December 24, 2023 Reading Time: 3 minutes

The word “liberal” has a big history.

As a political word, it has a definite beginning. Thanks to digitization, scholarship has proven beyond all question that “liberal” took on a political meaning for the first time in the 1770s. Adam Smith and friends christened their politics “liberal.” Liberalism 1.0 was Smithian liberalism.

Before the 1770s, liberal meant generous, munificent, as in “with a liberal hand,” or tolerant and befitting a free man, as in liberal arts and liberal sciences. Those meanings were not political.

The first political meaning accentuated the connection between liberal and liberty. That was Smith’s meaning. And it is quite the opposite of the much-later leftist sense.

Smithian liberalism is like other political philosophies in that it affirms the ethical supremacy of the good of the whole, equality before the law, and a special concern for the least-well-off. Like other political philosophies, it understands that a dollar means more to a poor person than it does to a rich person. These beliefs are not what divide philosophies and produce polarities.

What makes the political left the political left is the policies and agendas it espouses. There, the left collides with Smith. The left promotes bigger government, which Smith opposes, by and large.

Smith showed no enthusiasm for the welfare state, the nanny state, or the regulatory state. Quite the contrary. Smith disliked bullies and nudgers. His attitude was that everyone has a right to go to hell in his own toboggan.

Like Thomas Sowell, Smith saw intrusive government as the chief problem. Voluntary society has mechanisms for correcting its own errors and mischiefs, moral and economic. But in government and politics, the correction mechanisms are weak and often pathological. There is no invisible hand in government. Government errors and mischiefs are not corrected. Indeed, Smith indicated that big government tends to breed wickedness.

Yet Smith was the original liberal.

When I read Patrick Deneen’s book Why Liberalism Failed, I agreed with some of it. But Deneen bundles everything nefarious into a bête noire dubbed liberalism. It is easy to argue that a composite of bad ideas fails. Smithian liberalism has not failed. Rather, people, like Deneen, have failed to be liberal in the way of liberalism 1.0.

In the 1770s, with expressions like “liberal system,” “liberal policy,” “liberal government,” and “liberal plan,” Smith and his associates christened their outlook liberal. Smith clarified what he favored, in contradistinction to government intervention, in the following words: “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty, and justice.” This and many other passages christened the policy orientation as liberal.

The digitization of text has enabled us to see the christening very clearly, and is shown and explained in a scholarly study now online and forthcoming in Journal of Contextual Economics. After the political adjective liberal was established in the 1770s, the political nouns liberalism and liberal, as in, “he is a liberal,” followed, coming around 1820.

Subsequently in the United Kingdom, the Liberal Party emerged. William Gladstone served as Liberal Prime Minister, altogether more than twelve years, his last stint ending in 1894. Gladstone’s party leaned pretty consistently in the Smithian direction. The Smithian meaning of liberal was the spine of liberalism for more than 100 years following the liberal christening.

It was in the twilight of Gladstone that the word liberal began to take on a novel meaning. It was only around 1900 that the term began to take on the opposite meaning. And that take-up was promoted by Franklin D. Roosevelt and others, and the new meaning came to dominate the United States and Canada, whose soft power further boosted the leftist meaning elsewhere.

Those who favor less government need a name for that Smithian outlook. Whatever name is adopted, it will be abused in various ways. Some will steal it, as did the anti-liberals in 20th century, continuing today, especially in the United States and Canada. Others will besmirch it, just as Deneen creates a “liberal” bête noire and leftists create a “neoliberal” bête noire. A new name for the Smithian outlook will face the same abuses.

Liberalism 1.0 will always be the first and greatest political liberalism. Hold fast to the original arc of the past 500 years, sparked by the printing press, and cresting in Smith’s time — an arc called liberalism.

Daniel B. Klein

Daniel B Klein

Daniel Klein is professor of economics and JIN Chair at the Mercatus Center at George Mason University, where he leads a program in Adam Smith, and author of Smithian Morals.

He is also associate fellow at the Ratio Institute (Stockholm), research fellow at the Independent Institute, and chief editor of Econ Journal Watch.

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