The New Liberalism

When debating about a new liberalism, sceptical questions naturally arise: in what respect does this new liberalism diverge from old liberalism? The answer is self-evident: in principle, there is no fundamental distinction between the two. Liberalism is singular in essence and endures across time; yet each generation must confront its own unique challenges—challenges distinct from those of the past and inevitably superseded by those of the future. Thus, even liberals must continually pose the question: how should I address the pressing issues of my time, ensuring that the resolution I adopt serves to safeguard the paramount good that is human freedom—a freedom that signifies the moral and spiritual elevation of the individual?

Anyone who has browsed the catalogues of antiquarian bookshops, particularly the more illustrious ones, will be familiar with the frequent reference to the Einaudi collection mentioned just after the title. Its inclusion enhances the significance of works in the fields of economics and political history, while its absence underscores their rarity.

The liberal does not approach contemporary dilemmas by parroting: ‘Freedom! Freedom!’. Hence, while liberals may, in certain domains, adhere to a ‘liberalist’ outlook they do not do so universally, particularly in matters of personal conduct where economic pragmatism and moral-political expediency dictate such an approach

Adam Smith, whom the uninstructed in economics mistakenly venerate as the arch-liberal above all others— and his followers derisively branded as ‘Smithian liberalists’—was also the very thinker who asserted that the defence of the nation was of far greater import than material wealth: ‘Defence is more important than opulence.’ He historically championed the Navigation Acts, advocating the protection of the merchant fleet, and penned vehement criticisms against absentee landownership. It is impossible to ascertain precisely what Smith would write were he alive today, yet it is certain that he would not seek to resolve the problems of 1776, but rather those of 1945.

Liberals reject the notion that human freedom is a mere derivative of economic freedom—that the latter serves as the causal force, with moral, spiritual, and political liberty emerging as its effect. On the contrary, it is the morally autonomous individual and the society composed of men who profoundly acknowledge the dignity of the human person that shape economic institutions in their own image. The machine dominates and enslaves only those who willingly submit to servitude, allowing themselves to become mere appendages to its mechanism.

Adam Smith, whom the uninstructed in economics mistakenly venerate as the arch-liberal above all others— and his followers derisively branded as ‘Smithian liberalists’—was also the very thinker who asserted that the defence of the nation was of far greater import than material wealth: ‘Defence is more important than opulence.’ He historically championed the Navigation Acts, advocating the protection of the merchant fleet, and penned vehement criticisms against absentee landownership. It is impossible to ascertain precisely what Smith would write were he alive today, yet it is certain that he would not seek to resolve the problems of 1776, but rather those of 1945.

Adam Smith, whom the uninstructed in economics mistakenly venerate as the arch-liberal above all others— and his followers derisively branded as ‘Smithian liberalists’—was also the very thinker who asserted that the defence of the nation was of far greater import than material wealth: ‘Defence is more important than opulence.’ He historically championed the Navigation Acts, advocating the protection of the merchant fleet, and penned vehement criticisms against absentee landownership. It is impossible to ascertain precisely what Smith would write were he alive today, yet it is certain that he would not seek to resolve the problems of 1776, but rather those of 1945.

Adam Smith, whom the uninstructed in economics mistakenly venerate as the arch-liberal above all others— and his followers derisively branded as ‘Smithian liberalists’—was also the very thinker who asserted that the defence of the nation was of far greater import than material wealth: ‘Defence is more important than opulence.’ He historically championed the Navigation Acts, advocating the protection of the merchant fleet, and penned vehement criticisms against absentee landownership. It is impossible to ascertain precisely what Smith would write were he alive today, yet it is certain that he would not seek to resolve the problems of 1776, but rather those of 1945.

Adam Smith, whom the uninstructed in economics mistakenly venerate as the arch-liberal above all others— and his followers derisively branded as ‘Smithian liberalists’—was also the very thinker who asserted that the defence of the nation was of far greater import than material wealth: ‘Defence is more important than opulence.’ He historically championed the Navigation Acts, advocating the protection of the merchant fleet, and penned vehement criticisms against absentee landownership. It is impossible to ascertain precisely what Smith would write were he alive today, yet it is certain that he would not seek to resolve the problems of 1776, but rather those of 1945.

Liberals reject the notion that human freedom is a mere derivative of economic freedom—that the latter serves as the causal force, with moral, spiritual, and political liberty emerging as its effect. On the contrary, it is the morally autonomous individual and the society composed of men who profoundly acknowledge the dignity of the human person that shape economic institutions in their own image. The machine dominates and enslaves only those who willingly submit to servitude, allowing themselves to become mere appendages to its mechanism.

There exists an undeniable connection between economic freedom, on the one hand, and both general liberty and political freedom, on the other; however, this relationship is far more nuanced than commonly presented in propagandist literature.

It is erroneous to claim that individuals in modern society are deprived of freedom solely because the ownership of the means of production rests with a class denominated by capitalists. Setting aside the fact that, in numerous countries—including extensive regions of Italy, or rather, vast areas within every Italian region—the number of capitalists exceeds that of non-capitalists, and disregarding the incontrovertible reality that the rigid dichotomy between capitalists and proletarians does not even constitute a viable theoretical abstraction capable of encapsulating any fundamental truth of human history, one must acknowledge the existence of multiple, interwoven social strata. Indeed, scarcely an individual or family can be found that does not simultaneously belong to several social categories. Even beyond these significant considerations, it must be recognised that no particular mode of ownership—whether private or public—of the means of production is inherently capable of addressing the issue of freedom.

In the extreme case, freedom is not safeguarded even under a system of full quiritarian private property, in which land, water, mineral resources, industrial enterprises, and raw materials are held in absolute possession by the owner, who may dispose of them entirely at his discretion, without external accountability. Throughout history and across all jurisdictions, legislators have universally rejected the notion of unlimited and unrestrained dominion over property, establishing boundaries within which proprietors must operate. These constraints are most stringent for resources such as minerals and water, somewhat more relaxed for land, and comparatively broader for industrial machinery and raw materials. Modern economic analysis—unjustly disregarded by socialist theorists—traces its intellectual lineage to the seminal work of Augustin Cournot, published in 1838, and identifies monopoly as the principal, and indeed the sole, factor by which ownership of the means of production ceases to facilitate economic service provision at a price aligned with the minimum cost of the marginal producer. Instead, under monopolistic conditions, ownership becomes a source of inefficiency, artificially inflating prices to monopoly levels and generating gains that are both superfluous from a productive standpoint and detrimental from the perspective of social equity and distribution.

Liberals do not echo Proudhon’s dictum, la propriété, c'est le vol—property is theft—for this assertion is historically unfounded and contradicted by daily experience. However, they do firmly uphold the principle that le monopole, c'est le vol—monopoly is theft. Informed by the insights of modern economic analysis, liberals maintain that economic servitude cannot take root where competition flourishes, where new entrepreneurs, traders, and speculative investors can challenge the dominance of established industrial, agrarian, and commercial enterprises. Conversely, where monopolies prevail, production tends to stagnate, demand for labour and wages decline, excessive profits accrue to a privileged few, and the distribution of national income becomes increasingly skewed to the detriment of the majority. For this reason, liberals reject state intervention directed against property, which embodies thrift, personal independence, familial continuity, and a driving force for economic progress. They do not seek to dismantle private ownership, whether of consumer goods or the means of production. Nor do they wage war on accumulated wealth, or on fortunes earned through free competition by those who possess initiative, take risks, and succeed. Equally, they do not seek to suppress speculation—provided that speculation serves as a means of anticipating future needs by speculators, adapting to their own profit and to the far greater advantage of most, the means of satisfying.

Yet, what liberals do demand—precisely because they have recognised its corrosive effects—is the eradication of monopoly, the true root of all evil and social harm. They call for the unwavering application of the law against those who have entrenched themselves behind artificial barriers to exclude new entrants from their sphere of activity. As many - maybe most - monopolies are the artificial, i.e. they are the direct product of legal constraints, they advocate for the abolition of restrictions, duties, privileges, and prohibitions that prevent willing individuals from working, from establishing new enterprises, new business, from competing freely with entrenched interests.

Away with tariffs, away with quotas, away with exclusive concessions, away with the perpetuation of chained patents, away with privileged corporations, away with monopolistic enterprises—away with all that suffocates initiative, that, under the guise of regulation, strangles enterprising individuals and compels them to corrupt those who dispense concessions, permits, and licences.

Yet monopolies are not solely the creations of legislative fiat, which may be dismantled by merely revoking the laws that established them. There also exist “natural” monopolies—arising from the inherent impossibility of duplicating competing enterprises. Against such monopolies, liberals advocate state intervention, either through direct oversight or through the regulation of monopolistic industries. They recall that, long before the term socialisation gained currency, two eminent liberals, Camillo di Cavour and Silvio Spaventa, championed the state administration of railways. They note as well that, with their support, Ivanoe Bonomi in 1916 declared all Italian waters capable of yielding hydroelectric power or irrigation as public property, thereby nationalising them.

They seek to advance this approach, prepared to debate and determine, on a case-by-case basis, the most suitable means of liberating clearly monopolistic industries from private domination. In some instances, this may necessitate direct state operation; in others, the establishment of autonomous public bodies; in yet others, the formation of joint-stock companies with a state majority shareholding, or even the delegation of operations to private firms, subject to public terms and conditions, and regulated pricing. Around the negotiating table, men of goodwill must engage in dialogue, with the common objective of averting the two greatest perils looming over the modern economic order: first, the ascendancy of trade unions, consortia, and trusts, whether monopolistic or in the form of industrial and labour unions; and second, the rise of the most colossal and menacing monopoly of all—the state itself. For, at the opposite extreme of absolute private ownership stands the absolute dominion of the state, which would seize control of all means of production.

No tyranny is more oppressive than that which renders a man's livelihood, the sustenance of his family, contingent upon the will of those who wield authority from above. It matters little whether such power has been seized by force or conferred through electoral mandate. What does matter, however, is whether an individual seeking employment, advancement, prosperity, or recognition must solicit these exclusively from a ruling authority—a leader or a political faction—or whether, by his own effort, he may attain them through direct engagement with those who demand the goods and services he believes himself capable of providing. Where all depends upon the state, there exists only servitude; there, merit is displaced by intrigue, and the procurers of favour prevail over the truly capable. This is why liberals insist upon a clear distinction between the domain of private enterprise and that of public intervention. The question at hand is not whether economic activity, in a given case, should be entrusted to private initiative and, if so, under what legal framework, nor whether it ought instead to be assumed, delegated, or regulated by the state. The criterion for determining the appropriate sphere for each is not merely one of scale—wherein minor enterprises are left to private hands while grand undertakings are absorbed into public administration. Such a distinction is crude and insufficient; for an enterprise deserves to fall within the public domain only insofar as its scale renders it inherently monopolistic.

Yet liberals do not subscribe to the notion that maximising production alone suffices to resolve economic dilemmas. Even if the production mechanisms, composed of a judicious blend of private and public enterprises, were so perfected as to yield the highest possible output, this would merely be the maximum permitted within the limits of the existing demand. If, in a given nation, a single individual possesses vast riches while a million others languish in destitution, then, under that distribution, the economy may indeed reach its peak productive capacity—but only within the constraints of an inequitable order. If, in a country, there is only one rich man and a million men with no makeshift goods, we can, yes, obtain a maximum of product; but it is the maximum proper to that type of distribution of wealth. Quite different is the maximum that would be obtained in another country where all men had equal individual incomes. Different would be the maximums and different would be the types and varieties of goods produced. On moral grounds, we as liberals, we reject both extremes as intolerable, for each engenders its own form of servitude. In the first case, the million destitute serve the lone master; in the second, all men become the subjects of a despot, for it is impossible to maintain absolute equality among individuals—who differ in intellect, industry, thrift, and ingenuity—without recourse to the most insufferable coercion.

Thus, as liberals, we envision a society in which the distribution of national income ensures that no individual subsists below the minimum standard deemed necessary, in each country, for a dignified existence commensurate with the nation's overall prosperity based on national income. At the same time, it also prevented to accumulate indefinite wealth beyond a level considered as socially perilous. To achieve this equilibrium, two principal instruments must be employed: taxation and education.

Income and inheritance taxation must be structured in such a way as to incentivise the creation of new and expanded wealth while steadily eroding old and inherited fortunes. With each successive generation, children should be compelled to reconstruct part of their inheritance, while grandchildren and great-grandchildren must remake the remainder if they wish to preserve it intact; failing that, they should be left to decline. At the very least, the education system must be organised so that all meritorious students can progress through every level of schooling—from early childhood education to postgraduate studies—without financial burden. They should receive not only tuition-free education but also provisions for sustenance, accommodation, healthcare, books, and other necessary study materials. Only under such conditions can we eradicate the fundamental blemish of the modern social order. This flaw lies not so much in disparities of existing wealth, which can be redressed through taxation, but in the inequities of opportunity at the outset of life. When the child of a poor man is afforded the same educational opportunities as the child of a wealthy man; when the descendants of the affluent are, through taxation, compelled to work should they wish to retain their inherited wealth; when undue profits derived from monopoly are eliminated, while incomes gained through free competition—including those of new entrants from the ranks of labourers and agricultural workers, as well as from the middle class—are safeguarded and esteemed; and when the middle class constitutes the majority of society, then we shall not have a society of equals—for such a society would be one of lifeless uniformity—but rather a society of free men.

It is undeniable that the vision of a society enriched by a diversity of enterprises—both public and private—where wealth is continually replenished by new sources of income while parasitic fortunes are gradually eradicated, is not one that can be realised overnight. However, there are nations that have come quite close to this ideal. In times of peace, the highest earners in these countries contribute 60 to 70 per cent of their income to the state, even before accounting for the additional burdens of inheritance and consumption taxes; in times of war, this contribution rises to 97 per cent. Inheritance taxes compel the liquidation of estates, necessitating the sale of books, paintings, and other family heirlooms by those unable to replenish their wealth through daily labour. Moreover, efforts to ensure equal starting opportunities for all have been pursued for over a century and continue to be strengthened.

These countries may be labelled as capitalist by those who do not capture their true nature and their extraordinary capacity for adaptation. In reality, they are moving towards the realisation of the free city—a society in which every individual who is willing to work is afforded the means to attain economic independence. This independence is not merely from a private employer or a bureaucratic superior but, most critically, from the most oppressive master of all: the impersonal, remote, and anonymous entity known as the state. When a man can say : “This is my home, this is my land, this is my art, my craft, my trade—one that is needed by my fellow citizens”; when he can stand tall in defiance of those who would demand his allegiance to a creed or a party as a precondition for employment—then, and only then, has he taken a step towards true freedom. Possessing a reserve of his own, he is no longer compelled to seek, day after day, the permission of others to work—not even from those whom he himself has, on some distant election day, chosen as his leaders. No longer is he a slave, he may not be a hero, nor an extraordinary figure; he may be one of the many who quietly pass through life fulfilling their duty. Yet, in that dignity, in that independence, he may rightly consider himself a free man.