For many years I have been a member of the Mont Pelerin Society, an international group of economists, writers, businessmen, and politicos roughly devoted to the free market. Fortunately—considering the wide spectrum of disagreement among the members—the society doesn't do anything activist; it doesn't lobby, pass resolutions, or even publish journals or papers. What it does do it does very well: meet biennially in different countries, hear papers and comments, and foster socialization amongst the members. The last, of course, is the major function, and generally a pleasant time is had by all.
The most recent meeting occurred at Hong Kong, in early September 1978. It was clear from the sessions that a new dispute had taken its place alongside the chronically unresolved ones: fiat paper money versus gold (i.e., Friedmanites and neo-Keynesians versus Austrians and "gold bugs") and money versus unions as the major cause of chronic inflation (this time, Friedmanites and Austrians versus neo-Keynesians and businessmen). The new dispute was optimism versus pessimism, the general estimate of the future prospects for liberty.
The official papers on the topic, with Friedmanite economist George Stigler's presidential address leading the way, were suffused with doom and gloom. The dark night is closing in, statism is accelerating, and the end is nigh. (The only exception among the official papers was a buoyantly optimistic report on intellectual trends in France by libertarian economist Henri LePage.) Fortunately, the Mont Pelerin Society, in its charmingly liberal fashion, allows time and space for rump, or "alternative," sessions by members who want to organize their own panels. In reaction to the official pessimism, Roger MacBride and I hastily organized one, with reports on liberty's prospects from around the globe. We were confident a priori that libertarians, in contrast to the conservatives who dominated the official panels, would present a far more optimistic picture for their respective countries.
Our expectations were not disappointed. Everyone was inspired by the vibrantly optimistic reports about the growth and increasing influence of libertarian ideas and organizations in their respective countries, presented by Vivian Forbes of Australia; Rosa Maria Gomar, economics professor at the new private Francisco Marroquin University in Guatemala; Leon Louw, youthful attorney and head of the Free Market Foundation in South Africa; and others reporting on trends in England, Italy, Canada, Luxembourg, Belgium, France, the United States, and even Spain and Portugal.
Our hastily gathered libertarian session on future prospects was more, however, than an uplifting and inspiring counterweight to the official melancholia. For it is no accident that libertarians tend to be buoyantly optimistic while conservatives are suffused with pessimism. In fact, these seemingly purely personal reactions are really a function of the general world outlook of both schools of thought.
At first blush, these reactions might seem surprising, since the libertarian ideal is far more remote from current realities than is the goal of conservatives. But there are several explanations for this curious situation.
In the first place, conservatives tend to view history "impressionistically," that is, to focus on the day-to-day march of events and simply lament the growing intervention of the State. In a sense, conservatives tend to be frozen in horror at the seemingly inexorable march of political events. Libertarians, on the other hand, realize that history proceeds "dialectically," in a process of action and reaction. They see that the increasing powers of the State, so unnerving to conservatives, have given rise to an increasing "backlash" of opposition, provoking the reaction of the flourishing libertarian movement, not only in the United States but in a growing number of countries around the globe. The libertarian is, necessarily, movement-oriented; to him, it is more important to herald the growth of the movement than to lament eternally the growing powers of the State. The conservative, on the other hand, is, with a few exceptions, not movement-oriented and so tends to despair at the stimulus but to overlook the response.
Since conservatives are long-run pessimists, their strategic perspective tends to be self-destructive and to act as a self-fulfilling prophecy. They channel the bulk of their energies and funding into very short-run political activities: typically, supporting Eisenhower or Nixon. The idea is that all efforts must be focused on this election and basic principles must go hang; since if this election is not won, all is doomed. Of course, even if "this" election is won, nothing is changed and statism marches onward. Whatever funding or energies are not exhausted in this series of futile skirmishes is then deployed into a kind of "time capsule" strategy: a very low-key keeping the flame of principle alive for later centuries when perhaps the cycle of history will be reversed.
Libertarians tend not to engage in these self-defeating strategies. As long-run optimists, they believe in being both radical and strategic, in keeping steadfast to principle while working to advance their principles in the real world. In a sense, while the conservative bifurcates into a dual ultra-short-run/ultra-long-run perspective, the libertarian keeps his eye on a unified "middle run," on a long run within reach through a series of short runs. He understands the dialectic of history and hails the "reaction" of the burgeoning worldwide growth of libertarians organized into an increasingly coherent movement.
There is another fundamental reason why libertarians are optimists while a hallmark of conservatives is their profound pessimism. For the two groups have very different views of who the main enemy might be. For the conservatives, the major enemy is democracy, the masses. Statism is the product of howling masses trying to tear down their betters through egalitarian and welfare measures. If so, once universal suffrage is attained, individual liberty is doomed; for then the masses are ineluctably in the saddle, and Chaos and Old Night are inevitably at hand. If universal suffrage is the great fly in the ointment, the only solution is to restore property qualifications for voting; but the chances for this are close to nil, so pessimism becomes the only sane outlook for the future.
It is no accident, therefore, that Professor Stigler's speech was profoundly pessimistic. He has adopted the new Friedmanite (Chicago school) line that governmental intervention is neither mistaken, irrational, nor the imposition of sinister interests; it is brought about by the mass of voters, by the general public, and it is in their actual economic interest. In short, in a democracy, the masses run the show, and they are getting what they want and what truly benefits them. As Stigler despairingly concluded, there are only two courses of action left to the free-market advocate: either take one's place, as cheerfully as one can, on the planning board of the socialist bureaucracy and try to moderate it with bits of the market; or try to restrict the popular suffrage.
The libertarian, in contrast, does not consider the general public his major enemy. He considers the enemy to be the State, to be those vested interests that run the State and benefit from its rule—in short, the ruling classes. He regards the masses, not as benefiting from statism, but rather as duped by the State and constituting its major victims. The general public would be his true ally if only enlightened of the real situation, believes the libertarian. And since such enlightenment is hardly as quixotic as restricting the suffrage, the libertarian is far more optimistic than the conservative. More than that: he sees that statism is now foundering on its own inner "contradictions" and that the intellectuals and the general public are more and more perceiving this fact and therefore enlisting in the growing libertarian and antistatist backlash.
The observed difference between libertarian optimists and conservative pessimists, then, is neither inexplicable nor a quirk of personal temperament. It is a function of profound and systemic differences of social philosophy and world outlook.
This article originally appeared in print under the headline "Viewpoint: Optimism and Pessimism in Hong Kong".