Liberty’s Prospects? I’m Optimistic

I was discussing (virtually) the prospects for preserving liberty recently with a few individuals who were pessimistic about liberty’s prospects. I’m optimistic. Liberty has always been threatened by those who want the power to control the lives of others. They have a measure of success because some people don’t care enough to protect their freedoms, others just take them for granted, and still others look for a nanny state to make their choices for them. Still, I’m optimistic that the ideas of liberty are powerful enough that people will resist when they see the consequences of losing their liberty.

Part of my optimism comes from beginning my professional life as an economist in the 1970s, when rising inflation, rising unemployment, price controls, and lines at the gas pumps seemed to point toward both a loss of liberty and economic decline. The motto of the decade was “Think small.” And if that wasn’t enough, the decade also brought with it disco music and leisure suits.

The Club of Rome predicted a Malthusian economic collapse in its book, The Limits to Growth. We were in a Cold War that pitted two “superpowers” against each other, just one misstep away from global nuclear war, and the consensus of the economics profession was that central planning was a more productive way to manage an economy than relying on markets.

The 1970s was a decade that could promote pessimism, but the Reagan and Thatcher revolution followed. Then the Berlin Wall fell and the Soviet Union dissolved. In many ways we are freer today than we were in the 1970s. I can see threats to our freedoms, but I also see people (like those at the Independent Institute and other organizations that promote classical liberal ideas) who are championing the ideas of liberty. Part of my optimism is based on that good work.

In the 1940s Friedrich Hayek saw the threat of socialism as The Road to Serfdom, and Joseph Schumpeter, in Capitalism, Socialism, and Democracy, feared that capitalism would not survive because those who received the greatest benefit from capitalism would not stand up to defend it. Liberty probably looked more endangered in the 1940s than in any time since the nation’s founding.

The first half of the twentieth century brought with it the establishment of a federal income tax, the Federal Reserve, two World Wars, the Great Depression and the accompanying New Deal, and a progressive income tax with rates that topped out above 90%. No wonder Hayek and Schumpeter were pessimistic. Seventy-five years later, we are freer in many respects than in the 1940s, or the 1970s.

Yes, allure of socialism seems to be making a comeback among younger people who do not remember the horrors of the Soviet Union or life behind the Berlin Wall, but the ideas of Karl Marx hold less sway today than they did throughout most of the twentieth century. Socialism was viewed by many as a mainstream viable alternative to capitalism right up until the collapse of the Berlin Wall in 1989 followed by the dissolution of the Soviet Union in 1991. By the mid-1990s, socialism had been demoted into a system championed only by a few on the extreme left.

We need to be on our guard to protect the liberty we have. Ronald Reagan said “Freedom is never more than one generation away from extinction.” That’s why it is important to champion the ideas of liberty. Liberty has had some setbacks, but mostly has been on the rise for half a century. I am optimistic that those ideas will win out.

Randall G. Holcombe is a Senior Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
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