Dan Sanchez – March 20, 2023
In his 1973 book For a New Liberty: The Libertarian Manifesto, Murray N. Rothbard characterized libertarians as the successors of the classical liberals of an earlier age.
“For the classical liberal movement,” Rothbard wrote, “was throughout the Western world, a mighty libertarian ‘revolution’ against what we might call the Old Order — the ancien régime which had dominated its subjects for centuries.”
The term “ancien régime” (French for “old regime”) usually refers specifically to pre-Revolutionary France. Rothbard aptly broadened the appellation to encompass the West more generally.
The Old Order
“This regime,” Rothbard continued, “had, in the early modern period beginning in the sixteenth century, imposed an absolute central State and a king ruling by divine right on top of an older, restrictive web of feudal land monopolies and urban guild controls and restrictions.”
The economic aspect of the Old Order, as Rothbard described it, was an unholy alliance between the State and its favorite producers: feudal landlords, guilds, and commercial monopolies. Thus, the Old Order was a witch’s brew of absolutism, feudalism, and mercantilism.
“The result,” Rothbard related, “was a Europe stagnating under a crippling web of controls, taxes, and monopoly privileges to produce and sell conferred by central (and local) governments upon their favorite producers.”
These special privileges turned producer groups into what Ludwig von Mises characterized as “castes,” making the Old Order a caste system. As Mises explained in his 1945 essay “The Clash of Group Interests,” in such a system, society, “is divided into rigid castes. Caste membership assigns to each individual certain privileges (privilegia favorabilia) or certain disqualifications (privilegia odiosa).”
The feudal nobility was a caste, because its members were granted lands by the Crown (either directly or indirectly through greater nobles) and benefited from the forced labor of peasant serfs who were legally bound for life to work their lord’s manor.
This encumbrance (or privilegia odiosa) made the serfs a caste as well. And slaves in the European colonies suffered the worst encumbrances, forming a still lower caste.
Each urban guild was also a caste, because its membership was granted the exclusive privilege to practice its trade within the city.
Monarchs created additional castes by granting royal monopoly ”patents” to their favorite merchants and merchant companies.
The royal State could itself be considered a caste, because it reserved for itself the privilegia favorabilia of ruling (taxing, dragooning, imprisoning, etc.) its subjects. And those subjects may be regarded a caste, because they suffered the privilegia odiosa of being so ruled.
In the economic caste system of the Old Order, resources flowed into (or more often, remained in) the hands of whichever producers enjoyed government favor, irrespective of whether those producers made good use of those resources. As a result, producers had little incentive or ability to innovate and optimize production. That is a big reason why the West under the Old Order was so moribund, as Rothbard mentioned.
The New Liberty
But then this stagnant, corrupt, and senile society was revivified by the revolutionary new ideas of liberty.
The liberals championed the rights and responsibilities of individuals over the privileges and encumbrances of caste collectives. As the spirit of liberalism spread through the West, it abolished serfdom and slavery and reduced the power of the nobles, guilds, royal monopolies, and the State itself. Land, labor, and capital were liberated from the State and its cronies. Absolutism, feudalism, and mercantilism were replaced by liberalism and capitalism. The Old Order was supplanted by a New Liberty.
Under the New Liberty, retaining and acquiring economic resources became a function, not of political pull, but of value creation for the masses. This provided the stimulus and freedom to innovate and optimize production that had so long been lacking. In the West, the productive powers of humanity were finally unleashed, inaugurating the Industrial Revolution and the unprecedented skyrocketing of living standards that has blessed every nation the New Liberty has since touched.
And by advancing the freedoms of expression and association, the New Liberty galvanized, not only the economy, but all realms of culture, including morals, manners, scholarship, the sciences, and the arts.
The Present Struggle
Tragically, as Mises wrote, humanity has since “gone back to group privileges and thereby to a new caste system.” Today’s omnipotent “democratic” State directs a vast proportion of the world’s wealth to bestow huge favors upon some (like crony bankers) and impose massive burdens upon others (like the middle class). On still others (like welfare recipients) it bestows seeming favors that are actually burdens because they foster an impoverishing dependence on the State.
A neo-absolutism has engendered a neo-feudalism and a neo-mercantilism. Success in life is once again becoming more and more a function of political pull and less and less a function of value creation. This has slowed and in many ways even reversed human progress.
Society has grown corrupt and tyrannical and so is once again suffering stagnation and decline. But the ideas of liberty are eternal truths that always have the power to refresh and renew the world.
The classical liberal movement—”a mighty libertarian revolution” as Rothbard called it—overthrew the Old Order, inaugurated a New Liberty, and gave humanity a new hope. But the Old Order has returned in new trappings. The emperor has new clothes and the empire is striking back.
Only the return of the liberal—of the ideas of liberty—can save us now.
Originally published at Fee.org. Dan Sanchez is an essayist, editor, and educator. His primary topics are liberty, economics, and educational philosophy. He is the Director of Content at the Foundation for Economic Education (FEE) and the editor-in-chief of FEE.org. He created the Hazlitt Project at FEE, launched the Mises Academy at the Mises Institute, and taught writing for Praxis. He has written hundreds of essays for venues including FEE.org (see his author archive), Mises.org, Antiwar.com, and The Objective Standard. Follow him on Twitter and Substack.
Image credit: Detail of coronation portrait of Charles II of England by John Michael Wright, Public domain, via Wikimedia Commons