Front Page Titles (by Subject) Laissez Faire and Moral Revolution - Literature of Liberty, Spring 1981, vol. 4, No. 1
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Laissez Faire and Moral Revolution - Leonard P. Liggio, Literature of Liberty, Spring 1981, vol. 4, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Laissez Faire and Moral Revolution
Moral Revolution and Economic Science: The Demise of Laissez-Faire in Nineteenth-Century British Political Economy. Westport, Connecticut and London, England: Greenwood Press, 1979
British political economy underwent a profound metamorphosis from the early to the later part of the nineteenth century. During the last quarter of that century economists abandoned the earlier policy of a nonactivist or limited state intervention in the economy. What undermined the economists' faith in Adam Smith's notion that an invisible hand would lead selfish men through a free market to maximize the social good? What caused laissez faire to fall mortally wounded while socialistic ideas were embraced?
The changes in pure economic theory (of value, wages, etc.) during the period did contribute to undermining laissez-faire, but they cannot explain the root cause. For example, the most devastating blow to the entire edifice of classical economics occurred with the introduction of the final (marginal) utility theory of value. This radically innovative value theory set economics on an entirely new foundation from Smith's and Ricardo's labor and cost-of-production theories. Marginal utility theory discredited such established fixtures of classical economics as the subsistence theory of wages, Malthus's population theory, the projection of a stationary state for the future, and the separate theories of distribution for land, labor, and capital.
But despite this revolution in pure economic theory, the later economists, Jevons, Marshall, and Sidgwick merely continued an earlier movement away from laissez faire. Jevons merely continued Bentham's view of utilitarianism: man was fundamentally a pleasure maximizer and the greatest happiness for the greatest number was the moral principle upon which social policy ought to be tested. The author argues that it was John Stuart Mill, the great heir of Jeremy Bentham, who was the principal architect to undermine laissez faire. Bentham certainly set the groundwork for this moral revolution, but he retained enough individualism to remain somewhat wedded to the limited government position of Adam Smith. It was left to Bentham's successor, Mill, to distill the collectivist implications of the principle of utility. Adam Smith's natural law or natural rights moral underpinning provided a buttress that led logically to his non-interventionist policy recommendations. But the principle of utility provides no such necessary connection with laissez faire. Thus, John Stuart Mill's frequent flirtations with the ideas of the Continental socialists and his virtual concession of the high moral ground to them becomes explicable.
Other factors besides utilitarianism, of course, contributed to the downfall of laissez faire. Nassau Senior and J.S. Mill provided additional amunition with their “art-science” distinction, the effect of which was to bifurcate economics. No longer would the positive science of economics have anything prescriptive to say to policy makers. This naturally undermined the whole intent of Adam Smith's Wealth of Nations, which was precisely to instruct legislators in how to maximize production by leaving the economy free.
Human Rights and Ethics
The following summaries supplement the perspectives on normative ethical and political theory sketched within this issue of Literature of Liberty in David Gordon's bibliographical essay, “Contemporary Currents in Libertarian Political Philosophy.” The four opening summaries help clarify some recent directions taken in the theory of human rights and their moral justification. Then follow a variety of ethical issues dealing with such themes as privacy, the rights of animals and of nature, the variable notion of “nature,” the developing concept of mind, and the possibility of an objective morality.
That we currently find little consensus on how we can justify rights or on what is right or wrong in our treatment of nature, animals, or our fellow humans should excite little wonder. Our age is, in fact, undergoing a profound proliferation of values and world views. On a worldwide basis and with a novel, unprecedented confidence, individuals and social groups are asserting their right to determine their own minds, lives, and values. “Every man and every woman is his and her own philosopher"—this sometimes seems to be the implicit motto of the spirit of our age. One expression of this cultural and social pluralism has been given voice by philosophers from within the American Philosophical Association. The dissenting “Committee for Pluralism in Philosophy” has protested the lack of diversity within the professional philosophical association and has called for adequate recognition given to such non-analytic philosophizing (including such schools as phenomenology, existentialism, and American “pragmatism”). [See Janet Hook, “‘Analytic’ vs. ‘Pluralist’ Debate Splits Philosophical Association,” The Chronical of Higher Education (January 12, 1981): and Edward B. Fiske, “Analysts Win Battle in War of Philosophy,” The New York Times (January 6, 1981):15,17.]
Other non-academic examples of the individualist cultural trend asserting the right of pluralism and diversity could easily be cited from the headlines of our daily newspapers. Seen in this worldwide context, then, the current lack of consensus on rights theory may be a vital sign of health and openness. If anything, a greater variety of approaches promises to improve our understanding of freedom, rights, and the social system most suitable for healthy individuals.