- F. A. Harper, Introduction
- Gustavo R. Velasco, On the 90th Anniversary of Ludwig Von Mises
- F. A. Harper, Ludwig Von Mises
- Property and Freedom, Alberto Benegas Lynch
- Technological Progress and Social Resistance, Guillermo Walter Klein
- Principles Or Expediency? F. A. Von Hayek
- Protection For Farmers, Antony Fisher
- For a Philosophy of Choice, Lord Grantchester
- The Surest Protection, Ralph Harris
- Towards the Just Society, Ralph Horwitz
- Size and Well-being, J. Enoch Powell
- Pour Eviter “une Collectivisation Par Annuities”, René Berger-perrin
- En Défense De L'economie Libérale: Réponse à Quelques Objections, Gaston Leduc
- L'occident Pour Son Malheur a Choisi Keynes Contre Mises, Pierre Lhoste-lachaume
- Das Ordnungsdenken In Der Martwirtschaft, Ludwig Erhard
- Unsere Gesellschaftsordnung Und Die Radikale Linke, Edith Eucken-erdsiek
- Privateigentum— Die Für Mitmenschen Günstigste Lösung Bei Den Produktionsmitteln, Wolfgang Frickhöffer
- Macht Oder ökonomisches Gesetz, Ernst Heuss
- The Reliability of Financial Statements, Ulrich Leffson and Jörg Baetge
- Ist Die Inflation Unser Schicksal? Alfred Müller-armack
- Der Reiche Goethe Und Der Arme Schiller, Volkmar Muthesius
- Krise Der Politischen Formen In Europa, Otto Von Habsburg
- The Need to Make Cognizance Available, Ulysses R. Dent
- Ways to Communism, Giuseppe Ugo Papi
- Convergence Theories and Ownership of Property, Kenzo Kiga
- Soaring Urban Land Prices and Market Economy, Toshio Murata
- Jesus and the Question of Wealth, Alberto G. Salceda
- A Program For a Liberal Party, Gustavo R. Velasco
- On the Entrepreneur Andries De Graaff
- La Integracion Economica De America Latina, Romulo A. Ferrero
- Problems of Economic Responsibility and Initiative Re-emerging In Eastern Europe, Ljubo Sirc
- Rent Control In Sweden: Lessons From a Thirty Year Old Socio-economic Experiment, Sven Rydenfelt
A Program for a Liberal Party
Gustavo R. Velasco
It is ideas that constitute the foundation on which the whole edifice of social cooperation is constructed and sustained…A lasting social structure cannot be built on the basis of false and mistaken ideas…The only way open to anyone who wishes to lead the world back to liberalism is to convince his fellow citizens of the necessity of adopting the liberal program.
Ludwig von Mises, The Free and Prosperous Commonwealth
1 - That the world undergoes a crisis has become a mere commonplace. Since the First World War and especially since the Great Depression and later the Great War, the symptoms exhibited by our age have seemed so serious that there has been general agreement in deeming them as critical. But the sickness from which we suffer has not been diagnosed by so doing. What is more alarming is that mankind shows no signs of overcoming its predicament and, once its illness disappears or becomes less violent, of again setting out on the road to health and wellbeing. On the contrary, the crisis appears to grow deeper and more general; the confusion in ideas and of action appears to be progressively greater; and once again we hear voices of frustration and despair such as were heard when ancient civilization fell or at the end of the Middle Ages, which vilify and repudiate what has been our pride and the cause of such progress as we have achieved, like reason and truth, science and technology, order and liberty, cleanliness and beauty, tolerance and compassion, as well as other moral principles and even the worth of the human person and the respect that is due him.
The foregoing are evident facts and it would be senseless to close our eyes before them or to try to counteract them by opposing the several favorable aspects which in spite of them are found in the present world, such as the unprecedented accomplishments of the physical sciences and of technology, the progress of medicine, the prosperity in many countries and the improved economic conditions of others, the disappearance of social inequalities, the feeling provoked by the misfortunes suffered by our fellow-men, even if it is strangely unequal and sometimes does not manifest itself where one would most expect it. If present tendencies persist and ultimately prevail, there can be no doubt that the civilization which we have built so slowly and laboriously will collapse and that the world will enter a new Dark Age, more fearsome than the one which began after the fall of the Roman Empire, both because it will not be lightened by a new moral ideal and because the means for dominion and destruction at our disposal are infinitely greater. Justification is not lacking, therefore, for the fear that pervades those who think, as well as more or less clearly the majority of men, that we are living in great danger and that a catastrophe such as history has not seen up to now is not only possible but that an accident may occasion it. The result would be a return to barbarism and the degradation and even the destruction of our species.
The confident and secure world that existed in the latter part of the 19th century and until 1914 stands in striking contrast with the situation which I describe. The efforts of the philosophers, economists, and social scientists who flourished during the hundred years from 1750 to 1850 culminated in the formation of a doctrine which inspired the policies and social action, first of Great Britain and the United States, later of France, and that spread from these nations until it became a universal ideal and until it was adopted everywhere, except in Russia, Turkey and Persia which remained as models of despotism. Under its influence both the material and the spiritual picture of the world was transformed. The idea of indefinite progress which was first kindled as a beacon of hope at the start of our modern age turned into a conviction. And simultaneously a feeling of confidence in its future gave heart to man-kind.
Liberalism never reigned fully either in the institutions or in the minds of men. So true is this that one can assert that it is not a program that has been tested and failed but a program that has not been tried as yet. In all epochs there have existed enemies of freedom like Plato and Hegel or utopians who, turning their backs on reality and on human nature like Fourier and Marx, have exalted coercion and the state or set up the ideal of a collectivist and regimented society. Due to historical contingencies the Catholic Church became an enemy of liberal ideas, in spite of the fact that they are in no way incompatible with religious beliefs and that particularly in AngloSaxon countries many of those who have originated and propagated them have been men of exemplary piety. Lesser figures delighted in misinterpreting and ridiculing them. The fundamental difficulty arose from the fact that many people were not capable of understanding them or up to what they required on the moral side. They did not see or did not want to see that liberalism is a permanent and longterm system, and that it often requires us to sacrifice some immediate advantage in exchange for a greater and more general good but which we shall Only enjoy in the future. Envy of those who were more gifted, resentment before luckier members of the same group, an exaggerated sentimentality before present evils although they would disappear in time, moreover were diminishing every day before our eyes, and finally demagoguery contributed to discredit liberalism and to present it as a materialistic and inhuman system. Some principles which were good in themselves like nationalism and democracy but which were overstated, as well as the excessive faith that early liberals put in the clearness and persuasiveness of their tenets contributed to the same result. Impressed by them, they thought that all men possessed the intellectual ability to reason correctly about the problems raised by social cooperation and to act accordingly. It is a pity that they forgot that a majority are lacking in the aptitude to comprehend abstract ideas and to reason logically, and that even when they succeeded in doing this, a special advantage even if it is transitory appears as more valuable in the eyes of most men than a greater and lasting gain whose enjoyment has to be deferred.
The sorry and alarming spectacle offered by the times may suggest the idea that liberalism is also going through a critical period. As a matter of fact we are living in an interventionism which lacks any principles, in a socialism which has been refuted finally in theory and which has gone bankrupt as noisily as inhumanly in practice, and a democratism which merely masks the dictatorships and tyrannies that have always been with us or in whose name the highest rights of man are being abolished daily. In contrast to this confusion and bewilderment- to this opportunism which lives from day to day of exploded clichés and magic formulas-the liberal doctrine not only preserves its entire validity and force, supposedly challenged by events and in truth owing to the incomprehension, misrepresentation, and criticism which it has met, but has rethought its teachings rigorously and in a few cases it has purified them and made them more precise. Far from rectifying or modifying them, the progress of political and social sciences and particularly of economic theory have confirmed and strengthened the essence of the liberal program super-abundantly. Neo-liberalism does not therefore represent an actualization of the principles of freedom but a mere restatement in those cases in which our present forms of thinking and of expressing ourselves make it advisable, their application to contemporary problems, and the search of solutions to some that did not exist before. However, the satisfaction we derive from having elaborated a coherent and true doctrine has no importance next to the decisive reason that makes it more indispensable than ever, namely the absolute failure of all alternative doctrines and the crossroad without hope and without issue which the world has reached by reason of embracing or of practicing them.
This essay has no pretensions of originality or profundity. In large measure it does not go beyond repeating and condensing what the classics of liberal thought have written, especially those who have expounded and developed it recently. Liberalism is not a dogma or a monolithic and completed doctrine. Within it there is an immense task for those thinkers who wish to state it in new terms or to apply it to the present situation of the world as I pointed out, and to complete, refine, and polish it, as well as for the work that never ends in social matters of refuting and exhibiting the errors that oppose it. My purpose is much more modest and limits itself to gathering together in a relatively brief and simple document the essential minimal elements of liberalism, which in my judgment can and should serve as the basis for a liberal party. This party would not be new in Mexico: it is the great party which although it still lacked a name inspired with its ideas and aspirations the movement which gave us our independence; which after a heroic struggle, first in the field of ideas and later and unfortunately after an armed struggle, introduced the reforms that our community required indispensably and defended our nationality against foreign aggresion, and which after incorporating its program again in a new Constitution which was fundamentally similar to the former one of 1857, dominated both the thought and action of the responsible elite and of those who have governed our country until a few decades ago. Before the demands of the people, past realizations were valueless; the justification of those who will take up the standard of our great Liberal Party which now lies abandoned, must be the promise and the ability of fulfilling the ambitions and ideals of freedom, prosperity, justice, and peace of our country.
2 - The starting point of liberal thought is the recognition of the value and importance of human cooperation. Therefore, the measures that it advocates tend to maintain existing cooperation and to increase it in every possible way. For these purposes it seeks to have conceded to reason in the spheres of social and political sciences the same recognition that is granted to it in other fields and that has led natural sciences to such spectacular progress. Although it is deliberately limited as I shall explain later on, it offers a complete plan for political and social life, which is capable of being developed and detailed as far as may be necessary. In spite of this, reflection will disclose that the essence of liberal doctrine can be condensed, as I shall attempt to do in the following lines, into two pre-requisites without which it is impossible that any people will rise to be acquainted with liberalism and to practice it, that is, in a certain level of intelligence, morality, and culture, and in a minimum of external orders into three means which are the rule of law, a market economy, and democracy, in a supreme end which is freedom; and into three products, which will consist in prosperity, justice, and peace. The combined result of this design will make a good society possible. This society will provide favorable conditions and the atmosphere for the final end which we should pursue and which is no other than to realize and develop all the potentialities that lie in man and to allow him to be happy on this earth.
3 - Of the foregoing points the last one will require fewer explanations. It is obvious that in a human group in the primitive conditions of the Australian aborigines or of the Bushmen in South Africa, it will be impossible for the institutions which characterize liberalism to function. In similar situations, the only alternative will be to wait until the slow development of such peoples enables them to practice them. As regards more advanced societies, the fact is that the security and other conditions favorable to an exchange economy on an important scale have only been present during the first two centuries of the Roman Empire and gradually, beginning with the 17th century, first in the Low Countries and England and later in other parts of the world. As indicated before, liberalism is an exacting system, which demands of those who pursue it a certain level of intellectual capacity, at least in the governing classes, and a morality that will accept the sacrifices that it imposes, in the sense that it may compel us to forego the satisfaction of our desires or to postpone it, in order to avoid greater evils either to ourselves or to our fellow-men, or to render possible the achievement of a more important good. Consequently, if men refuse to engage in the mental effort that is imperative to acquaint themselves with liberal doctrine and to understand it, although they may posses sufficient intellective powers in general, or if as is now the case, they consider the immediate gratification not only of their needs but of their whims as more important than their rightly-understood interests, the necessary conditions for liberalism to operate and render its fruits will have ceased to exist.
The other prerequisite that must be fulfilled before one can go on to the means that the liberal system puts into play is the prevalence of at least external order and of an absence of disturbances and violence. In the absence of such tranquility, even though it should be purely extrinsic, no progress will be possible and even social cooperation will disintegrate and end up by disappearing or by being imposed by authoritarian regimes from the right or the left as we have seen all too often. This points to the vital importance of order as a basis or take-off platform for the erection of the liberal edifice.
4 - Although it may last a long time, the order imposed on a community from without will always be artificial and consequently will not allow the rich variety of social relations that a spontaneous order does, or provide by itself a security that it will endure indefinitely. If we wish to attain this second kind of order it is necessary that we cease to be at the mercy of the inconstant and arbitrary will of the men who exercise power, and be subject exclusively to the permanent, general, and impersonal commands of the law. In other words, the primary guarantee that in a given society the order that is the result of internal equilibrium will come into being, consists in the supremacy or rule of the law.
The complex of requirements and institutions for good government that experience has assayed and that writers on political science and constitutional law have explained, have grown up in the AngloSaxon world and are therefore known as “the rule of law.” This expression has no adequate translation or even equivalent in other languages, although the concepts of the Rechstaat or état de droit and of the principle of legality, which were elaborated by German and French writers and from them passed to the laws and legal thought of other nations, correspond approximately to it. One must emphasize, nonetheless, that the ideas and institutions which are condensed under the rule of law go farther and have a wider content than the concepts which I mention, and that like others of British origin it is not easy to grasp them thoroughly. That is why I shall attempt to summarize them as clearly and precisely as possible.
For the rule of law to exist in a country it is necessary, in the first place, that law should be expressed or instituted through general and abstract rules. This means that they should contemplate a hypothesis, that is, a plurality of acts or cases which may take place or arise, and not concrete cases or acts. As a result of this, laws should be enacted for the future and in principle should be permanent in character. Another essential requirement consists in the equality of the law, namely that it should apply equally to all men and that such distinctions and classifications as it may make should also be of a general nature and besides being founded on relevant considerations should of course be justified on the ground of their benefit for the general public. Finally, legal norms should be certain, that is, capable of being known by those persons who must take them into account when planning their future conduct.
The requirements that I have mentioned so far may appear to be obvious as well as present in any civilized nation. Nonetheless, they are forgotten so often or circumvented in such clever ways that it is important to insist on them and to state that if they are absent there will be no rule of law. More concretely, this system manifests itself in certain political institutions, to such an extent that it is frequently declared that it is the equivalent of constitutionalism or constitutional government, that is, of a government that is subject to rules of a higher nature than ordinary laws, whether written or customary, which make up the constitution of a country. Before examining rapidly the institutions which characterize the rule of law, I must mention some other conditions which are frequently omitted due to the emphasis on its relation with constitutionalism. These are that the general and equal rules, established for an indefinite period and known or certain, to which I have referred, should not limit themselves to delegating on some authority or to empowering it to decide freely what it shall say, without the possibility of comparing its acts with some rule or standard and of passing judgment on them. This implies that the law is binding on all men, whether private individuals or public officers, with the result that the latter may not conduct themselves as they wish but only in observance of general preexisting rules.
On entering the field of constitutional law we find fundamentally the same idea in the demand that government should be a government of laws and not of men. This means that it should be conducted under general and impersonal rules and not through orders specially issued for each case, of a discretionary nature. As a consequence of the foregoing, the functions of government should be differentiated according to whether they are legislative, executive or Judicial, and their exercise entrusted to separate organs. Although we do not find it in countries which have been unified by their long history like England, federalism achieves great importance in others such as Switzerland and the United States because it prevents the abuse of power through its division between the central government and those of the states or other parts that make up the federation. Another essential feature consists in the recognition and delimitation of a sphere of freedom and property for all the inhabitants of a country, which public authorities are compelled to respect and which they can not invade or restrict except in those cases which comply with the conditions laid down by the fundamental law. The duty of insuring that this guaranteed sphere of freedom is respected and of maintaining other authorities within their orbits and powers devolves on the judicial department, which is granted a special position and considerations so as to enable it to fulfil this task. Finally, experience has shown the advisability of embodying the rule of law in laws which are considered to be of a higher rank and value than ordinary ones and which it is desirable to write down for the sake of clearness and stability.
The tendency that prevails to extending the activities of government without limit and then to granting public officers extensive powers so as to conduct them, makes it necessary to state that the rule of law can not endure in a collectivist and authoritarian state. Since this has led some to speak disrespectfully of the liberal-bourgeois state, it must be admitted candidly that the system we are discussing corresponds to a government that is limited both extensively and intensively and that it can not survive when it ceases to be limited. This implies that public authorities must engage only in certain tasks, namely those which it is considered are incumbent on them but must not try to encompass and to rule all of social life. It means as well (although this derives from what I said before) that the powers of those who rule must be specific and restricted and not indefinite and all-embracing.
We have now outlined the essential features of the government or rule of law. The complex of doctrines which it comprises and which have been formulated over a long period of time, have as a common practical objective the protection of individual liberty by insuring that coercion by the power of the state is exercised exclusively in the cases specified by true laws, by authorities empowered to do so and through a legal process, and with the possibility of a judicial review, that is, a review by authentic courts, which will extend to the substance or content of the act in question. As may be seen, the rule of law is something more than mere constitutionalism and goes beyond it, since it involves certain requirements with respect to the contents of the constitution. Consequently, the rule of law is not one more rule or strictly speaking a legal norm. It is a rule of rules, a certain conception of what these should be. We can therefore describe it as a meta-legal doctrine or, if one wishes, as a political ideal. And it is unnecessary to explain that it is not a principle of natural law in the sense that it may exist elsewhere than in the conviction or will of men or possess objective validity apart from them.
5 - By safeguarding freedom and by guaranteeing to each individual a known sphere of action within which he may decide at his convenience, the rule of law enables him to use his knowledge in the fullest and most productive way, particularly his special, concrete and often unique knowledge, including that of circumstances of time and place. In this way the formation of a spontaneous order of human activities becomes possible, of much greater complexity than the order which could be produced by virtue of deliberate arrangement. The market provides us with an example of this sort of order in which the different and sometimes opposite purposes of those who take part in it are adjusted and reconciled for their reciprocal benefit. That a market economy depends on the rule of law and on the security and freedom which it brings is proved by the examples mentioned before, of the economic development achieved during Rome's golden age and by the Netherlands and England beginning with the 17th century and the Industrial Revolution, as well as in the United States of America under the protection of a constitution which for the first time in history incorporated the basic principles of liberalism.
The institutions and mechanisms which are characteristic of a free economy are well-known and their exposition, the conditions for their existence and operation, and their results are found in the books that deal with economic theory. I would therefore refrain from calling them to mind if it were not for the fact that it is frequently believed that one can do without one or more of them, forgetting thereby that they are all connected and that they form an aggregate or system which can only render its maximum yield when its operation is not hampered. In my opinion, we can speak of a market economy when we find:
freedom to consume or, more precisely, to wish and to form new wants and to search for new means of satisfying them;
freedom to work, to invest, and consequently to produce;
freedom to exchange and to trade;
freedom to acquire, and to use and enjoy the things produced or acquired, that is, to exercise that variety of freedom which is property, and both in the case of consumer and of capital goods;
a stable and reliable money;
the price system;
profits and their counterpart losses;
and economic calculation, with its companion, a rational economy.
The fundamental and indisputable argument in favor of a free economy is that there exists no viable and acceptable alternative for modern man. Division of labor has created the world in which we live by increasing incalculably the productivity of the efforts of isolated men or groups. A market economy represents the system of production and distribution that corresponds to the division of labor and everything that is against it harms the division of labor and is a step backward in the long road that man has traversed. It is undoubtedly possible to abolish a free economy, as communism and nazism have done, or to accumulate such a number of difficulties that its functioning will become impossible. But this will mean a return to the world of periodic famines, plagues and epidemics, destitution, narrowness, and strife of all against all, in which our ancestors lived, not in some remote time or in barbarous countries but as recently as the Middle Ages.
On more concrete grounds the objections to the two economic systems which offer themselves as alternatives, namely to socialism and to interventionism, are that the first one is impracticable and that the second one is unstable and therefore does not amount to a true alternative. Without private property, without money, without a price system, without profits or losses, economic calculation is impossible under socialism. Unquestionably it is possible to produce physically in a socialist regime, that is, to make shoes or produce wheat. But it is impossible to produce economically, that is, to know what is more productive, whether to produce wheat or to make shoes. Now the essence of the process of production consists in furnishing what consumers want most, in the optimal possible quantities, through the best combination of the factors of production, that is, of natural resources, labor, and capital. Putting it more plainly, the productive efforts of man should be exerted in those fields where their yield will be greatest. In a free economy this problem is solved almost without our being conscious of it through the institutions and mechanisms which I enumerated before. In a complete and world-wide socialism, not in the Russian kind which is not complete and which guides itself although imperfectly by the prices formed in other countries and in world markets, production would take place blindly and distribution would be arbitrary, not according to the contribution of each individual to the productive process but to the notions and dictates of those in power.
One can understand socialist economists breaking their heads over this demolishing attack, which exhibits their system as irrational and condemns it to an incurable inferiority. When their attempts to refute it or to contrive ingenious devices which would enable socialism to operate at least with the same efficiency that a free market does, end in failure, the procedure that has been followed is that of secrecy, as in the case of those diseases which are called secret or of the insanity in a member of a family which is never mentioned by the rest, not to speak about the radical flaw in their system, not to discuss it, to ignore it, in the hope that people will not learn about it or that in the meanwhile they will come up with some answer. Whoever remains silent consents, says a Spanish proverb. With this behavior socialists not only admit patently the deficiency pointed out by the thinkers to whom mankind owes the discovery of the impossibility of economic calculation in a socialist commonwealth; they also lose all claims of a moral nature to bringing it about, since it is evident that they pretend that we adopt socialism without knowing its essence and consequences, worse still, as the result of a deception.
With the scarcity and backwardness that prevail in them, the economic organization of socialist countries has furnished us a preview of the situation which awaits us a hundredfold worse in a world in which socialism ruled absolutely. What is difficult to understand, to such a degree as to make one suppose that men prefer to indulge the envy and resentment they feel toward others, to their own interests, is why this failure, evident to everybody, which confirms what theoretical thought had announced, this scandalous unfulfillment of the promise to establish a paradise on earth, has not opened the eyes of all who have suffered under collectivism. The same question must be asked with respect to interventionism, with its train of restrictive measures, its contradictions, and delusions. As we well know, it diverges from socialism whose central idea is the transfer of the ownership or control of productive goods to the state, in fact to the governing group, thereby doing away with private property and necessarily preventing the existence of a price system, money, competition, and profits. Instead, interventionism does not aim at abolishing a competitive economy or at substituting it with some other kind. Its purpose is more modest and apparently more reasonable and feasible: to guide it, correct it, improve it, and to obviate what it considers to be its undesirable consequences. The action that it advocates is not the study and perfecting of the institutions and mechanisms which pertain to a free economy; neither is it in favor of modifying the facts which economic laws or regularities presuppose, so that only those which produce the effects one desires will operate and so that the ones which result in unsatisfactory consequences will cease to do so. Instead of this, its means of action, its only resource, is the direct and coercive intervention of public officers by way of orders, prohibitions, permits and licenses, privileges, exemptions, etc. More specifically we find price control so that prices will not go up or go down, the prohibition of establishing new industries because existing ones are considered to be sufficient, obligatory licenses in order to engage in certain activities or to buy some goods or to import or export, franchises of various kinds, exemptions from the taxes due from other taxpayers, etc. Laying aside the huge and costly administrative apparatus that this sort of measures brings into being, the control that it imposes on the entire life of the inhabitants of a country, and the corruption that necessarily accompanies it, the decisive argument against interventionism is that it does not achieve the ends that it sets itself. It can not be denied that it favors some special individuals or groups but it does this to the detriment of all the rest. If we consider it as a whole, instead of abundance it brings about scarcity; instead of low prices, dearness; instead of order, confusion and disorder. Finally, interventionism does not amount to a third road, or to a solution that will be neither liberalism nor socialism. Once its failure is recognized as well as the deterioration in the conditions that it sought to improve, there are only two ways out: either forego all interventionist measures, at the same time trying to occasion the least possible harm, and stop hampering the operation of a market economy, or sink into the abyss of collectivism, not only with the economic inferiority that I have shown, but with its tyrannical rule and its denial of all the things that make life attractive and worthwhile. This is possibly the greatest danger that interventionism entails: that it facilitates and prepares the way for socialism, both because it disorganizes economic life and through the intellectual and moral confusion and frustration which it engenders.
6 - Democracy represents the third and final means of liberalism. Through the first one, the coercive activities of the state are limited and the formation of a spontaneous order in the economic realm becomes possible. The results of such an order can be superior to all our expectations, as they have been in effect, since they have transformed the conditions in which humanity lived and put an end to the poverty which was its lot until two centuries ago. However, a lasting economic improvement can not exist if the peaceful course of affairs is interrupted by internal struggles. To prevent this a form of government is required that will insure that government responds to the wishes of the ruled. Democracy is that form. Its essential function is to establish peace and prevent violence by making it unnecessary to change the persons in power and the policies they follow by means of revolutions and armed conflicts.
Secondarily to this paramount reason, there are other grounds for preferring a democratic regime. To begin with, it is obviously expedient that if laws are to be binding, the people who will have to abide by them should have a voice in their preparation and agree to them. Next, democracy offers better prospects than any other kind of government of putting into practice the ideas of liberty and equality. Lastly, democratic institutions hold out greater hope and perhaps the only effective method of interesting the majority in public affairs and acquainting it with them, and of educating it in the virtues of tolerance, a disposition to compromise in practical matters, and patience which are indispensable for its succesful exercise.
The undoubted advantages of democracy should on no account lead to overrating it or to minimizing the difficulties involved both in establishing it and in its effective operation. Still less should they cause us to accept contemporary democratism with its monstrous superstition that what the majority decides should be above further discussion. Most emphatically we must proclaim that the will of the people is not the will of God and that popular election does not guarantee the selection of those who are most capable of directing public affairs. The heart of the matter is that democracy is only a method for deciding how a state is to be conducted and about the contents of laws. Consequently it must be judged by what it achieves, but is neither an absolute value nor an end in itself.
Democracy degenerates both in its theoretical conception and in practical application when the attempt is made of setting it up as the supreme standard for deciding social questions, as unfortunately happens today. Once again we must hold firmly that the powers of a majority are neither unlimited nor unlimitable. In the first place, for the amendment of the rules which make up a constitution a special majority should be necessary, as well as a procedure that insures that the will of the whole nation has the opportunity of expressing itself and that the majority is not moved by temporary fads or passions. Secondly, every community is held together by beliefs common to its members of so fundamental a character that it is conceivable that nobody should have the power to alter them. Among them is the principle of democratic government itself, with the possibility for what is only a minority today to become a majority, just as the latter may have been made up formerly of a minority of the citizens. It is admittedly very difficult if not altogether impossible in a general discussion such as the present one to be more specific in the matter. I therefore limit myself to reiterating that from the fact that whatever the government does must be approved by a majority it does not follow that the majority is morally entitled to do what it likes. The opposite claim is based on the idea that the state can do everything it wishes and that no obstacles should stand in the way of the will of the people. But democracy which originally intended to prevent all arbitrary power, turns into the source of a new and unlimited power in this manner. Essentially there is no difference between the unlimited power of the democratic state and the arbitrary power of an autocrat. That is why democracy can fulfil a useful function only within the framework of liberalism. Apart from liberalism it becomes a mere form, as hollow as it is dangerous.
History teaches us that democracy is probably the most difficult form of government. Both in order to forestall the danger against which the preceding paragraph warns, to insure that the real will of the people is expressed, and to achieve that it works effectively, it is necessary to solve with the greatest care a number of difficult and far-reaching questions. Merely as an example I mention the one relating to who should have a vote, since this by no means represents a right that every man can claim but is a function for whose exercise it is necessary to prove that one meets the requirements of age, good judgment, capacity, independence, and responsibility that each country may judge to be appropriate. Another most important point relates to the form of insuring that public officers, especially the members of legislative bodies, are not regarded as having the duty of promoting and patronizing special interests, for example those of the district that elected them, instead of respecting their freedom to decide in accordance with their knowledge and their conscience. However, after admitting the faults and especially the dangers that democracy presents, there is no alternative to striving to implant and perfect it because it represents the only method of peaceful change that man has discovered up to now.
7 - In one sense the three means that we have examined are a manifestation of freedom and find their inspiration in it. In another sense all tend toward liberty by protecting and exemplifying it and pursuing that it should endure. The insistence on freedom is a result of the conviction that it is the highest political end and that it not only provides the proper atmosphere but is an indispensable condition for the attainment of the most valuable objectives of civil society and private life. Only in liberty can human society flourish and produce its best fruits. Even more, it is freedom alone that gives meaning to life, to such a point that without it life loses its human quality and becomes unbearable.
Freedom must therefore be the central idea, the permanent ideal, and the spirit that should vivify and guide both the institutions that I have described and all the others in society, as well as the action of rulers and citizens. To give an example, the rule of law provides a necessary but not a sufficient condition for the existence of individual freedom. In other words, the laws and determinations that depart from it are objectionable in principle, but those that conform to it will have to be judged according to their advantages or disadvantages. Besides all relevant considerations, a decisive one should be whether their effect is favorable or unfavorable to freedom. Similarly, in order to decide in the case of a market economy regarding the difficult problems presented by its different mechanisms and institutions and more in general with respect to the legal framework within which economic activity takes place, the chief criterion or guide that should be followed is that of its effect on freedom. To operate successfully democracy is in need of liberty even more intensely if possible, owing to the difficult conditions it requires and to the propensity that I mentioned, to cease being a safeguard for liberty and to become its destroyer.
In order to achieve all this, freedom must be the over-riding principle and the permanent goal of the activities of a liberal party. In this way it will honor its name and will not be one more party which defends special interests, but the party of everybody. For liberty, in the final instance, is only another name for humanity.
9 - When the means of liberalism, animated and guided resolutely by the spirit of liberty, are put into action the consequences are momentous and sweeping. As the countries in which liberalism has prevailed, even if imperfectly and for a limited time, show by their examples, a market economy produces prosperity, the rule of law results in justice, democracy brings about peace. If this is true, and the facts are before us for everyone to see, the disappearance of the three great scourges which have caused most suffering to humanity, namely poverty, injustice, and war, depends exclusively on us.
A free market constitutes the most perfect instrument, up to now the only instrument, that man has discovered for satisfying his needs and desires. In the first place a market economy provides what is demanded by consumers, not what the rulers in a collectivist or interventionist system consider in their wisdom or because it is advantageous to them, that the people should consume. In the second place, it does this more economically, rapidly, and fully than any other system, as may be confirmed objectively by the abundance and variety of goods and services that are offered for everyone to choose from.
It may be worthwhile to spell out what this implies for the well-being and material, cultural, and spiritual development of man since a free economy is being attacked today with unprecedented hypocrisy and impudence for the very success it has achieved in enriching the possibilities of all kinds that contemporary man finds before him. Let us begin by pointing out that the increase in population, whatever the annoyances and even problems that it originates, is due to large-scale production and to the present world market. The reason is that the market provides not only high-priced automobiles and intoxicating drinks (which it would not do if we refrained from demanding them) but the doctors, medicines, surgical instruments, and equipment which have abated the mortality of children, almost eliminated contagious diseases, and lengthened human life considerably. In the countries which have enjoyed freedom in economic matters both capitalists, property owners, and high officials as well as unqualified workers, that is, the common man, can not only eat and drink at their pleasure, live in a comfortable house and enjoy the amusements formerly considered as exclusive of the upper classes, but provide their children with a good education, and if they have sufficient talent and energy, rise without hindrance in the social scale. Economic liberalism spreads prosperity and well-being. Truly through liberalism common man has come into his own and achieved equality both in production and in consumption.
9 - Justice has also been an aspiration of mankind since earliest times. We demand that the laws in force should be just, that is, that they satisfy a certain sentiment that we experience on knowing about them and especially when they are enforced. This sentiment cannot be innate to man or the result of an intuition or a revelation because in that case it would be the same in all human beings and it is a fact that some of them lack the sentiment of what is just and unjust while in all others it differs completely. We can also confirm that it is impossible for different persons to agree not only on whether a certain legal determination is just or unjust but on the criterion that should be employed to the effect and on the concept of justice itself. The proof of this statement is found in the fact that philosophers and jurists have debated untiringly for over 2000 years without reaching an agreement on what justice is.
It is not the purpose of this essay to investigate how that segment or substratum of ideas is formed, on the basis of which we judge at a given moment if a certain conduct is just or unjust. It seems more useful to determine if it is true that a notion of justice exists independently of a given set of norms and of the situations in reality to which they refer, which possesses validity by itself and, as some pretend, for all eternity. We must begin by affirming that justice or injustice can only be present in society (therefore, to speak of social justice is to incur a pleonasm which immediately denounces that what one has in mind is something other than justice) and only make sense when they refer to a definite system of norms. Reflection does not permit us to discover any other standard for designating such norms as just or unjust than that of whether they are conducive or not conducive to the conservation and promotion of social cooperation. In other words, it is not possible to pass judgment on the contents of a law de lege ferenda, in accordance with the postulates of a preconceived idea of justice. The only possible guide consists in whether they tend or do not tend to maintain and favor that great means of maximizing the well-being and happiness of each one and consequently of all of us, which is social cooperation. The resulting conclusion is that “just” is the name we apply to law, that is, to those rules whose observance is enforced through coercion, when in effect they tend to organize society for the best possible realization of those ends which men try to achieve through their voluntary cooperation in society.
It cannot be denied that the sentiment with which we are dealing manifests itself more acutely in the presence of injustice, to such a degree that it is held that injustice constitutes the primary concept. Whatever one may think about this, observation indicates that there are two chief reasons for describing a law or act as unjust. This takes place when the law in question departs from equality or when it is applied unequally. A law or act are also considered unjust when they infringe on the recognized and protected sphere of freedom and rights of a given individual or when they deprive him of them in other than permitted cases or when they do this without complying with the process established for that purpose.
Under the rule of law, laws must fulfil the conditions of generality, equality, and certitude. Another of its characteristics lies in the delimitation and guarantee of a sphere which each man can consider as his own. Besides these qualities, we find the great advantage of allowing the formation of spontaneous orders, far superior to an imposed organization in the richness and complexity of the relations which arise in them and, consequently, through the opportunities which they present for extending and perfecting social cooperation. By favoring the latter, the rule of law makes it possible for a fuller justice to exist in a liberal society.
It is true that the specific spontaneous order which we describe as a market economy is attacked as being unfair in the name of a so-called social justice. But however much one exerts oneself, the only thing one discovers behind this offensive is a disagreement with the system of distribution which is a result or, more precisely speaking, which is coessential with a free economy, and the request that the returns that go to certain factors of production, especially to labor, be increased. These kind of claims do not even make a pretense of being based on some common or general principle and the only trait that unites them is the attack on the existing system and the contention that it ought to be rejected in obedience to a subjective idea, or more exactly speaking, of a subjective emotion of justice. It is clear that if we are to concede to reason the same function in social matters as in other fields of human action, this method is not only unacceptable but would lead us to chaos. The distribution effected by the market is based on each participant's contribution to the productive process. Needless to say we can conceive of other systems, such as an equal distribution irrespectively of any other consideration, a distribution according to need (individual or family?), a distribution according to merit, etc. Each one gives rise to conclusive objections, both of a theoretical and a practical nature, due first and foremost to the fact that “need” and “merit” are concepts on which there is no universal agreement, so that their definition would necessarily fall on the government, with all the attendant drawbacks that can be imagined. But it is unnecessary to enter into a discussion of those systems because alleged social justice does not advocate them. Therefore, the assertion that the rule of law and the market order to which it opens the doors provide the best opportunity for justice, still stands.
10 - The consequence of democracy is the elimination of violent conflicts and the establishment of internal peace. For liberal doctrine there is no opposition between domestic policy and foreign policy and the ideas that it seeks to realize within a limited area are valid also for the whole world. And just as it proscribes domestic violence because it upsets the division of labor, it considers war between nations as fatal, especially at present that none is self-sufficient and that the world is on the road to becoming a single economic community.
Consequently, liberalism adds the powerful reasons of expediency and necessity to the arguments advanced by many eminent thinkers in favor of the ideal of perpetual peace. And not content with espousing and strengthening this ideal, liberal thought points out the way in which it can become a reality. The system it urges is essentially peaceful, so that if all nations adopted the institutions which form it, the disputes and clashes that result in war would not arise, or they would not be so acute, or in the last resort they would be settled amicably.
Liberalism not only brings tranquillity to the nations that adopt it; it also establishes the necessary conditions for world peace and leads us to it.
11- The means, end, and results that we have gone over will conduct us to the good society that man has dreamed since ancient times. This is the opportunity of recalling that the program I have outlined is purely political and that it limits itself to what the state should do or allow to be done. And since the state is only a part, or more correctly speaking an aspect of society, side by side with the legal institutions that it may establish or with the other institutions for whose formation and proper functioning it should also take the necessary steps, still others will be necessary so as to achieve a good society and to make the life of man truly full and amiable. I refer to good manners, which are so important in order to ease and smooth relations between men, to the qualities and virtues which we include under the name of morality, such as truthfulness, good faith, tolerance, prudence, responsibility and charity or love for our fellowmen. Their importance is so great that I have been tempted to consider them as a complement both of the libertarian legal order and of the economic one. If I have abstained from doing so it is because of the reason I mentioned before and because government should not impose certain ethiçal norms or even promote them directly. I also have in mind all esthetic manifestations, from the highest to those which make even the most modest things and our daily activities more agreeable. And last but not least, to religious beliefs and practices, of a sublime value that nothing can substitute for those who hold them and who find in them a fullness and consolation greater than any science or other earthly creation can provide.
As I have insisted, liberalism is a doctrine exclusively of this world which does not promise anything which can not be achieved in and through society. It is not a religion or even a world-view. The mistaken belief that it involves a certain conception of the world with regard to the meaning and purpose of human existence is refuted by pointing out that it has nothing to say on these subjects and that men who differed radically in their views of the nature of man, his ultimate destiny, and his goals have partaken of the same liberal ideas. To sum up, liberalism is an ideology, a doctrine of the mutual relationship of the members of a society and of the application of that doctrine to their actual conduct.
Liberalism does not offer to transform man or to turn him into a superior being. It merely believes that it furnishes an opportunity for the development and realization of all our aptitudes and abilities. Neither does it promise to make us happy because happiness, like other graces such as spiritual peace and exaltation, is purely internal and must be sought by each man within himself alone. Finally, liberalism does not prophesy or describe the shape of the future, because this is unpredictable and because we can not deny that there are forces and phenomena, either natural or willed by a Divinity, to which man is subject and which we do not know if he will be able to master. Besides, one of the greatest advantages of freedom is that it is the only ideal which faces the future without proposing to mould it to some particular or preconceived form. Liberalism awaits it fearlessly and confidently because it is sure that in the society erected on its bases man will find the best way of solving the problems he encounters, of rising as high as his purpose, and of achieving the happiness that is attainable on this earth.