What is classical liberalism, anyway? A good way to answer that question is to read Why I, Too, Am Not a Conservative by the late Nobel economics laureate James Buchanan. The book, containing several essays he had previously written plus two original chapters, aims at “articulating the liberal vision, interpreted in its classical understanding,” Buchanan explains. Like him, in this review I will use “liberalism” to refer to “classical liberalism.”
Buchanan “loosely” defines liberalism as a “political organization in the form of constitutional democracy and economic organization through operative market arrangements, relatively free of hands-on political direction.” It also entails free trade, private property, the rule of law, and open franchise. He identifies his main intellectual predecessors as Adam Smith, Immanuel Kant, Thomas Jefferson, James Madison, and John Rawls. To find Rawls, the Harvard philosopher who wrote A Theory of Justice, on this list will not be the only surprise for those unfamiliar with Buchanan’s work.
The subtitle of the book, The Normative Vision of Classical Liberalism, indicates that it is about political and moral philosophy, although it is strongly grounded in economics. Since its birth in the 18th century, modern economics has looked at man through a presupposition of natural equality, competence, and perfectibility — a viewpoint typical of the Enlightenment. In many ways, as we will see, Buchanan is an Enlightenment thinker.
Problems with conservatism / In 1960, another liberal economist and Nobel economics laureate, Friedrich Hayek, published The Constitution of Liberty with a postscript titled “Why I Am Not a Conservative.” In Why I, Too, Am Not a Conservative, Buchanan wanted to echo Hayek’s position while deploring that the latter had drifted too far toward conservatism. Buchanan opposed many ideas typical of European-style conservatism, to which American conservatism is increasingly becoming similar. In the book, he argues against the conservatives’ attachment to the status quo when reforms in favor of more individual liberty are desirable. He criticizes conservatives’ embrace of social hierarchy in lieu of the “natural equality” of individuals, their siding with Plato instead of Adam Smith. While values are viewed by conservatives as objective and transcendent, he argues for the liberal view that they are subjective and reside in the consciousness of each individual. Against the conservatives’ paternalism, the classical liberal believes in equal individual liberty and responsibility.
Crucially for Buchanan, classical liberalism, contrary to conservatism, rests on the presumption of man’s perfectibility. The individual can “become or remain free of dependency status, provided the institutions that can facilitate independence are in place.” The individual can make choices and is capable of self-governance. He is also capable of abiding by the Kantian fairness principle of not treating others only as means, which implies eschewing deceit, fraud, breach of contract, promise-breaking, lying, cheating, stealing, and of course inflicting bodily harm.
What democracy implies / As Buchanan noted, the requirement of moral capacity opposed him to many economists, including his Virginia school colleague Gordon Tullock, with whom he wrote the seminal Calculus of Consent (1962). Buchanan thought that the market and its legal background, including democracy, are not enough to compel bad men to behave morally. We also need “a minimal level of voluntary adherence” to a Kantian sort of personal ethics in order to maintain a liberal order.
Other conditions related to the perfectibility of man are required to sustain a liberal democratic society. Individuals must understand “simple principles of social interaction,” and that entails “a generalized understanding of basic economics.” Or else, Buchanan claims, they must show “a widespread willingness” to defer to others who do understand.
To the objection that such a deference contradicts the presumption of natural equality, Buchanan likely would have answered that any individual can learn basic economics, just like Smith thought that the street porter had the same inherent intellectual capabilities as the philosopher (although they might not develop them to the same degree). “The difference between the most dissimilar characters, between a philosopher and a common street porter,” Smith wrote in The Wealth of Nations, “seems to arise not so much from nature, as from habit, custom, and education.”
A counter-objection would be that even if anybody can learn, the incentives to do so must be present. The typical citizen, whose individual influence on democratic decisions is infinitesimal, remains “rationally ignorant” of political issues and even more of the analytical tools necessary to understand them. To do otherwise requires a professional motivation or some virtuous ethics. Buchanan’s optimistic belief in man, typical of the Enlightenment, does require something like what he calls a “normative leap.”
Another condition of democracy, according to Buchanan, is that the fundamental principle of generality or non-discrimination apply over “all aspects of collective intrusions into individual lives.” The rule of law treats people equally because they are acknowledged to be equal.
Moreover, says Buchanan, a degree of “melting pot” or assimilation is necessary to allow the maintenance of some common ethics. He added that liberals must be willing to temper “the basic principle of nondiscrimination, perhaps the most important element of classical liberalism,” when necessary to prevent the destruction of the liberal culture, emphasizing the case of Islamic fundamentalists. We may suppose that he understood the risks involved in this sort of exception, given the danger of Leviathan that his theory continually emphasizes.
Buchanan’s liberal ethics / Buchanan believed that “laws and institutions” (to use Smith’s expression) are necessary for an efficient liberal social order. Institutions include non-compulsory rules of ethics. Those rules can either evolve or, contra Hayek, result from deliberate change. Buchanan did not share Hayek’s dread of constructivism in social affairs. The minimal ethics of a liberal society is based on Kantian-like reciprocity: reciprocal respect, fairness, honesty, and such. The increased trust that such a common ethics generates leads to more efficacy in impersonal dealings, more trade, more division of labor, and more prosperity. In this perspective, Buchanan suggests, it is the lack of liberal laws and institutions that explains why the collapse of the Soviet empire three decades ago was not rapidly and generally followed by economic and political freedom.
The ethics of reciprocity provides a solution to prisoner dilemmas in social interaction. Persons seek their own interests, but within rules “that allow others, as natural equals, to pursue their separate interests under comparable limits.” This ethics of reciprocity embodies another Kantian idea, the categorical imperative, which dictates that a person behave in such a way that his behavior can be generalized to the benefit of everybody. Buchanan insisted that the imperative does not require altruism, but only “the ‘general interest,’ individually defined.” In other words, it is enlightened self-interest.
The idea of a general interest individually defined illustrates his constant striving to define all values only in terms of individual values, with all individuals being equal. Nobody can define values for others; only the consent of all individuals is acceptable. In this approach, the arbitrary aggregation of individual utility into some concept of social welfare can only produce an arbitrarily defined “public interest.”
Buchanan was a radical liberal, but he was not an anarchist. He believed that a limited government and the rule of law are necessary for the maintenance of a free society. The more men are angels (to use Madison’s terms) — that is, the more they follow an ethics of reciprocity — the less government is needed. The less ethical they are, the more they need government (up to the breaking point where the politicization of everything reduces both public and private morality). Private ethics and government controls are thus substitutes. Perhaps libertarians (including the present author) have tended to underestimate the importance of private ethics and to reject notions of fairness too easily.
Interestingly but not surprisingly, Buchanan also believed that some ethics is necessary in government and that it is buttressed by ethics in private dealings, and vice-versa. Public and private ethics go together. Doesn’t the degradation of both as witnessed in America (and elsewhere in the Western world) confirm his point?
What Buchanan saw as the necessity of some common morality in a liberal society leads to interesting and sometimes troubling issues — outside the extreme cases of Islamist terrorists. Strangers should be treated with respect and welcomed to participate in free trade. However, he said, outliers who don’t respect the common ethics can be tolerated only if they are not too numerous. This would imply a rejection of both “nondiscriminatory immigration policy” and the promotion of multiculturalism. Buchanan blamed Hayek for moving too rapidly from the morality of the tribe to the ethics of the “Great Society,” for being too liberal — an interesting criticism given that Hayek is often considered as the more conservative of the two.
I would suggest that more thinking is required on these difficult issues. The principle “No liberty for the enemies of liberty” (a formulation that Buchanan did not use) is obviously very dangerous. It is accepted in extreme cases involving violence: the culprits are deprived of their liberty, at least for some time, by judge and jury. In other cases, the principle certainly does not cohabit easily with liberalism.
Another problem Buchanan raised is the welfare state, which rests on an ethics of compassion. Compassion, in turn, belongs to an ethics that involves a necessary hierarchy between takers and those from whom property is taken. The welfare state (as well as Christian ethics) is thus in competition with the ethics of liberalism. Buchanan’s idea of a constitutional welfare state — one established at the constitutional moment in the interest of all individuals — can be viewed as a way out of that conflict.
In Why I, Too, Am Not a Conservative, Buchanan explains his long-time admiration for the Rawlsian brand of contractarianism. Rawls’s social contract, he claims, has been falsely interpreted as a justification for the welfare state. On the contrary, Rawls’s approach is classical liberal because it is predicated on the equality of all individuals. His principle of fairness has no meaning except in the treatment of equals. And his famous “veil of ignorance” is similar to Buchanan’s own “constitutional moment” or social contract. At this social-contract stage, politics is exchange, not exploitation. Buchanan thus offers a way to reconcile a limited welfare state with the extreme individualism of unanimous agreement. Again, he provides much food for thought.
A liberal vision / What differentiates the “clan” (Buchanan even says “the tribe”) of classical liberals from other people, including many economists? The answer, according to Buchanan, is two-fold. First, liberals understand “the philosophical implications of the science of economics.” The central implication is that “there is no need for some all-powerful authority, some sovereign, to orchestrate the productive, allocative, distributive, and evaluative process summarized as ‘the economy.’ ”
The second distinguishing characteristic of liberals is that they dream of “potentially attainable [liberal] worlds” based on the fundamental underlying value of “individual liberty itself.” For Buchanan, constitutional democracy, with an emphasis on “constitutional,” meaning that democracy is limited by some basic unanimity requirement, is the only political regime that can preserve that value.
He saw the “soul of liberalism” as “aesthetic–ethical–ideological.” There is “no social or collective purpose,” only “private purposes.” There is “a faith, or normative belief, in the competence of individuals to make their own choices based on their own internal valuation.” “Values emerge only from individuals.” The liberal “vision” is “built on the central, and simple, notion that ‘we can all be free,’ ” which is what Smith called the “system of natural liberty.” These strong statements explain why we, liberals or libertarians, often look like Martians to most of our contemporaries.
Buchanan persuasively argues that only such an integrating normative ideology can win against the soul or “animating principle” of socialism. We must see policy proposals “in the larger context of the constitution of liberty rather than in some pragmatic utilitarian calculus.” We can add that many economists, often brilliant ones, accept simple utilitarianism without reflecting on its philosophical foundations and its implications. They notably ignore that interpersonal utility comparisons — weighing the benefits of some against the costs imposed on others — lack any scientific grounding.
Classical liberalism is a “realistic utopia.” Buchanan tells us that his life “enterprise” has been to spell out the conditions under which this utopia would be possible. Hayek also thought that liberalism was a realistic utopia, but traditional and evolved moral rules were a major pillar of his theory. Buchanan challenges Hayek on that. Social evolution, Buchanan argues, provides an explanatory argument of how moral rules are often made, but a rational justification is still needed: they must meet the criterion of an “as if” reconstruction of the resulting order. By this he means that they must be consistent with what rational individuals would unanimously consent to. Otherwise, many different and contradictory evolved social orders could be judged as desirable.
Like Hayek and 18th-century liberals, Buchanan viewed economics as a “moral science” — that is, a science that interfaces with moral values at some point or other. This is sometimes called “political economy.” Buchanan argues that “economics emerged from, and intrinsically requires, a moral stance or predisposition that views social relationships among persons … as relationships between and among moral equals.” Just think of supply and demand on a free market.
Values, reality, and dreams / These considerations raise the problem of “is” vs. “ought.” If we know anything, it is that an “ought” (a moral principle or what “should be”) cannot be derived from an “is” (a fact of reality). Just because slaves exist does not mean that they should exist. Conversely, someone’s moral value is not necessarily consistent with reality. A liberal, Buchanan thought, has an attitude or predisposition to view individuals as moral equals deserving equal respect and equal treatment. But the liberal analyst must still verify that individuals act in a way consistent with those values. Perhaps Why I, Too, Am Not a Conservative could have been clearer on such methodological issues.
Buchanan did envision the possibility that a liberal society with natural equality might not be consistent with the empirical reality of differentiation among individuals. In a 2015 article in Public Choice titled “Afraid to Be Free: Dependency as Desideratum,” he emphasizes that individuals may not want to be free as much as Enlightenment thinkers thought. In Why I, Too, Am Not a Conservative, however, he wrote:
I feel a moral obligation to take the requisite leap of faith and to think and act as if persons can, indeed, be free and responsible beings. … We must hold fast to the faith that human animals are uniquely capable of organizing themselves within social structures that make liberty, peace and prosperity simultaneously achievable.
Even if individuals are unequal in many dimensions, “the differences are so multivarious as to make any meaningful rank ordering absurd.” Thus, the normative argument against Plato’s hierarchal vision is still defendable. We also know, or should know, that the presumption of equal liberty produces a beneficial social order.
Hayek may have been more realistic when, in “Why I Am Not a Conservative,” he wrote, “The liberal, of course, does not deny that there are some superior people — he is not an egalitarian — but he denies that anyone has authority to decide who these superior people are.” Lord Macaulay, a British historian in Hayek’s liberal pantheon, wrote something similar in 1830.
Buchanan’s use of terms such as “faith,” “revelation,” and “conversion” might be bothersome for a rationalist, but they acknowledge that values ultimately underly the evaluation of any political order. In learning and living, a measure of faith is inescapable. He also said he found it difficult “to enter dialogue or discussion with either the precommitted nonliberal or the normative eunuch.” Anybody who has defended minority ideas will understand this feeling, but did Buchanan go too far? He remained willing, however, to discuss his ideas with anybody who would listen with an open mind.
“Perhaps classical liberalism is a dream after all,” he wrote. “But, at least, hope remains.” For that hope to be realized, enlightenment is required and thus the preaching of liberal ethics. “We do need the ‘gospel’ of liberalism,” he also wrote, “along with the dream of societies peopled by free, responsible and prosperous beings.” Many libertarians may be too preachy (I am not casting the first stone), but more mainstream classical liberals should probably be more so.
One does not need to agree with everything in Buchanan’s enthusiastic celebration of liberal ethics to recognize that Why I, Too, Am Not a Conservative is a must-read. Many critics (such as Nancy MacLean, author of the Buchanan hit-piece Democracy in Chains) should first try to understand this radical liberal.
