What Went Wrong? Liberalism to Progressivism to Nationalism and Socialism

Students researching and debating the U.S./Middle East topic will likely clock plenty of hours toward history, geography, economics, and international relations coursework. In this post I suggest some organizing themes for research, and recommend some books.

The previous post looked at the amazing popularity of (classical) liberal ideas among intellectuals in Egypt in the first half of the twentieth century. Though many scholars and intellectuals in Europe and the U.S. were captivated by utopian, “progressive,” socialist, and nationalist ideas in the early 1900s, other scholars argued against these collectivist policies, defending instead strong civil society institutions, limited government, and open international movement of goods, investments, and people.

Ludwig von Mises was a powerful advocate of classical liberal principles and policies. His book Liberalism: The Classical Tradition was first published in 1927. Bettina Bien Greaves explains the title in the preface to the 1985 edition of Liberalism:

The term “liberalism,” from the Latin “liber” meaning “free,” referred originally to the philosophy of freedom. It still retained this meaning in Europe when this book was written (1927) so that readers who opened its covers expected an analysis of the freedom philosophy of classical liberalism. Unfortunately, however, in recent decades, “liberalism” has come to mean something very different. The word has been taken over, especially in the United States, by philosophical socialists and used by them to refer to their government intervention and “welfare state” programs.

Liberalism is available in a new edition from the Liberty Fund, and the full text of the book is available on the Online Library of Liberty. Students researching U.S./Middle East policy should…read the whole book, but especially “Chapter 3: Liberal Foreign Policy.” Understanding that domestic and international policies are closely linked is key.

Consider the discussion in Liberalism of the right of self-determination:

The liberals of an earlier age thought that the peoples of the world were peaceable by nature and that only monarchs desire war in order to increase their power and wealth by the conquest of provinces. They believed, therefore, that to assure lasting peace it was sufficient to [79] replace the rule of dynastic princes by governments dependent on the people. If a democratic republic finds that its existing boundaries, as shaped by the course of history before the transition to liberalism, no longer correspond to the political wishes of the people, they must be peacefully changed to conform to the results of a plebiscite expressing the people’s will. It must always be possible to shift the boundaries of the state if the will of the inhabitants of an area to attach themselves to a state other than the one to which they presently belong has made itself clearly known. In the seventeenth and eighteenth centuries, the Russian Czars incorporated into their empire large areas whose population had never felt the desire to belong to the Russian state. Even if the Russian Empire had adopted a completely democratic constitution, the wishes of the inhabitants of these territories would not have been satisfied, because they simply did not desire to associate themselves in any bond of political union with the Russians. Their democratic demand was: freedom from the Russian Empire; the formation of an independent Poland, Finland, Latvia, Lithuania, etc. The fact that these demands and similar ones on the part of other peoples (e.g., the Italians, the Germans in Schleswig-Holstein, the Slavs in the Hapsburg Empire) could be satisfied only by recourse to arms was the most important cause of all the wars that have been fought in Europe since the Congress of Vienna. (Link to paragraph)

By this standard, U.S. policy toward the Middle East should be one of defending the plasticity of political boundaries:

It must always be possible to shift the boundaries of the state if the will of the inhabitants of an area to attach themselves to a state other than the one to which they presently belong has made itself clearly known.

In the United States the word liberal was adopted by opponents of classical liberalism. Progressives, socialists, and even Karl Marx understood the tremendous advances that liberal policies brought to the western world, but felt that new economic and social institutions could take the rest of mankind “to the next level” of economic progress and social equality. Word meanings shifted, as documented in the Lost Language website (post here on site and LD topic).

There have always been opponents of the principles and policies of classical liberal economists. Advocates for free trade and against mercantilism were opposed by aristocrats and mercantilists who benefited from government policies that protected their land rents and domestic production.

Not everyone benefits when the poor have more options for better-paying jobs in a fast-expanding market economy. Aristocrats struggled some as the price of household help went through the roof. Once the rural poor could find better jobs in nearby factories and cities, or in the manufacturing towns in the north of England, it became much harder to keep the horses groomed, mansions dusted, and beds turned down each evening. English elites soon called economics “the dismal science” since it disrupted what they saw as the natural order of things. This 2013 Atlantic post explains the actual origin of the dismal science. And this earlier Library of Economics and Liberty (Econlib) article tells the story in more detail.

A century ago the nationalist policies of European nation-states led the leading European industrial powers into total war and engulfed, destroyed, and transformed much of the world. World War I opened what Robert Nisbet referred to as the “seventy-five year war.” See Nisbet’s short book The Present Age, also online at the Online Library of Liberty.

On the one hundredth anniversary of the fall into World War I, studying its causes and consequences should, I think, be a part of every student’s history research. For students preparing to debate U.S./Middle East policy [and the 2017-2018 nationalism/globalism LD topic], the consequences of WWI, which led to the collapse of the Ottoman Empire, are key background.

How do welfare-state policies at home contribute to international conflicts? Hans Sennholz, a student of Mises and longtime professor of economics at Grove City College, explains in his 1957 Freeman article “Welfare States at War”. Dr. Sennholz begins his essay discussing Middle East conflicts over a half-century ago:

The new international crises sparked in the Middle East, and the constant danger of another world war, need not surprise the student of contemporary interna­tional relations and economic poli­cies. The ideology of socialism and interventionism has swayed our foreign relations, and the policies of Welfare States have destroyed international peace and order.

While throwing the blame for the present crises on the doorsteps of “capitalist colonialism,” the Wel­fare States are battling each other. All parties involved in the Mideast are either socialist or intervention­ist nations. Israel is a large army camp crowded by people who are given to socialist ideas; Egypt is an interventionist country with a dic­tator bent upon leading his nation to socialism; France has a social­ist government with controls that leave little room for competitive enterprise; and Britain is flounder­ing between socialism and interventionism. In other words, there is little capitalism, in the sense of competitive private enterprise, in any one of these countries.

Absence of individual freedom and free enterprise makes for eco­nomic nationalism and interna­tional conflict. By fundamental na­ture and objective, the Welfare State controls private property and limits individual freedom in order to distribute economic spoils and privileges to pressure groups. The Welfare State is a favor state.

Pressure groups of producers ex­pect the government to increase the prices of their products or services, with utter disregard for the economic interests of the vast majority of their own countrymen and of many foreign producers. In most cases of welfare legislation the favored group’s foreign com­petition is either eliminated entirely or severely curtailed. This is economic nationalism, the most im­portant source of international conflict.

Subtitles for the rest of the article:

• Economic Nationalism Creates Conflict• West Sets Bad Example• Underdeveloped Areas Follow Suit• What Course Freedom?• The Principles of World Leadership• Things We Can Do• Philosophies in Conflict