The Online Library of Liberty

A project of Liberty Fund, Inc.

• Foreword
• Economic Liberalism the Classical View
• 1: The Classical Psychology of Liberalism
• 1: The Theory of Moral Sentiments
• 2: The Lectures
• 3: The Wealth of Nations
• 4: The Achievement of Smith
• 2: The Political Ideas of the Classical Economists
• 1: The Political Philosophy of Hume and Smith
• 2: The Paradox of Economic and Political Freedom
• 3: Human Nature, History, and Government
• 4: The Nationalism of the Economists
• 5: The Structure of Government
• 6: Economic Improvement and Social Progress
• 3: Liberalism In the Great Century
• 1: The Importance of the Nineteenth Century
• 2: The Practice of Policy
• 3: The Meaning of Economic Liberalism
• 4: The Ideas of Policy
• 5: The Theory of Policy In Mill

5

The Structure of Government

The economists favored a particular form, or structure, of government, and it was derived from their ideas about political behavior and about the purpose of government. They favored a form in which power would be distributed among two or three groups in such a way that each person would have some freedom but not enough to deprive other persons of their freedom. I say “some” rather than complete freedom, because every person would not have all of the powers that have come to comprise the characteristics of a free government. Every person would be assured of government by law, but not all of them would have the power, through the vote or other means, of participating in the making of law.

POLITICAL EQUILIBRIUM

This structure of government was described in different words by the economists who wrote about it. Whatever it was called, its features were the same in the writing of Hume, Smith, James Mill, and Senior. It appears by implication in some of the Parliamentary speeches by Ricardo. The conception was simple and clear. It held that society consisted of the governed and the governors. The mass of the people comprised most, but not all, of the first group. That group was to express itself in the lower house of Parliament, to the extent that it was to express itself at all. Parliament could not be allowed to rule alone. It had to be restrained, and the restraint would be exercised by what frequently was described as the “aristocratical interest,” that interest would express itself in an upper house, the Lords, or through a royal family, or both. The purpose of the House of Lords and of the monarchy was to prevent a representative government from abusing its power. The Lords and monarchy, that is, would contribute order and stability while the Commons would provide freedom. The belief in limited representation was not a justification of aristocracy and monarchy. That rationalization runs in quite a different direction and follows from an assumption that there is a class which by reason of its superior talents and exclusive political wisdom necessarily should be given power. The economists, in their conception of human nature, ascribed the same motives to the upper classes as to the lower and believed neither was to be trusted with a monopoly of power. Their object was a government that would establish an equilibrium among competing interest groups. That would be done by distributing power in such a way that no group would become paramount but each would have power enough to express its permissible interests. The theory of such a government is the familiar one of checks and balances. It was one of the ideas for which the eighteenth century is famous. It is found in many of the political papers of the period, and was set forth most impressively in The Federalist (as Chapter 3, Vol. 1 of this book explains).

Most of the economists did not write systematic political works and did not develop the idea fully. But they did present its essential features. Hume declared that liberty most probably would succeed in a society in which the government was strong enough to maintain order and did not have to fear popular resistance, and in which the people were strong enough to exercise their rights and need not fear the government. Such a society would be governed by “checks and controls, provided by the constitution.”30 Of the views of Smith, there is no better summary than what the Earl of Buchan said of them:

Although James Mill denied the possibility of an exact “balance of power” among the democratic, aristocratic, and royal interests in society, he nevertheless proposed a governmental structure consisting of “checking bodies.” The legislative branch, to be chosen by an extensive although not a universal suffrage, would restrain the aristocracy and monarchy, and would advance the democratic interest. The aristocracy would be represented by a body serving as a check on the legislature. An hereditary monarch would discharge the administrative and judicial functions of government.32

Senior favored a “mixed” form of government, in which the people would have representation enough to protect liberty and the aristocracy and monarchy enough power to secure order.33 Ricardo’s views on the structure of government are suggested in a speech he made on the suffrage. There is in the speech a strong implication that he looked with approval on the House of Lords. Since he usually was in the radical wing of Commons, one may assume that his approval was not given out of sympathy for an aristocratic form of government. One may infer that his position on this point was similar to that of the other classical economists and that he favored the continuation of the House of Lords (which, he stated, the people also wanted preserved) because it provided a necessary restraining element in government.34

[30] Hume, “Of the Liberty of the Press,” op. cit., III, 9; and “That Politics May Be Reduced to a Science,” op. cit., III, 15.

[31] Quoted by Rae, op. cit., p. 124.

[32] James Mill, op. cit., pp. 60-61.

[33] Senior, op. cit., I, 341.

[34] Cannan, op. cit., p. 251.