Liberalism and Capitalism

In the 19th century Mill was to write “over his own body and mind the individual is sovereign” (1960 p. 15). This illustrates the comman commitment of utilitarianism and Kantianism to freedom. Much earlier Bentham and Smith had recognized that freedom was to be sought in wealth not in virtue.

Liberalism and capitalism are committed to the elimination not of vice but of (absolute) poverty and as Smith argues, to the promotion of the “passion for money making”. In his Theory of Moral Sentiments Smith speaks of “self interest” as the legitimate summation of all passion and this as Hirschman has shown is an essential moral argument justifying capitalism (1977).

Capitalism according to Smith emerged as an unintended consequence of the pursuit of self interest of the “great proprietors” and “merchants and artificers” (1981 p.370). Capitalist order is justified according to Smith because it establishes liberal political rule and ensures world wide plentitude . Smith recognized that sustaining capitalist order requires the existence and reproduction of an individuality focused on the pursuit of (this worldly) self interests and committed to the legitimacy of liberal rights. It is the universalization of this type of individuality which ensures that expansion of the market and dominance of the rule of law (of capital) become inextricably interlinked.