Classical Liberalism - economy/political division

[boxinghefner]

can someone explain this to me.

Right so adherents of classical liberalism argue that we need to avoid absolutism (and thus coercion). Following from this - the best method of avoiding coercion is capitalism ("history suggests only capitalism is necessary condition of historical freedom" (1962:10).

Advocates of this view argue that the way in which that is enacted is via a divison between the economic and the political: "capitalism ... offsets economic from political power" (1962:9). How is this division conceptualised? How is there a division between the economic and the political? I don't understand how that's possible; the two are going to have some sort of relationship. Presumably this division is enacted via the limitation of state involvement in the market? Deregulation of the economy?


[Friedman (1962) Capitalism and Freedom]

[Publius]

In the idealized liberal world, government would exist only to enforce and uphold property rights (not exactly accurate, but good enough.) Government would not actually play a role in the economy, as an actor, it would simply insure that capitalism could exist, through rule of law, courts, etc.

This is, I think, an entirely unrealistic view but, it is a perfectly valid possible view; things COULD work this way, one could imagine. They don't, as a matter of fact, but they conceivably could; this is, apparently, good enough for most liberals.

They assume that markets are, by nature, free enterprises, and government is, by nature, a authoritarian enterprise.

[boxinghefner]

In the idealized liberal world, government would exist only to enforce and uphold property rights (not exactly accurate, but good enough.) Government would not actually play a role in the economy, as an actor, it would simply insure that capitalism could exist, through rule of law, courts, etc.

that's quite interesting. Friedman gives us a long list of things that govt should not be expected to have involvement in - but like Hayek obviously doesn't take this theory to extreme anarcho-capitalist conclusions. There's actually a great chapter on this in Constitution of Liberty i've just come across ('Economic policy & rule of law'). There could be a debate here about how much Classical Liberalism is reconcilable with neoliberalism I suppose.


This is, I think, an entirely unrealistic view but, it is a perfectly valid possible view; things COULD work this way, one could imagine. They don't, as a matter of fact, but they conceivably could; this is, apparently, good enough for most liberals.

It establishes a fairly questionable divide - like you say, it doesn't work in practice. Quite fascinating to contrast with neoliberalism - and looking at some of the stuff that has been enacted under the umbrella of neoliberal policy (assuming you accept the definition of neoliberalism provided by Marxists like Harvey). To try and establish a divide between the economy and political is like someone eating their diner off the floor of a dirty train carriage - it's hard for me to understand the logic. Materialism has got its hold on me obviously.



They assume that markets are, by nature, free enterprises, and government is, by nature, a
authoritarian enterprise.

yus, I thought/think there is something somewhere by Hayek about the grudging/relative necessity/benefit of democracy as a form of governance. Can't find this though.


Thanks for your comment - very informative

[Publius]

Originally posted by [email protected] 15, 2006 12:32 am





that's quite interesting. Friedman gives us a long list of things that govt should not be expected to have involvement in - but like Hayek obviously doesn't take this theory to extreme anarcho-capitalist conclusions.

Hayek and Friedman were my favorite 'liberals' when I was of that persuasion and they still are.

Both were rather reasonable, unlike most Austrians and Objectivists, and both, while still being very libertarian, actually attempted to use practical ideas. Hayek, I believe, even supported a low minimum wage later in life (he sort of moved away from Austrian economics, I believe) and Friedman of course came up with the idea for a negative income tax, which I still think is the single best method of providing aid to the poor.



There's actually a great chapter on this in Constitution of Liberty i've just come across ('Economic policy & rule of law'). There could be a debate here about how much Classical Liberalism is reconcilable with neoliberalism I suppose.

A lot of classical liberals dislike 'neoliberalism' (we may be using the term differently) due to its reliance on government instituted "free trade" deals that are really anything but.

That being said, I think "neoliberal" is a nonsense piece of Marxist jargon.



It establishes a fairly questionable divide - like you say, it doesn't work in practice. Quite fascinating to contrast with neoliberalism - and looking at some of the stuff that has been enacted under the umbrella of neoliberal policy (assuming you accept the definition of neoliberalism provided by Marxists like Harvey).

Yeah, it is 'strange' that a lot of 'free trade' deals have things like quotas, limits, restriction on dumping, etc., which clearly go against the most basic of liberal market tenets.

Basically, 'neoliberalism' could be seen as nothing more than adopting classical liberal speech patterns and sticking to what amounts to roughly a protectionist, government-dictated economy.

I fully support free trade, but not as it's currently instituted. Too many bullshit restrictions of say, agriculture.

It's a complex issue, to say the least.



To try and establish a divide between the economy and political is like someone eating their diner off the floor of a dirty train carriage - it's hard for me to understand the logic. Materialism has got its hold on me obviously.

It seems possible, but it seems pointless.

Why seperate them, why go through all that trouble, when you could far more easily focus on just GOOD government.

It's hard, but it's easier than completely divorcing the two.




yus, I thought/think there is something somewhere by Hayek about the grudging/relative necessity/benefit of democracy as a form of governance. Can't find this though.

I agree with him there, I just don't happen to think markets are particularly better.



Thanks for your comment - very informative

I try.

[Nusocialist]

Most of what the right/vulgar libertarians say about classic liberalism is bullshit, I share with chomsky the feeling that socialism and particularly anarchism are the real descendants of classical liberal thought.
The idea that the classic liberals would support crap like Rothbard corporate fuedalism is laugable.
Have any of these so called modern classic liberals actually read Adam Smith? The man hated capitalists and abhored the division of labour.

[Tungsten]

Publius

They assume that markets are, by nature, free enterprises, and government is, by nature, a authoritarian enterprise.Acutally, that's mostly true. But the situation's more complicated than market vs government (which is a false dichotomy). Most modern governments (and this is the general rule) are simply mouthpieces of a certain class of people who have a vested interest in enriching themselves, a rather small minority, at the expense of society at large which they do via state aparatus. As I'm sure you already knew, these people's politics are what can be broadly described as "statist" - that is, people who make a living from the state and are most likely to benefit from it's expansion. This can cover a whole spectrum of people and professions.

[Dimentio]

Most capitalists [not adherents to the free market but owners of big businesses] are actually earning quite a lot in subidizes from the state. I know that the federal state in the US saved GM when they were near bankcruptcy in the 80;s, and the Swedish state is paying the Volvo factory in this city about 8,5 million euro in compensation for environmental regulations.

The total amount of subsidizes which the Swedish state is paying to businesses is about 8 billion euro. But if they do not do it, the companies threatens to outsource. It is a scandal.