The Evolution of Laissez Faire: Free Market Economics in Political Theory and American Thought

Leonard O Goenaga

The Evolution of Laissez Faire: Free Market Economics in Political Theory and American Thought

I. Intro

• Opening Statement: Defining Laissez Faire
• Thesis Statement

II. Outline

III. Body

• Laissez Faire in the 18^th Century
• Thought 1: The Founding: Thomas Jefferson (18^th Century)
• Thomas Jefferson

ú  Declaration of Independence

ú  First Inaugural Address (1801)

• Laissez Faire in the 19^th Century
• Thought 2: Free Labor: Abraham Lincoln (19^th Century)
• Lincoln’s letters  
• Thought 3: Social Darwinists (19^th Century)
• Herbert Spencer
• Andrew Carnegie, “The Gospel of Wealth”
• William Graham Sumner, What the Social Classes Owe Each Other
• Laissez Faire in the 20^th Century
• Thought 4: Progressive Backlash and the Mixed Economy (20^th Century)
• The Decline of American Laissez Faire
• Progressivism
• Wilson, FDR & Croley
• Thought 5: Defense of Laissez Faire (20^th Century)
• Milton Friedman
• Ayn Rand & Objectivism

IV. Summary

• Summary statement of areas of Thought.
• Laissez Faire and the future of the 21^st Century
• Thought 6: The Future of Laissez Faire: Conservative and Libertarian Movements (21^st Century)
• Reagan Conservatism
• Ron Paul & the Young Libertarian Movement

V. Conclusion

• Restated Thesis
• Concluding Statements

Traditionally, laissez faire is coined from a French phrase meaning, “allow to do”. It is known to represent a strain of economic and political thought that calls for minimal government intervention in the private sector, characterized by a ‘hands off’ approach by the government, in hopes of having private sector solutions for private sector problems. Although the original source of the phrase is disputed, the first sign of its usage is claimed to be from the Marquis d’Argenson, whom claimed  “Laissez faire,” in his 1736 Memoires (Keynes, II). Whatever the source, and there are several claims to it, laissez faire has been popularized throughout the ages. It has specifically been heralded as a rallying cry for different political groups and leaders throughout American history, from founders such as Jefferson, to current political leaders such as Ron Paul. It is this evolution of the term, and the continual passage of its importance from generation to generation, that this paper will explore. This paper will follow the passage of the torch of laissez faire throughout the 18^th, 19^th, 20^th and 21^st centuries, focusing on how it has been seen at the Union’s founding (Jefferson), the Free Labor movement (Lincoln), the Social Darwinist period (Spencer, Carnegie, Sumner), the Progressive backlash (FDR, Croly, Wilson), the revival of laissez faire in the 20^th century (Friedman, Rand), and finally conclude with an analysis of laissez faire’s future.

During the nation’s founding, few had such effect on the development of this new government than Thomas Jefferson. Having been an important thinker, and the writer of the Declaration of Independence itself, Jefferson makes a good starting point in our exploration of laissez faire. Perhaps Jefferson best exemplifies the goal of laissez faire in the statement “that all men are created equal, that they are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness,” (Dolbeare 49). It is this Jeffersonian emphasis on the individual that makes laissez faire possible, and the quote itself hints at greater free-market sources: such as political theorist John Locke. The tradition of Jeffersonianism is grounded in the idea of sacred individualism, or the importance of preserving the individual as having precedence over government. This involved the establishment of individual rights, individual responsibility, and civic participation. This liberal individual-focus is perhaps where we can best draw Jefferson’s connection with laissez faire. Free markets themselves cannot function with a weighted understanding of the importance of the individual. As Jeffersonianism calls for a rejection of big government, so does laissez faire. The two stand on similar soil, necessitating both a small government and individual responsibility to properly function. It is no wonder that in various writings do we find elements characteristic of laissez faire. In his First Inaugural Address (1801), we find several portions emulating free-market ideas. One in particular perhaps best summarizes Jefferson’s tone: “a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities,” (Dolbeare 151). The element of laissez faire found within the quote speaks for itself. This tone of free-market and individual-focus continues throughout Jeffersonian thought, and with the close association between Jeffersonianism and laissez faire, one will likely find them joined at the hip throughout their political evolution.

Next in line within the progression of laissez faire minded thinking is Abraham Lincoln. It is of interest that again, we find Jeffersonian ideals standing side by side with those of free market capitalism. Lincoln appears to have been incredibly influenced by Jefferson’s notions of individual liberty and freedom in the form of the Free Labor movement. It is of no surprise, given the ideals set in Jeffersonianism that someone like Lincoln would take them to their logical conclusions, which resulted with the emancipation of the slaves. This newfound freedom is also easily associated with laissez faire principles. One may wish to argue that a government stepping in to force the emancipation of slaves upon its member states appears to be interventionalist, and thus anti-laissez faire, but I would disagree. Laissez faire principles imply a genuine equality amongst the labor force. The ideals of a ‘hands off’ economic approached it rooted upon the principle that men are equal in their ability to work, create, and compete. A general air of freedom scents the ideas of laissez faire, as it necessitates a freedom from government interference, and freedom of the individual to work. Thus, I would argue that a government allowing such an institution as slavery, which clearly degrades an economic atmosphere of free competition, is a government intervening upon the market. Following this line of reasoning, I am inclined to see Lincoln in agreement. Lincoln argued that the Constitution was to be regarded as the law of the Union, while the Declaration to be it’s guiding spirit. We’ve already expressed the laissez faire qualities of Jefferson, the document’s author, and knowing a genuine Jeffersonian spirit existing within Lincoln (see Letter to Boston Republicans 1859), we see further ground for a laissez faire friendly mindset. Within Lincoln’s Second Inaugural Address (1865), we are given a hint of his laissez faire convictions. The dilemma is the argument of possibly deporting black laborers, in fear that this newfound group would overrun white laborer’s occupations. In a true laissez faire fashion, Lincoln rejects any government interference, responding that to “reduce the supply of black labor, by colonizing the black laborer out of the country, and, by precisely so much, you increase the demand for, and wages of, white labor,” (Dolbeare 246). Lincoln states that occupation levels will remain the same, and shares derived theoretical principles of wages shared by classical liberals. Instead of advocating that the government step in and assure public anxiety, Lincoln calls for the market to run it’s own course, rejecting any intervention amongst the newly liberated workforce. Clearly, this hints at laissez faire presuppositions. What then, is the importance of Abraham Lincoln in the discussion of laissez faire? Most importantly, Lincoln took the necessity of freedom needed by laissez faire, and advocated by Jeffersonianism, to its logical conclusion and beyond social traditions such as slavery, resulting with a freed workforce that brought the actual laborers closer to the ideals stressed in free market capitalism. It would be difficult to relate laissez faire to free market capitalism, if the laborers in the market are hardly free.

Given the gains laissez faire had experienced in the early and mid 19^th century, we now find it at it’s peak in the form of Social Darwinism. During this era in the late 1800s, laissez faire was probably given its greatest economic setting and ideological foothold in the form of the industrialization of the U.S. and the intellectuals of Social Darwinism. The environment itself benefited from the ideas of a free market. The economy was shifting from being agricultural based, to industrial. Population rates and immigration soared in number, giving rise to a greater potential workforce for the budding industries. In addition, populations were urbanized, leading businesses to compete for labor, as well as buyers. The rise of tycoons of the like of Carnegie, Rockefeller, and others were standards of the time, and competition was exceptionally fierce. For these reasons of industrialization, population booms, and the rise of big business, it is no wonder we find an accompanying ideology to spur along justified growth. Social Darwinism found within its roots the ideas of Englishman Herbert Spencer. Having coined the phrase “survival of the fittest” within his Principles of Biology (1864), Spencer adapted the ideas of natural selection as contained within Darwin’s On the Origin of Species, and molded them to an economical setting. Survival was now fought amongst big businesses, producing the strongest and most vital industries above the others. Individuals such as Carnegie ran with the philosophical setting, arguing in The Gospel of Wealth for the moral and fiscal benefits such competition produced within man. One other intellectual who adapted the ideas to the industrialized setting, and considered the intellectual leader of Social Darwinism in America, is William Graham Sumner. In his What the Social Classes Owe Each Other, Sumner stressed individualism, free trade, inevitability of inequality, and the struggle of survival as a good. In a full throated argument against hand-outs, and the sanctity of a man’s hard earned work, Sumner summarizes the Social Darwinist’s laissez faire battle-cry where, in What the Social Classes Owe Each Other, he states that “rights do not pertain to results, but only to chances. They pertain to the condition of the struggle for existence, not to any of the results of it; to the pursuit of happiness, not to the possession of happiness…each has a right to acquire and possess property if he can,” (Dolbeare 285). It is for these arguments, clearly pro free-markets that we may point to Social Darwinism within the late 1800s as the peak of implemented laissez faire within the United States. It is also interesting that from this peak we also find its future drought.

Following the high laissez faire experienced during the era of Social Darwinism comes its first great challenge. Until the 20^th century, laissez faire had remained lightly challenged, but greatly accepted. The inherited liberal tradition of Locke and Adams, as well as leaders like Jefferson, Jackson, Lincoln, the Social Darwinists, and others, cemented this tradition. However, from the Social Darwinist’ shadow, and in rebellion to them, came laissez faire’s first and greatest challenge: Progressivism and the Mixed Economy. Evolving from the Populist movements of the 1890s, and such popular notions as found in Edward Bellamy’s Looking Backward, Progressives began to interpret the ‘pursuit of happiness’ differently. Feeling as if the cut-throat capitalism found in industrialism was overly brutal, Progressives started to question the meaning of democracy, and how to improve its quality. Herbert Croly, in The Promise of American Life (1909), perhaps best summarizes the progressives’ intent, where he states that:

The democratic principle requires an equal start in the race…the chance which the individual has to compete with his fellows and take a prize in the race is vitally affected by material conditions over which he has no control…[yet] with the aid of exceptional strength and intelligence he may overcome the odds against him and win out. (Dolbeare 373)

Progressives such as Croly, Roosevelt, Brandeis and Wilson thus called for a bigger government to deal with bigger business and to thus even the playing field for those whom they saw as at a disadvantaged start (“there shall be two masters, the great corporation and over it the government of the United States,” [Wilson, Dolbeare 395]). The results came in the form of Progressivism and it’s associated welfare state. A Hamiltonian government meant to enact good was called back into the picture, to again compete with its rival: the laissez faire allied Jeffersonian model. Progressivism called for a rejection of Social Darwinism, an equal start (in the form of welfare benefits, income taxes, free education, etc.), public ownership of industries, civil rights, trust busting, and other associated policies. This style of government had its greatest gains in power given the rise of FDR and the crash of the Great Depression. With the economy in a crisis, unchecked laissez faire was perceived as being the cause of the market burst, which resulted with progressivism seeing a boom. FDR and Wilson implemented various progressive policies, calling for ‘new societies’ of equality and welfare benefits. Perhaps the injury to laissez faire is echoed best in the words of Woodrow Wilson, where in his The Meaning of Democracy (1912), he states “America is not now, and cannot in the future be, a place for unrestricted individual enterprise,” (Dolbeare 393).

Although laissez faire saw a serious low-point in the form of the interventionalist policies surrounding the Great Depression, as well as the Keynesian critique of Laissez Faire and the resulting developments that turned the state into a mixed economy, there was no shortage of it’s support. Perhaps the greatest 20^th century economist that idealized defense of laissez faire and free markets was found in Milton Friedman. A leader of the popular Chicago school of politics, Friedman advocated a minimized role for the government in the economy, putting emphasis on private sector solutions for private sector problems. He rejected the Keynesian blame of laissez faire policies for causing the Great Depression, and although formerly a Keynesian himself, Friedman argued that it was actually too much government that caused and prolonged the market meltdown. Friedman developed the macroeconomic policy of monetarism, which focused on the connection between the supply of money and inflation. Friedman denounced the role of the government in micromanaging the private market, arguing that the private sector would respond to the government’s efforts, thus nullifying any intended response. In addition, he argued for a natural rate of employment, and theorized that Keynesian policies would lead to stagnation (which they did). One cannot underestimate the importance Friedman has had on bringing a justification to laissez faire on economist grounds; bringing successful economic theory attached to the ideas of free market capitalism. His ideas have been popular amongst conservatives and libertarians, and have idealized an intellectual movement that has reshaped the study of economics, as well as having influenced leaders from Ronald Reagan to Margaret Thatcher, and such free-market success stories as the Chilean Economic miracle. For these reasons, it is no wonder that even such critiques as Princeton University economist Paul Krugman claims he is “the best spokesman for the virtues of free markets since Adam Smith,” (Krugman 1).

Another interesting area that vehemently defended laissez faire within the 20^th century comes from the direction of Ayn Rand and the associated school of Objectivism. Ayn Rand was a Russian-born screenwriter (having written the popular novels The Fountainhead and Atlas Shrugged, which still sells yearly in the 100,000’s), philosopher, and rational individualist who heavily advocated a return to 19^th century capitalism. Similar to the Social Darwinist of the 19^th century, Ayn called for a purification of the economy in the form of laissez-faire capitalism, and designed an entire school of thought focused on such a purpose. This school, known as Objectivism, focused on rational egoism in ethics, calling for a rejection of the supernatural, as such ideas as religion and mysticism called for unproductive self-sacrifice. This school called on man to entertain his reason for selfish pursuits, seeing a purified form of rational selfishness as an engine to successful economics and government. To Ayn, individuals “must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life,” (Rand 3). Clearly, such a quote recalls images of the self-motivated motifs of Social Darwinism, and one cannot be blamed for doing so. Perhaps Ayn wished to reinstall such an economic perspective in the modern setting by reviving it with new justification via her philosophical school of Objectivism. Her thought of perfecting the self-interested capital-driven man echoed earlier sentiments of Sumner, Carnegie and Spencer, as they all hoped to underscore the utter importance capitalists had in society (seen in her book Atlas Shrugged, which details the effect of industrialist and entrepreneurs going on strike and leaving the U.S. to establish a free economy, resulting with a collapse of U.S. society). In summary, Ayn Rand, although overlooked academically, is important in that she was not only a leading voice in the justification of laissez faire in the form of a philosophical school dedicated to individual-based egoism, but also in the development of one of the standard-bearers of traditional laissez faire capitalism in the current era: the modern Libertarian movement.

From these two great thinkers arose the future defenders of laissez faire policies: those of conservatives and libertarians. Although two cuts from the same cloth, and seemingly allies, the modern Conservative and Libertarian movements draw distinctions. However, both share in being greatly inspired by such free-market advocates like Friedman and Ayn Rand. The Conservative movement sought to rebuttal the effects of progressive economic policy, and given the renewed intellectual vigor of such individuals as Friedman, laissez faire found an invigorating voice in Ronald Reagan. Campaigning for free markets, Chicago type economic policy, ‘Reaganomics’, and individualism, Reagan led a conservative revolution that brought with it laissez faire ideals. Within his threefold conservative approach (free markets, strong national defense, and traditional family values), Reagan was able to push back some of the progressive economic changes. Fiscal conservatism till this day carries much weight within the modern conservative movement, and although damaged by large Republican spenders such as Nixon and the Bush’s, laissez faire is still considered a foundational position. In addition to Conservatives, modern Libertarians have grounded themselves even closer to laissez faire ideals. A strand of American ‘conservatism’, Libertarianism derives its influences from such thinkers as Friedman, Ayn Rand, Goldwater, and others. Its approach is similar to those of the conservatives, yet it denounces traditional socially conservative stances, as well as adapting non-interventionalist foreign policies. This renewed movement is best currently personified in the form of Representative Ron Paul, a severely fiscal-minded libertarian who champions laissez faire policies. A former 2008 contender for the republican candidacy, Ron Paul led a ‘revolution’ amongst libertarians, bringing about a lively grassroots styled campaign amongst dedicated youth.  Perhaps it is in this surge of youthful libertarian interest, as well as the tradition of Reagan-type conservatism, that laissez faire policies will find its future’s voice.

With the start of the 21^st century, it is interesting to guess where laissez faire will go, and how future generations will interpret it. Given its rise and fall between the 19^th and 20^th century, it begs the question, given the current political climate, whether the 20^th to 21^st century will have similar experiences. At the moment, the U.S. government is experiencing its worst economic woes since the Carter years. In addition, laissez faire principles have been nearly trampled on, as the government has already secured over 200 billion in ‘bailout’ funds for the banking sector. In addition, ignoring numerous other car companies who met their demise in the 20^th century, the ‘Big Three’ U.S. automakers are now pleading with the government for loans (GM, Ford, and Chrysler). Such bailouts of big business go both against the tenets of ‘survival of the fittest’ of the Social Darwinist era, as well as the anti-corporate attitude of Wilson and others. One is thus left with the impression that laissez faire is again experiencing a renewed debate on it’s existence in the economy. Having analyzed laissez faire within the 18^th, 19^th, 20^th, and 21^st centuries, and having explored such instrumental thinkers as Jefferson, Lincoln, Spencer, Croly, and others, we are left curiously looking for the free market’s future. Will the torch finally be extinguished by these modern economic problems and government’s interventionalist bailouts? Will this crises finish where Progressives and the Great Depression left off? Or will the environment bring about renewed discussion, and a possible rediscovery of laissez faire as the answer to the economy’s problems? It all too eerily emulates the Great Depression, and how Progressives blamed Hoover and an unchecked laissez faire economy (Hoover was hardly a non-interventionalist). This renewed Jeffersonian versus Hamiltonian narrative leads us to ask: Where then, is laissez faire to go? Perhaps the torch will be passed to the youthful hands of this libertarian ‘revolution’, or fortified within the fortress of old southern conservatism. Or perhaps the torch has finally met its match.

Works Cited

Dolbeare, Kenneth M., and Michael S. Cummings. American Political Thought. Washington D.C.: CQ Press, 2004.

Keynes, J.M. “’The End of Laissez Faire.’” PanArchy.og. Winter 2008.  12 Dec. 2008 <http://ww.panarchy.org/‌keynes/‌laissezfaire.1926.html>.

Krugman, Paul. “The New York Review of Books, Volumn 54, Number 2.” NYBooks.com. 2 Feb. 2007. The New York Review of Books.  10 Dec. 2008 <http://nybooks.com/‌articles/‌19857>.

Rand, Ayn. The Voice of Reason: Essays in Objectivist Thought (The Ayn Rand Library, Vol V) . New York: Penguin Group, 1990.

A Comparison Between Modern and Classical Liberalism: Is Modern Liberalism Truly Liberal?

Leonard O Goenaga

POT3302, Political Ideologies

Professor Boronat

March 9th, 2009

A Comparison Between Modern and Classical Liberalism: Is Modern Liberalism Truly Liberal?

A few days ago, Pat Buchanan, a well-known conservative commentator, released an article expressing how America is not on the path to Socialism, but is already there. With the climate of car and bank bailouts, trillion dollar stimulus plans packed with perceived liberal-programs, one is left to examine the claim seriously. Conservatives and Republicans alike have echoed the critiques of Obama as a Socialist, and echoing Rahm Emannuel’s statement that ‘we can’t let this crises go to waste’, one is left to wonder more. On what are President Obama’s policies modeled after? Are they truly socialistic? Or, are they truly of the Liberal tradition, known currently as Modern Liberalism? If so, how ‘liberal’ is this modern liberalism, and does it show any influence from the Social-Democratic movement within and abroad? This paper seeks to examine the similarities and differences between classical and modern liberalism, as well as survey the possibility of Social-Democratic thought on Modern Liberalism, and thus examine how ‘liberal’ modern liberalism actually is.

Before we can proceed to analyze any potential socialist narratives of the Obama administration, and with it this New-Left movement in modern liberalism, we must first move into defining terms. We will first start defining several traits of Liberalism as a whole, as it settled the background for Modern Liberalism’s arrival, and accommodate the majority of reference points Modern Liberals use to justify their system as essentially liberal. In our comparative analysis, we will first analyze key themes within these traditions, followed by key thinkers. To begin, we define Liberalism as a whole, as “a political philosophy based on belief in progress, the essential goodness of the human race, and the autonomy of the individual and standing for the protection of political and civil liberties,” (Meriam-Webster). In more simplistic terms, Liberalism can be defined as the political ideology of preserving the individual’s liberty. This begs the question, what is liberty? Liberty is interchangeable with freedom, and it may be defined as “the ability to think or act as one wishes,” (Heywood 29). In other words, Liberalism attempts to first argue that the foundation of society is founded upon by a social-contract amongst individuals (see Locke’s Second Treatise), and that these individuals engage in said contract to best preserve their ability to think and act as they wish. John Locke, the father of this tradition, affirms this notion, arguing that “creatures of the same species and rank…should also be equal amongst another,” and that “every man has a property in his own person…nobody has any right to but himself,” (Locke 8, 19). Individuals are thus of prime importance (being all made in the image of God, and thus maintaining equality in design and self-ownership), both in political power (such as the establishment of a social contract and civil society), and economic pursuit (owning one’s own labor, and the freedom of pursuing the fruit of ones labor). Although such a brief attempt to summarize Liberalism is overtly not complete, we can see core themes that set the foundation for Liberalism: The Individual, Freedom, Reason, and Justice (Heywood 27). We have already established, given Locke’s argument of divine design and self-ownership that individuals are at the root of Liberalism. In addition, we have mentioned the purpose of individuals instituting government, via the social-contract, is to preserve their ability to pursue their aims and preserve their liberty. An additional foundation to this system is one’s access to reason. The individual’s ability to reason is central in engaging in society, making economic decisions, and establishing government and society. “reason…teaches mankind who will but consult it that, being all equal and independent, no one ought to harm another in his life, health, liberty or possessions,” (Locke 9). One final liberal theme of importance is the concept of justice, or “a moral standard of fairness and impartiality,” (Heywood 32). Naturally, a combination of individualism, freedom, access to reason, and the pursuit of justice leads one to devise a concept of equality amongst individuals. It is from this idea of equality, as well as a morphed idea of justice, that Modern Liberalism begins its revision.

Having analyzed the central Liberal ideas of individualism, freedom, reason, justice and equality, we may now explore the political direction it led to, known as Classical Liberalism. Before analyzing Classical Liberalism’s defining themes, it would work to our advantage to summarize the initial aims of the liberal state (having hinted to it above. In Political Ideologies, Andrew Heywood properly sums these aims of the Liberal state as being first “being created by individuals and for individuals…Second, social contract theory portrays the state as an umpire or neutral referee in society,” (Heywood 37-38). The characteristic of the government is thus a passive role, or as Locke properly sums it as a ‘night watchman’. This implies a minimist state, which both preserves one’s civil liberty (freedom from government), and protects one from the state of war (individual or foreign aggression, and governmental coercion). The Classical Liberals best wish to preserve this separation of government and the privacy and liberty of individual, both politically, socially, religiously, and economically. Society is generally atomistic, and made up of reason-driven individuals. Classical liberals believe, given the liberty of the individual, man is best designed to maximize his freedom to allow him maximized reason. This belief in the egoistical individual roots a system of economic and moral efficiency, arguing that since man is best enabled to handle his own economic and moral choices, he should be protected in-as-much as he doesn’t stumble over the boundaries of another man’s liberties. In addition, Classical Liberals believe in the existence of natural rights, found in the form of negative rights. Jefferson explained these national rights as seen in the Declaration of Independence, “that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,” (Jefferson 3). Besides the utter importance of natural rights, and egoistical individual, Government is designed as a ‘necessary evil’. The Classical Liberal ideal is then, the least government possible, the absolute protection of natural rights, and the freedom of egoistical individuals to pursue their aims without fear of attack or coercion from governments. This leads way to an acceptance of laissez faire economic principles, as advocated by Adam Smith and David Ricardo. The Liberal political model was extended to the economic realm, where reasonably, individuals should also be free to pursue economic aims. “Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man or order of men,” (Smith 466). The economic functions best when the government governs least. Due to man’s access to reason, and egoistical individualism, Classical Liberalism sought to embrace and maximize the ideas of Adam Smith and free markets, arguing that the preservation of man’s liberty naturally meant a preservation of his economic endeavor. It from the perceived failures of a supreme laissez faire approach (the Social Darwinism of the 19th century), as well as a different understanding of justice and equality, that the schism between Classical and Modern Liberalism occurred.

Finally arrived at Modern Liberalism, we must recap our finding. In the end, Liberalism wishes to preserve the liberty of man’s actions and desires; in-so-much that they do not trample the natural rights of his/her fellow man. Liberalism advocates the individual as the center of political power and society, as well as emphasizing man’s reasonable nature, his God-given status of equal and free, and the justice of maximizing man’s individual liberty. Classical Liberalism takes from these ideas, emphasizing a passive and minimal role for government, as well as focusing on a free market laissez faire styled economy. From this, Modern Liberalism is born in the wake of grievances against the perceived discriminative nature of laissez faire economies, and a different notion of justice. These are found in the arguments that Social Darwinism and laissez faire policies do not necessarily make one free, but rather produce inequalities. In other words, the policies made individual’s access to pursuing their freedoms unequal, or as popularly proposed, the playing field in which individual access their freedoms is unfair. Maintaining the individual as primal importance, Modern Liberals thought that through using government, as seen in the 20th century in the endeavors of FDR’s New Deal, Johnson’s Great Society, and JFK’s New Frontier, society could maximize an individual’s freedom. The focus here was now individuality, or “self-fulfillment achieved through the realization through the realization of an individual’s distinctive or unique identity or qualities,” (Heywood 55). J.S. Mills, in On Liberty, attempted to emphasize the individuality and self-actualization of an individual, “the only freedom which deserves the name is that of pursuing our own good in our own way, so long as we do not attempt to deprive others of theirs,” (Mill 22). This idea of self-actualization and individuality formed the bridge into modern liberalism: the goal is to provide the environment which best allows the individuality to experience freedom, or actualize themselves. From here, thinkers such as T. H. Green advocated a review of the notion of liberty. This led to the idea of positive freedom, which were rules made not to protect an individual from government (negative rights), but to advance one’s access to fulfilling and advancing their liberty. This came into fruition within the idea of FDR, whom working within the depression, advocated for a positive role for government. The idea was to utilize the government to ‘level the playing field’, by helping the disadvantaged poor. By implementing welfare-state policies, such as social security and welfare, it was argued that the government could pull individuals from the entangled restraints of poverty and social inequality that prevented them from actualizing their liberty. As justice was earlier mentioned, Government now took the responsibility of enacting social justice, or “a fair or justifiable distribution of wealth and rewards in society,” (Heywood 33). In addition to redistributing wealth and providing social services that arguably ‘leveled the playing field’, the role of government in economics grew. In The General Theory of Employment, Interest and Money, economist J. M. Keynes argued that the government could take a positive role of by regulating demand via fiscal policy. Although an opposite to the ideals of classical liberalism, Keynesian economics further added to the ability of Modern Liberalism to ‘level the playing field’. We thus see the following themes within Modern Liberalism: Individuality, positive freedom, equality, welfare state, and social justice.

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Constitutional Precommitments, and Their Relation to Democracy: An Evaluation of Holmes and Waldron.

Leonard O Goenaga

POT4930, Constitutional Theory

Professor Fatovic

February 18th, 2009

Question 2: Constitutional Precommitments, and Their Relation to Democracy: An Evaluation of Holmes and Waldron.

For some time, Constitutional Democracy has been seen as somewhat of an oxymoron. This tension has been between Constitutionalist (such as Hayek) and Democrats (such as Shapiro), who have argued over the dangers of an unchecked democratic mob, or aristocratic preserving tendencies of a dead constitution-writing elite. This debate has long been fought between both of these sides, each claiming their system to be the best, while fretting over perceived dangers of the other. However, Stephen Holmes, in Constitutionalism and Democracy, dares to argue that these two views are not so much mutually exclusive, and that they are essentially beneficial to one another’s existence. Holmes seeks to argue that Constitutionalism preserves and protects the opportunity for democracy in the form of precommitments. These precommitments can be defined as higher laws and principles, decided during the founding stages of a nation’s creation, which organize the functions and powers of government, as well as the rights and rules of the citizenry. In such a way, precommitments may be seen as binding restrictions, found in the form of written constitutional high law, that dictate a framework for further laws, and the functioning of government and power. It is the goal of this paper to survey the ideas of Holmes, a supporter of precommitments, and Waldron, whom opposed Holmes’ ideas, and discover which of these two areas of thought best preserve the idea of Democracy.

Before discovering the ways in which Constitutionalism enables Democracy, Holmes and those whom support precommitments must answer two questions regarding the ability of one generation to bind the latter. This argument against restraint is found within Thomas Paine and Thomas Jefferson, whom state that “the present generation has an unlimited and illimitable right to new-model the institutions under which it lives. The only consent that legitimates any form of government is ‘the consent of the living,’” (202). The trouble for Constitutionalism comes in this: how can dead generations of the past, set the rules for the present? Does it not initially seem that this process is anti-democratic? In addition, individuals who supported this view, such as Jefferson, suggest that “”only periodic and obligatory constitutional plebiscites can disenthrall the present from the past and assure every generation its proper say,” (205).

Having observed the complaints of Jefferson and Paine, we must now ask if a generation can bind the next. To answer this, we must observe first the type of contract being passed over, and the parties involved. “Rather than being presented as an exchange of promises between separate parties, modern constitutions are typically styled as frameworks which ‘we the people’ give ourselves,” (209). In other words, there are not two parties involved, but rather a single entity of the people prescribing to the established precommitments. “The present generation is bound by the decisions of its forefathers because the dead and the living constitute one people…Just like any other individual, a nation is bound by its original vows,” (208). This leads us to ask, why can one generation bind the next with such principles as constitutional precommitments? We find this in Holmes’ analysis of the inheritance of debt. “If you inherit another’s property you also inherit his debts,” (212). Perhaps conceptualizing the passing of debt improves an understanding of the individuals involved. “Whenever he accepts a bequest, a nonsigner of the original contract implicitly consents to the political conditions which make enjoyment of that property possible,” (213). The people, agreeing to this contract not with a second body, but within itself, and within the consent and contractual nature described in Locke’s second treatise, participates in the inheritance of the ‘property’ of the government. We also must ask, having established that the people constitute one body, and not contractual between two groups, if an individual can bind itself. A theological argument illuminates that one can restrain himself, while still preserving freedom. God committing himself to his own principles is a sign of His freedom. Committing to omnipotence allows omnipotence (213-214). Even Bodin understands the need for self-restraint, “by claiming that precommitment is a vehicle of royal freedom – the strategy by which a sovereign may most effectively assert his will.” (215).