Liberalism and Imperialism
Keith Windschuttle
The New Criterion
December, 1998
reprinted in Hilton Kramer and Roger Kimball (eds.) The Betrayal of Liberalism, Ivan R. Dee, Chicago, 1999

To propose that Great Britain should voluntarily give up all authority over her colonies, and leave them to elect their own magistrates, to enact their own laws, and to make peace and war as they might think proper, would be to propose such a measure as never was, and never will be adopted, by any nation in the world… If it was adopted, however, Great Britain would not only be immediately freed from the whole annual expense of the peace establishment of the colonies, but might settle with them such a treaty of commerce as could effectually secure to her a free trade, more advantageous to the great body of the people, though less so to the merchants, than the monopoly which she at present enjoys… [I]nstead of turbulent and factious subjects, [they would] become our most faithful, affectionate, and generous allies; and the same sort of parental affection on the one side, and filial respect on the other, might revive between Great Britain and her colonies, which used to subsist between those of ancient Greece and the mother city from which they descended.

-- Adam Smith, The Wealth of Nations, 1776

Western imperialism is widely regarded among liberal thinkers today as the most damning indictment of Western culture. As the process unfolded over the past five hundred years, it was accompanied, we are now frequently told, by unconscionable exploitation and in some cases the near total destruction of the indigenous inhabitants of the European colonies, together with widespread slavery and gross abuse of indentured labor, not to mention the rampant destruction of the environment. Moreover, rather than reproaches of this kind waning as the era of European colonialism in Asia and Africa recedes into distant memory, they appear to be increasing.

Today, few undergraduates of European ancestry can complete a degree in the humanities at any Western university without being made thoroughly ashamed of the imperial crimes of their forbears. In the past decade, the leading lights of the 'post-colonial' movement in literary criticism, Edward Said, Homi Bhabha and Gayatri Spivak, have achieved celebrity status for their claims that Western culture is inherently and irrepressibly racist and imperialist. One result is that the old heroes of literary and popular culture, the men who won the West and who explored the wilderness, are now seen as the villains. Their places have been taken by those who fought imperial oppression, the Geronimos, the Ghandis and the Mandelas. Among the signs of our times are the obligations now routinely assumed by Presidents and Prime Ministers throughout the West to offer apologies and compensation to the descendants of the victims. A new book by a British writer has even argued that its imperial record has cost Europe its claim to being civilized.

Over five centuries Europeans, armed with a set of invincible stereotypes, devoured tribal society across four continents. The image of the bestial and pitiless savage which licensed this onslaught was never more a portrait of the Mexica, or the Inca, or the Nama, the Herero, the Tasmanians, or even the tigers of humankind, the Apache, than it was an image of Europe's own destructive capacity. It is a prevailing irony of this story that as the tide of European conquest engulfed tribal peoples, so the colonists' civilization succumbed to a savage whom they had so violently condemned. But the savage was within themselves.

This quotation is from Mark Cocker's Rivers of Blood, Rivers of Gold, (1998) which describes the European conquest of the tribal societies of North and Central America, Australia and South West Africa as "one of the great acts of human destruction, comparable to the Nazi holocaust, or the Stalinist purges of the Soviet Union, or the mass slaughters of communist China." It follows another book on the same subject by the Swedish author, Sven Lindquist, called Exterminate All the Brutes, (1996) a title derived from Joseph Conrad's Heart of Darkness, which the author claims epitomizes what European imperialism was all about.

In the hands of those literary critics who call themselves cultural historians, behavior of this kind is not treated as an aberration-it was built into Western culture, they maintain, from the start. For instance, Edward Said in Orientalism, says that as early as the Iliad and the first Greek dramas, Europe drew an aggressive line between itself and "the Other" of Asia. Europe portrayed itself as "powerful and articulate; Asia is defeated and distant". Moreover, argues Richard Waswo in The Founding Legend of Western Civilization (1996), this aggressive division has been perpetuated intact down through the ages. He chronicles the legend of the fall of Troy and the founding of Rome, which he calls a "legend of perpetual colonization" that "became the rationale for imperialist attitudes from ancient Rome to Vietnam". The story is manifest, he says, in cultural expressions as diverse as The Aeneid, the Faerie Queene, the fiction of Joseph Conrad and E. M. Forster, the films of John Ford, in American policy in Vietnam, and even in the current policies of the World Bank.

Although these authors affect a sweeping command of Western culture, one thing that is conspicuously absent from their writing is any awareness of the genre they inhabit themselves, that is, the tradition of anti-imperialism. Many of them write as if they believe the critique of imperialism first emerged among its colonized subjects as a protest at their bondage. The most they concede to the Western side of the equation is that anti-imperialism also arose within Marxism, especially Lenin's book Imperialism: The Highest Stage of Capitalism. (Marx himself, some are aware, was in favor of British rule in India, which he thought would hasten the world revolution).

The reality, however, is quite different. Since the Middle Ages, the merits of imperialism have been the subject of an extensive debate within Western culture. Much of this debate has been sharply polarized and there have been few times and places in which a favorable policy has been unequivocally endorsed. For most of the past millennium, argument has focused on the political consequences of empire, but since the seventeenth century it has been matter of sustained debate about economic policy as well. In the last two hundred years, the intellectual tradition that has raised most objections to imperialism has been not Marxism but liberalism. Indeed, Lenin's work on the subject is no more than a thinly modified expropriation of the book Imperialism: A Study, published in 1902 by the English liberal writer, J. A. Hobson. One of the ironies of the debate in the 1990s is that the author of Rivers of Blood, Rivers of Gold is a journalist on the Guardian newspaper in England, which in the nineteenth century and for most of the twentieth was known as the Manchester Guardian. Under this name, it was a liberal, anti-imperialist journal whose record provides an effective counter example to the one-dimensional, ahistorical caricature of the story told by writers like Said, Bhabha, Spivak and Mark Cocker himself.

As the quotation from Adam Smith at the start of this article indicates, there have long been prominent authors in the liberal tradition who have insisted that imperialism is against the financial, military and cultural interests of Europe. Smith was by no means the first to express such sentiments; they preceded him by centuries. It is also true, however, that in the second half of the nineteenth century a version of liberalism emerged that became complicit with the imperialism of the era, especially with the plethora of annexation that culminated in the "scramble for Africa" after 1880. To talk sensibly about the true relationship between European culture and imperialism, these two strands of liberalism need to be disentangled and placed within their historic context.

Since the fall of Rome, the nature of the Roman Empire and the causes of its decline have occupied a unique place in the Western mind. Anthony Pagden has argued in Lords of All the World (1995), that for much of this period the lesson heeded was that the fate of Rome demonstrated there was a point beyond which all empires could not grow. On reaching this point, they would begin to falter and then progressively degenerate. Their administrative competence would become enfeebled, their military forces would be spread too thinly, and the metropolis would begin to lose its original character and virtue. Once imperial expansion had begun, so it was reasoned, the process fed upon itself and became ungovernable. It eventually became a threat to the stability and prosperity of the capital itself. In 1795 Immanuel Kant summarized this view: "For the laws progressively lose their impact as the government increases its range, and a soulless despotism, after crushing the germs of goodness, will finally lapse into anarchy." Had the Romans remained in Italy, a number of seventeenth century scholars argued, their sovereignty would have lasted forever. Edward Gibbon provided his own age with the full story:

The rise of a city which swelled into an empire, may deserve as a singular prodigy, the reflection of a philosophic mind. But the decline of Rome was the natural and inevitable effect of immoderate greatness. Prosperity ripened the principle of decay; the causes of destruction multiplied with the extent of conquest; and as soon as time, or accident, had removed the artificial supports, the stupendous fabric yielded to the pressure of its own weight.

The lesson of Rome had a powerful influence on public policy among the states of Europe that emerged from the Dark Ages. The republican city-states of medieval and Renaissance Italy and the Hanseatic League of cities on the Baltic Sea, though all had extensive overseas trade networks, consciously developed a culture that elevated commercial gain over military glory and discouraged expansionary ambitions. Similarly, throughout the seventeenth and eighteenth centuries, the republic of the United Netherlands was only willing to become involved in wars that furthered the nation's commercial interests, and restricted overseas expansion to trading posts.

Until the nineteenth century, the principal exceptions to this pattern had been the empires of Spain and Portugal, and to a lesser extent, France. The two Iberian kingdoms had willingly embraced the model of Imperium Romanum when they embarked upon a course of conquest and direct rule over vast tracts of territory in the Americas, India, China and the Pacific. However, within a hundred years, their example was being held up elsewhere in Europe as confirmation of the original thesis about the inevitable fate of over-reached empires. Spain, in particular, was regarded as a victim of its conquests. The American mines that had initially poured so much gold and silver into the Spanish treasury had blinded its rulers to the fact that long-term prosperity could only come from agriculture and trade. The defense of their American possessions, and their attempt to impose an internal cultural, legal and religious uniformity upon them, were impoverishing the country. By the 1820s, the Spanish empire in the Americas was all but lost. The founder of the Bank of England, William Paterson, observed: "The Indies, properly speaking, may be said to have conquered the Spaniards, rather than having been conquered by them."

When the British initially arrived in the Americas they emulated the Roman ambitions of their Iberian rivals. Henry VII's letters patent to John Cabot in 1496 gave him rights to "conquer and possess" any territory not already in Christian hands. Elizabeth I urged the same upon Sir Walter Raleigh in 1584. However, it became clear to the British by the seventeenth century that the future of their global interests lay not in further territorial gains but in trade which, in turn, depended not upon conquests on land but upon control of the seas. The Scottish author, Andrew Fletcher, declared in 1698: "The Sea is the only Empire which can naturally belong to us. Conquest is not in our Interest". Instead of Rome, the ancient imperial model the British eventually chose to emulate was that of Greece. Unlike the Romans, the Athenians had established colonies around the Mediterranean that had been independent partners of the metropolis. In 1704, Fletcher described Britain's empire as a replica of the Archaen League of ancient Greece, a model that was later applied by James Madison and James Wilson to their proposals for a federal structure for the United States. Of course, by 1776 the British king and his government demonstrated themselves most reluctant to see this model enshrined in the actual independence of the American colonies. Nonetheless, there were many British liberals at the time who, like Adam Smith in The Wealth of Nations, endorsed the Greek ideal of colonies as children who would grow to be the "faithful, affectionate, and generous allies" of the parent. Prominent among these was the philosopher and historian, David Hume, who pointed out in February 1776 that it would be impossible for a European power to forcibly hold down an overseas colony whose inhabitants belonged to much the same culture: even if the reconquest of Britain's American colonies was successful, Hume asked rhetorically, "how would they be governed?"

Hume, Smith and Gibbon expressed views that had by and large prevailed within educated opinion of the liberal variety by the end of the eighteenth century, in both Britain and on the Continent. In France, Diderot and Montesquieu had argued that the expansion of kingdoms should be confined to "sweet commerce", which constituted the proper relationship between peoples and which offered the best prospect of checking the proliferation of modern warfare. By 1800, most of "enlightened" Europe agreed that large-scale overseas dependencies were not only economically unviable but politically undesirable because, as the British had found in 1776, the French had discovered in the 1790s, and Spain was to confirm in the 1820s and 1830s, they could even threaten the stability of the metropolitan powers. Moreover, Britain and France had realized in the Caribbean that the brutal exploitation of forced native labor and of imported slave labor not only offended against Christian ethics but was wasteful of economic resources and uncompetitive with the output of commercial agriculture on the American mainland. The Caribbean had also demonstrated that African slaves and indentured native laborers could, as they did at St Domingue in 1791, display the same potential for revolutionary discontent as the settlements of independent European farmers.

This liberal opinion, however, was not enough to curb imperial expansion. During the Napoleonic wars, the British established a series of naval bases to preserve its ocean trade from disruption by France and its allies. After 1815 it turned several of these bases into permanent entry points into Africa, South America, the Persian Gulf, south-east Asia and the Far East. In 1820 it established a new colony at the Cape of Good Hope and in 1840 did the same in New Zealand. By the 1880s, most of the naval bases and entry points had expanded to such an extent that they had become the components of a mighty empire on which the sun never set.

The most convincing explanation of this transformation is that of the economic historians P. J. Cain and A. G. Hopkins. Their two-volume British Imperialism (1993) argues that the seeds of the nineteenth century empire were sewn with the financial revolution that followed the Glorious Revolution of 1688. This eventually led to the emergence of a class of "gentlemanly capitalists" or "merchant bankers and merchant princes", centered on the great financial houses of the City of London. Gentlemanly capitalism, Cain and Hopkins argue, had close ties to the government and military and helped to promote expansionist forces of investment, commerce and migration throughout the world. Its main objective was to create an international trading system centered on London and mediated by sterling. World trade was to be financed by short-term credits, while world development was to be promoted initially by long-term loans to foreign governments and subsequently through direct overseas investments. The resulting expansion of global commerce was to be handled, transported and insured by British firms. These aims were all fulfilled. Between 1870 and 1914, Britain supplied forty per cent of the world's total of exported capital.

Cain and Hopkins argue that, in its early stages, there was no sharp break between this vision and that of the Enlightenment. It was based on the liberal idea of improvement and retained a faith in free trade, both of which Britain hoped could be exported worldwide. Moreover, the gentlemanly capitalism model, while obviously expansionist, was neither inevitably imperialist nor militarist. It found many willing clients among governments, investors, developers and traders on each of the Asian, African, Australian and American continents. It became imperialist, they argue, primarily to protect its investments, either because, as in the case of several members of the Ottoman Empire, the local political system was incapable on its own, and without reform, of guaranteeing them, or when they were threatened by other imperial or nationalist rivalry. Another reason why Britain eventually re-adopted the Roman model of empire-openly symbolized by the proclamation in 1876 of Queen Victoria as Empress of India-was for its impact on domestic politics. Though liberal, the gentlemanly capitalist system was far from being democratic or republican. Throughout the nineteenth century it conceded democratic reforms only reluctantly and to evade crises. Overseas expansion and imperialism played a vital role, Cain and Hopkins argue, in maintaining property and privilege at home in an age of social upheaval. It did this partly by securing cheap food and raw materials from its dominions and major trading partners, partly through the ideological appeal of manly exploits and an international civilizing mission, and partly through the theatrical attraction of a Queen and her government bestriding the world like a colossus. Imperialism thus became an integral part of the configuration of British society, which it both reinforced and expressed.

Although Marx's analyses of nineteenth century imperialism claimed that it served the interests of the new industrial middle class, Cain and Hopkins point out that manufacturers did not possess enough individual wealth or power to be major players among the British imperial elite. Moreover, their concentration in the north of England and their lack of connections through their want of genteel family backgrounds and elite school education, meant they were not sufficiently acceptable to impose their will on the political system. The "moneyed interests' were not subservient to the industrialists, as Marx claimed, but vice versa.

Within this context, the northern manufacturers produced a political movement of their own with an independent political and economic theory. While strongly supporting overseas trade, this movement came out against both militarism and imperial expansion. Known as "Radicalism", it was originally a tendency within the Liberal Party. Its leading spokesmen were John Bright and Richard Cobden who represented what was known as the Manchester School of liberalism and who were the staunchest defenders of laissez faire, the small state and individual self-reliance. Cobden, who became notorious in the 1850s for his opposition to the Crimean War, saw himself and his constituents as the true heirs of the principles of Adam Smith. For Cobden, free trade was as much an ethical and political issue as a matter of economics: "I see in the Free Trade principle that which shall act on the moral world as the principle of gravitation in the universe", he said, "drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in bonds of eternal peace." He told an audience at Manchester in 1846:

I believe that the desire and the motive for large and mighty empires; for gigantic armies and great navies -- for those materials which are used for the destruction of life and the desolation of the rewards of labour -- will die away; I believe that such things will cease to be necessary, or to be used, when man becomes one family, and freely exchanges the fruits of his labour with his brother man.

Although Radicalism helped elevate two British prime ministers, Gladstone and Lloyd-George, it was no match for the alternative movement that came to dominate the Liberal Party in the 1880s, the high point of British imperial expansion. This was Liberal Imperialism -- also known as New Liberalism -- which sneered at the Radicals as "little Englanders" and regarded their pacifism as naïve in a world where Germany and Russia had emerged as aggressive new powers. Under the influence of Liberal Imperialism, some one-time Radicals like Joseph Chamberlain abandoned their creed to eventually become the most zealous prophets of Imperium Brittanica. Many of the rest broke with Liberalism after 1900 and shifted their center of gravity leftwards, taking their pacifism and anti-militarism into the new Labour Party.

Apart from imperialism itself, the political issue on which the traditional version of liberalism foundered was the role of the state. This had two dimensions: one at the level of political theory; the other within electoral politics that followed the extension of the franchise. Classical liberal political theory had regarded the state as a necessary evil whose optimum size was as small as possible. However, the high Victorian era saw the emergence of a different perspective. At Oxford, political theorists imported the German idealist philosophy of G. W. F. Hegel, which held that the institutions of society are the concrete embodiment of ethical values. The state thus has a greater claim upon the allegiance of the individual than conscience. At Oxford, the philosophers T. H. Green, F. H. Bradley and Bernard Bosanquet taught Hegelianism to the generation of statesmen and public figures who were to govern the empire in the period of high imperialism. They included the future Viceroy of India, Lord Curzon; the South African Proconsul, Lord Milner; the Liberal Prime Minister from 1908-16, Herbert Asquith; and Liberal foreign secretary from 1905-16, Sir Edward Grey. The philosophers Green and Bosanquet were both prominent in Liberal Party politics and used Hegelianism to make a profound about-face in liberal doctrine: liberty was no longer to be defined as freedom from the state; liberty was now something delivered through the state.

While Hegelian idealism was too arcane to be of direct influence in any but the most exalted circles, its challenge to classical liberalism coincided with the growth of democratic politics. The Reform Bills of 1867 and 1884 extended the franchise to males in virtually all social classes. The new concept of the state sanctioned the existing political parties to abandon laissez faire and to appeal to these new voters with the promise of social legislation and welfare reform. Whereas classical liberalism regarded the state as a necessary evil, the democratic perspective of New Liberalism saw the state as a necessary good that was capable of removing or alleviating the insecurities and misfortunes of the newly enfranchised lower orders. It was the Liberal Imperialist governments of 1906-16 that went furthest in delivering tangible legislation to back these ideas: the Workmen's Compensation Act of 1906, the Old Age Pension Act of 1908, the Minimum Wage Act of 1909 and the National Insurance Act of 1911. The Welfare State of the later twentieth century was largely an unfolding of the principles and measures introduced in these years.

The two Liberal governments that made these reforms held power with the support of the Labour Party, which by then had become the repository of the anti-militarist and anti-imperialist cause of the old Radicalism. As they were to discover in 1914, however, the pacifists had as little influence on the Labour Party as they had had on their former political partners. The intellectual elite of Labour was composed of people who shared a close affinity, in terms of education, social class, personal contacts and political philosophy, with the ruling Liberal Imperialists. In particular, the members of the Fabian Society, headed by Sidney and Beatrice Webb, wrote policy documents for both Labour and Liberal Parties. With their dedication to social planning and a strong state, the Webbs saw their main enemies located not among the conservatives of the Tory Party but within the thinning ranks of adherents of Cobdenite laissez faire. The London School of Economics was founded by the Webbs and the Liberal politician R. B. (later Lord) Haldane not to enshrine classical political economy but to sanction far greater state spending than financial orthodoxy then thought tolerable, as well as to provide a rationale for the Fabian policy of state ownership of key sectors of British industry.

Their relations with the Labour Party earned the Fabians the epithet of "the black-coated proletariat", but they had much more in common with the ruling class than the class struggle. Indeed, on occasions they could not hide their contempt for the lower orders who they saw not as constituents to serve but as obstacles to overcome. The Fabian playwright, George Bernard Shaw, wrote in 1904:

Capitalism has created, as it formerly did in Rome, an irresistible proletarian bodyguard of laborers whose immediate interests are bound up with those of the capitalists, and who are, like their Roman prototypes, more rapacious, more rancorous in their Primrose partisanship, and more hardened against all the larger social considerations, than their masters, simply because they are more needy, ignorant and irresponsible.

Instead, the Fabians and leading Liberal Imperialists preferred close business and personal contacts with each other, constituting a social circle that also included bankers and some Conservative journalists and politicians. H. G. Wells, originally a member of the group, wrote a venomous account of them in 1911 in The New Machiavelli, describing them as "very keen on military organization", who were determined to greatly increase state spending on education and social reforms, and who were unfazed about a likely war with Germany. Indeed, a war of this scale, they reasoned, would require a planned economy which would need to be directed by people like themselves. The historian Elie Halévy, discussing the Webbs when he first met them, recorded that:

their socialism was profoundly anti-liberal. They did not hate the Tories, indeed they were extraordinarily lenient to them, but they had no mercy for Gladstonian Liberalism. It was the time of the Boer War and both the advanced liberals and the men who were beginning to form the Labour Party had generously sided with the Boers against British Imperialism, in the name of freedom and humanity. But the two Webbs and their friend, Bernard Shaw, stood apart. They were ostentatiously imperialistic. The independence of small nations might mean something to the liberal individualist. It meant nothing to collectivists like themselves. I can still hear Sidney Webb explaining to me that the future belonged to the great administrative nations, where the officials govern and the police keep order.

Halévy also cited Bernard Shaw discussing politics in terms that would become more familiar in the speeches of the great dictators of the 1930s: "The world is to the big and powerful states by necessity: and the little ones must come within their border or be crushed out of existence."

In the event, the Fabians did not get to direct the first war against Germany, (though it was a different story in the Second World War and especially its aftermath when their plans for the welfare state and the nationalization of coal, steel and utilities were largely achieved). There was one consequence of the first war, however, that they soon came to believe fulfilled everything they stood for: the Bolshevik Revolution. In 1932, the Webbs became one of the most famous of the "political pilgrims" who visited the Soviet Union and pronounced it a marvel of social planning and progressive reform. They "fell in love" with what they found there and wrote their final book together, Soviet Communism: A New Civilization? (1935), extolling its virtues.

On the other hand, the first third of the twentieth century seemed to have rung the death knell of classical liberalism. In these years, apart from its name, what kept the Liberal Party "liberal" was its nominal adherence to the free trade component of Adam Smith's economics. But free trade was not the defining issue. Even the Labour Party as late as the 1920s supported free trade against protection on the grounds that it provided workers with cheap food. The real point, as it had always been, was the relationship between the individual and the state. On this question, any difference between the Liberal Imperialists and the socialists within the Labour Party was of degree, not principle. Both thought the modern era demanded a considerable increase in the role and authority of the state. In 1925, one of the prophets of the new age, John Maynard Keynes, declared the liberals of the old Radicalism to be personae non grata. He said the Liberal Party "must emancipate itself from the dead wood of the past".

In my opinion there is now no place, except in the Left wing of the Conservative party, for those whose hearts are set on old-fashioned individualism and laissez faire in all their rigor-greatly though these contributed to the success of the nineteenth century. I say this, not because I think that these doctrines were wrong in the conditions which gave birth to them … but because they have ceased to be applicable to modern conditions.

Once the First World War had begun, the pacifist and anti-imperialist wing of old Radicalism was largely a spent force. In 1914, the Manchester Guardian had opposed Britain's engagement in war with Germany, but once hostilities started it largely fell in line with popular opinion. There were very few traditional liberals who had the courage of the convictions of the philosopher Bertrand Russell. His opposition to the war cost him his post at Cambridge and earned him a prison sentence. Russell, who was for some time a socialist and a visitor to the Soviet Union in 1920 (where, unlike the Webbs, he immediately became disillusioned with the Bolshevik regime) deserves to be seen as a far more important figure in determining the fate of the old liberalism than is usually credited. He became one of the architects of the eventual re-birth of classical liberalism in the twentieth century. He did this principally by undermining the philosophical foundations of neo-Hegelianism and its political derivatives. Though he had himself been a student and early supporter of British Hegelianism, it was he and G. E. Moore who became disenchanted enough to wage a successful counterattack. In the name of traditional empiricism and what came to be called analytic philosophy, they routed philosophical idealism and the various speculative and grand theories that derived from it. In the long run, this was to have an impact not only on philosophy but on politics as well. Russell was a principal force in creating the cleavage between Anglo-American philosophy and Continental philosophy, which holds to this day. This great divide meant that the ideas of Hegel, Marx and Heidegger, and their attendant politics of Communism and Nazism, which won so many adherents in Germany, France and Italy, were far less influential within educated opinion in Britain and the United States. Or, rather, they were less influential when it really counted, that is, when these ideologies were serious contestants with Western liberal democracy for intellectual and political hegemony during the 1930s, 1940s and the Cold War.

Among Russell's later philosophical allies were members of what was known as the "Vienna Circle" of logical positivists. Carl Hempel, Rudolf Carnap and others had left their home in the 1930s for the United States where they produced the same kind of hard-nosed, non-speculative thought that Russell had championed in Britain. Vienna also produced another young man of a similar cast of mind who applied it to politics and economics when he, too, left at about the same time. Friedrich von Hayek taught economics at the University of London in the 1930s and, while employed by the London School of Economics in 1944, he produced The Road to Serfdom, a powerful indictment of the School's Fabian founders and of the plans for post-war reconstruction prepared by the Labour Party. Hayek identified these policies as little different to the national socialism the British were fighting on the Continent. They had been "bodily taken over from the German ideology".

Twenty five years ago there was perhaps still some excuse for holding the naïve belief "that a planned society can be a far more free society than the competitive laissez faire order it has come to replace". But to find it once more held after twenty five years of experience and the re-examination of the old beliefs to which this experience has led, and at a time when we are fighting the results of those very doctrines, is tragic beyond words.

Hayek argued that social planning and communism were two sides of the same coin and that the only genuine alternative to them were the ideas of classical liberalism, of which the wartime generation, reared for so long on New Liberalism, was now hardly aware. However, once the war was over and the Labour Party's post-war reconstruction had begun, Hayek's views were quickly relegated to the far Right of the political spectrum. This was partly because, although most Western countries adopted the Labour brand of social planning, there had emerged no resulting diminution of political liberty, as Hayek had predicted. It was also because the New Liberal economic theories of John Maynard Keynes delivered a long period of growth, high wages and prosperity. In the 1950s Hayek moved to the University of Chicago where one of his colleagues was Milton Friedman, a kindred spirit in commitment to traditional laissez faire liberalism. For the next twenty years, while the "Keynesian revolution" held sway over all Western economies, Hayek and Friedman worked on their own counter-revolution, designing an approach derived from classical economics that could maximize economic growth while minimizing state intervention.

It was not until the 1970s, when Keynesianism had degenerated into stagflation (growing inflation plus growing unemployment) that Western governments began to look around for an alternative. By this time, the Chicago school's counter-revolution called "monetarism" had established its intellectual credentials. Hayek was awarded the Nobel Prize for economics in 1974 and Friedman won it in 1976. By 1979, Margaret Thatcher and Ronald Reagan were both running for office on platforms based on a revival of classical economics and liberalism.

The period since then has been a remarkable triumph of this approach: in effect, the revival of the old Radicalism of the nineteenth century by the new Conservatism of the late twentieth century. What Keynes dismissed in the 1920s as a small rump on the left of the Conservative Party has grown to become the dominant political force of our time. Those Western nations who have chosen to ignore the British and American examples and persevered with government intervention plus a big, generous welfare state, have all found the result has been low economic growth plus persistently high unemployment that has consigned ten per cent and more of the lower orders to underclass status. For a time, it seemed that the rapid growth of the "tiger economies" of East and South-East Asia in the 1980s might provide an alternative approach through their version of state-directed capitalism based on industry policies and ministries of technology. However, the crises that have swept through these economies in the last two years have revealed them as the vulnerable beasts that classical economics has always predicted.

As they have worked themselves out over the past two hundred years, then, the sweeping turns in the history of liberalism's stands on imperialism and the state have provided a number of object lessons. Apart from endorsing classical liberalism and classical economics as the best guarantees of both freedom and prosperity, the story indicates that the current efforts by British and European social democratic governments and their academic advisors to find a "Third Way" that preserves capitalism while expanding "social justice", are most likely to be fruitless. There is no new Third Way. The most likely contenders, the New Liberalism of the imperial era, Keynesian economics and the interventionist state, have already been tried and found wanting.

This story also gives the lie to the currently academic fashion for denigrating the whole of Western culture on the basis of its imperial record. The West has long nurtured an intellectual tradition that has been opposed to imperialism and the conquest of others. This tradition might not have always been in the ascendancy, but its persistence over the centuries is impressive and, at this point in history, it reigns throughout its home turf without a serious challenger. The great irony of this part of the story is that those who today most loudly denounce the historic crimes of Western imperialism are working within an intellectual framework generated by the German philosophy of either Marx, Nietzsche or Heidegger, whose followers not only have records for homicide that are unequalled in human history, but who are themselves all indebted to the same Hegelianism that was used to sanction British imperialism at its highest stage.

There are, of course, no guarantees that any of the above lessons will be heeded in the future or even remembered for very long. The last two decades have seen a revival of idealism and irrationalism within Western intellectual life, and the philosophies of Hegel and his heirs are once more being taken seriously in academic quarters. In some cases, such as the current fashion for these ideas among literary critics and social theorists in our universities, they may well cause the cultural alienation of a generation of undergraduates, with consequences that are difficult to predict. In others, such as the recent endorsement of Hegel's philosophy by the US State Department official, Francis Fukuyama, the outcome is also unpredictable. So far, Fukuyama appears to have generated few followers and, indeed, the American version of liberal democracy that he claims has brought us to "the end of history" seems an unpromising site for a Hegelian revival. As the British example demonstrated a century ago, a political elite susceptible to Hegelianism is unlikely to be either liberal or democratic. Nonetheless, the record of this particular infection in penetrating the Western mind over two centuries should not be underestimated. Its epidemiology shows that, like anthrax, it can often lie dormant for a generation or two before becoming virulent again. Constant exposure appears to be the only effective immunization.