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The Future of Freedom-Retrospect and Prospects, Part 1

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With the approaching end of 1994, The Future of Freedom Foundation is celebrating its fifth anniversary. For a half-decade, Jacob Hornberger and I, and the other authors who have contributed essays for Freedom Daily, have attempted to make the ethical and economic case for individual liberty and the market economy. In our published articles and spoken addresses, we have tried to present the principled argument for freedom on a wide variety of economic and social issues, as well as on a number of domestic and international topics.

During these five years, I found that one of the most frequently heard comments during discussions with people has been: “How can we turn this situation around? Haven’t we moved too far down the socialist or welfare-statist road to bring about a reversal? The interventionists and coercive redistributors just have too much political power and emotional appeal for us to ever succeed in defeating them. You may be right, but you’re just wasting your time. Mr. Hornberger, you ought to go back to practicing law; at least you’d make a better living. And Mr. Ebeling, as a college professor, well . . . err . . . gee, I guess you don’t have any real-world skills! Well, okay, I guess you have no alternative to talking about this stuff (poor fellow).”

It is easy to be pessimistic when the television and the newspapers bombard us almost daily with depressing reports of new intrusions of the state into our personal and business affairs in America. And the television news constantly flickers with images of wars, mass murders, acts of terrorism, and welfare-statist and interventionist tendencies around the globe.

In fact, friends of freedom have known this pessimism at various times during the last two and a half centuries.

In the 1770s, Adam Smith, in The Wealth of Nations, sounded a sad note of despair. After presenting his devastating criticisms of mercantilism his era’s version of the centrally planned economy and monopoly privilege Smith said:

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as to expect that an Oceana or Utopia should ever be established in it. Not only the prejudices of the public, but what is much more unconquerable, the private interests of many individuals, irresistibly oppose it.

And Smith explained what was usually in store for the opponent of state regulation and politically bestowed monopoly privileges:

The member of parliament who supports every proposal for strengthening this [mercantilist system of] monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men, whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.

When Adam Smith died on July 17, 1790, he left this earth with no confidence that his idea of a “system of natural liberty,” founded on individual freedom, limited government, and free trade, would ever emerge triumphant in the battle against state power and special-interest politics. Yet, sixty years later, on February 27, 1849, the last of the mercantilist trade protections was repealed in Great Britain. Free trade had triumphed over protectionism and government economic regulation.

The force behind this triumph in the early decades of the 19th century had been The Anti-Corn Law League, led by Richard Cobden and John Bright. They and their supporters had waged an intellectual and political campaign for thirty years that freed the British people from state control over economic affairs.

On July 4, 1849, The Anti-Corn Law League held its last meeting in Manchester, England, before dissolving itself now that free trade had won the day. Richard Cobden gave the closing address and, near the conclusion, said:

I believe we are at an era which in importance, socially, has not its equal for the last 1800 years. I believe there is no event that has ever happened in the world’s history, [from] a moral and social point of view . . . more calculated to promote the enduring interests of humanity than the establishment of the principle of Free Trade. . . . [W]e have a principle established now which is eternal in its truth and universal in its application, and must be applied in all nations and throughout all times, and applied not simply to commerce, but to every item of the tariffs of the world; and if we are not mistaken in thinking that our principles are true, be assured that those results will follow, and at no very distant period. Why, it is a world’s revolution, and nothing else; and every meeting we have held of this League, and this its last meeting probably, may be looked back upon as the germ of a movement which will ultimately comprehend the whole world in its embrace. . . . It will pervade all the nations of the earth because it is the spirit of truth and justice, and because it is the spirit of peace and good-will amongst men.

Over the next twenty years, almost every major country in Europe moved towards the introduction of freer trade and fewer restrictions on the market activities of their citizens. Writing in 1959, Austrian economist Oskar Morgenstern described the world that the free-trade ideas of Adam Smith and Richard Cobden helped to build:

In the period 1870-1914 . . . the outstanding feature . . . was a unity of the economic world. . . . Before 1914 there was freedom of travel without passports, freedom of migration, and freedom from exchange control and other monetary restrictions. Citizenship was freely granted to immigrants. Short-term and long-term capital could move unsupervised in any direction, and these movements could take any form. Direct foreign investments were common and welcome. Securities of other countries were freely traded on most stock exchanges. Transfers of profits were unhampered and foreign investments were not confiscated after they had begun to show yield. Monetary standards in most countries were firmly established on gold. . . . Gold coins of all countries found their way easily in all directions. . . . National boundaries were thus of small importance, as was the fact that most countries had different currencies.

This world came to an end in 1914, with the beginning of the First World War. This has been explained by Swiss economist William Rappard in his volume The Crisis of Democracy (1938):

During the war, in all democratic countries, neutral as well as belligerent, [there] was the deliberate provisional subordination of the freedom of the citizen to the strength of the government, that is, an eclipse of democratic liberty. . . . In the first place, there was a tremendous concentration of power in the hands of the executive. . . . Besides this abnormal concentration of power in the hands of the executive, the war brought about a second and still more far-reaching change in the structure and working of democracy. Under the pressure of military necessity the sphere of state enterprise in economic matters was tremendously enlarged and the action of government control considerably expanded and intensified. . . . It involved a complete. . . breach with the tradition of liberal individualism under which Europe had made such gigantic strides both in wealth and in freedom in the course of the preceding century. . . . The eclipse of democratic liberty which resulted from these interventionist policies was all the more complete and the more general, as all the democratic governments were led by the same military necessities to limit the political and intellectual no less than the economic freedom of the people.

The “temporary” loss of political, personal, and economic freedom during the First World War was institutionalized in the 1920s and 1930s with the emergence of the totalitarian states. A deep pessimism about this was voiced in the 1930s by William Henry Chamberlin in his book Collectivism: A False Utopia (1936):

Before the [First] World War it would have seemed banal and superfluous to make a case for human liberty, so far as North America and the greater part of Europe were concerned. Such things as regular elections, freedom of press and speech, security against arbitrary arrest, torture, and execution were taken for granted in almost all leading countries. . . . Concentration camps for political recalcitrants and the wholesale conscription of forced labor as a means of getting public works done were unknown. . . . The history of the post-war phase in Europe has been one of severe and unbroken defeats for the ideals of democracy and individual liberty. The revolutions of the twentieth century, unlike those of the eighteenth and nineteenth, have led to the contraction, not the expansion, of freedom. The two main governmental philosophies which have emerged since the [first world] war, fascism and communism, are based, in practice, on the rigid regimentation of the individual.

During the dark decade of the 1930s, many like William Henry Chamberlin wondered if the free society had any future at all. He lamented: “The grip of the modern-style dictatorship is strong. They seem proof against anything but the unpredictable chances of unsuccessful war.”

Yet, now at the end of the 20th century, modern totalitarianism seems to have also passed into history, as the older mercantilism did in the first half of the 19th century. While Italian fascism and German Nazism were defeated in war, Soviet communism has died of “natural causes.”

Nothing must have seemed as impossible to Adam Smith in the 1770s or as unlikely to Richard Cobden in the 1830s as the achievement of free trade and a free market. How could the economic ignorance of the general public and the power of special interests ever be defeated? Yet, in one person’s lifetime, they were defeated, and economic liberty was victorious. Practically everyone born under Soviet communism, especially those who grew up under Stalin, must have believed that such a total state could never be overthrown, surely not without the shedding of oceans of blood. Yet, before our eyes, the Soviet Union the house that Lenin and Stalin built collapsed with only a small handful of people losing their lives.

Freedom can be ours, if we have the will to fight for it and if we do not allow the remaining collectivist currents of our own times to paralyze us with pessimism. To strengthen that will and overcome that pessimism is why there is a Future of Freedom Foundation.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).