34
  • 25Robert Skidelsky, John Maynard Keynes: The Economist as Saviour, 1920–1937 (New York, NY: Penguin, 1994)
  • 26Robert Skidelsky, “Doing Good and Being Good” in the Times Literary Supplement (March 26, 1999): 13–15
  • 27Robert Skidelsky, John Maynard Keynes:, Fighting for Freedom, 1937–1946 (New York, NY: Viking, 2001)
  • 28Murray N. Rothbard, Economic Thought Before Adam Smith: An Austrian Perspective on the History of Economic Thought Volume 1, (Cheltenham, UK, Edward Elgar Publishing, 2006) p. 435
  • 29Jörg Guido Hülsmann, “Bastiat’s Legacy in Economics,” The Quarterly Journal of Austrian Economics 4, No. 4, (Winter 2001): 55–70
  • 30F.A. Hayek, “Individualism: True and False” in Individualism and Economic Order (Chicago, IL: University of Chicago Press, 1948.) pp. 1-32
  • 31Albert O. Hirschman, The Rhetoric of Reaction: Perversity, Futility, Jeopardy (Cambridge, MA: Harvard University Press, 1991) p. 55
  • 32Pareto uses the term at least a dozen times in Cours d’économie politique (1896) most commonly read in French. A representative sample includes his discussion on monetary inflation in which he writes:  “Tous les prix ne changent pas de suite. La dépréciation de la monnaie se résout surtout en  une spoliation des classes laborieuses.” (“All prices do not change immediately. the depreciation of the currency mainly results in the spoliation of the working classes.”) See Vilfredo Pareto, Cours d’économie politique 1 (Lausanne: Librairie de l’Université, 1896) p. 204
  • 33An often-quoted phrase by Bastiat is “la spoliation légale” from The Law, which is often translated as “legal plunder.” See Frédéric Bastiat, The Law (Auburn, AL: Ludwig von Mises Institute, 2007). 
  • 34Karl Marx, “The Communist Manifesto,” in Capital and Other Writings, ed. Max Eastman (New York, NY: The Modern Library 1932), p. 321 
  • 35Jérôme-Adolphe Blanqui, Histoire de l’Économie Politique en Europe depuis les anciens jusqu’à nos jours, 1 (Paris: Guillaumin, 1845) p. vi. Originally published 1837.
  • 36Ibid., p. vi-vii. 
  • 37Ibid., p. vii. 
  • 38Alexis de Tocqueville, trans. Alexander Teixeira de Mattos, Recollections (New York, NY: Meridian, 1959), pp. 2–3.
  • 39See article 6 of the Declaration: “All citizens, being equal in its eyes, shall be equally eligible to all high offices, public positions and employments, according to their ability, and without other distinction than that of their virtues and talents.” Retrieved online, February 8, 2024: https://www.elysee.fr/en/french-presidency/the-declaration-of-the-rights-of-man-and-of-the-citizen
  • 40See Ralph Raico, Classical Liberalism and the Austrian School (Auburn, AL: Ludwig von Mises Institute, 2012) pp. 196-198 
  • 41Jean-Baptiste Say, A Treatise on Political Economy, or the Production, Distribution, and Consumption of Wealth, trans. C. R. Prinsep (New York, NY: Routledge, 2001) p. 147. This translation was originally published 1880.
  • 42Ibid.
  • 43Rothbard was responding to a comment by Ayn Rand: “Ayn Rand once wrote that big business is ‘America’s most persecuted minority.’ Nothing could be further from the truth. From the turn of the twentieth century, through the New Deal period, and up to the present day, big business has been in the forefront of the shift from a free economy and a free society toward statism.” See Murray Rothbard, “Should There be a Tax Hike? Part I” in Never a Dull Moment: A Libertarian Look at the Sixties, ed. Justin Raimondo (Auburn, AL: Ludwig von Mises Institute, 2016)  p. 49
  • 44See Benjamin Constant,  De l’esprit de conquête et de l’usurpation, dans leurs rapports avec la civilisation européenne  (Paris: Le Normant, H. Nicolle, 1814), p. 8-9.  For example, Constant writes: “War therefore predates trade. One is wild impulse, the other is civilized calculation…The Roman Republic, without trade, without letters, without articles, having no internal occupation other than agriculture … and always threatened or threatening, engag[ed] in the business of uninterrupted military operations.” 
  • 45Charles Comte, “De l’organisation sociale considérée dans ses rapports avec les moyens de subsistance des peuples,” Censeur européen, 2 (March 1817): 22.
  • 46Charles Comte, “Considérations sur l’état moral de la nation française et sur les causes de l’instabilité de ses institutions,” Censeur européen, 1 (January 1817): 20-21 
  • 47Ibid., p. 21
  • 48[1] Patricia J. Euzent and Thomas L. Martin, “Classical Roots of the Emerging Theory of Rent Seeking: the Contribution of Jean-Baptiste Say,” History of Political Economy 16, no. 2 (Summer 1984): 255-262.
  • 49Karl Marx, “The Eighteenth Brumaire of Louis Bonaparte,” 1852.  Retrieved online, February 8, 2024: https://www.marxists.org/archive/marx/works/1852/18th-brumaire/ch07.htm
  • 50Ibid.
  • 51Ibid.