The Origin of 'Liberalism'

When Adam Smith and a group of fellow Scots first used the word in a political sense, it meant something very different than it does today.
Adam Smith (left) and Edinburgh's Parliament Square, c. 1794 (Wikimedia Commons)

It's easy to feel lost in information today, but “big data” can also help us understand the formulations we use in interpreting information, including politics. Google has scanned millions of books published over centuries. Can billions upon billions of words in digital form help us understand our history and character?

Thanks to digitization, we can now establish when the word “liberal” first took on a political meaning. For centuries it had had what scholars have called pre-political meanings, such as generous, tolerant, or suitable to one of noble or superior status—as in “liberal arts” and “liberal education.”  But now using Google’s Ngram Viewer we can see what the word “liberal”—as an adjective—was used to modify. Up to 1769 the word was used only in pre-political ways, but in and around 1769 such terms as “liberal policy,” “liberal plan,” “liberal system,” “liberal views,” “liberal ideas,” and “liberal principles” begin sprouting like flowers.

My research with Will Fleming finds that the Scottish historian William Robertson appears to be the most significant innovator, repeatedly using “liberal” in a political way, notably in a book published in 1769. (I presented more details in a lecture at the Ratio Institute, viewable here.) Of the Hanseatic League, for example, Robertson spoke of “the spirit and zeal with which they contended for those liberties and rights,” and how a society of merchants, “attentive only to commercial objects, could not fail of diffusing over Europe new and more liberal ideas concerning justice and order.”

Robertson’s friend and fellow Scot Adam Smith used “liberal” in a similar sense in The Wealth of Nations, published in 1776. If all nations, Smith says, were to follow “the liberal system of free exportation and free importation,” then they would be like one great cosmopolitan empire, and famines would be prevented. Then he repeats the phrase: “But very few countries have entirely adopted this liberal system.”

Smith’s “liberal system” was not concerned solely with international trade. He used “liberal” to describe application of the same principles to domestic policy issues. Smith was a great opponent of restrictions in the labor market, favoring freedom of contract, and wished to see labor markets “resting on such liberal principles.”

Elsewhere, Smith draws an important contrast between regulating “the industry and commerce of a great country … upon the same model as the departments of a publick office”—that is, to direct the economy as though it were an organization—versus “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice.” In drawing such a contrast, Smith again is signaling the label “liberal” for the latter, which he favors.

Smith also compliments a school of French economists: “In representing perfect liberty as the only effectual expedient” for making national wealth as great as possible, “its doctrine seems to be in every respect as just as it is generous and liberal.” At the core of Smith’s idea of liberal principles is the idea of natural liberty:

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.

For Smith, natural liberty was not an axiom. He made exceptions to it and acknowledged that he was doing so. Still, it is his main principle, and the burden of proof is on those who would contravene it. In an open letter to Smith in 1787, Jeremy Bentham saluted him for having taught society the presumption of liberty. Bentham then proceeded to challenge Smith on one of his exceptions, saying that Smith had failed to meet the burden of proof when he made an exception to natural liberty by endorsing an existing law setting a maximum interest rate.

Presented by

Daniel B. Klein

Daniel Klein is a professor of economics at George Mason University, where he directs the Smithian Political Economy program, and a fellow at the Ratio Institute.

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