The two major problems with modern liberalism (European meaning) are a lack of
(1) theoretical fortitude to generally deal with the vast fields of contingency and indeterminacy opened up by greater freedom, and more specifically, a lack of
(2) doctrinal maturity to guide it in political participation.
Both deficiencies have a common source. The model of social order underlying modern liberalism is the market. But the market is only a subset within the broader social order.
Hume or Smith were never in danger of reducing the system of liberty to a mechanism that describes free markets. But when Hayek speaks of spontaneous order, he is already propagating the narrower vision.
I do not know when and why it occurred, at any rate, the tragic turn of liberalism looms when sight is increasingly lost of the spontaneous order of society at large.
Why would liberalism suffer such constriction? Maybe because its roots lie in a precapitalist world, and more importantly in a world where government could not possibly be anything but very small by later standards. Maybe because its heyday coincided with the breakthrough of commercial society. Small government and commerce looked like the essence of liberalism. They appeared to offer liberalism's ultimate formula for success.
Now, let me explain what I mean by "the vast fields of contingency and indeterminacy opened up by greater freedom."
(1) Freedom brought about capitalism. (2) Capitalism brought about wealth. (3) Wealth required and enabled mass political participation, and wealth made possible government endowed with unprecedented resources. (4) Mass political participation brought about unheard of demands on the state. (5) Unheard of demands on the state brought about big government.
Freedom brought about big government.
It is useful to think outside the usual box, for a moment, and admit that there are not only silly and objectionable grounds for a larger state to happen. At least from stage (3) on, the delta of implications deriving from mass political participation and unprecedented publicly available wealth becomes much too broad and complicated, too contingent and indeterminate to simply wipe away any consideration of larger government as an expression of base doctrinal dazzlement.
However, this is exactly the error committed by the liberal movement. By its very structure, the liberal doctrine was conditioned, or at least predisposed to heavily underweight political processes and the dynamics of state institutions and government. Liberalism yields to this propensity at a time when these are becoming the most powerful forces in society, next to free markets and civil society, by which latter I mean the growing independence of humans and organisations from the tutelage of the powers-that-be.
The irony, nay, the tragedy is that liberalism becomes a creed of political abstention, just at the time when liberty is taking off in the biggest possible way. This is the dawn of the era of the paradox of freedom. Liberty proliferates and grows all over the world, but liberals hardly participate in shaping her fate. Those among them ready to accompany liberty in the political realm quickly amalgamate with other political schools uninhibited to regard politics as a welcome tool to bring mankind advances that the smaller governments of yesteryear were utterly incapable of. This is the reason why, for instance, the German liberal party has become yet another branch of social democracy a long time ago. A liberal party, a strong liberal force in politics is simply not conceivable under the core paradigm. A liberal must cheat or desert in order to become politically effective.
I must use the word for the third time: it is a tragedy that the audacious vision of perhaps the greatest liberals ever, and the unparalleled success of their political activism have not become the guiding light of modern liberalism. Instead, liberals live estranged from and often embittered by a time characterised by more freedom than has been experienced in any period before ours.
It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are for ever destined to depend for their political constitutions on accident and force.
(Federalist 1, par. 1)
The answer to this puzzle is not a foregone conclusion - it is an ongoing process of political activity producing partial answers.
Itself a great and wonderfully versatile source of reading, the Hit&Run blog has the below recommendation for your summer beach read:
English majors may fondly recall novelist Nathaniel Hawthorne for enthralling works like The Scarlet Letter and The House of the Seven Gables. But few seem to have read Hawthorne's brilliant 1852 satire The Blithedale Romance, which draws on his frustrating experiences with the short-lived utopian community called Brook Farm. [...]
The Blithedale Romance is by turns laugh-out-loud funny and darkly tragic, and its ending packs a wallop. In a world where so-called intentional businesses, foundations, and communities built around shared moral purposes are all the rage, the novel should be required reading. It reminds us that even the best intentions are rarely strong enough to overrule either the longings of the human heart or the basic laws of economics.
Few presidents have accomplished so much in such a short time—Harding served from March 1921 to August 1923, when he died of a heart attack. As we’ve argued before, the fiscal policies Harding instituted brought the country out of the economic depression occurring as a result of the Great War, a period in which the national debt climbed from $1 billion in 1914 to $24 billion in 1920. It was a dire time: The country was already experiencing rising unemployment just as soldiers were returning home from the war looking for work. Deflation led to bankruptcies and business closures. In urban areas where African-Americans lived in close proximity to whites, race riots broke out.
Harding’s pledge to restore America to a condition of “normalcy” led to his landslide victory in November 1920. In office, he cut government spending to the bone and reduced federal income tax rates across the board. As he said to Congress, the government acted during the war as if “it counted the Treasury inexhaustible”; if that pattern continued, it would result in “inevitable disaster.” To get government spending under control, Harding established the nation’s first Budget Bureau (the forerunner of today’s Office of Management and Budget) in the Treasury Department. As a result, federal spending dropped from $6.3 billion in 1920 to $5 billion in 1921 and then $3.3 billion in 1922. He supported the Revenue Act of 1921, which eliminated the wartime excess-profits tax, lowered the top marginal income tax rate from 73 to 58 percent, decreased surtaxes on incomes above $5,000, and increased exemptions for families.
By the time Harding died, the signs of economic growth were evident.
Meghan Daum paints a charming portrait of Lincoln, Nebraska. Her life wasn't too happy, and she felt somewhat lost in this world:
Until one day I got on a plane and moved to Lincoln. Like I said, I don’t expect people to get it. I didn’t get it myself. Instead, I can offer this controlling metaphor. It concerns the final approach into the Lincoln airfield. It’s a long runway surrounded by fields, with no built-up adjacent areas or bodies of water to negotiate. The runway is so long, in fact, that it was designated an emergency landing site for the space shuttle and, to this day, every time I fly in, even when the wind is tossing the little plane around like a rag doll, I always have the feeling that nothing can possibly go wrong. The space is so vast, the margin for error so wide, that getting thrown off course is just a minor hiccup, an eminently correctable misfire. Lincoln’s air space, like its ground space, is inherently forgiving.
After those acid trip sunsets, that’s the thing about Lincoln that rocked my world. That you can’t really mess up too badly. You can marry too young, get a terrible tattoo or earn $12,000 a year, and the sky will not necessarily fall. The housing is too cheap and the folks are too kind for it to be otherwise. Moreover, when you live underneath a sky that big, it’s hard to take yourself too seriously. Its storms have a way of sweeping into town and jolting your life into perspective. That jolt was Lincoln’s gift to me. It comes in handy every day.
As expected, the US boys had been a formidable opponent, and it was a stiff piece of work for the German soccer team to prevail in a 1:0 victory. How close the US has come to the very top in international football - as we call it in Europe - is being underscored by a soccer sensation superbly captured in Professor Birdthistle's guest-post at The Volokh Conspiracy:
If you were lucky enough to see today’s German vivisection of Brazil, you will have witnessed perhaps the most famous game of soccer ever played. Even had Brazil gone on to win this World Cup, those victories and new trophy would soon have faded amidst their cluttered trophy cabinet. But a loss this massive, this calamitous — at home in front of their bawling compatriots — will scorch football’s record books like a funeral pyre for decades to come.
The slaughter was so devastating, so historic, it may take a poet to capture it. Perhaps Wordsworth:
Dire was it in that dusk to be alive, But to be Brazilian was truly hell.
And footballers in Brazil now a-field Shall think themselves accursed that they were here, And hold their manhoods cheap whiles Germans speak That fought ’gainst them upon Saint Jögi’s day.
Even the historical superlatives can’t convey just how Titanic this disaster is for Brazilian soccer. The Seleção hadn’t lost a competitive game at home in 39 years. This defeat was their worst in 94 years.
Walter Williams considers "Reparations for Slavery".
that slave owners and slave traders should make reparations to those whom they enslaved.
punishing perpetrators and compensating victims is not what reparations advocates want.
What moral principle justifies punishing a white of today to compensate a black of today for what a white of yesterday did to a black of yesterday?
There’s another moral or fairness issue. A large percentage, if not most, of today’s Americans — be they of European, Asian, African or Latin ancestry — don’t even go back three or four generations as American citizens. Their ancestors arrived on our shores long after slavery. What standard of justice justifies their being taxed to compensate blacks for slavery? For example, in 1956, thousands of Hungarians fled the brutality of the USSR to settle in the U.S. What do Hungarians owe blacks for slavery?
There’s another thorny issue. During slavery, some free blacks purchased other blacks as a means to free family members. But other blacks owned slaves for the same reason whites owned slaves — to work farms or plantations. Are descendants of these slaveholding blacks eligible for and deserving of reparations?
When African slavery began, there was no way Europeans could have enslaved millions of Africans. They had no immunity from diseases that flourished in tropical Africa. Capturing Africans to sell into slavery was done by Arabs and black Africans. Would reparations advocates demand that citizens of Ghana, Ivory Coast, Nigeria, Kenya and several Muslim states tax themselves to make reparation payments to progeny of people whom their ancestors helped to enslave?
Reparations advocates make the foolish unchallenged argument that the United States became rich on the backs of free black labor. That’s nonsense that cannot be supported by fact. Slavery doesn’t have a very good record of producing wealth. Slavery was all over the South, and it was outlawed in most of the North. Buying into the reparations argument about the riches of slavery, one would conclude that the antebellum South was rich and the slave-starved North was poor. The truth of the matter is just the opposite. In fact, the poorest states and regions of our nation were places where slavery flourished — Mississippi, Alabama and Georgia — while the richest states and regions were those where slavery was absent: Pennsylvania, New York and Massachusetts.
One of the most ignored facts about slavery’s tragic history — and it’s virtually a secret today — is that slavery was a worldwide institution for thousands of years. It did not become a moral issue until the 18th century. Plus, the moral crusade against slavery started in the West, most notably England.
I think the call for slavery reparations is simply another hustle.
Ralf Raico offers an excellent panoramic account of the origins of World War I.
As for economic causes and consequences, make sure to read this article in which David Stockman explains that
[...] the Great Depression was born in the extraordinary but unsustainable boom of 1914-1929 that was, in turn, an artificial and bloated project of the warfare and central banking branches of the state, not the free market. Nominal GDP, which had been deformed and bloated to $103 billion by 1929, contracted massively, dropping to only $56 billion by 1933.
Crucially, the overwhelming portion of this unprecedented contraction was in exports, inventories, fixed plant and durable goods—the very sectors that had been artificially hyped. These components declined by $33 billion during the four year contraction and accounted for fully 70 percent of the entire drop in nominal GDP.
So there was no mysterious loss of that Keynesian economic ether called “aggregate demand”, but only the inevitable shrinkage of a state induced boom. It was not the depression bottom of 1933 that was too low, but the wartime debt and speculation bloated peak in 1929 that had been unsustainably too high.