What happeneed to Liberalism?

The Mises Institute have started creating an audio version of Murray Rothbard's classic and invaluable For a New Liberty: The Libertarian Manifesto. It was whilst I was listening to his introduction, on the libertarian heritage in classical liberalism, that the following subject occurred to me:

Rothbard opens by citing the accomplishments of the Libertarian Party, and a quick listen to the impartial listener reminds one that, in spite of Rothbard's enthusiasm, the accomplishments are miniscule. Such actual failings of a political party devoted to libertarianism have lead British libertarians to a much more pessimistic view of political involvement. This is, of course, coupled with normal skepticism about the viability of "third parties" in our electoral system (or that of the US).

It was whilst I was musing about this that the thought actually occurred to me that third parties in the UK actually have an excellent example to show that they can, under the right circumstances, be amazingly successful.

What is this example: Why, it is the party of government itself, the Labour Party. Of course, party politics as we know it now in the UK is relatively recent; during the eighteenth and much of the nineteenth centuries party organisation was more like that in the US, with parties being loose affilations, and definitely not having such things as party whips. However, during that time and even into the more modern style politics was a two party concern as it is now. But back then it was the Whigs versus the Tories, or the liberals versus the conservatives. But then, of course, something changed. Now, the competition is Labour versus the Conservatives. The Liberal Democrats, the strongest remnants of the split within the old Liberal party over coalition with the Social Democratic Party, are the strongest third party, but still a third party, a minor affair. In barely one hundred years the Labour Party grew and eclipsed the liberals as the opposition to the Conservatives. The liberals, despite abandoning the laissez faire creed of old, receeded and diminished. When was the last time a liberal government held power? Not since the Second World War.

So what happened? How was it that a third party in a two party electoral system was able to rise so swiftly and replace the liberals? So far as I can tell, Rothbard answers this question well:

But the worst thing about the rise of the socialist movement was that it was able to outflank the classical liberals "on the Left": that is, as the party of hope, of radicalism, of revolution in the Western World. For, just as the defenders of the ancien régime took their place on the right side of the hall during the French Revolution, so the liberals and radicals sat on the left; from then on until the rise of socialism, the libertarian classical liberals were "the Left," even the "extreme Left," on the ideological spectrum. As late as 1848, such militant laissez-faire French liberals as Frederic Bastiat sat on the left in the national assembly. The classical liberals had begun as the radical, revolutionary party in the West, as the party of hope and of change on behalf of liberty, peace, and progress. To allow themselves to be outflanked, to allow the socialists to pose as the "party of the Left," was a bad strategic error, allowing the liberals to be put falsely into a confused middle-of-the-road position with socialism and conservatism as the polar opposites. Since libertarianism is nothing if not a party of change and of progress toward liberty, abandonment of that role meant the abandonment of much of their reason for existence — either in reality or in the minds of the public.

In effect, by allowing the socialists to become "the radicals," "the left wing," the liberals became middle of the road, and quite simply, people thought "well, what is the point in them?" Previously radical libertarians, such as Herbert Spencer, who stopped fighting for new liberties and ended up simply defending old ones, allowed themselves to be portrayed as conservatives. And so, in the end, people saw the only choice as being between the Conservatives or the Labour party. The liberals simply served no visible purpose.