Capitalism and Classical Liberalism Are Headed for Divorce
Once, they marched arm in arm. But today’s market economy is now one of the greatest threats to the liberal values we inherited from the 19th century.
Are capitalism and classical liberalism calling it quits?
Photographer: Express/Hulton Archive via Getty Images
The founders of modern liberalism had no doubts about the positive links between philosophical liberalism and capitalism (or “commercial society” as they would have dubbed it). Adam Smith argued that self-seeking produces “universal opulence.” David Hume noted that merchants “check the power of the ancient nobility” and produce political pluralism. Voltaire described the London Stock Exchange as a temple of toleration and cosmopolitan values.
They were broadly right. The advance of liberalism shadowed the advance of capitalism — first in medieval Venice, then in Renaissance Florence, then in the Dutch Lowlands, then most spectacularly in Britain and America. The building blocks of both capitalism and liberalism are identical: individual rights in both law and custom, freedom of choice in both politics and the marketplace, the separation of politics from economics, freedom of conscience and debate. Numerous countries are both liberal and capitalist. No sighting has yet been reported of a country that is both liberal and non-capitalist.