laissez faire

Scholars seek to reclaim the term “liberal” from governmentalists


There is a push in libertarian circles to reclaim the term “liberal,” a word that once represented a hands off approach to government, from those who advocate for the “governmentalization of social affairs.”

Through Liberalism Unrelinquished, an effort spearheaded by Kevin Frei, a number of scholars are declaring that they will not surrender use of “liberal” to describe their views. The organizers of the statement hope to attract 500 or more signers.

The statement explains that “liberal” once represented the views of Enlightenment era, perhaps best identified through the work of Adam Smith, an 18th Century moral philosopher and the father of modern economics.

Smith laid the foundation for the moral case for capitalism in The Theory of Moral Sentiments (1759) and The Wealth of Nations (1776). The statement also points to Richard Cobden, William Gladstone, and John Bright — 19th Century British liberals who advanced laissez-faire economic views.

The American founders enshrined the liberal concepts of the Enlightenment era into the Declaration of Independence and, later, the United States Constitution.

“Especially from 1880 there began an undoing of the meaning of the central terms, among them the word liberal,” the statement reads. “The tendency of the trends of the past 130 years has been toward the governmentalization of social affairs. The tendency exploded during the First World War, the Interwar Years, and the Second World War.”

No, Herbert Hoover didn’t push laissez faire policies

One of the myths of the Great Depression was that President Herbert Hoover did nothing to deal with the nation’s most severe economic downturn because his belief in “laissez faire” economics. In truth, Hoover was very much an interventionist. You need only crack open a history book to read about the Smoot-Hawley Act, a protectionist law signed by Hoover that jacked up tariffs on American exports.

To further dispell this myth, Steven Horwitz, an economist at George Mason University, has written an excellent paper explaining how Hoover wasn’t just an interventionist, but also the father of the New Deal.

Herbert Hoover: Father of the New Deal, Cato Briefing Paper No. 122

Myths of the Great Depression

Via Learn Liberty is a new video with Dr. Stephen Davies discussing three prevalent myths about the Great Depression, specifically that Herbert Hoover practiced laissez faire capitalism (this is one that, for some reason, is still debated today) and that the New Deal and/or World War II ended the the economic turmoil that the nation faced:

Bush = Hoover 2.0, Part 1 - “The False Claims”

But not because of the reasons you may believe

Many supporters of free and open markets have for years sounded the alarm about the impending doom and inevitable collapse of the financial markets due to the fiscal and monetary policies beign pursued by the Congress, the White House, and most importantly the Federal Reserve.

On the other hand, many similarly minded individuals rode the wave of capitalism on its way up, while ignoring the unsound basis for which the wave was formed.  It is the latter that gives anti-freedom interests of all types the ammunition they need to spread the false assertion that lack of regulation on private industry is the root cause of this credit crisis.

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