Democracy in the propertied, Lockean sense – as in Ancient Athens,  where less than one-fifth of the population enjoyed suffrage, from  which not only slaves but also women were excluded – thus found its way  to the Anglo-American world, but not to France after the fall of the ancien regime

No free state could survive without an overarching state

Where a government attempts neo-liberal shock therapy while by-passing  the pre-requisites of industrialisation and establishment of a local  manufacturing sector, it will only lead to the widening of social,  political, and cultural inequalities

Liberalism, Dayan Jayatilleka once wrote, reflects the irreducible solitude (and singularity) of the individual. It fails, however, to reflect his social conditioning: man is man, yet he is also rich, poor, privileged, or oppressed. Marx wrote somewhere that there was never one form of capitalism. Likewise, there was never one form of liberalism.  
“Some see it as Western civilisation’s gift to mankind,” notes Helena Rosenblatt, “others as the reason for its decline.” Rosenblatt further observes is that at its inception, it didn’t tout, much less prop up, unbridled capitalism; it instead connoted a social good, to be distributed rather than protected, to be administered rather than barricaded.  
Most political theorists would ascribe its origins to the Anglo-American political tradition – the founding fathers in the US and the Whigs in Britain – and to the thinking of John Locke. But as Rosenblatt puts it, it began in France, and became a political tradition in the US only in the 20th century; by then it had undergone a significant transformation.  

This is important, because we would have to discount Locke’s contribution if so. Locke and the social contract theorists of the 17th century highlighted the sanctity of private property; Rousseau and the French political theorists of the 18th century, by contrast, highlighted the role of a general will which subsumed individual (and property) rights. The one emphasised individual sovereignty, the other collective sovereignty,   
Democracy in the propertied, Lockean sense – as in Ancient Athens, where less than one-fifth of the population enjoyed suffrage, from which not only slaves but also women were excluded – thus found its way to the Anglo-American world, but not to France after the fall of the ancien regime. Alexis de Tocqueville, surveying 18th century America, admired its network of provincial assemblies. Yet in France too such institutions had been set up after the Revolution, achieving a significant level of political decentralisation.  

State-led industrialisation preceded high growth; until industrial expansion could take place, simply put, there was no other way for these economies to take off as they did

This was liberalism in the Gallic sense, later reconfigured by German philosophers. It proved to be more inclusive, democratic, and unstable than the American and British varieties. At its centre was the inexorable contradiction of any liberal state: the need for freedom versus the need for order. Or as Simon Schama observed in his study of the French Revolution, “the creation of a potent State and the creation of a community of free citizens.”  

To put it simply the one couldn’t do without the other: no free state could survive without an overarching state. What liberals who conflate their ideology with a free market capitalist ethic thus fail to realise that much of the progress attained by the superpowers of the 19th century – Britain and the US – couldn’t have been achieved without outward (in the case of Britain) and inward (in the case of the US) industrial expansion financed by the government. Following the end of the American Civil War, for instance, US railroad companies accepted grants of land running into millions of acres from Washington.  

The problem with classical liberalism, which came into prominence only in the mid 20th century, is that it assumes that economic freedom can only be achieved by restraints from political autocracy. As the history of industrialisation in the US shows, however, prosperity has been achieved hand-in-hand with the centralisation of political power.  

Classical liberals, particularly of the Austrian School of Economics led by Friedrich Hayek, could not resolve this contradiction. So they came up with the idea of a spontaneous order: the idea that free markets evolved due to human action, not human design; through the interactions of individuals, not the commands of governments. The issue with this approach is that, rehashing the earlier argument, industrial growth in the US and Britain was the result not of a spontaneous order, but of a planned one.  

The spontaneous order thesis, propounded years ago in Colombo (at an Advocata seminar) by Razeen Sally, would be that the State should be an umpire, designing and enforcing “the rules of the game” but not playing that game. Yet as the American, British, and East Asian experience shows, free market capitalism evolved in countries where the state played both umpire and player. The example of the Tokugawa shogunate in Edo Period Japan, which rigorously enforced industrialisation, must be noted here. In all these situations, state-led industrialisation preceded high growth; until industrial expansion could take place, simply put, there was no other way for these economies to take off as they did.  

The paradigm of the Austrian School, meanwhile, found little favour outside the Anglo-American world. Its vision of economic and political freedom fell apart over a decade in Latin America, where, starting in Chile, a group of economists affiliated to the Chicago School – in turn influenced by the Austrians, and Friedrich Hayek – performed shock therapy on its economies. The brutal repression of dissidents and growing inequalities of income, wealth, and power necessitated fully-fledged militarisation: the opposite of what classical liberalism had set out to achieve in the first place.  

Since then the lesson we’ve learnt is that in countries with low levels of industry, classical liberalism will prove to be irrelevant. The economies of the First World are where they are today not because they put into effect the tenets of free market liberals, but because they process raw material imported for cheap from those of the Third World, which remain as underdeveloped as ever. There’s a word for this: neo-colonialism.  

Where a government attempts neo-liberal shock therapy while by-passing the pre-requisites of industrialisation and establishment of a local manufacturing sector, it will only lead to the widening of social, political, and cultural inequalities. This will necessitate the entrenchment of the state in response to growing dissent, at once contradicting the classical liberal maxim that where economic freedom prevails, so too will political freedom. In such a scenario the government cannot afford to be just a night watchman. Especially not in countries like ours, where neither industrialisation nor local manufacture, so far, has taken off.  
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