What Happened to Ordered-Liberty?


September 10, 2012 by P. J. Toscano

Freedom is America’s sacred cow. No one can speak against it. Few examine it. The popular obsession with freedom is mostly a product of unschooled delusion.

If polled today, most Americans would probably say that slavery is the opposite of liberty. But this is untrue. The opposite of liberty is order. Liberty and Order are rival elements of the paradox of American constitutionalism. Today Republicans and Democrats alike appear to have forgotten what the framers of the American Republic clearly understood: Unfettered freedom leads to the tyranny of chaos. Unrestrained order leads to the chaos of tyranny.

Thus, the principal objective of this Nation’s founders was not freedom, but the proper balance between Liberty and Order. They understood that unrestrained liberty would allow a ruthless minority to create powerful private institutions dedicated to greed, exploitation, and the enslavement of the majority. They understood, too, that unrestrained order would allow a ruthless minority to seize the government and pass laws that suffocate and enslave (often by favoring some minority by ensuring its wealth, power, privilege and leisure). So, the framers laid the foundation of a constitutional democratic republic that holds sacred neither freedom nor order, but rather Ordered-Liberty.

Ordered-Liberty can be achieved only by laws that, at very least:

(1) Apply equally to all, including the rule-makers,

(2) Recognize the existence of individual, inalienable rights necessary to protect privacy and the private concerns of individuals,

(3) Avoid pre-determined substantive outcomes, eschew all forms of social planning, and avoid criminalizing the normative behaviors of the middle and lower classes, and

(4) Regulate sensibly any dangerous and exploitive collective endeavors.

These ideas were identified and developed in the brilliant work of Friedrich August von Hayek in his Constitution of Liberty (University of Chicago Press, 1960), his multi-volume Law, Legislation and Liberty (University of Chicago Press, 1973), and his popular summary The Road to Serfdom (University of Chicago press, 1944.)

To his discredit, Hayek allowed his critique of governmental social planning to be hi-jacked by that inveterate egotist and relentless self-promoter, Milton Friedman, who used Hayek to propagate Friedman’s Chicago School of laissez-faire economics. Friedman and his ilk refuse to apply Hayek’s deconstruction of governmental social engineering to the private sector and the totalitarian management and planning power structures that typify and animate most large domestic and international corporations and syndicates.

As a result of Friedman’s legerdemain, Mitt Romney’s running-mate, Paul Ryan, can now claim Hayek (along with Ayn Rand) as inspirations for his mindless allegiance to the popular conservative obsession with a “free” market. But like political freedom, market freedom leads to tyranny unless restrained and balanced by order. Unrestrained market freedom inevitably results in market chaos that allows a ruthless minority to prosper at the expense of a principled majority.

The current obsession with the unrestrained free market is antithetical to American constitutionalism based on Ordered-Liberty which, applied to economics, requires sensible regulation of endeavors that pose a likelihood of serious, palpable, or measurable damage to others.

In the spirit of Ordered-Liberty, Congress passed the 1933 Glass-Steagall Act that created the Federal Deposit Insurance Corporation (FDIC) and imposed reforms to control speculation by banks, especially regarding the use of depositors’ money in high-risk securities investments. This act was repealed in 1999 by the Gramm-Leach-Bliley Act, passed in the spirit of unrestrained market freedom that inevitably led to the September 15, 2008, Chapter 11 bankruptcy filing by Lehman Brothers and its $600 billion in assets. This bankruptcy filing was the short heard around the world because it triggered the year 2008 global market collapse and Great Recession from which the world has not yet recovered and from which, I believe, it cannot recover unless the principles of Ordered-Liberty are imposed upon yet unregulated market activities.

To achieve a market of Ordered-Liberty, Americans (especially Republicans and libertarians) must understand that Hayek’s critiques of governmental social planning apply with equal relevance and force to the private sector. The American Dream is not freedom and unrestrained growth for the few. The American Dream is a principled vision of Ordered-Liberty that not only eliminates arbitrary, governmental, outcome-determinative, legal barriers to prosperity for all citizens, but that regulates dangerous and exploitive private collective human endeavors as well.

The risky and improvident behaviors of investment bankers since at least 1999 demonstrate how important it is for citizens of a democratic republic based on Ordered-Liberty to oppose the unfettered freedom of private-sector pirates in pursuit of criminal greed even as they must oppose the gangster-like despotisms of communist, socialist, and fascist regimes.

A sensible and well-regulated economy, however, cannot be created or managed by extremists of the political right or left. It requires centrist pragmatism and a cooperative spirit. It appears, however, that in America these days extreme problems attract extremists to leadership roles rather than principled persons committed to maintaining in both society and the market place the delicate balance required by the founder’s vision of Ordered-Liberty.

16 thoughts on “What Happened to Ordered-Liberty?

  1. gomw says:

    Don’t read this unless you are prepared to do some serious thinking outside the box. This is heavy. I had to read it three times to wrap myself around it. The hard truth is: nothing is easy.

  2. Perhaps I’m being pedantic here, but Hayek is much more associated with the Austrian School of economics than the Chicago School–in fact, I’d never heard of anyone associating him with the Chicago School of Economics (which is neo-classical, at least since the 70’s–Milton Friedman himself was a monetarist). I may catch a lot of flak for this, but it isn’t to Hayek’s credit: Austrian economics is much less credible than the neo-classical school…

  3. Jeremiah,

    I am not schooled in economics and must concede your point. My point, however, was not that Hayek and Friedman had similar views of monetary policy or macroeconomics, but rather that Hayek’s critiques of governmental social planning, summarized in The Road to Serfdom, were used by Friedman and others to bolster their view of a “free” market unrestrained by adequate and sensible rules of order that might have prevented the economic catastrophe that began in year 2008.

  4. tariq says:

    But what is the center? My main problem with centrists is that, besides being boring, their position is dependent on where the right and the left is. Economically speaking, what we consider the center today would have been considered the right in years past and what we considered the center in years past is now considered left. In the 1980s, leftists saw Ronald Reagan as far right-wing, but nowadays many of Reagan’s policies would never gain acceptance with the tea baggers or even mainstream conservatives. Bill Clinton today is considered some great progressive, but when he was president, actual progressives thought he was too conservative. What is right and left shifts over time, and so the center shifts as well.

    This country needs radical social and economic change, not centrist change. When I say “radical,” I don’t mean extremist. I use the word radical in its original sense; radicals are people who get to the root of the problem. Paul Ryan is not a radical, he is a right-wing economic extremist. Originally, the term radical was used for socialists and anarchists (actual anarchists like Bakunin, Kropotkin, Louise Michel, Lucy Parsons, Emma Goldman, etc… Not these silly modern-day so-called “anarcho-capitalists”). Our country has ignored, marginalized, and persecuted the radical left and opted instead for two parties that basically serve the same economic interests, that basically stand for business as usual. So I don’t see the value in “centrist pragmatism” when the center is between two parties that both stand for capitalist exploitation.

    Also, what’s with all the deference for “the founders”? Which founders? They did not all agree with each other and had competing visions for America’s future. Plus, most of them were white supremacist enslavers of black people….

    What I am arguing for is the need in America for a stronger radical left rather than a stronger center.

  5. tariq

    You seem to have missed my point and seized upon and have reacted to a single phrase or two. I agree with your concept of radical. I agree that the country has shifted far to the right. I agree that not all the “founders” were exemplary in their ideas. But these responses do not address my point regarding Ordered-Liberty and the need to abandon the notion of a “free” market in favor of a market that is regulated–a balance of liberty and order. I would have thought that notion was fairly radical given the current attitude most Americans have about freedom.

    • tariq says:

      Yes, I do agree that an unrestrained supposedly “free” market is bad for the country. But I don’t see a “free” market as unrestrained liberty. Sure, it is “freedom” for the bosses to exploit people and trash the environment, but it is not freedom for the exploited workers, the displaced communities, or the persecuted union organizers. The term “free market” is just the smoke to hide the tricks.
      In any case, I think we are more or less on the same side but we use a different language.

  6. gomw says:

    My question to P. J. after reading Tariq with whom I totally agree. (I may also agree with P J and they may agree with each other) is do you consider SS, Medicare and collective bargaining as dangerous and exploitative collective endeavors. I see them more like elements of Galbraith’s countervailing power.

  7. Joseph says:

    I think this is a very reasonable post. In terms of founders, I think that it is dangerous to be too reductive in approaching what they had to say. They were complex, imperfect individuals who did not agree (a couple even had a duel I think). But this post I think is a pretty fair assessment and summary of what I remember about the Federalist Papers: Too much minority control over government is tyranny, too much freedom (or democracy) is another kind of tyranny. Minorities should rule that masses, and the masses shouldn’t be able to crush the rights of minorities. We need balance.

    I have always viewed our government as imperfect at best, and I certainly believe better arrangements are possible (even if I answer fairly conservatively on most political tests out there, I rate fairly far along the Libertarian Left spectrum). But my ideals and hopes aren’t likely to happen. As P.J. Toscano pointed out, past depressions this country was in were gotten out of by REGULATING the market, not hoping that greed will solve all our problems.

    In terms of Austrian vs. Chicago schools of thought, I think it’s splitting hairs a bit to worry about that in terms of this particular post. I also am not an economist, but I found an article shared by Boris Anisimov on the Mormon Worker Facebook page helpful in differentiating between the two but also noting their similarities:


    The similarities between the two schools of thought mentioned in the article match up with what P.J. Toscano is saying: a misguided belief in the benefits of unrestrained markets.

    Tariq, I’m probably closer to you politically and economically, but I have often taken a real politik approach to dealing with how things are in this country. And I don’t think P.J. Toscano was talking about centrism in regards political parties and candidates in the U.S. I actually think the description here of “ordered liberty” is very useful regardless of where one is on the political spectrum. It actually helped clarify some of my own thoughts that I didn’t really have words for expressing or organizing.

    Nice post.

  8. Joseph says:

    *”Minorities should rule the masses” was meant to be “minorities shouldn’t rule the masses.” I don’t know why my typos are so bad when making comments on blogs. I usually am pretty good at catching things in other formats.

    • tariq says:

      Your original wording, “Minorities should rule the masses,” was a more correct assesment. James Madison, the “father of the constitution, had a very aristocratic attitude when it came to the lower classes. He, along with many of his colleagues, did not think the lower classes should be involved in the political process. In fact, that is why we have a senate. Senators were to serve the purpose of making sure “frivolous” popular desires were checked by their aristocratic wisdom.

      Noam Chomsky has spoken and written alot about Madison. Here is some of what he says, which I agree with:

      “The main designer, furthermore, was an astute political thinker James Madison, whose views largely prevailed. In the debates on the Constitution, Madison pointed out that if elections in England” were open to all classes of people, the property of landed proprietors would be insecure. An agrarian law would soon take place,” giving land to the landless. The Constitutional system must be designed to prevent such injustice and “secure the permanent interests of the country,” which are property rights.
      Among Madisonian scholars, there is a consensus that “the Constitution was intrinsically an aristocratic document designed to check the democratic tendencies of the period,” delivering power to a “better sort” of people and excluding those who were not rich, well born, or prominent from exercising political power (Lance Banning). The primary responsibility of government is “to protect the minority of the opulent against the majority,” Madison declared. That has been the guiding principle of the democratic system from its origins until today.” http://www.thirdworldtraveler.com/Chomsky/ConsentPOP_Chom.html

      I guess talk about “ordered liberty,” balance, and founding fathers just doesn’t resonate well with me the way it does with some of ya’ll. The way this kind of talk usually translates in the real world is, balance and ordered liberty means that democrats and republicans need to come to together and compromise to find some kind of center path. I know that is not what P.J. is saying, but that is what it usually translates to in reality. But i think that both parties are already too far to the right economically, and so any center or “balanced” approach is also bound to be a win for capitalist exploitation.

      Plus, it accepts that these right wing capitalist fundamentalists really are all about freedom, when actual freedom has nothing to do with it. What they are for is privilege, not liberty. Liberty is just a word they throw around to make their greed seem like a transcendent cause. It is not a struggle of liberty versus order. It is a struggle of privilege versus justice and equality. That is how the old school anarchists and radical socialists framed it, and that is a frame that I still think is appropriate.

      • Joseph says:

        Good points, Tariq. I still see the value of balance, but the information on Madison was interesting. I never viewed all the founding fathers with equal respect, but I always respected Madison more than Hamilton. I now no longer feel that way. It’s interesting that Madison was so concerned about an “agrarian law” prevailing, since Thomas Paine (who Madison did show respect to) actually wrote an essay called “Agrarian Justice.” Also, even the racist, slave-holding Jefferson proposed exactly what Madison feared: giving tracts of land from the wealthy to help the poor get land and get started on their own. Guess that’s why he was sent out of the country during the constitutional convention.

        Ordered chaos still makes sense to me, though.

      • tariq says:

        I agree that there is value in balance. I am not trying to tear down what P.J. is saying. I am with him as far as the general principles and sentiments of what he is saying goes. The question is, a balance between what? The kind of balance I would like to see is some kind of balance between the anti-capitalist analysis of the state socialists and the anti-authoritarian analysis of the anarchists. The closest thing I’ve seen to a balance between marxism and anarchism in the U.S. is the IWW (Industrial Workers of the World) in the years leading up to WWI, though it is not the only example. What I am not interested in seeing is a balance between the ideas of ordinary conservatives and liberals. All that leads to is business as usual.
        Anyway, I hope I’m not coming off as too much of a jerk. I respect all of you folks.

      • Joseph says:

        Not to me. I think I’m probably the one who looks that way more often (though I also do not intend to do so, there’s just a compulsive gadfly in me at times). I’ve always enjoyed your comments and posts.

  9. tariq,

    In your last post you asked, “a balance between what?” My post was about a necessary balance between liberty and order, which, in my mind, translates practically into restrained regulation targeted to eliminating the worst effects of economic freedom. Social security and medicare and even a national health program are forms of regulation that make sense to me. Taking people’s property without just compensation does not; it is, in my view, just legal theft. Of course, both of these are forms of regulation and require a taking of property. The difference is that the benefits of social security and medicare inure legally but not necessarily equally to all citizens, while the taking and redistribution of land would arguably benefit only the recipients of the land to the detriment of those from whom it is taken. I understand that in this example there is the fundamental problem of how the owners of the land acquired it in the first place (usually by adverse possession or conquest). But putting that intractable problem aside, there is a difference between taxing all the populace fairly to create a safety net for all and taking people’s real property to advantage only the recipients of a land grant.

    In writing this, i realize what a rat hole egalitarian economic theory turns out to be.

    My point, however, is to avoid the extremes of socialism and communism, by proposing that sensible communitarianism requires a society to reject too much free market and too much controlled market because each leads to tyrannies of different kinds, but tyrannies nevertheless. The communitarianism I (in my naive idealism) am thinking of requires regulation to avoid the most intolerable damage to and subjugation of the poor and underprivileged by a clever on going effort to balance liberty and order.

    • tariq says:

      I don’t accept the premise that liberty and order are at odds. And I don’t accept the premise, shared by conservatives and liberals alike, that socialism or communism automatically equals tyranny. There is such a thing as libertarian communism. The anarchists of the nineteenth and early twentieth century used the terms anarchism and libertarian communism as synonyms.

      You are hearing conservative rhetoric about “liberty,” and are responding by saying, yes, but it has to be tempered with order. I hear conservative rhetoric about “liberty” and I say, no, that is not liberty, it is just privilege and exploitation masquerading as liberty.

  10. Forest Simmons says:

    “Your freedom or liberty to swing your fist ends where my nose begins.”

    The fist can be an economic fist. Why do Mormons think that economic bullies have exemption from this basic dictum?

    As you pointed out, there are public tyrannnies and private tyrannies. And the private tyrannies tend to get control of the public tyrannies.

    Unfettered capitalism has the same dynamic as the board game Monopoly. Even though all of the players start on equal terms, the dynamics of the game soon break this symmetry. Random deviations from the symmetry are magnified by the positive feedback of the game dynamics: the more you own, the better position you have for increasing your wealth.

    In the game, when somebody wins, we congratulate him or her, and then start a new game.

    The Law of Moses had a seven year release for that purpose.

    Any such provision in modern times must be grafted onto capitalism, if that is the game we want to continue playing.

    Suppose that in the game of Monopoly once you got 90 percent of the money, then you could start re-writing the rules of the game to suit yourself. That would accelerate and clinch the concentration of wealth. And that is where we are today.

    The problem is a system that allows the concentration of wealth and power, without accountability.

    Priesthood holders are accountable to God for the way they use their power or authority. Amen to that power if they abuse it through unjust dominion.

    Political leaders and corporate CEO’s that are not accountable to the demos of democracy inevitably start to exercise unrighteous dominion. That is the lesson that “we” have learned through sad experience.

    Who is the “we” in that sentence of section 121? I think it refers to the heavenly hosts and their eons of experience leading up to establishing a righteous priesthood government in the eternal worlds.

    Our challenge is to do the same here. “Thy kingdom come on earth as it is in heaven.”

    Heaven is governed by common consent. God is not a tyrant. Too many people think of God as a benevolent dictator, but Moroni said that Jesus Christ spoke to him in plain humility as one man speaks to another.

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