I think that the principle of the Conservative Party is jealousy of liberty and of the people, only qualified by fear; but I think the principle of the Liberal Party is trust in the people, only qualified by prudence.
From his ardent opposition to imperialism to his efforts to abolish the income tax following the Crimean war, William Gladstone—the Grand Old Man—is a shining example of liberalism in practice. Although he frequently occupied 10 Downing Street, Gladstone’s career will always be remembered for time at the Exchequer, where he became an institution of British politics. Joseph Schumpeter described Gladstone’s vision of finance in his History of Economic Analysis:
Gladstonian finance was the finance of the system of ‘natural liberty,’ laissez-faire, and free trade. From the social and economic vision that this implies—and which we must now understand historically, irrespective of all general arguments pro and con—the most important thing was to remove fiscal obstructions to private activity. And for this, in turn, it was necessary to keep public expenditures low. Retrenchment was the victorious slogan of the day and was even more popular with radicals—such as Joseph Hume, the ‘sleepless watchdog of finance’—than it was with either Whigs or Tories. Retrenchment means two things. First, it means reduction of the functions of the state to a minimum; this was referred to by later, especially German, critics, as the policy of the ‘night-watchman state’… Second, retrenchment means rationalization of the remaining functions of the state, which among other things implies as small a military establishment as possible (Schumpeter 1954: 403-404).
One part of Gladstone’s political triumph that Schumpeter doesn’t focus on that I desire to touch on here was how he was seen as an opponent to privilege and an advocate of a society of equals. It’s difficult to think of a politician today of Gladstone’s beliefs—and William Gladstone was certainly a politician—receiving the epithet “The People’s William.” Today, the issues of the system of natural liberty, be they free trade or concern about the level of Federal spending, are all too often cast as the issues of those in power.
Yet it doesn’t be so. At least not as I see it. The issues of such a society are concerned about the economic prosperity of everyone in society. Its about creating a society of equals who are all free to truck, barter and exchange amongst each other as equals. That goal necessitates minimizing the need for political superiors in society who can impose their fiat, for good or ill, upon others. As much as we may talk about governments acting for the good of the people, all power will be abused. Here, we see the system of natural liberty’s concern for everyone: It wants to put people in a position where they don’t have to live their lives in accordance with the desires of their political superiors.
Concern about inequality itself is all hoopla. Per se, inequality should mean nothing to people. Envy is not a virtue, nor should political discourse encourage it by implying that inequality is the artifice of those in power and that other people have to consent to other people being wealthy. That’s all nonsense. The pertinent issues are those etymologically baked into the word ‘privilege.’
Derived from the Latin words ‘privus’ and ‘lex’—‘private’ and ‘law.’ The proper notion of privilege is one based on citizens being raised above other citizens via coercive laws. One isn’t privileged by being born into wealth alone. One is privileged by being born into a noble family who, by law, can extract tax income from their peasants. Privilege contrary to the system of natural liberty is all around us today. Bankers are in a privileged position due to too-big-to-fail policies. Farmers are in a privileged position because of the subsidies they receive from the Federal Government. The list goes on and on.
A contemporary People’s William would be an outspoken opponent of crony capitalism. Liberalism can be persuasive in the debate over inequality if it focuses on how crony capitalism creates vast patterns of inequality across the world.
Schumpeter. Joseph A. 1954. History of Economic Analysis. New York, New York: Oxford University Press.