This was written in 1986 in response to a piece by Greg Sheridan in The Weekend Australian describing three strands of right-wing thought and floating the idea of a merger. He pondered the prospect of some masterly theorist effecting a ‘dazzling synthesis’ of market liberalism, cultural conservatism and the thoughts of BA Santamaria.
As the spiritual and intellectual debacle of socialism becomes increasingly obvious to everyone outside the ranks of Western intellectuals, there are signs of increasing tension between various non-socialist schools of thought. For example the IPA Review during 1988 reported a survey of six liberal or conservative columnists on a wide range of issues which yielded unanimous agreement on only three items. [yes 1988 is later than 1986. The article went to The Australian and probably other places but it did not find a home until it was published in 1990 by the Victorian student newsletter Liberal Voice. It was on my website at this address and it is in this collection of Hayek papers. The good news is that you can read the introductory essay without buying the book! I strongly recommend a free read of the Introduction because it gives some handy historical context to the battle to revive classical liberalism that started in the 1970s.]
If these tensions reflect fundamental differences, then the groupings of the ‘non-left’ [the term that I use since I renounced “the right”] may fragment into warring factions. No doubt some differences arise from misunderstandings which can be resolved, and some simply reflect the different priorities and interests of individuals. Significant differences are likely to arise on two points – the use of state power to enforce moral principles and the domain of economic policy. In each case the nub of the issue is the extent of state intervention that is appropriate.
He associated market liberalism with the free-enterprise think tanks, such as the Centre of Independent Studies. The conservatives tend to be involved with Quadrant, the Association for Cultural Freedom and perhaps the Institute for Public Affairs. Santamaria does not fit comfortably with either of those groups though he has points of contact with both. He operates in a tradition of Roman Catholic thought which includes Hilaire Belloc and is equally suspicious of capitalism and communism.
The synthesis that Sheridan wants to see would combine the economic rigour of the market liberals, with religious and spiritual inspiration, both tempered by the prudence of the conservative.
In Sheridan’s opinion, the economic rationality of the market liberals is too narrow in its focus and it lacks moral, cultural and spiritual depth, a view which is often expressed in the comment that economists know the price of everything and the value of nothing. Against this it can be argued that the classical liberal tradition, epitomised by F A Hayek and Karl Popper is not vulnerable to the charge of narrowness. Indeed, much of the work for the dazzling synthesis has been done by Hayek, senior member of the Austrian school of liberal economists.
Market liberalism aims to protect the private domain of the individual and small groups – including the family – Burke’s ‘little platoons’. This domain is at risk from the hostile activities of individuals and groups who are liable to use brute force or other political means of coercion if they are not kept under control by institutional constraints, a strong liberal tradition and the Rule of Law. In the protected private domain all manner of spiritual and cultural traditions and practices can be nurtured but the barbarism of unchecked power is likely to sweep these things away or else corrupt them by recruiting them to its own purposes, as when Christianity became the official religion of Rome.
Some economic rationalists may need to be reminded that we do not live by bread and technology alone. Our lives gain meaning and purpose from the myths and traditions which constitute our non-material heritage. At a lower but no less important level our daily transactions are dignified and lubricated by civility and good manners. Both the higher and lower orders of this fragile structure of civilisation are perpetuated by cultural practices and by institutions such as the family and the universities. These, like the private domain itself, are under threat from various doctrines and schools of thought that are also part of intellectual heritage. If we lose the capacity to subject our tradition heritage to imaginative criticism we run the risk that the positive tendencies will be driven out by the negatives. Some would say that this process is well advanced.
Economic liberals may sometimes appear to have little interest in these spiritual and cultural matters but this is not entirely true and the impression arises from three reasons. First, it is not possible to talk usefully about every social problem at once and economists tend to talk most about the things they know best. Second, they do not speak with one voice on such matters. Third, they do not see these things as part of the agenda of state policy. Here a basic principle is at stake because they do not aim to impose religious or cultural values, instead they wish to sustain ‘a type of order in which, even on issues which to one are fundamental, others are allowed to pursue different ends’, as Hayek put it.
Turning to economic policy we find much conservative apprehension about the push for deregulation and privatisation. Socialists and many conservatives share a distrust of capitalism due to their failure to appreciate the function of markets and the nature of competition in the marketplace. Competition is commonly regarded as a Darwinian struggle, a war of ‘all against all’, ‘dog eat dog’ with the large and the strong surviving to exploit the weak.
This is misleading because it is not appropriate to describe economic competition in military terms, or to speak of the conquest of a market. It is especially misleading to think that sellers are in conflict with buyers because both parties to a voluntary transaction can be well pleased with the deal. As for competition leading to monopolies (and then to exploitation), the survival of a firm in an open market depends on keeping the customers happy which is the very opposite of exploitation. Monopolies typically arise as a result of state intervention whether by nationalisation or by granting special trading rights. Under these conditions a great deal of activity shifts from pleasing buyers to maintaining or extending the political patronage that led to monopoly status.
It is illuminating to examine how progressives and radicals lost touch with the classical liberal principles of free trade and human rights. Early in the nineteenth century the two major opposed forces in politics were the liberals and the conservatives (Whigs and Tories). However the rise of socialism and the labour movement upset the balance of power and made the battle of ideas much more complex. By the start of the twentieth century the ideas of classical liberalism were broken up and distributed among various rival groups. Part of the classical heritage that is associated with Edmund Burke, with concern about revolutionary excesses and the tyranny of the majority, was appropriated by backward looking conservatives (the kind of conservatism that Hayek renounced in ‘Why I am not a conservative’). Some humanitarian elements were carried forward by Fabians [I was young and naïve then] and Liberals who could see no way to achieve progress without increased State control and regulation. Free trade was an early victim of the new consensus because not even the conservatives wanted to save it. The Great Depression resulted, followed by the disasters of war. The depth of the liberal decline was recorded by Orwell’s 1945 observation that the British intellectuals of all political shades were more totalitarian than the mass of the people.
As Hayek noted, with the growing power of the labour movement over the last century, liberals of the classical (non-socialist) variety have been forced into ad hoc alliances with conservatives to resist the socialist thrust of the Left. Consequently market liberalism has become identified as a reactionary movement, aided by the fact that socialism has exerted a hypnotic charm over the majority of intellectuals for two centuries. Hence the importance of Hayek’s piece ‘Why I am not a conservative’ as a corrective. Due to the compromises required for the liberal/conservative alliance in practical politics, the spirit of classical liberalism has languished to the point of death because no party or group sustained it in a pure form. This had been the case with the Liberal Party in Australia which, until the 1980s pursued protectionism in trade and anti-intellectual conservatism on cultural and social issues [not fair].
The Rule of Law is a principle that conservatives might be expected to hold dear. But Hayek drew attention to ‘the characteristic complacency of the conservative toward the action of established authority and his prime concern that this authority be not weakened rather than that its power be kept within bounds. This is difficult to reconcile with the preservation of liberty’. Some conservatives tend to share with socialists a willingness to recruit the power of the state to coerce others where the liberal would allow freedom of choice. Conscription for military service (by the ‘Liberal’ Coalition Government in Australia) was a case in point and retrospective legislation on tax avoidance was a notable example of the Rule of Law being flouted by another ‘Liberal’ government.
Returning to the matter of pooling resources or merging the intellectual traditions of the non-left, the market liberals may wonder whether the conservatives are prepared to lift their understanding of economics and join the push for open markets, especially in labour. Economic rationalists must strongly contest the right of the state to interfere in the marketplace and thus to threaten the fabric of a democratic and capitalist system which has the potential to let everyone pursue their own interests and improve their lot free from material deprivation, intellectual tutelage and moral or physical coercion.
Liberals have usually been prepared to learn from anyone, including their opponents and over the years they have shed many errors that sustained previous generations, such as belief in the inevitability of progress. With some of the economic battles won [we thought], it is important for the ‘dries’ to become more active in the debate on values and the broader cultural agenda.