# On the Decline of Classical Liberalism in America: A Comment on Davies **URL:** **By** Robert Higgs **Published:** October 1, 1988 --- “While economic-policy questions prompted comment, criticism, and recommendations by intellectuals, these questions invariably attracted people whose material and political interests were at stake.” Stephen Davies’s bibliographical essay (“The Decline of Classical Liberalism: 1860-1940,” _Humane Studies Review_, Vol. 5, 1987-1988) presents a wide-ranging and stimulating survey of a critically important issue in the political and economic history of the West. Although Davies considers several countries, he gives the bulk of his attention to Great Britain. He says relatively little about the United States, to which I shall confine my comments. Davies writes as if the “decline of classical liberalism” had to do with a “debate” between opposing schools of intellectuals. Of course, such a debate did occur. One can document its various aspects and nuances because the books and articles written by the opposing intellectuals are now sitting on library shelves accessible to scholars. The accessibility of such sources, however, holds certain dangers. One may slip too readily into thinking that the decline of classical liberalism involved mainly a shift in the intellectuals’ attachments to various beliefs. Davies notes in his final paragraph, almost as an afterthought, that “the decline of liberal beliefs among the mass of population, as opposed to the intellectual elite,” is an “important and unstudied topic.” Quite possibly, the changing beliefs of the masses had a greater impact than the speeches and writings of intellectuals. Of course, it is much harder to find out what the masses were thinking. But it may not be wholly infeasible. In approaching this task, it would be worthwhile to study Aileen Kraditor’s _The Radical Persuasion, 1890-1917: Aspects of the Intellectual History and the Historiography of Three American Radical Organizations_ (Baton Rouge: Louisiana State University Press, 1981), an extraordinarily stimulating and beautifully written analytical study, much broader than its title suggests. > While economic-policy questions prompted comment, criticism, and recommendations by intellectuals, these questions invariably attracted people whose material and political interests would be affected substantially by the outcome of the policy contest. If concentrating on what the intellectuals were writing distracts us too much from what the masses were thinking and doing, it may also divert us too much from what the political and economic, as opposed to the intellectual, elites were doing. Davies observes that no one has tried to argue that the individualist-collectivist debate was primarily about economic policy, though his references to well-known works by Sidney Fine, James Gilbert, and Jonathan Hughes suggest a qualification with respect to the American case. In the United States the struggle—it was much more than a mere debate—definitely did involve economic policy. Indeed, economic policy was the focus. While economic-policy questions prompted comment, criticism, and recommendations by intellectuals, these questions invariably attracted people whose material and political interests would be affected substantially by the outcome of the policy contest. It is an open question how much influence the intellectuals had; no doubt it varied among the various policies adopted. But one is entitled to general skepticism. I am not saying that the intellectuals were irrelevant or even unimportant. But if intellectuals exert influence, they usually do so in ways that are diffuse, delayed, and difficult to trace. They may ultimately change the rhetoric of policy discussion, bringing new questions onto the political agenda, shifting the burden of proof, or tilting the balance of public values away from old objectives and toward new ones. We are all familiar with Keynes’s dictum about the power of ideas, as opposed to vested interests, in the long run; and many of us are inclined to agree with Keynes on this issue. But demonstrating the truth of the belief is another, vastly more difficult matter. Even if the belief is valid, however, this way of viewing the power of ideas may harbor an unwarranted assumption about inevitable tendencies—what an economist would call convergence toward (ideological) equilibrium. Often, though, the world does not cooperate by flowing gently along a smooth path, adjusting with a lag to the ideas propounded by an earlier generation of academic scribblers. Events, sometimes earthshaking events, happen. Their occurrence and the way societies react to them can cause discrete deviations from what otherwise would have been the path of ideological evolution. I have argued in _Crisis and Leviathan: Critical Episodes in the Growth of American Government_ (New York: Oxford University Press, 1987) that the decline of classical liberalism in the United States followed such an erratic course, the world wars and the Great Depression serving as the critical shocks. In such a process the intellectuals themselves may be the most susceptible to altering their ideas in the face of suddenly changed societal conditions—they are always going off half-cocked, anyhow, seeing revolutions, crises, and great tranformations even when no one else perceives such cataclysms. > If concentrating on what the intellectuals were writing distracts us too much from what the masses were thinking and doing, it may also divert us too much from what the political and economic, as opposed to the intellectual, elites were doing. It is remarkable that nowhere in his essay does Davies mention the “trust problem,” the conglomerate of policy questions associated with the emergence of the great corporate enterprises. No other issue came close to this one as a focus of both the intellectual argument and the political struggles that attended the rise of collectivist thinking and policy in the United States between the 1880s and World War I. Valuable older works on this topic include Robert H. Wiebe’s _Businessmen and Reform: A Study of the Progressive Movement_ (Cambridge, Mass.: Harvard University Press, 1962), Gabriel Kolko’s _The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916_ (New York: Free Press, 1963), and William Letwin’s _Law and Economic Policy in America: The Evolution of the Sherman Antitrust Act_ (Chicago: University of Chicago Press, 1965). > Among the original sources, one should examine not only the works of intellectuals and politicians, but the decisions of leading courts, especially the U.S. Supreme Court. Excellent recent studies are Stephen Skowronek’s _Building a New American State: The Expansion of National Administrative Capacities, 1877-1920_ (Cambridge: Cambridge University Press, 1982) and Thomas K. McCraw’s _Prophets of Regulation_ (Cambridge, Mass.: Belknap Press, 1984). Finally, among the original sources, one should examine not only the works of intellectuals and politicians, but the decisions of leading courts, especially the U.S. Supreme Court. The struggles between individualists and collectivists often manifested themselves in law cases. At the appellate level, the judges who decided the cases usually supplied articulately reasoned arguments for and, when dissents occurred, against the decisions. The appellate judges therefore, almost uniquely, qualify as both important intellectual spokesmen and prime political movers. After reading introductions such as Lawrence M. Friedman’s _History of American Law_ (2nd ed., New York: Simon and Schuster, 1985) and Alfred H. Kelley, Winifred A. Harbison, and Herman Belz’s _The American Constitution: Its Origins and Development_ (6th ed., New York: Norton, 1983), the student will be better prepared to grapple with works such as Bernard H. Siegan’s _Economic Liberties and the Constitution_ (Chicago: University of Chicago Press, 1980) and Richard A. Epstein’s _Takings: Private Property and the Power of Eminent Domain_ (Cambridge, Mass.: Harvard University Press, 1985); but there is no good substitute for reading the decisions themselves. _Robert Higgs is the William E. Simon Professor of Political Economy at Lafayette College in Easton, Pennsylvania. be the mark with which it had stigmatized the infant in his cradle, it vanished in the atmosphere of the city. This freedom, which at the beginning only merchants had enjoyed de facto, was now the common right of all the burghers de jure.³_