A few days ago, I read a long essay on a website of the radical right that argued for something its author called “conservative socialism.” It leaned heavily on Alain de Benoist, and through him on the French writer Jean-Claude Michéa, and its thesis was easy enough to state. The modern conservative, it said, wants to defend tradition and capitalism at the same time, and cannot, because capitalism is the most destructive force ever set against tradition. The modern Left wants to fight capitalism in the name of progress, and cannot, because progress is the ideology of capitalism. The way out was a socialism of limits, rooted in nation and custom, which the author thought workable only in a white ethnostate. He ended by saying that the proper name for his position might be fascism, which he thought “quite perfect” except that nobody now knows what it means.

I should have found the whole thing easy to dismiss, and the conclusion I did dismiss. What troubled me was that I agreed with a fair amount of the diagnosis. I dislike the large corporation. I dislike the soft, smiling conformity of the human resources department, and the way that firms which owe their size to the State lecture the rest of us on virtue. I am, so far as my tastes go, rather conservative. At the same time, I believe in free markets without apology, and I believe in scientific and technological progress without any limit that I can name. On the author’s map, those commitments ought not to sit together in one head. Either he is wrong about the map, or I am confused. I have spent some time since deciding which, and this essay is the result.

The question I found myself asking was the one in my title. Libertarians are fond of labels, and we have accumulated a great many of them: anarcho-capitalist, minarchist, paleolibertarian, left-libertarian, bleeding-heart libertarian, thick and thin libertarian, and others I have forgotten or never learned. The word itself has had an odd history. It began as a term of metaphysics, meaning someone who believed in free will as against necessity, and it was only in the middle of the last century, in America, that it was taken up by people who wanted a name for classical liberalism once the word liberal had been captured by its enemies. Labels of this kind are useful only so far as they tell you what someone believes and why. I shall therefore begin with what I believe, and come to the label at the end.

First Principles

My starting point is old and simple. The State should leave people alone unless they are using force or fraud against others. Within that limit, adults should be free to work, trade, worship, write, drink, marry, associate and dissociate as they please, and to make fools of themselves if they choose. I do not think this needs elaborate justification. The burden of proof lies on anyone who wants to stop me doing something that harms nobody else, and it is a burden that the modern State seldom even tries to carry.

It follows that I do not regard free markets as either unstable or unjust in themselves, and I want to be clear about this, because it is where I part company with the author of that essay and with nearly everyone on the left. A market is only the name we give to the sum of voluntary exchanges. If I sell you a horse for ten pounds, we both expect to be better off, or the sale would not take place. Multiply that by some millions of transactions a day and you have an economy. Its outcomes will be unequal, since people differ in their abilities, their luck and their willingness to work, but an outcome reached by voluntary exchange is not made unjust by being unequal. Injustice requires an injury, and an injury requires someone to have used force or fraud.

The charge of instability is more serious, because it seems to rest on experience. Everyone over a certain age remembers 2008, and the history books are full of panics and crashes. But look closely at any great crash and you find credit at the bottom of it, and behind the credit you find a central bank or a government guarantee. The South Sea Bubble was a scheme to refinance the national debt. The crisis of 1825 followed a burst of easy credit and wild lending on Latin American loans. The crash of 2008 followed years of cheap money and an implicit promise that the large banks would not be allowed to fail, which was kept. Mises and Hayek explained the mechanism nearly a century ago: when the price of borrowing is pushed below what savers would freely accept, entrepreneurs start projects that the real stock of savings cannot complete, and the boom must end in liquidation. I do not claim that a free market would never see a bad harvest or a foolish investment. I do claim that the great synchronised collapses, in which everyone seems to have made the same mistake at once, are products of monetary manipulation and not of exchange.

If markets are neither unstable nor unjust, the case for regulation falls away. That does not mean a free market would be lawless. Fraud would be actionable, and so would negligence. The common law of contract and tort, with its old rule that whoever causes harm must answer for it, is a far better protection than an inspectorate staffed by people who hope one day to be employed by the firms they inspect. A free market is a market in which everyone answers for what they do, with all they have. Keep that in mind, because it brings me to the corporation.

The Corporation as a Creature of the State

The limited liability company is so familiar that most people suppose it to be a natural feature of commerce, like money or the ledger. It is nothing of the kind. Until the middle of the nineteenth century, a body of investors in England could obtain limited liability only by royal charter or by a private Act of Parliament. Incorporation was a privilege, granted by the Crown or the legislature, and everyone understood it as such. The Bubble Act of 1720, passed to protect the South Sea Company from competition, made unauthorised joint-stock ventures illegal until its repeal in 1825. The Joint Stock Companies Act of 1844 allowed companies to register without a special Act, but their members remained liable without limit. Only with the Limited Liability Act of 1855 and the Joint Stock Companies Act of the following year did limited liability become available to anyone who filled in the right forms.

The defenders of the modern company say that limited liability is just a contract. A lender who deals with a company knows that he can look only to its assets, and charges interest accordingly. So far as lenders go, I accept this. If a bank chooses to lend on those terms, that is its business. But the man who is injured by a company’s lorry, or whose land is poisoned by its works, or whose savings are lost through its directors’ recklessness, has made no such contract. Statute has taken from him a claim that the common law would have given him against every owner of the business, and has limited it to whatever the company happens to hold. That is a transfer of risk from the shareholder to the stranger, and it is made by law. Remove it, and investors would watch what their companies did with far more care. Some businesses would stay smaller. Some would be organised as partnerships or mutuals. Some would buy insurance, and their insurers would ask awkward questions. I have no idea what the resulting economy would look like in detail, and nor does anyone else. I am fairly sure it would contain fewer giants.

None of this is a new thought. Adam Smith disliked the joint-stock companies of his day. In the fifth book of the Wealth of Nations, he observes that their directors, “being the managers rather of other people’s money than of their own,” cannot be expected to watch over it with the vigilance of partners in a private firm, so that “negligence and profusion” must always prevail in their affairs. He thought such companies justified only for a few routine undertakings, such as banking, insurance, canals and the supply of water. J. R. McCulloch opposed limited liability when it was debated in the 1850s. The great liberal campaigns of the early nineteenth century were directed against privilege disguised as commerce: the East India Company’s monopoly of the China trade, ended in 1833, and the Corn Laws, repealed in 1846. Thomas Hodgskin, in Labour Defended against the Claims of Capital (1825), argued that the worker’s poverty came from the legal privileges of capital, and that free exchange, left alone, would give the labourer his due. Sixty years later in America, Benjamin Tucker named four monopolies created by the State, over money, land, tariffs and patents, and called their abolition socialism. Whatever we think of his vocabulary, he was asking the right question.

Limited liability is only the foundation. On top of it the State has built a whole apparatus of advantage for the large firm. Regulation is sold to the public as a check on big business, but its costs are fixed, and they fall hardest on the small competitor who cannot afford a compliance department. The large banks have never seriously opposed the growth of banking regulation, and I do not think this is because they love their customers. Patents and copyrights, extended again and again, give legal monopolies to firms that can afford the lawyers to defend them. Government procurement creates whole industries that live by selling to the State. In Britain, we have the privatised utilities, which are regional monopolies run for profit under regulators, and which can load themselves with debt, pay dividends and leave the rivers full of sewage. Our water companies were sold off in 1989 as a triumph of the market. A licence to be the only supplier of an essential good in a given region is not a market. It is a franchise, of the sort the Stuarts used to sell.

This explains something that puzzled the author of the essay I mentioned. He thought the corporate embrace of what we now call “woke” proves that the progressive Left serves the interests of capital. The simpler explanation is the law. Anti-discrimination law, through the doctrine of disparate impact in America and through the Equality Act 2010 here, makes employers liable unless they can show that they have done everything a tribunal might expect. A diversity bureaucracy is insurance against litigation, and for a firm that depends on government contracts and regulatory goodwill, visible agreement with the State’s morality is cheap. The sole trader and the small partnership feel much less of this pressure. The large company feels it because it lives close to the State.

It also explains why I could not follow that author to his conclusion. If you dislike the corporation because it is a creature of State privilege, fascism is the last place to look for relief. Mussolini’s economic doctrine was called corporatism, and the word was meant literally: industry was to be organised into State-sanctioned corporations under the control of the party. In Germany, a law of July 1933 allowed the government to force firms into cartels, and the largest firms, IG Farben and Krupp among them, did very well out of rearmament and the seizure of Jewish property. Fascism is the corporation and the State made into one interlocking structure of economic and political control. A socialism that “regulates the market” for the common good will end in the same place, for the simple reason that the people best placed to tell the regulators what the common good requires are the managers of the largest firms.

Progress, and the Things Worth Keeping

Here I must part company with the author on different grounds, and with a good many of my friends on the cultural right. Benoist, following Heidegger, speaks of a “metaphysics of limitlessness” and treats the belief in unending progress as the root disease of the modern world. I think it is the best idea our civilisation ever had. Before 1846, when ether was first demonstrated as an anaesthetic in Boston, surgery meant being held down while a man with a saw worked as fast as he could. A child born in England in 1800 had a fair chance of not reaching five. Famine, which had visited every generation in Europe since there were records, has gone from the developed world and most of the developing world, and the great famines of the last century were largely made by governments. I do not see why any of this should stop, or where a line could sensibly be drawn. If someone can find a way to double the human lifespan, or put a town on Mars, or make power so cheap that it is not worth metering, I want him left alone to do it.

The author would say that I am therefore committed to the destruction of everything I claim to value in my culture, and here I must admit that he has a point, though not the point he thinks. Technology dissolves tradition, whether or not corporations are involved. The printing press did more to unsettle the medieval Church than any heretic. The railway broke up the county as a social world. The contraceptive pill changed relations between the sexes more in a decade than law or argument had in a century. None of these depended on limited liability. Marx, who admired capitalism more than his followers like to remember, saw that under the bourgeois epoch “all that is solid melts into air,” and he was describing the power of invention and commerce, not the Companies Acts. Abolish every corporate privilege tomorrow and the solvent would still be at work.

My answer is that a tradition is worth keeping only if people keep it willingly. Hayek said in “Why I Am Not a Conservative” that the trouble with conservatives is that they have no principle for deciding which changes to resist, and so end by resisting change as such, or by asking the State to resist it for them. I think he was right. Traditions are not museum pieces. They are the accumulated habits of people who found them useful, and they change as circumstances change. Some will not survive the next century. Some, I suspect, will survive better than their mourners expect, because they answer needs that no machine removes. People still marry, still christen their children and bury their dead with the old words, still prefer old towns to new ones, and still pay more for a house in a street that looks as it did in 1900.

It is also worth asking who has done most damage to the things a cultural conservative values. I do not think it was the market. Compulsory State schooling took the education of children away from parents and churches. Planners in the 1960s knocked down the centres of a dozen English towns that had survived the Luftwaffe, and put up tower blocks that the people moved into them had never asked for. Two world wars, fought by conscripted armies and paid for by taxation and inflation, did more to break the old social order in Britain than any amount of trade. The welfare state took over functions that families, friendly societies and parishes had performed for centuries, and those institutions withered. If I want to keep what remains of my culture, my first enemy is not the inventor or the shopkeeper. It is the State, which has the power and the inclination to remake society according to whatever theory is fashionable among the people who run it.

I will not pretend that every tension disappears. Free movement of labour is a market principle, and a cultural conservative may find that its results trouble him. A libertarian can say a good deal about property, association and the right to exclude, and about how a welfare state makes immigration a question of public cost rather than private contract. That argument has to be made carefully and on its merits, and I shall not attempt it here. I only note that it is a real difficulty, and that I would rather face it than pretend it away.

Why I Do Not Call for the Abolition of the Welfare State Tomorrow

So far I have written as a fairly orthodox free-market libertarian. Now I must explain a position that some of my friends will think a betrayal. I do not believe that a free society would need a welfare state. Before the State took over, the working classes of this country had built an impressive network of friendly societies, burial clubs, co-operatives and mutual insurers, and by the early twentieth century millions of people belonged to them. Charity did the rest, imperfectly but often with more humanity than any benefits office. In principle, I would see the whole apparatus of State welfare dismantled. In the present order of things, I accept that it must stay, and I want to explain why this is a conclusion from my principles and not a departure from them.

The argument is about restitution. A libertarian who says that markets are just means that the outcomes of free exchange are just. He does not mean that the outcomes we see around us are just, because we do not live in a free market. We live in a mixed economy in which the State has, for generations, moved wealth from the many to the few. The Town and Country Planning Act 1947 nationalised the right to build, and the resulting scarcity of land with permission has made houses in much of England absurdly expensive. That is a transfer from everyone who must rent or buy to those who already own. Since 1971, when the last link between money and gold was cut, our currency has lost most of its value, and inflation falls hardest on people whose wealth is in wages and savings, while those with access to cheap credit and real assets do well. Occupational licensing, regulatory costs and the privileges of the large firm, which I described above, push down the wages of ordinary people and close off the small businesses they might have started. The very poorest families in Britain pay a large share of what they have in indirect taxes. When I look at the distribution of wealth in this country, I do not see the result of free exchange. I see, in large part, the result of theft, some of it ancient and much of it continuing.

Robert Nozick saw this, and said so in Anarchy, State, and Utopia. His theory of justice in holdings had three parts: just acquisition, just transfer, and the rectification of past injustice. He admitted that he did not know how rectification would work in practice, but he allowed that past injustices might be so great as to make a more extensive State necessary for a time in order to correct them. I do not claim Nozick for my side on the details. I only point out that the most rigorous defender of the minimal State in modern philosophy accepted the principle.

There is also a question of order. Suppose a libertarian government came to power tomorrow, and began by abolishing benefits while leaving everything else in place. The landowner would keep the value that planning law had given him. The bank would keep its access to the central bank and its implicit guarantee. The water company would keep its monopoly, and the defence contractor his contracts. The only transfers abolished would be the ones that flow downwards. That would not be a free market. It would be the corporate State with the safety net removed, and it would discredit liberty for a generation. The proper order of reform is the other way round. Abolish the privileges first: free the land, end the bank guarantees, grant no more monopolies, strip the corporation of its exemption from liability, and let money be sound. As the poor come to keep what they earn, and as prices fall to what an open market would set, the need for welfare will shrink, and it can then be wound down without cruelty. Herbert Spencer, in The Man versus the State (1884), made the case against poor relief with great force, and I agree with much of it as a description of what a free society would look like. I do not think it tells us how to get from here to there.

So What Am I?

I am not an anarcho-capitalist in the usual sense, since the anarcho-capitalists I know are often quite relaxed about the large corporation, and treat it as one more voluntary association that would do well enough without a State. I think it would barely exist without a State. I am not a left-libertarian either, though I have read Kevin Carson with profit and agree with much of what he says about privilege. The left-libertarians tend to share the cultural assumptions of the progressive Left, and I do not. Nor am I quite a paleolibertarian. Rothbard in his last years made common cause with the populist right, and I sympathise with the instinct, but the movement he helped to found has always been suspicious of the technological future, and I am not.

The tradition I belong to is older than any of these labels. It begins with Adam Smith’s contempt for the chartered company, and runs through Hodgskin and the English radicals who wanted to abolish privilege so that labour might keep its own. It includes Cobden and Bright, who thought free trade would make the world both richer and more peaceful, and who spent their lives fighting the landed interest and the war party. It includes Auberon Herbert, who wanted the State reduced to the defence of person and property and everything else left to voluntary effort. Across the Atlantic it includes Tucker, who saw that the money monopoly and the patent were as much instruments of exploitation as the tariff. In 1965, Rothbard wrote an essay called “Left and Right: The Prospects for Liberty,” in which he argued that classical liberalism had been the original radical party, the party of liberty and progress against an old order of privilege, and that socialism was a muddled attempt to reach liberal ends by conservative means. That seems to me a better account of the nineteenth century than the one Michéa gives, and it puts me where I want to be.

If I need a name, then, I am a radical liberal of the old sort, who has added to Smith and Cobden a hostility to the limited liability company that they would have understood, and a faith in invention that they would have shared. I am conservative in my tastes and radical in my politics, and I see no contradiction in that. The things I want to conserve were made by free people over long periods of time, and they have been damaged chiefly by the State and by the interests that live off it. The author of that essay was right to say that much of what calls itself conservatism today is incoherent. Its incoherence lies in defending the corporate State while lamenting what the corporate State has done. His remedy was to make the State larger and give it a racial mission. Mine is to take away its power to grant privileges, and see what free people make of the world when they must answer for their own conduct and are allowed to keep what they earn.