Following the advent of political economy, various groups of thinkers generated their own variations, generating the four main perspectives of political economy: Classical Liberalism, Modern Liberalism, Conservativism, and Radicalism. Each perspective has its own ideal commerce scenario, and its own thoughts on how government and economy should mix and mingle. For example, Classical Liberal political economy places an emphasis on the individual and the hierarchy, favoring laissez-faire capitalism. Its offshoot, Modern Liberal political economy, places an emphasis on the individual and equality. Both Conservative and Radical political economy differ greatly from their liberal counterparts, with Conservative views focused on community and hierarchy, favoring more structured government based on past iterations, and Radical political economy placing an emphasis on community and equality, laying the foundation for the communism. Classical Liberalism had long been the predominant perspective, but following the advent of Radical and conservative perspectives, Classical Liberalism has been challenged. This essay examines those challenges and attempts to determine which perspective has presented the greatest challenge to Classical Liberal political economy.
Classical Liberalism was built by the same architects that had engineered the father of them all, classical political economy. Classical Liberalism was built on a sturdy foundation of belief in laissez-faire government, and, as such, placed emphasis on principles including human nature, morality, equality, and efficiency, among others. All was well and good until certain factors made themselves visible. Classical political economy was a balancing act of optimism and pessimism, and pessimism was beginning to overtake the optimism. The population was growing at unprecedented rates and there didn’t seem to be enough land. Economists foresaw higher demand for land, raising rent. Capitalists would be forced to raise wages so their workers could be the food that was becoming more expensive by the day. Chaos was imminent.
As classical political economy became increasingly pessimistic, thinkers began pondering a new way to view the situation. Out of a desire to reconstruct society, these “Radical” thinkers sought to finish the tasks proposed by the Enlightenment, a believed point of failure on the part of the classical political economists. The Radicals saw private property as a growing problem; though the state had been subjected to the reasoning force of Enlightenment thought, and restrained as a result, private property benefited from this restraint of government. Continuing in the Enlightenment tradition was a cornerstone on Radical thought. So, much like the church and the state before, private property was next to be placed under the Radicals’ magnifying glass of reason.
The German philosopher and economist Karl Marx played a large role in building up the Radical perspective of political economy. His works, among them a comprehensive analysis and critique of capitalism backed by the pessimism of classical political economy and the work of compatriot philosopher G.W.F Hegel, served as a starting point for many theorists to follow. In addition to classical political economy, Marx was inspired by the communal society envisioned by the utopian socialists before him, who had theorized (and, in some cases, actualized) communities based on shared ownership of land. These communities, alongside the work of Marx, inspired a cohesive Radical perspective, whose principles would eventually become meshed with Lenin and Trotsky’s concept of a “vanguard party,” the theoretical foundation for what would become the Soviet Union.
In response to the advent of the Radical perspective, a new group of thinkers, committed to the ideals of structured living through authority. The Enlightenment’s reason-based examination of anything and everything under the sun had unraveled the feudal system, a system from which many drew their personal security. With the structure of life mapped out, it was easy to fit into prescribed roles and make a living. The Enlightenment worked against this, leaving many people in new cities, unemployed and uncomfortable with the thought of making it on their own. From this came the Conservative perspective, dedicated to the virtue of a defined social order.
Drawing from the French Revolution, Conservatives saw the disintegration of social order as the disintegration of society as a whole. This, coupled with the Romanticism movement which originated in Germany, made for a perspective on political economy that looked to the past for guidance, whereas the optimism of classical liberalist political economy looked forward.
Classical Liberal political economy, from the 19th century on, was being attacked from all angles. Radicals asserted that capitalism would eventually crumble, being replaced with a communal lifestyle. Conservatives, though they also valued hierarchy (albeit in a different manner), in Classical Liberal political economy, the government exists barely, whereas in Conservative political economy, the state is the same powerful figure that it had been before going under the scrutiny of the Enlightenment. Laissez-faire leadership and a pessimistic outlook had given rise to two perspectives primed to overtake Classical Liberal political economy.
In the 20th century, rival perspectives were not the only factors working against the Classical Liberal perspective. The Great Depression was a one-two punch, dissuading large groups of people from believing in the free market and running many Classical Liberalists out of the realm of public discourse. It was not until the 1970s that Classical Liberal thought even considered a comeback, so to speak. Also, the advent of Cambridge economics dealt a blow to Classical Liberal thought, as Keynes posited a claim the laissez-faire capitalism, a cornerstone of Classical Liberal political economy, was prone to depression and unemployment.
In addition to these factors, Radical thought and its emphasis on equality and community present a direct contrast the Classical Liberal emphasis on the individual and the hierarchy. Radical thought, however, did not prove to be as much of a threat in the long run, as the applications of theories posited by the likes of Marx and his contemporaries were on full display in the Soviet Union during the Cold War. This presentation of Radical political economy, I believe, tainted Radical thought in the eyes of the world.
Conservative political economy, with its staunch support of the ideals and romanticized social structures of the past, has presented the biggest challenge to Classical Liberal political economy. Coupled with the fall of Radical thought on the world stage, Conservative thought has been neck-and-neck with Classical Liberal thought in the race for dominance, even considering the advent of Modern Liberal thought, a departure from the Classical Liberal school of thought, as Modern thought places an emphasis on the individual and equality, a stark contrast to the hierarchy supported by Classical Liberalism. As political economy continues to develop, it is easy to assume that Classical Liberal thought and Conservative thought will be the two main perspectives vying for dominance.