The Rise of the Welfare State in the 20th Century

Conclusion: the power of ideas

A Philosophical History of Freedom

Conclusion: the power of ideas

The crisis we are going through is a crisis of civilization, that is, an intellectual crisis with moral, political, and economic consequences.

There is much discussion about the crisis of politics, the decline of parliamentary democracy, representative government, and thus, freedom. This crisis is somewhat easily attributed to capitalism and the "dictatorship of the markets."

This situation is the consequence of a radical intellectual change in ideas. Since the end of the 19th century, Europe has abandoned the ideas that had allowed it to become a prosperous and enlightened continent. For a while, its eldest daughter, America, resisted the winds of collectivism before being overwhelmed by them as well.

In 1941, George Orwell made this assessment:

It is clear that the age of free capitalism is coming to an end and that one country after another is adopting a centralized economy that can be called socialism or state capitalism, as you like. In this system, the economic freedom of the individual and, to a large extent, his liberty in general - freedom to act, to choose one's work, and to move around - disappear. It is only very recently that we have begun to glimpse the implications of this phenomenon. Previously, it had never been imagined that the disappearance of economic freedom could affect intellectual freedom. It was generally believed that socialism was a form of liberalism enhanced by a moral component. The state would take charge of your economic life and free you from the fear of poverty, unemployment, etc., but it would not need to interfere in your private intellectual life. It has now been proven that these views were false.

However, contrary to what the prophets of doom predict, Western civilization is not doomed to disappear in the 21st century. It has not exhausted its potentialities. Freedom is yet to come.

This is what Murray Rothbard suggested in 1982: We have now experienced all the variants of statism, and they have all failed. Throughout the Western world at the beginning of the 20th century, business leaders, politicians, and intellectuals began to advocate for a "new" mixed economy system, characterized by state domination, in place of the relative laissez-faire of the previous century. New panaceas, initially attractive, such as socialism, the corporatist state, and the Welfare-Warfare State, have been tried and have evidently failed. The arguments in favor of socialism and state planning now appear as pleas for an aged, exhausted, and failed system. What remains to be tried if not freedom? In a certain sense, our situation is better than in the past. After the successive failures of various socialist, communist, and social-democratic experiments, we know today how to distinguish, better than yesterday, true ideas from false ones. And false ideas can be refuted and replaced with true ones. As Mises said:

Everything that happens in the global society we live in is the result of ideas. The good and the bad. What is necessary is to combat false ideas. (...) Our civilization can survive, and it must. And it will survive thanks to better ideas than those that govern the world today, and the rising generation will develop these better ideas.

(Economic Policy: Thoughts for Today and Tomorrow, 1979).