Ralph Raico in this brilliant book calls to our attention the dictum of Augustin Thierry: "The great precept that must be given to historians is to distinguish instead of confounding" (p. 136). Thierry, as Raico shows, did not always follow his own advice; but the remark perfectly describes the historical writing of Raico himself. He is master of the fine discriminations that F.R. Leavis thought essential to the task of the critic. His profound scholarship and keen intelligence make him a great historian. Indeed, he is our foremost historian of classical liberalism.
Raico begins his work of conceptual clarification by asking, what is classical liberalism – or, better, what is liberalism, since only the classical variety qualifies as liberalism properly so called. "There was no 'classical' liberalism, only a single liberalism, based on private property and the free market, that developed organically, from first to last" (p. 1).
Raico answers his definitional question in the book's initial chapter, "Classical Liberalism and the Austrian School." Liberals believe that the main institutions of society can function in entire independence of the state:
Liberalism ... is based on the conception of civil society as by and large self-regulating when its members are free to act within the very wide bounds of their individual rights. Among these, the right to private property, including freedom of contract and exchange and the free disposition of one's own labor, is given a high priority. Historically, liberalism has manifested a hostility to state action, which, it insists, should be reduced to a minimum. (p. 2)
Liberalism, so defined, seems to have an obvious affinity with Austrian economics. But here a problem arises: is not Austrian economics a value-free science? Adherence to liberalism, obviously, entails value judgments. The relation between them, then, cannot be that the economic theory logically implies the political doctrine. Indeed, enemies of classical liberalism have at times embraced tenets of the Austrians. The Fabian socialist George Bernard Shaw, influenced by Philip Wicksteed, accepted the subjective theory of value; and, Raico notes, the analytical Marxist Jon Elster finds Marxism compatible with methodological individualism. Nevertheless, Raico claims, "On the level of policy, Austrianism's individualist and subjectivist methodology tends, indirectly at least, to sway decisions in a liberal direction" (p. 8).
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