Daniel Klein
Professor of economics and JIN Chair at the Mercatus Center at George Mason University, and associate fellow at the Ratio Institute (Stockholm).
Erik Matson
Senior Research Fellow at the Mercatus Center and deputy director of the Adam Smith Program in the Department of Economics at George Mason University.
The debate about when liberal first acquired a political meaning has been resolved. The answer is the 1770s, when the adjective liberal became the name of the policy orientation against government restriction, government monopoly, and protectionism, and in favor of individual liberty, premised by a stable, functional system of governmental authority.
This policy orientation was christened “liberal” by Scotsmen Adam Smith, William Robertson, and others. In 1776, Smith’s The Wealth of Nations advanced the liberty principle as a policy maxim. That book built a case for a presumption of liberty. It was enormously influential.
In the decades that followed, the adjective liberal was exported from Britain to the continent and gave rise to the nouns liberal and liberalism. All of this has been established thanks to new analysis made possible by the digitisation of historic texts.
The first political liberalism, then, proclaimed the policy orientation of Adam Smith. But, 100 years later, liberal began to acquire a meaning contrary to the original political meaning. That inversion began first in Britain and, in the early 20th century, began to grow in North America, where the inverted meaning became pronounced.
These confusions about the true meaning of “liberal” will not subside any time soon.
But consider a question that brings us back to the 1770s: how did liberalism’s Scottish vanguard decide on the name of their policy orientation?
For centuries, the adjective liberal denoted aspects of liberality. To be liberal was to be generous, munificent, indulgent, as in “with a liberal hand,” or open-minded, tolerant, free from bias or bigotry, and generally befitting a free man, as in “liberal arts” and “liberal sciences.” These meanings were not political, and “liberal” was not used to label a kind of politics.
Building on this traditional understanding, Smith and others started, when discussing policy and politics, to write of “liberal principles,” “the liberal system,” “the liberal plan,” “liberal policy,” “liberal government,” and “liberal ideas.”
“Liberal” was fitting, firstly, because liberal and liberty look alike. They share the morpheme liber. That likeness held potentiality for infusing “liberal” with a strong link to liberty.
“Liberal” and “liberty” are joined by Smith when he writes of “the liberal plan of equality, liberty and justice.” George Turnbull and Adam Ferguson had previously written things that connected “liberty” and “liberty,” and David Hume connected “liberal” and “freedom.”
Second, the new movement’s economic writings taught something about God and nature: the munificent bounty that flows from according people liberty. Smith wrote of economic liberty producing “liberal wages” and a “liberal reward of labour.” In speaking that way, Smith is not ascribing liberality to employers. Rather, liberal policy induces higher real wages and thus cooperates metaphorically with God’s liberal hand.
Third, the pre-political “liberal” connotes a loose hand, a looseness of the rein, a permissiveness or tolerance, which corresponds to the affirmation of the ordinary life of ordinary people. That affirmation was strong among these Scottish thinkers.
In expounding “the liberal plan,” Smith expressed the maxim as “allowing every man to pursue his own interest his own way.” That attitude reflects liberality in the allower, for it accords dignity to the man who is so allowed. The governor or ruler shows liberality by according to each person the dignity of enjoying liberty and of being responsible for his or her exercise of it.
Some say that liberal has been ruined as a word for the policy outlook associated with Adam Smith. They suggest that it is high time that people who prize liberty relinquish “liberal.”
No matter what word the Scottish sages had chosen, however, if the chosen word had taken, it would have been destined for trouble.
The words freedom, justice, rights, and equity were all born as names of venerable things. Words with a luminous aspect are inevitably abused and pilfered, as happened with “liberal.” Humankind is destined to Babel-like terminological confusion in such matters. At any rate, liberal is the word that was chosen and that took. It is our history. To abandon the word liberal, with its venerable pre-political history (“liberal arts,” “liberal sciences,” and “liberality”) and with its long history as the signifier of a worthy political outlook, would be to abandon our history.
This article by Daniel Klein, a member of the FEE faculty network, and Erik Matson originally appeared on CapX and was republished by FEE.
