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The classical liberal international order of the nineteenth century was not planned or designed by anyone. It was, for the most part, the natural outgrowth of the expanding influence of a new political philosophy of freedom, free markets, and free trade. It began to emerge in the wake of the twenty-five years of war that Britain and other European countries had been fighting against France until the final defeat of Napoleon in 1815.
During those decades of war, the ideas that came to be identified with classical liberalism — individual liberty, secure and respected private property rights under impartial rule of law, the recognized right of individuals to freely follow occupations of their own choosing and to voluntarily trade with others on mutually agreed-upon terms, and wide respect for civil liberties — had been slowly growing in influence in both intellectual and political circles, especially in Great Britain.
The United States had been founded on those ideas following its independence from the British in 1783 and then recognized to a great (though imperfect) extent in the Constitution of 1787. Here was heralded a new philosophy of man, society, and government. One in which the individual was center stage with certain “inalienable rights” and in which was a far more limited government than had ever been experienced anywhere else in the world.
The ideal of free trade at the center of liberal internationalism
In Great Britain the advancement of classical liberalism included the case for unrestricted freedom of trade and enterprise among the people of the world. It culminated in the unilateral abolition in June 1846 of the agricultural protectionist trade barriers known in Britain as the Corn Laws. In the immediate years after 1846 this radical change to freedom of trade in food was accompanied by the repeal or reduction of all other trade barriers to free trading in industrial and manufacturing goods in Great Britain and the reduction of import taxes to serve as modest government revenue sources.
Furthermore, the British free traders argued that they had no wish to force their free-trade beliefs on others. They hoped that other nations would see the benefits from a world without trade barriers, but they left that up to the domestic decisions of the citizens of other countries and their governments. Whether or not other nations followed the free-trade path, Great Britain would.
While far from eliminating and abolishing domestic and foreign barriers to human association and exchange to the same degree as the British and the Americans, many of the other nations of Europe followed suit in eliminating or reducing most of their trade impediments, guided by that classical liberal ideal.
The depoliticizing of human relationships for the liberal order
For most of the middle decades of the nineteenth century the guiding principle that directed much of public policy in practically all of the countries of the civilized world was the depoliticizing of social and economic life. The mercantilist system of government control and command was removed and in its place arose the private sector of voluntary associations in civil society and the economics of free markets.
As the nineteenth century progressed, men, money, and material goods traveled increasingly freely from one corner of the globe to another, with few political restrictions standing in the way, and most certainly in comparison with the eighteenth century. In addition, the freedom of exchange included worldwide sharing of knowledge about the arts and sciences. The world was becoming a global community of people who were increasingly freer and materially better-off.
Yes, there were international governmental agreements, including international river commissions, railway and transportation agreements, telegraph and postal unions, health rules and guidelines, procedures for uniform weights and measures, and respect for patents and copyrights. Individual governments might also occasionally still try to influence the direction and form of domestic production and trade. Moreover, diplomatic
intrigues and alliances still threatened the peace among nations.
Liberal ideas created international order, not global government.
But there was no League of Nations and no United Nations as part of some grand political design to police and manage international aspects of human life. There was no International Monetary Fund or World Bank or World Trade Organization. The major Western countries each, at some point, formalized their domestic monetary systems on the gold standard, with the result that each followed the “rules” of the gold standard and thus generated a global monetary order without governments’ gathering together to create it. And they followed fiscal policies that, in comparison with our own times, greatly limited government taxing and spending.
There also were attempts to establish some international rules concerning acceptable methods and forms of warfare, and the humane treatment of prisoners of war and civilian populations in wartime-occupied territories. At least among the European powers during the nineteenth century, wars were less frequent, shorter in duration, and less destructive to person and property than in other times. To a great extent it was because the classical liberal ideal of respect for and minimal intrusion into the lives and property of private persons had influenced the thinking and policies of those governments, even if not to the same extent as among the British and the Americans.
However loosely, inconsistently, and incompletely, the attitudes and policies of all the major Western countries were guided by the classical-liberal spirit of the age. The world was not a classical-liberal heaven. Governments did things and private individuals acted in ways that were often far from the notion of a full respect and regard for the rightful liberty of all others. But it came closer to that ideal than had ever been practiced in any earlier time.
This liberal international order emerged and took on its specific forms of itself, again however imperfectly and inconsistently, as one nation after another became more liberal in its domestic affairs; this was reflected in government policies and practices, sometimes unilaterally and sometimes through agreements with other nations that also had been moving in similar liberal directions.
Collectivism and Neo-Liberalism replaced classical liberalism.
This world was shattered by the two world wars, followed by the counterrevolutions of collectivism in their various forms of socialism and communism, fascism, National Socialism (Nazism), and the interventionist-welfare state. Personal freedoms were reduced or extinguished; private-property rights and freedom of exchange were abolished or heavily straitjacketed; international free trade was replaced with trade barriers, restrictions, and prohibitions on the movement of money, goods, and people. Once again, people were made the property of the State to one degree or another. And two destructive world wars were endured, the likes of which had not been experienced before in modern history; tens of millions of people were killed by collectivist regimes or in the wars that collectivism set loose on the world.
So when the Second World War came to an end in 1945, the victorious powers, most especially the United States and its Western allies such as Great Britain and France, were determined to try to escape from the totalitarian madhouse of the 1920s, 1930s, and 1940s.
But the guiding ideas were not the classical liberalism of that earlier pre–World War I era. It was “Neo-Liberalism” that had captured the imagination of progressive thinkers, already before 1914, but which gained adherents and dominance during the 1930s and 1940s in the Western democracies. This was a liberalism that believed that a free society of civil liberties could be maintained, even while government took paternalistic responsibility for economic decision-making through democratic socialism or the interventionist-welfare state.
The re-politicizing of domestic and international relationships
Markets needed to be harnessed from unjust and uncontrolled laissez-faire through government controls and regulations, income redistributions and social (i.e., compulsory) safety nets of planned pensions, health care, housing, employment and product regulations, and activist monetary and fiscal policies inspired by the new Keynesian economics.
International trade was not to be fully market-based and mostly free, as it had been in the nineteenth and early twentieth centuries, especially under British inspiration. Instead, it would be managed trade among the nations of the world, in which governments negotiated and determined what goods and services might be sold among countries, in what quantities and qualities, and at what tariff-influenced prices.
It is certainly true that many of these international trade agreements among governments significantly reduced the barriers to international trade and investment compared with the economic walls that nations had attempted to build around themselves in the 1930s. But it was not free trade, if that is understood as unrestricted trade in the importing and exporting of goods and services between nations of the world based on private consumer and producer decision-making.
In the heyday of classical liberalism, democratically elected government was considered the complement to free markets, with citizens’ choosing those who should hold political office for a period of time. But democracy was not considered the essence of a free society. That core was the freedom of individuals to peacefully live their lives as they chose, without the intervention and tyranny of kings or democratic majorities.
But in the new world of the interventionist-welfare state, democracy became the center of political life, because it was through the political process that special-interest groups vied for privileges and favors at the expense of others, and where those holding or wanting political office could offer other people’s money in exchange for campaign contributions and votes on election day.
The seeming crisis of democracy and the failure of the liberal international order that has brought about these reactionary alternatives of renewed protectionism, economic nationalism, populist politics, and the appeal of authoritarian leaders in various countries is not a crisis or failure of liberalism, if understood in the classical sense that we discussed earlier.
Only classical-liberal internationalism ensures freedom and peace.
Classical liberalism was abandoned, unfortunately, long ago. This crisis is that of Neo-Liberalism, the progressive liberalism of interventionism and welfare statism, the corrupt social liberalism of political power in the hands of domestic and international politicians and bureaucrats using government authority to advance their own social-engineering ends and serving the ideological and wealth-seeking special-interest groups who want control and income at the expense of others.
But the replacements offered for the prevailing system of Neo-Liberal interventionism are all merely variations on the same statist and collectivist theme. They couch themselves in nationalist or religious rhetoric, but they all offer nothing more than more of the same fundamental institutional system: political paternalism, economic privilege, and social tyranny, with just different power-holding elites managing and manipulating the people wanting an end to the existing politicized Neo-Liberal domestic and liberal international order.
And China lurks in the wings, waiting to take its place as the master of the world in place of a declining America, with its own nationalist and socialist vision of the authoritarian state in which the individual is subservient to those in political control. China’s rationalizing appeal to existing and would-be dictators and tyrants around the globe should not be underrated: It is an authoritarian democracy that is offered in place of the corrupt and dysfunctional Neo-Liberal democracy existing in numerous countries.
There is only one answer if liberty, prosperity, and world peace are to be truly restored and maintained. It is a renewal and revival of the classical-liberal internationalism that gave men freedom, began to end human poverty, and established the foundation for global world tranquility by separating the personal and economic affairs of humanity from the grasping and violent hands of government. Any other path will only mean a repetition of the past: power-lusting, special-privilege, tyrannizing social engineers, and international tensions that will threaten new and highly destructive conflicts within and between nations.
This article was originally published in the January 2019 edition of Future of Freedom.