Classical
Liberalism
“Now, Professor, I
trust that we’ll talk about classical liberalism.”
“Just as I promised, Julie. Classical liberalism refers to the political and economic
teachings in books by F. A. Hayek (1), Milton Friedman (2) and others. The etymology (origin) of classical
liberalism is described in p. 5-6 of Friedman’s book: ‘In the late eighteenth
and early nineteenth centuries, the intellectual movement that went under the
name of liberalism emphasized freedom as the ultimate goal and the individual
as the ultimate entity in the society.’
‘After 1930 in the U.S., the term liberalism came to be associated with
a readiness to rely on the state …to achieve objectives regarded as
desirable.’ ‘In the name of
welfare and equality, the 20th century liberal has come to
favor…state intervention and paternalism.’ ‘Because of the corruption of the term liberalism, the views
that formerly went under that name are now often labeled conservatism.’ “
“Wow, Curmudge.
If Friedman were alive today, he might say that the progressives
arrogated (took without justification) the term liberalism. In fact, in his book Friedman continued
to use liberalism with its original meaning.”
“You know, Julie, for busy people like us, the Introduction
of Capitalism and Freedom contains
statements that provide a short preview of Friedman’s teachings. Here are some examples: ‘The scope of
government must be limited. Its
major function must be to protect our freedom both from our enemies outside our
gates and from our fellow citizens: to preserve law and order, to enforce
private contracts, and foster competitive markets.’ ‘The second broad principle is that government power must be
dispersed…better in the county than in the state, better in the state than in
Washington.’ ‘The great advances
of civilization have never come from centralized government.’ And then he named examples such as Newton,
Einstein, Edison and others.
‘Government can never duplicate the variety and diversity of individual
action.’ ”
“I’ve been reading some of the clippings in your file, Old
Guy. Here’s what Friedman said
back in the 1960’s: ‘There’s no such thing as a free lunch. If the government spends a dollar, that
dollar has to come from producers and workers in the private economy.’ And about the Keynesian multiplier,
‘There is no magic “multiplier effect” by taking from productive Peter and
giving to unproductive Paul.”
“Here, Julie, is a comment by Robert Barrow in 2011: ‘Food
stamps were an economic stimulus such that every dollar of benefits was
supposed to generate $1.84 in the economy in terms of economic activity.’ ‘There is no theoretical or empirical
support for the Keynesian position.’
‘There are two ways to view Keynesian stimulus through transfer
programs. It’s either a divine
miracle—where one gets back more than one puts in—or it’s the macroeconomic
equivalent of bloodletting.’ (3)“
“And in a clipping from Hayek’s Nobel Prize lecture: ‘If man
is not to do more harm than good in his efforts to improve the social order, he
will have to learn that in this, as in all other fields where essential
complexity of an organized kind prevails, he cannot acquire the full knowledge
which would make mastery of the events possible.’ Translated, this means that in a large, diverse nation like
the U.S. (a complex system), the central government can’t have enough knowledge
to properly control the economy, or for that matter, anything else. Finally, in Hayek’s book: ‘What
socialists have sought ever since the French Revolution is not equality before
the law but rather equality of outcome.’ “
“So it appears, Julie, that classical liberalism is the antithesis of modern liberalism,
socialism, and progressivism.”
The
Administrative State
“It’s interesting, Curmudge, that before we started our Curmudgeonocracy
discussions I had never heard the term ‘administrative state.’ “
“That’s understandable, young lady. Both of us have lived our entire lives
in an administrative state. It’s
the only life we have known; there has been no need to give it a special
name. It was started during the
presidency of Franklin Roosevelt.
He had to have an army of bureaucrats to administer his New Deal
programs. Basically, the
Administrative State is the way that progressivism is implemented.”
“Please tell me about it, Professor, although I may not like
what I hear.”
“Well to begin with, the Administrative State is under the
Executive branch of our government, and it includes the cabinet-level
departments such as State, Defense, Interior, Labor, Treasury, Agriculture and
others. Then under the departments
are services, bureaus, and agencies such as Internal Revenue, Fish &
Wildlife, FBI, and a seemingly never-ending list of others.”
“Much to your surprise, Herr Professor, I’ve been doing my homework.
These bureaus and agencies have effectively become a fourth
branch of the federal government, encompassing the roles of the
Legislative, Executive, and Judicial branches specified in the Constitution. When Congress passes a law without a
lot of detail, an agency fills in the details (called rules), enforces them,
and one who doesn’t obey finds himself before an administrative law judge.”
“You’ve got it as usual, Julie. This provides a way for members of Congress to avoid
responsibility for unpopular rules.
And pinning down accountability within agencies is often difficult. This may be the ultimate
example: ‘A centerpiece of the Dodd-Frank
financial reform legislation was the creation of a new Federal Consumer
Financial Protection Bureau (“CFPB”) within the Federal Reserve. Few
bureaucratic agencies in American history, if any, have combined the vast power
and lack of public accountability of the CFPB. It is an independent agency
inside another independent agency, presided over by a single director who is
insulated from presidential removal. Additionally, the Board is outside of the
congressional appropriations process.’ “
“Golly, Curmudge, the
Administrative State sounds like a progressive’s dream, but to strict
constructionists it’s a nightmare, as it would also have seemed to James
Madison. In Federalist No. 47 he
wrote, ‘accumulation of all powers, legislative, executive, and
judiciary, in the same hands, may justly be pronounced the very definition of
tyranny.’ “
“Regrettably Julie, we’ve been stuck with the
Administrative State for a long time.
I spent much of my professional career helping industry comply with
Environmental Protection Agency regulations.”
“Then, Old Guy, you must have some personal comments about
the Administrative State, which we’ll discuss in our next posting.”
Kaizen Curmudgeon
(1) Hayek, F. A. The
Road to Serfdom (1944); The
Constitution of Liberty (1960).
(2) Friedman, Milton Capitalism
and Freedom (1962).
(3) Barro, Robert J. The
Wall Street Journal, August 24, 2011.
Link to posting from blog archives: Evidence-Based Medicine 3—10/14/10
http://kaizencurmudgeon.blogspot.com/2010/10/evidence-based-medicine-patients.html
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