The Meaning of Liberty
Republicans and conservatives rightly love liberty. That’s why so many have difficulty engaging with the new conservative economics and domestic policy propounded by American Compass and politicians including Senators Marco Rubio, Josh Hawley, and J.D. Vance. They believe, wrongly, that these policies contradict liberty.
The opposite is, in fact, true. Conservative economics is not just consistent with liberty, the two are inextricably intertwined.
The simplistic defender of liberty will be aghast at that assertion. The new thinking endorses government intervention in the economy and supports tilting the scales of redistribution to favor families over individuals. Both ambitions are contrary to liberty, in the simplistic view, because they set the collective judgment of the elected representatives in government over that of the market—an unforgivable heresy.
But that’s just not so, and a simple review of American history will show us that. Our democratic governments have always set their judgment over that of the market to better encourage commerce, provide for the national interest, or protect domestic institutions like the family. It’s the recent market fundamentalism that is antithetical to American democracy, not conservative economics.
Take the simple underpinnings of the modern economy, bankruptcy and corporate law. At common law, an individual was liable to repay all of his debts regardless of his capacity to do so. Thus, debtors unable to repay their lenders were thrown into debtors’ prison or were required to sell all of their personal assets to avoid such a horrid fate. That was simply the law consistently enforcing the doctrine of personal responsibility.
America’s founders thought differently. They believed that individuals deserved second chances in life and ought not to be condemned to misery and servitude because of a risk gone wrong. They thus created the law of bankruptcy, which overrode common law to allow a person unable to repay his debts to have some of them discharged by law.
This surely created what is today called “moral hazard” as the dishonest took advantage of this escape to take greater risks than perhaps they ought to, with borrowed money. But the result was, on balance, social gain. More people were willing to take risks knowing they could preserve their freedom, and both liberty and economic growth were thereby encouraged.
The creation of modern corporate law supercharged this innovation. Prior to the mid-19th century, individuals were personally liable for debts their businesses incurred. Predictably, this inhibited risk-taking for the same reason the fear of debtors’ prison did. Only an act of government—an Act of the Crown in Britain or a legislative declaration in the United States—could allow an individual to avoid that fate by creating a corporation in which his liability would be limited to his investment in the company.
Whig politicians in the 1830s and 1840s sought to change that. They wanted government to put a finger on the scale in favor of economic expansion, and toward that end they advocated for uniform and regular incorporation. Their idea was that allowing any combination of individuals to form a corporation without prior approval would increase the number of people who would do so. That in turn would encourage risk-taking and collective economic endeavors, things needed to expand industry and engage in widespread commerce. Their success was so widespread that we have today forgotten this reform was ever needed.
Other now common practices were adopted in early America to put government in charge of once-private activities to better ensure liberty for all. Public prosecutors were created in the late 1700s, taking the burden off private individuals to procure lawyers to pursue criminal cases. That gave such men power, but it also meant that crimes against the poor would be brought more readily. This narrow abridgement of “liberty” actually increased liberty for the vast majority of Americans.
The economic platform of the new Republican Party pushed these principles to the national stage. The Morrill Land Grant College Act used public lands to build public universities with the express intent of encouraging agricultural research to improve farm productivity. The Pacific Railroads Act subsidized the construction of the first transcontinental railroad, and further acts subsidized the construction of America’s mighty rail network. The protective tariff allowed American manufacturing to grow rapidly, bringing power to the nation and wealth to its citizens.
These principles remain a staple of conservative and Republican policy even today. Which Republican governor doesn’t use public funds to attract large industries to their state? Which fails to invest in public education and public universities? Even school choice, that bastion of conservative education policy, is at heart merely a different mode of redistribution from those with wealth to those without to accomplish a publicly determined end.
Viewed against this backdrop, the “new” economics is actually the traditional American understanding renewed for our age: what Henry Clay dubbed “the American System,” updated to address the challenges of a globalized and financialized economy in which American families are struggling to form and support themselves and the American nation is struggling in great power competition with China. Market fundamentalists may be indifferent to the outcomes of those struggles—or, more commonly, propose naïve nostrums about how the “self-regulating market” is itself the best guarantee of success. Americans and most conservatives are not so foolish or sanguine.
Americans today want what their ancestors wanted: genuine liberty to live dignified lives of their own choosing. They do not want a regimented, socialist economy or a woke, uniform society. But neither do they want concentrated private power, exercised economically or socially, to put barriers in front of them that they cannot reasonably be expected to surmount. They want a government responsible to them that tears those barriers down and erects protections to ensure they cannot fall into undeserved penury. And then they want government to get out of the way and let them flourish.
Democracies do not die in darkness. They die in the full light of day when enough of their citizens decide that they cannot achieve their dreams unless the system changes. For as the Declaration of Independence tells us, “whenever any Form of Government becomes destructive of these ends [the rights to life, liberty and the pursuit of happiness], it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.” No beautifully decorated house is grand if its residents live in misery.
The United States of America remains one of the greatest and most exceptional nations in world history. We did not acquire this status by blithely pretending that the individual can prosper while the community suffers. We became the Earth’s inspiration and its colossus by recognizing that the individual can only prosper when his happiness, as viewed on his terms, is inextricably intertwined with the health of a community dedicated in word and in deed toward that goal.
That is what today’s conservatism needs to rediscover. That is what today’s reformers are doing. That is why those who love liberty are our natural allies and will soon become our firm friends.