For almost a decade, many thoughtful people have agreed that something called “liberalism” is under assault in America without ever concretely explaining what liberalism is. Two weeks ago, John McGinnis brought unusual clarity to the discussion in these pages with a two-sentence summary of liberalism that was comprehensive and specific. Liberalism, he said, “has historically been marked by independent courts, free trade, protection of property rights, and a limited state, even if it incorporates social welfare programs” and could be linked to figures ranging from Margaret Thatcher and Ronald Reagan to Lyndon Johnson and George Bush.
McGinnis is correct about liberalism’s historical features, but it is important to note that it can be divided into two very different approaches for how to achieve them, splitting figures like Reagan and Thatcher on one hand from Johnson and Bush on the other. We might call the two approaches “classical liberalism” and “managerial liberalism.”
Classical liberalism emphasizes representative government bolstered by associations close to the people; free markets with limited but flexible government adjustments; and non-interventionism abroad. Managerial liberalism emphasizes centralized government by large institutions; the use of administrators, judges, and university and philanthropic leaders to devise policies; and foreign wars to protect interests abroad.
These two competing approaches are the main shapers of America’s political development, and the extremes in our politics today come from a particular turn in their competition. Sometime between 1933 and 1969, managerial liberalism supplanted classical liberalism, which had been dominant before. This has given rise to our present discontents, which are not rebellions against liberalism per se but against one failed version of it. Tracing the assumptions and progress of these two versions of liberalism shows the triumphs of America under classical liberalism, and America’s slow decline under the managerial alternative. In drawing this sketch, I hope to suggest how to find our way back.
Classical Liberals vs. Managerial Liberals in Europe, 1690–1787
Like Americans themselves, the options for governing them came from Europe: from two channels of thought about how government and markets should interact. As scholars such as Michael Sonenscher, Istvan Hont, and Gordon Wood have shown, this body of thought emerged during two early-modern historical shifts: the expansion of commerce as religious wars waned and government’s increasing use of money (“capital”) borrowed from private lenders to pay for territorial wars.
The market-based regimes these shifts created were no longer divided vertically into classes. Instead, the fundamental social principle was division of labor—people became defined by the jobs they did, the compensation and prestige they received, and the increasingly specialized goods they bought. Rising numbers of people in these countries were well-off and self-confident enough to demand relative equality under the law and some form of elected government. Between about 1750 and 1790, the two forms of liberalism began offering answers to the question of how this governing should be done.