Economic liberalism

Fernando Fernández. Professor. IE Business School

14 June 2011

Neither the left nor the right. Nobody dares to defend economic liberalism any more, even though it is essential to defend the welfare state that liberals like so much.

In the El País Sunday Supplement, Javier Marías wrote that nowadays, hardly anyone, on the left or on the right, is willing to be liberal. And he’s right. Especially when one sees the way our government begs and scrapes every time it approaches some of the world’s most totalitarian states, as long as their sovereign funds are plentiful enough to be used to rescue the Spanish debt. To be fair, the relinquishment of the defence of liberal values in international politics began with the consecration of the United Nations as the supreme arbitrator of international lawfulness and with the elimination of all reference to political freedom as a necessary condition for social and economic development in the documents of the World Bank at the instigation of China.

He is also right when he criticises the fanatical, puritanical and repressive platform (he does not call it the road to serfdom, I suppose, to avoid being associated with Hayek) on which modern society has laid its foundations. He would also be right if he were to go all the way and refer to the Zapatero government as a den of prohibitionists; all for our own good, of course, just as Gary Becker’s benevolent dictators were.

Marías is not trying to avoid national controversy. He does not miss the opportunity to criticise Esperanza Aguirre, against whom he writes in depth when he removes the adjective "noble" from the economic definition of liberalism. Liberalism is noble; it means respect, tolerance, the acceptance of inequality. However, that is not true of economic liberalism, which, in the dominating single system of values, is associated with privilege. Liberalism is progressive; economic liberalism is reactionary. To underline the absurdity of that distinction, which has led the European left wing into so much confusion and held up the social and economic progress of a sclerotic continent, In the name of pedantic licence I am going to bring up two classic authors of economic liberalism.

Two authors who are the bête noire of everyday right-minded thinking, so liberal on a social level and so given to interventionism on an economic level. As if freedom were separable and could be sliced up at will. Two authors who should be re-read now that the threat to freedom comes from the apparent success of political systems that sacrifice freedom in exchange for the growth of the GDP. Systems that are not at all liberal on an economic scale because opportunities for personal enrichment do not come from freedom of enterprise, but rather from proximity to power, from the distribution of influences, licences, concessions and sundry favours; in short, from state capitalism or from old-style mercantilism. Systems that are highly attractive and capable of dragging along many alleged intellectuals, as did Stalin´s Russia: remember the ode by Neruda or Schumpeter´s flirting.

But unfortunately, Javier Marías is right. Nobody says they are liberal anymore. Not even the much-maligned Aguirre, who now forswears a health system based on co-payment. The left wing is now distracted with planning and the balance of payments. Spain´s centre-right has relinquished the battle of ideas and surrendered ideology to Zapatero´s school of light thought, all gratis. It might be mere election tactics, but dangerous tactics nevertheless, because with no social pedagogy, no clear commitments, there will be no moral authority for imposing sacrifices, for rationalising the welfare state, that beautiful human construction that requires high-level productivity, competitiveness and economic liberalism if it is to be sustainable. But I´m afraid the situation is worse than that. I´m afraid there are no longer any liberals in Europe.

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