Liberism

LIBERISM. - Liberism is an economic liberalism and designates at one and the same time a doctrine and an economic policy: the economic doctrine which holds that a beneficial and peaceful economic order is immanent in reality, and the almost wholly negative economic policy that derives from it. Both arose toward the middle of the 18th century and lasted, with some sporadic revivals, until about the end of the following century.

Liberism interrupts in an apparently abrupt manner a constant tradition of more than a thousand years which had until then made men distrust the instinctive order in the economy and had led them to favor and to practice a positive policy of rationalizing the economy. In reality it was slowly prepared by characteristic events and ideas in the twofold order of facts and doctrines.

In the order of facts, the most influential were the reaction of the agricultural classes and of settlement colonies against the policy of irrational exploitation practiced toward them by the mercantilism of the latest manner, wholly bent on strengthening national commerce and industry, as well as the reaction created by the excesses of credit voluntarism, which sometimes led to disasters - such was the case of Law's bank - of a national character. In the course of the 18th century even the upper mercantile-financial and industrial class, which mercantilism had after all raised with its favors, feeling itself by then sufficiently strong and rich and therefore able to stand on its own, no longer has any regard for the privileges which this system has heaped upon it, while it is very critical of the burdens which that system continually imposes on it for the strengthening of the State.

In the order of ideas - to say nothing of the properly philosophical ones, such as the Cartesian conception of a universe governed by mathematical laws, eternal and immutable, or such as the individualistic conceptions and the revaluation of egoism of English sensationalism - very important were the particular observations which, as concrete analysis progressed, accumulated within mercantilism itself concerning the natural mechanism of spontaneous and spontaneously rationalizing actions and reactions, apparently inherent in various particular aspects of economic activity, which renders every reflective action superfluous.

Liberism begins substantially with physiocracy. The physiocrats nevertheless remained suspended between liberism and voluntarism. They are already liberists because they hold that the beneficial and peaceful order is already made and indeed made ab aeterno, and must therefore not be created, but only recognized. They are still voluntarists because they hold that the beneficial and peaceful order does not come about spontaneously, but must first be recognized, then realized, by removing all the shackles accumulated by the ignorance of men, and finally constantly defended against this ignorance.

It was Adam Smith (1723-90), author of the famous book The wealth of nations (1776), who cut the moorings that still held the nascent liberism to the voluntarist shore, and who naturalized liberism throughout Europe. Smith collected and ordered all the criticisms that had been moved against mercantilist policy by the mercantilists themselves and by the physiocrats, giving them a truly scientific systematicity. From the physiocrats in particular he derived the idea of a natural order, an order which for him too is distinguished by the capacity to maximize the product of society, but he saw it come about spontaneously and moreover corrected their original error of having limited productivity to the land.

The characteristic trait of A. Smith's thought consists in the affirmation of the spontaneity and goodness of the economic order, which he brings out from facts rather than from dogmatic reasonings. Dogmatic, however, is the explanation he gives of it, and also very mysterious: men, each acting for their own self-interest, are led by an invisible hand to promote together, at the same time, the greatest good of society.

The economic action of the State should be limited essentially to administering justice, to defending the country, to building and maintaining certain public works and institutions which would never be provided by individuals and private associations, although there are cases in which public intervention is desirable. International free trade is also needed, which likewise admits of various exceptions, and especially those that aim at preserving the security of the country.

Smith's doctrines rapidly became popular in England and also on the continent, above all through the intermediation of the Frenchman Jean Baptiste Say (1767-1832), who in his Traité d'économie politique (1803) gave an organic systematization to Smith's ideas, perfecting them in many points and presenting economic science for the first time as a natural science. Where Smith had spoken of a spontaneous order, he speaks of natural laws.

The Smithian school, in England too, takes on a distinctly dogmatic and naturalistic direction. Two names deserve particular mention: that of Robert Malthus (1766-1836), author of the famous theory of population, and that of David Ricardo (1772-1823), author of the theory of rent, of foreign trade and of money. The latter, above all, had a great influence on English and continental legislation in a liberist sense.

With John Stuart Mill (1803-73) we are already outside the properly liberal current, inasmuch as he clearly posits the distinction between economic science and economic policy, and admits extensive interventions in the distributive sector. But precisely when Mill's thought is at its apogee, liberism has a new and rather ephemeral springtime through the work of the French school, and of Frédéric Bastiat in the first place (1801-50), and of the Manchester men in England. These strive to dispel the shadows that the theories of Malthus and Ricardo had cast on the natural order and fend off, without conceding anything, the criticisms of the socialists, critics and theorists of the national economy, seeking to demonstrate that all the lamented ills come from the fact that men have departed from liberty and would disappear by returning to it. They make economic liberty an essential requirement of political liberty.

With these authors liberism made its greatest effort also in practical politics (it is to them that the establishment of free trade in England and elsewhere is due). After it, it will have a slow decline in facts and in doctrines.

In its almost century-long career liberism had a very great influence in the world of facts and of doctrines. It first of all gave currency to economic naturalism, ending by persuading men that economic action is to be rationalized by purely economic criteria, and thus justifying economic individualism and amoralism. Secondly, it accelerated the pace of the material progress of humanity, though at the price of great sufferings for the humblest classes and therefore with accumulations of grave problems for the future. And, finally, it increased interest in economic matters and thus extraordinarily stimulated economic observation, with a consequent enrichment of humanity in this field.

Serafino Majerotto