Dan Klein: Is classical liberalism anti-democratic?

Helena Rosenblatt and Dan Klein debated whether classical liberalism is anti-democratic, for Timbro’s Ideologi podcast, moderated by Amanda Broberg. Rosenblatt delivered an opening statement, and then Klein delivered an opening statement. Here we present a transcript of Klein’s opener. The transcript has been lightly edited for readability and section headings have been inserted.

Klein presents the relationship between democracy and the political persuasion that in the 1770s Adam Smith and others christened “liberal.”

Klein’s opener (begins at 19:39 in the podcast):

Thank you very much, Helena, I look forward to reacting to some of your comments. I too have prepared an opener, which I’ll dive into first, and so you’ll be the first one to react.

But let me say preemptively that before I get accused of anything more, I do not beat my wife. And anyone who’s met my wife probably would know that she could probably take me.

Anyway, so: Is classical liberalism anti-democratic?

I’m going to say no, but I do think, like you, it’s complicated.

What is classical liberalism?

Let me start by saying a little bit about what I understand classical liberalism to be, and refer to one of Adam Smith’s younger colleagues, Dugald Stewart, who talked about The Wealth of Nations and other works by Smith, Turgot and others, saying that they were not delineating (and you agree with this, Helena) plans of new constitutions, but “enlightening the policy of actual legislators,” it was “not about the share which people possess, directly or indirectly, in the enactment of laws, but on the equity and expediency of the laws that are enacted.” So, it fits what you’ve been saying, [Helena].

The outlook—and Hume’s—was not about how a legislator becomes a legislator. It was about what a legislator should do in the interests of the good of the whole. So, it wasn’t particularly about the issue of democracy.

Now, what did they think was good policy for the whole? Here I say that Smith’s basic disposition, basic posture, is captured in his wonderful expression, “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice” [in WN]. He spoke of “the liberal plan,” “liberal principles” [in his correspondence], [“liberal system,”] and these meant liberalization. And, indeed, this did mean less governmentalization of social affairs. This did mean being opposed to, or suspicious of, the governmentalization of social affairs. So that was what it was about: Liberal policy, liberalization. Not democracy.

What if democracy had come first?

This liberal view developed, and had a certain ascendancy in the 18^th and 19^th centuries, especially. We could call that the liberal era, and it brought what Deirdre McCloskey calls the Great Enrichment.

Now, this wonderful development was not the result of democracy. I’ve got quotations here by [Dugald] Stewart, John Millar, Joseph Schumpeter, and Ludwig von Mises, all of them saying that, in fact, the liberal era came by virtue, to a great extent, of people like Smith enlightening legislators, aristocrats, and actually persuading them to do this [liberal reform].

And this is a quite sobering thought, because it makes you wonder whether we ever would have had a liberal era and the Great Enrichment if we had had democracy before the liberal era. I don’t think so.

Frankly, I think another interesting illustration of this idea is Hong Kong, which from the 1950s and then especially the ‘60s, ‘70s, 80s became perhaps the leading Asian tiger of the Great Enrichment, in Hong Kong. And how was that governed? It was not democracy, in fact it had British governors like John James Cowperthwaite, who did liberal Smithian policy.

Again [like the liberal era of Europe] we’d never have had the growth and blessings that Hong Kongese enjoyed, and that in a way tended to colonize southern China, without the Smithian approach, if it [Hong Kong] had been democratic all along.

From God to government

Let me say a little bit now about the mythologized democracy—I feel that democracy is mythologized today, [since] especially in the late 19^th into the 20^th century.

But before we get there, I want to go step back a little earlier to the 16^th, 17^th [centuries], and talk about the sources of legitimacy of the sovereign or the monarch. Earlier it had been God and church. And then it switched to parliament or the legislative assembly.

But in this rising role of parliament, it was to a great extent conceived as a limitation on the sovereign, the king, in the spirit of Magna Carta, and it was about the power of the purse, about, “Hey, you can’t do all these things to us. We have rights.” It’s about checking the power of government and the sharing and of different powers.

So, the legislative assembly grew in power. And then in the forward centuries it sort of becomes the sovereign. If you haven’t noticed, the king [or monarch] isn’t really very important in Britain or in Sweden, and the legislative assembly to a great extent has become the sovereign.

And then we have to worry about, What limits that? Checks. It’s very dangerous.

Whither responsibility in governing?

And part of that danger comes from the mythologizing of democracy from people like Rousseau in the 18^th, but then, especially in the 19^th century, by people like the New Liberals that you [Helena] mentioned—where democracy becomes whatever is good. Anything that you like or favor is suddenly “democratic.” That’s this expansive mythologized democracy.

Tocqueville saw it happening and saw great danger in it.

Classical liberals, on the other hand, soberly see that government is a coercive institution. It is based on force—its force is part of its defining nature and specialness—and see that it needs hemming in. Liberal principles are checks, limits on expansive intrusive government.

Now, one of the beauties of aristocracy, back in the 18^th century, was that the vast majority of people were officially excluded from governing.

I know that sounds strange, but think about it. That meant that the vast majority of people could not be easily bamboozled to think that the government acted in their interest. The vast majority of people were skeptical of government because government was a small group of aristocrats and magistrates who governed them.

At the same time, that exclusivity of governing ordained a certain responsibility for good governing. And hence we have an idea of responsibility with power. The word for that is nobleness or being noble. In mass democracy there is no nobility. And nobleness is rare.

Democracy mythologized

The mythologized democracy, Hayek suggested, in the 20^th century especially, projects a fantasy of consensus—as in the small band of our ancestors of our Paleolithic past, when there were just 40 of us in a small band. This is in our genes still, and in our instincts. We decided by consensus in the small band.

Modern collectivist politics plays upon these Paleolithic instincts by projecting the nation as a band. On this fantasy, there is no reason to limit or check the actions of the band as a whole. Its consensus knows what is good for the band and faithfully advances that good.

If we are the government, by democracy, why would we want to put limits and checks on ourselves when striving to advance our own common interest?

Tocqueville foresaw the emergence of a quasi-religion of collectivist politics perfumed by democratic mythology. Big collectivist government now fully replaces God as a source of meaning and validation. The nightmare that he warned us of is a continuation of displacement of God and religion by temporal powers.

Hayek, too, thought along these lines, and saw that this unlimited democracy came from thinking about the government as us.

The problem in all of this is that the nation is not a small simple band of 40 people. In the modern complex world, government lacks knowledge, benevolence, competence. Interpretations are not shared, and accountability is slight. Government lacks correction mechanisms. It never admits its mistakes. It breeds an administrative state, the permanent bureaucracy, the deep state, you might say, and it breeds self-serving ideologies. The administrative state is staffed mainly by people who support the [political] parties most eager for governmentalization. They push incessantly for governmentalization.

Theorists like Robert Michels, meanwhile, explained the iron law of oligarchy. Elites, in fact, fashion narratives and lead mobs in an effort to manufacture a phony consensus. There is no escaping the realities of the modern complex society, as much as you want to fantasize.

We’re never going to be a small band again, so we need democracy demythologized. It should be understood narrowly and plainly: Democracy is about voting more. Democracy means expanding the electorate, expanding the choices of the electorate, expanding the frequency of voting, making the electorate more directly determinative of outcomes.

None of those dimensions of greater democracy are necessarily good. The more numerous the number of voters, the less a vote means, and the less a vote means the more fancifully will votes be cast. When a million people decide, no one decides. And no one is responsible for the outcome. Since the voter knows his vote doesn’t affect the outcome, he is more prone to let delusion sway his choice. People indulge in false political quasi-religions.

In terms of determining electoral outcomes, they [voters] have no skin in the game, although in another sense I think they do have skin in the game because wisdom is good for you, and foolishness is bad for you. But people have a hard time learning not to be foolish in politics. They are indoctrinated and propagandized, particularly by the school system and the media.

So, there is much to be said for narrowing the electorate and limiting the role of mass or direct democracy. We’re accustomed to many limitations now—this is not a bizarre idea. We have restrictions on age, citizenship, criminal status, jurisdiction. We have restrictions on candidates like term limits, age, birthplace. On the directness, even when we’re talking about elected officials, such as the electoral college and, until 1913, the indirect election of US senators.

So, I think democracy needs to be demythologized. There are pros and cons to more or less democracy, and the tradeoffs should be explored calmly and decided prudentially. But democratic mythology should be rejected, and democratic radicalism should be rejected.

So, I’ll leave it at that, and turn it over to you, Helena [32:16 in the podcast].

Daniel Klein is professor of economics and JIN Chair at the Mercatus Center, George Mason University, where he leads a program in Adam Smith. He is the chief editor of Econ Journal Watch, coeditor of Edmund Burke and the Perennial Battle, 1789-1797. His contributions to Svensk Tidskrift are listed here.