Liberalism is still alive – it’s neoliberalism that’s the problem

David Boyle writes in the Guardian about the principles in the Radix book “The Death of Liberal Democracy?


“To understand why, despite the recent funeral orations, liberalism is very much alive, you have to go back to the 1860s and the abolition of slavery in two key countries. To be precise, 1863, when – in one of the great coincidences of history – the proclamations of liberty for the American slaves and the Russian serfs came just five weeks apart.

Both liberations were great victories for anti-slavery campaigners, more than half a century after the first successes of the campaign against the slave trade. But they were also great disappointments for radicals. Because, in both cases, the slaves and the serfs were catapulted from bondage into poverty.

So the original idea of free trade was not a simple licence to do whatever you wanted, if you were rich and powerful enough. It was designed as a means of liberation – so that the small could challenge the big, the poor could challenge the rich with the power of a new approach, an alternative provider, an imaginative, liberating shift. It was an antidote to the old pattern that employers could control not just what you were paid, but also what you paid for the things you needed to live.

But recent decades have seen this central liberal economic doctrine become its own opposite – permission for the rich to ride roughshod over the poor, an apologia for monopoly and an extractive discipline that prevents the all-important challenge from below. It became instead a potential tool of enslavement.

Why? Because of what happened in the US as a result of Friedrich Hayek’s 1944 attack on scientific central planning and his manifesto for economic liberalism, The Road to Serfdom, a hymn of praise to the idea that people needed to buy what they wanted, where they wanted – and that anything else was a recipe for tyranny.

The book was praised by John Maynard Keynes and George Orwell, yet its message – and Hayek’s alliance with the doyen of American liberalism, Henry Simons at Chicago University – led, in a few short decades, to something known as neoliberalism.

Simons killed himself in 1946 but not before he and Hayek had raised the money, from a furniture manufacturer, to write a version of his book for a US audience. Two economists failed to finish it. It wasn’t until 1962 that it was completed, by Simons’s pupil Milton Friedman, who published it as Capitalism and Freedom. This also marked the break between liberalism and neoliberalism, as I explain in my new book The Death of Liberal Democracy?. Friedman argued that intellectual property was a kind of property, and must be defended as such, rather than – as it actually is – a temporary suspension of free trade to encourage innovation. That is why draft agreements such as the Transatlantic Trade and Investment Partnership (TTIP), which purport to be about free trade, are actually about defending investments and trademarks.

Even more seriously, Friedman argued that monopoly didn’t matter, and – if it did happen – it was the fault of the government for over-regulating.”


  1. MQBlogger says

    “monopoly didn’t matter”

    He obviously hasn’t played Monopoly (sic)! The game starts by everyone getting richer and richer, until inequality bites and the very rich drive the not so rich into poverty.

    This is why a layer of democracy is needed on top of neoliberalism, to make sure the benefits are felt by all. I favour some kind of wealth tax to achieve this.

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