Classical Liberalism and the Rule of Law

The history of liberty and prosperity is inseparable from the practice of free enterprise and respect for the rule of law. Both are products of the spirit of classical liberalism. But a correct understanding of free enterprise, the rule of law, and liberalism (rightly understood) is greatly lacking in the world today.


Historically, liberalism is the political philosophy of individual liberty. It proclaims and insists that the individual is to be free to think, speak, and write as he wishes; to believe and worship as he wishes; and to peacefully live his life as he wishes. Another way of saying this is to quote from Lord Acton’s definition: “By liberty I mean the assurance that every man shall be protected in doing what he believes his duty against the influence of authority and custom, and opinion.”1 For this reason, he declared that the securing of liberty “is the highest political end.”


Lord Acton did not say, you will notice, that liberty is the highest end, but rather the highest political end. In the wider context of a man’s life, political and economic liberty are means to other ends. What ends? Those that give meaning and purpose to his sojourn on earth. Liberalism does not deny that there may be or is one ultimate Truth, or one moral “right,” or one correct conception of “the good” and “the beautiful.” What liberalism has argued is that even the wisest and best men are mere mortals. They lack God’s omniscience, omnipresence, and omnipotence. Mortal men look at and understand the world within the confines of their own imperfect knowledge, from the perspective of their own narrow corner of existence, and with extremely limited mental and physical powers compared to those possessed by the Almighty.


As a result, since no man may claim access to an understanding of man and his world equal to God’s, no man can claim a right to deny any other person the freedom to follow his conscience in finding answers to these profound and ultimate questions. They are so crucial to man’s very being as a spiritual and moral person that they must be removed from the arena of politics and political control. They must be left to the private and personal confines of each man and his conscience.


The reason for this should be evident. Political control is fundamentally the power of physical force. It is the right to demand obedience from the citizenry either to do or not do something under the threat of the use of coercion. Political power can be used to command people regarding how they may live, how they may think, and how they may act. It is one man bending the will of another to his wishes under the threat of physical harm.


Some men have faced such threats or uses of force and not given up their faith or beliefs or ideas. But liberalism argues that no man should be confronted with torture or death because of where his conscience leads him. Furthermore, once political power is used to dictate what men may believe and how they may peacefully act, society is faced with an endless struggle as those with conflicting faiths, beliefs, and ideas battle for control of the reins of political authority. It becomes a life-and-death confrontation to determine whose conception of the good, the beautiful, the right, and the just shall be imposed on all. In such a battle over truth and virtue man’s world becomes an earthly hell of human and material destruction.


There thus arose the idea of tolerance, that each man should respect the right of every other man to be guided by the dictates of his conscience. But even tolerance was soon seen to be authoritarian; it implied that the one tolerating the free thoughts and actions of another was doing so as if he were giving a privilege to someone else, a privilege that if given could at any time be taken away. Hence, it was insisted that freedom of conscience was a fundamental right possessed by all men, and not something permitted or allowed, say, by a majority for the benefit of a minority.


Photo by Ian Hutchinson on Unsplash


But how was the political authority—the government—to be prevented from overstepping its boundaries and encroaching on such individual rights as freedom of conscience and other elements of personal liberty? How were men with political power to be restrained from abridging other men’s rights? All law is man-made, regardless of the source of the inspiration for the law. It is men who articulate and agree on the law, who codify it, and who establish and enforce the procedures and mechanisms for its respect and enforcement. Man, therefore, can never be separated from law and the legal process.


Classical liberalism has always emphasized the inseparable connection between individual liberty and the right to private property. Partly it has been based on the idea of justice: that which a man produces honestly and peacefully through his own efforts, or which he acquires through voluntary acts of exchange with others, should be considered rightfully his. The case for private property has also been made on the basis of utilitarian efficiency: when men know that the rewards from their work belong to them, they have the motives and the incentives to apply their industry in productive and creative ways.


But in addition, the classical liberal has defended the institution of private property because it provides the individual with a degree of autonomy from potentially abusive political power. Private property gives the individual an arena, or domain, in which he has the ability to shape and design his own life, free from the control of political force. As a private owner of some of the means of production—even if it be only his own labour—he can search out the employment for himself that he considers most attractive and profitable, given his own personal purposes and plans. A community of individuals, each of whom owns varieties of property that he is at liberty to apply and utilize in various ways, provides a network of potential relationships of production, trade, and association among men outside and independent of the orbit and control of government. Private property gives reality to the ideal of individual freedom.


Photo by Andy Feliciotti on Unsplash


The networks of voluntary, peaceful, and private association form the elements of what has been called “civil society.” They are the “intermediary institutions” that stand between the power of the state and the single, isolated individual; they supply support and give assistance to the individual in the economic, social, cultural, and spiritual needs of life. But they also offer protection and strength to the lone individual who otherwise would face the power of government on his own. It is not surprising, therefore, that historically the more the power and intrusive reach of the government extends into the affairs of the citizenry, the more the state attempts in various ways to undermine and replace these voluntary associative institutions of civil society with its own bureaucratic structures. The weakening or elimination of the intermediary institutions of civil society leaves the individual increasingly dependent on the political caprice and largess of those who manage the agencies of government. He becomes a pawn in the hands of those men of system whom Adam Smith warned us against.


Where the rule of law is practiced and respected, the creative energies of man are set free. Each man is at liberty to utilize his own knowledge for his own purposes, but the very nature of the free-market economy is that he must apply that knowledge and his abilities in ways that serve the ends of others in society as well. Since no man can attain all his goals, beyond some of the more primitive ones, through his own labour and the particular resources that may be in his ownership and control, he enters into exchange relationships with others in society. Men begin to specialize in producing things for which they have a comparative advantage over their neighbours to extend their trading opportunities with others in the growing community of men. The interdependency that a division of labor creates makes each member of society increasingly conscious that he must serve his fellow men in order to accomplish his own ends.


Photo by Felix Mittermeier on Unsplash


The individuals on that great chessboard of society move themselves about, forming connections, relationships, and associations with those around them as they discover opportunities for mutual improvement. Patterns do take form; configurations of human interconnection do take shape. But these patterns are not planned or designed; they emerge from the relationships that men choose to establish among themselves, with no conscious intention of generating much of the institutional order and structure that result from their market and social interactions.


As Hayek pointed out, drawing on the insights of some of the political economists of the eighteenth century, the social order that develops is to a great extent “the results of human action, but not of human design.”And, as Hayek emphasized, it is all to the better that this is the case. Why? Because the emergent social patterns, order, and institutional arrangements incorporate the knowledge, ability, and creativity of the multitudes of human participants. No single mind or group of minds—no matter how wise and well-intentioned—could ever know, understand, and appreciate all the fragmented knowledge, insight, and ability that exist as divided knowledge and creative potential in the minds of all the members of humanity as a whole. If all that man knows, that he can do or might imagine, is to be taken advantage of and brought into play for the general good of all mankind, then every individual must be left free to use what he knows, and do what he wants to do, according to his own design.


What irks the social engineer when he looks around at the free society is that it appears to be a world without a “plan,” a jumble of social chaos. What the classical liberal sees is a world of multitudes of plans, each one being the plan given by an individual to his own life. There is order, pattern, and structure to this world, but an order, pattern, and structure generated out of the interconnections that individuals have formed among themselves through their voluntary market and social relationships.


The rule of law provides the societal rules of the road within which those individuals may freely move about as they see fit. The rules for the free society are fairly simple and straightforward: thou shall not kill; thou shall not steal; thou shall not bear false witness—no fraud or deception in relationships with others. Beyond these types of simple rules, each individual is free to follow his own conscience and interests in all other matters.


We must be willing and courageous enough to consistently defend freedom, self-responsibility, and all of their implications.


Each of us, Leonard Read said, must become candles of liberty in the darkness of collectivist ideas. The brighter we each shine through our understanding and ability to articulate the meaning of freedom, the more we will be beacons that can attract others. Quoting an old English saying, Read reminded us that it is the light that brings forth the eye and the ability to see.


None of us who care about liberty can avoid in good conscience our responsibility in this matter. I will close with the words of the Austrian economist Ludwig von Mises, who was one of the greatest and brightest lights for liberty in the twentieth century: “Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. . . . What is needed to stop the trend towards socialism and despotism is common sense and moral courage.”



The post was originally contributed by Richard M. Ebeling on FEE and is republished under the Creative Commons licence.


This post is written by Richard M. Ebeling, a distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was president of the Foundation for Economic Education (FEE) from 2003 to 2008.


The Foundation for Economic Education (FEE) is an educational foundation (est. 1946) inspiring tomorrow’s leaders with sound economic principles and the entrepreneurial spirit. FEE provides free online courses, top-rated in-person seminars, free books for classrooms, as well as relevant and worldly daily online content.

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