Front Page Titles (by Subject) Mill: Liberal or Socialist? - Literature of Liberty, July/September 1978, vol. 1, No. 3
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Mill: Liberal or Socialist? - Leonard P. Liggio, Literature of Liberty, July/September 1978, vol. 1, No. 3 
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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Mill: Liberal or Socialist?
“John Stuart Mill and the Future of Liberalism.” Contemporary Review (September 1976): 138–145.
John Stuart Mill (1806–1873) in On Liberty (1859) and in his Principles of Political Economy (1848) presents a mixture of humane and radical liberalism that is still relevant to reformers of the present age. His argument for an open and free society, opposed to collectivist and totalitarian systems, has never been decisively refuted. Never an adherent of pure laissez-faire capitalism, he nonetheless avoided doctrinaire socialism and sought to reform industrial capitalism by respecting individual autonomy, competition, and human diversity.
Mill's On Liberty, while defending liberal freedoms of thought, expression, and association, found its vital center in the ideal of a liberal and progressive society that promotes the development of autonomous agents. This “principle of liberty” expresses the maximum of individual freedom of action with the minimum of social control. Society should restrict only those individual actions that are, or threaten to be, injurious to others. Mill's principle of liberty rejects state paternalism and legal moralism. Liberty should not be restricted simply to save individuals from harming themselves or to make them conform with the community's moral consensus.
Mill's allowance of some state activity in the economy was always qualified by a concern to promote diversity, variety, and autonomy in all spheres of human life. In these individualistic concerns, Mill differed from the collectivism of orthodox socialism. For example, he was ever the enemy of any state system of education or welfare that would make the poor dependent on a bureaucracy of social workers and planners. He saw that innovation in education was “unlikely to flourish in a monopolistic state education system dominated by conservative bureaucracies and politically vulnerable local authorities.” Mill desired to uproot social injustice while disturbing personal liberty to the minimum practicable extent.
The two major targets of Mill's social criticism of industrial society were the maldistribution of property and the oppressive system of industrial organization. First, to remedy the inequitable system of rewards, Mill favored a reform of inheritance taxes that would diffuse wealth. His radical social justice, however, was not egalitarian; he condemned the inheritance of large fortunes for its undeservedness and for the threat to liberty posed by huge concentrations of wealth. Secondly, Mill opposed the type of industrial organization in which few owners of capital stand in an authoritarian relationship to voiceless wage-earners. This system, he believed, could only stultify the wage-earners' growth into responsible, autonomous individuals and institutionalize a conflict of class interests. He therefore advocated competitive syndicalism, an association of workers who collectively owned, managed, and profited from capital. Avoiding socialism, Mill encouraged the private property transfer rights of such workers' shares in industry, and he welcomed competition as a spur to innovation and efficiency.
Mill's liberalism was radically decentralist and anti-statist. He feared the growth of the state for the same reasons he feared the accumulation of private power. Unlike orthodox socialism, he insisted on the “need for political devolution and the diffusion of power and initiative within the great entrenched institutions of our society.” Although advocating the redistribution of property, he shied away from a levelling egalitarianism built upon bureaucratic centralism. Finally, in his favoring of a no-growth economy, he differed from both capitalists and socialists since he did not project an everlasting technological abundance. Whatever the merits of his reform proposals, Mill was not seduced into welcoming a democratic tyranny of the majority or sacrificing his devotion to individual diversity.