The Genius of Western Tradition

Written By: Julia Tyack

 The success of Western prosperity and progress can be traced to two prominent features in Western history (specifically English history) the restraint and legal limitation of the state/government and the legal protection of individual freedom and rights (the rights to property, protected investment and invention, production and trade. These two features have been best expressed in the classic British liberalism of the 17th and 18th Centuries or in what is known as the Libertarian tradition (see, for instance, Libertarianism by David Boaz).

In subsequent centuries these two fundamental elements of Western freedom and rights have suffered ongoing assault from repeated attempts to increase government taxation, spending, intervention and regulation.  One notable period of such increased government intrusion was in post-war America where total government spending (federal, state, and local) grew from 25 percent of national income in 1950 to 45 percent of national income in 1993 (Milton Friedman in his Introduction to Hayek’s The Road to Serfdom. p.xvi). This excessive intrusion undermined post war rates of growth and we are now 40 percent poorer than we should be, according to David Boaz (Libertarianism, p.4).

Indur Goklany notes research which shows that as the size of government expenditure increases (measured by government spending as a percentage of GDP), the annual growth rate declines.  Countries with government spending at less than 25 percent of GDP have had annual growth rates of 6.6 percent.  When government spending was more than 60 percent of GDP then the annual growth rate has dropped to 1.6 percent.  He says (referring to a detailed analysis by James Gwartney and others, of the relationship between annual economic growth rates and government expenditure between 1960and 1996).  Essentially, they found that a 10 percent increase in government expenditure (as a share of GDP) translated into a 1 percent drop in annual economic growth rate. These results are broadly consistent with those of other leading researchers” (The Improving State of the World, p.94).

This would confirm the wisdom of Milton Friedman in arguing that government at all levels should be reduced to no more than 10 to 15 percent of the economy for all functions, including defense (Milton Friedman by Lanny Ebenstein, p.234).  As Lebenstein noted, “(Friedman) believes that by restricting government to the functions of defending the nation from foreign enemies, protecting each of us from coercion by our fellow citizens, adjudicating our disputes, and enabling us to agree on the rules that we shall follow, humanity could produce the most and be happiest and freest”.

But let me return to the two great features of freedom that have inspired the amazing outburst of progress in Western economic prosperity and democracy.  William Bernstein traces the emergence of these features to the reign of King John of England at the beginning of the second millennium.  To raise funds for further military action against an opponent (Philip Augustus in the Normandy campaign) King John “encroached on the lands of his barons, raised rents on royal tenants and confiscated their property arbitrarily” (p.68).  He also promulgated laws and penalties retroactively and without warning.  The barons and their subjects finally rose up, occupied London in 1214, and forced the King into negotiations.  The combatants, says Bernstein, finally agreed to end hostilities by signing a long agreement that came to be known as the Magna Carta (which was an affirmation of English Common Law- “case law that governed the rights, duties, and punishment of all Englishmen- commoners, aristocrats and even the monarch”, p.68).  Bernstein notes that the Magna Carta forced the king to return illegally appropriated properties and to not repeat such theft.  It also codified the rights of Englishmen and extended them to all freemen, and it described in detail the procedures required to secure those rights.

Bernstein comments on the impact of this document:  For the first time in history, the king was held not to be above the law.  In other words, the king could not arbitrarily deprive any man of his life, liberty, or property.  Due process was required, predating Coke, Locke, and Jefferson by six centuries? (p.70). What was the historical impact of this agreement? Bernstein continues:  Note since the halcyon days of Greek democracy had so much freedom been granted to so many.  With that freedom came the opportunity to prosper. It is not too great a leap to see King John’s capitulation on June 15, 1215 as the fuse that would detonate the later explosion of world economic growth.  for all practical purposes, Magna Carta marked ground zero for the explosion of individual personal and property rights whose shock waves reverberate around the globe to this day.  The origins of modern economic prosperity are inextricably intertwined with the development of property rights and individual rights in England, beginning shortly after the start of the second millennium.  This does not mean that property rights did not evolve independently in other locations, most notably in Renaissance Italy and later, in Holland.  But it was in the Sceptered Isle that these rights attained a vigor, momentum, and importance that forever altered the course of world history. (p.71, 67).

Bernstein further notes,

Further developments strengthened the force of these two primary driving features of Western society.  For the first time, the king was explicitly subject to the common law.  Thus did equality under the law, applying to both the free peasant and to the king, make its first appearance in human history (p.73).  This was the beginning of ‘despotism’s decay’, says Bernstein, a process that continues to this day across the globe.

The Glorious Revolution of 1688 saw the invitation of Prince William of Holland to ascend the British throne as part of a deal to restore political and financial stability to England.  In exchange, William gave Parliament legal supremacy . The Crown could no longer dissolve Parliament, and the notorious Star Chambers (Crown courts whose often barbarous rulings superseded those of Common law) were abolished (p.209). Parliament came firmly under the control of the electorate.  The result was that Ordinary Britons, no longer fearful of royal default and seizure, gradually began to trust the capital markets. (p.210)

Confirming his assertion of the impact these developments had on subsequent world history, Bernstein then lists the spread of liberal democracies over the subsequent centuries:

1790- 3

1848- 5

1900- 13

1919- 25

1940- 13 (a brief interruption coinciding with the interwar rise of fascism)

1960- 36

1975- 30

1990- 61

Why exactly did the restraint of monarchal power (government) and the legal protection of individual rights produce so much good over subsequent history?  In previous eras the rulers made and enforced laws.  That environment imperiled the life and property of ordinary citizens, says Bernstein, who had little incentive to innovate and invest (p.66).  Bernstein notes repeatedly this important relationship between secure individual property rights and individual incentive.  Without property rights and civil rights, little motivates the inventor or businessman to create and produce beyond his immediate needs. (p.52). Protected freedom and property rights encouraged common people to invent, invest, produce, and trade, knowing they would be securely rewarded for their efforts.  This was evident in the enclosure movement from the medieval period up to 1650.  Before this time England operated open field systems where land was held in common by farmers and their lords.  What is the effect of this collective ownership on human motivation?  Farming in the absence of clear ownership rights produces staggering economic inefficiencies, since farmers will not aggressively plow, fertilize, or otherwise improve common land.  The modern correlate of this is a maxim attributed to Lawrence Summers, Harvard University President and former US treasury secretary:  No one in the history of the world ever washed a rented car. (p.213). Bernstein adds that evolving property rights along with scientific rationalism, capital markets and modern transport and communication gave farmers, inventors, and industrialists the incentive to innovate and they produced greater quantities of everything which raised the general standard of living of almost all Englishmen (p.214).  The lesson learned was, protect private property and the owners of such property will improve it and invest and innovate further and thereby lift the entire society to higher standards of living.

Protected property rights also formed the basis for a more general political freedom.  Bernstein notes this in saying, No less a socialist luminary than Leon Trotsky observed that civil liberty flowed from property rights.  The right to property is the right that guarantees all other rights. (p.52-53). Secure property rights and other personal rights are the essence of human freedom. As Milton Friedman says, without economic freedom and rights there can be no political freedom.

It is interesting that in the US presidential election campaign (2008) few of the candidates expressed a clear grasp of this critically important history and the fundamental insights that under-gird modern prosperity and progress. Rudy Guliani has been an exception here in noting that by cutting taxes (decreasing the size and intervention of government) he was able to turn New York from deficit spending and return it to growth and prosperity (this runs counter to much conventional wisdom which argues for increased taxation to fund increasing debt.  With the decrease of taxation under Guiliani’s tenure, government revenue actually rose).  He also emphasized the corollary importance of returning control and choice to average citizens and letting them create the growth that restored New York to health.

I would suggest that these two primary features of Western freedom are absolutely fundamental requirements for promoting prosperous, peaceful, and progressing nations.  They are the two most important things that any candidate for public office (or public bureaucracy of any kind) should fully understand and work to advance.

The genius of this exodus to freedom noted in this brief snippet of Western history (restraining state power, protecting individual freedom and rights) is that it simply unleashed pent up human potential (human creativity, inventiveness, entrepreneurship, risk taking) and this became the driving force behind all the success, prosperity, and progress that we have experienced since.  Guaranteed individual freedom and rights has inspired and supported history’s greatest outburst of human motivation to create, produce, buy and trade and this has fueled the economic growth and development that supports all the improvements to life that we value in the modern world.

To quote Indur Goklany, economic development provides the means to many ends, such as higher crop yields, greater food supplies per capita, greater access to safe water and sanitation, improved public health services, and better education, which in turn, help lower mortality rates and raise life expectancies.  Economic development accelerates the process of creating and diffusing new technologies, even as new technologies stimulate economic growth.  Economic development is also critical for raising the material well-being of populations and for providing them with creature comforts (The Improving State of the World, p.20).  All these elements operate in a feedback loop of inspiration and support that Bernstein calls the ‘virtuous cycle’ of growth and development.

Modern liberalism (a different variety altogether from classic British Liberalism) with its dependence on government to provide solutions (tax and spend) appears to understand nothing of this great Western heritage of freedom and individual rights.  It has adopted, instead, the collectivist orientation of socialism that seeks to promote a greater social good with collectivist schemes of public ownership, nationalization, central planning and regulation that are all inimical to true freedom and prosperity.  The only greater good that has resulted from such schemes is the equality of poverty.

We need to inform each emerging generation of this amazing Western heritage of freedom and inspire them to engage afresh the never-ending struggle to restrain state power and to protect the freedom and rights of individual persons. This is the ultimate driving force behind the ongoing progress of humanity.

Wendell Krossa wkrossa@shaw.ca