A Restatement Of Economic Liberalism Prologue: Capitalism and the permissive society Introduction :: The Historical Context :: Reasons For Suspicion :: The Rise Of The Word Man :: The Dilemma Of The Economic Liberal :: The New Left Attack :: Poverty And Equality :: 'Alienation' :: Student Dissent :: Contemporary Radicalism :: A turn of the tide?

Among the middle classes and the establishment generally, adherence to competitive capitalism is, even where it exists, largely a matter of lip-service. Most middle-class voters, who are not business leaders hardly ever mention competitive capitalism, or any of its synonyms, except as dirty words. 'Less government' is a popular cry, not to promote freedom of any sort, but because those who utter it believe that it would lead to a transfer of income from other classes to themselves. The favourite subjects of older middle class conversation are in a different area altogether - capital punishment, abortion or sympathy with South Africa. These are the landmines that aspirant Conservative candidates, or those who manage the annual conference of the Party, have to avoid.

If one looks at the attitudes of leading figures of industry, commerce and finance, their support for capitalism is rarely part of any wider libertarian outlook. Such people are not notable for their championship of libertarian causes outside the economic field. Prominent businessmen have the views that one would very much expect on 'permissiveness', the indiscipline of modern youth, drugs, the prosecution of obscene publications, and so on.

Even in their own professional sphere, the devotion of many in the business community to the competitive aspects of capitalism is usually conspicuous by its absence. While they may proclaim the virtues of competition in the abstract, their own industry is very often a special case qualifying for protective restriction, subsidy or regulation; and the organised leaders of business are often in the forefront of the drive for government intervention, provided that their own financial interests do not appear to suffer (and sometimes even when they do, so great is the failure of nerve).

To come down to a slightly more technical level: the minority among the intellectual classes who bother to read the standard defences of capitalism by writers such as Friedman or Hayek, soon find that the contemporary business leader not merely has seldom heard of the key points emphasised by them such as the rule of impersonal law, consumer sovereignty and the separation of politics from business. On the contrary, his ideal is often that of negotiated deals with government officials on a 'power game basis' for projects for which the consumer would not be willing to pay and which have negative 'spillover' effects. No wonder that capitalism on closer investigation seems no more attractive to our hypothetical inquisitive radical than he had earlier imagined and that thus his New Left views are only further confirmed.

None of this is any cause for surprise and was long ago described by Adam Smith. The typical businessman is, after all, more often an administrator or manager than an entrepreneur. The virtues of capitalism have little to do with the intentions of capitalists; and if there is far more competition in the longer run than the more simpliste critics suppose, it is because ofthe difficulty of keeping out new entrants, products and ideas, rather than because of any lack of desire to do so.

The logic of the system makes the capitalist a two-faced animal. When he faces outward in his business life he is, whether he likes it or not, in a permissive society. However much he spends on advertising, he must in the end persuade people to take his wares; and however much he dislikes the process, he must either influence or serve the public taste; he cannot use the weapon of coercion or the sanctity of tradition. Indeed, much of the business history of the post-war period consists of the replacement of the long-established Anglo-Saxon upper middle class managerial dynasties by immigrants or newcomers of 'non-U' stock, who had no fastidious scruples about catering for the requirements of a more affluent working class.

Yet, although he operates within a libertarian framework in his outside dealings, and he must also have some regard to the preferences of his work force in conditions of high employment, within his organisation the capitalist manager operates by authority and not via commercial forces. Within the wider community the business executive is on the side of authority, he identifies with the governors rather than the governed and expects their support in his difficulties, and he seems to have more in common with unambiguous authority figures such as judges, senior civil servants, generals, or headmasters than with the representatives of permissive culture, whether pop stars or 'trendy left' journalists. Yet, in his own business life, especially if he is a successful innovator, he is engaged in undermining accepted ways and destroying established values and practices.

He is sandwiched between two worlds. He cannot identify himself with radical protest or with anti-authoritarian sentiment of any kind, for he realises that these forces, if unleashed, would sweep away his own position. There was an important exception to this in the heady triumphant phase of the Anti-Corn Law agitation of the 1830s and 40s, when the capitalists had sufficient confidence to rally the masses in a crusade against the established order. But this phase did not last very long; and once their immediate free trading objective had been achieved, the business classes gave Cobden little further support in his dream of world peace through enlightened self-interest. Within ten years of the repeal of the Corn Laws he and Bright lost their seats as a result of their opposition to the Crimean War. The capitalist did not apply the utilitarian calculus he used in his own business decisions to issues of war and peace in which he remained as jingoistic as any other Victorian.

Yet if he cannot thrive as a radical, or 'dove', or apostle of the permissive society, the capitalist - whether entrepreneur or business manager - is unimpressive as a leader in the authoritarian, paternalistic mode. As Schumpeter observed, a bourgeois ruling class completely lacks the glamour of an aristocracy. With neither the trappings of tradition, nor the heroic qualities of the great war leaders or generals, middle class business leaders cannot excite the identification or hero worship which reconcile other people to their wealth and position.

Indeed, the more that other members of the governing classes, such as politicians, civil servants or college heads, model themselves on the successful business manager, the less deference they are likely to attract and the more their authority is likely to be resented. Moreover, the more 'meritocratic' the process of selection, the less the governing classes are differentiated by special accents or special clothes, and the more 'they are just like us' (only luckier, or cleverer or more given to 'swottlng'), the more 'they' will be resented. Even the pretence at aristocratic superiority and genteel dowdiness of the governing politicians of the Macmillan-Butler era were more appealing than the habits of their meritocratic successors. The hostility of the latter's opponents is not one whit less, while this is in no way compensated for by a sneaking or deferential respect among the population at large. At most they are tolerated on the strict condition that they bring results.

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