Negative Liberalism and Theory of Laissez-Faire State

Philosophical and political roots of negative liberalism can be traced in the social contract theory of Hobbes and Locke. Subsequently, it was developed, revised and amplified by Bentham and J. S. Mill’s utilitarianism, Spencer’s ‘survival of the fittest’ doctrine, Paine’s doctrine of State as a ‘necessary evil’ and others. On the economic front, the Physiocrats, Adam Smith, David Ricardo, Thomas Robert Malthus and others provided the ground and arguments for economic liberty. The two—negative liberty and economic liberty—combined were destined to give birth to what we call classical liberalism or laissez-faire individualism. Its sole focus is individual and to ensure political liberty, it needs a limited government, liberal democracy and minimal state intervention; to ensure economic liberty, it argues for capitalist-market system; and personal freedom amounts to enjoying a combination of political rights and economic liberty. In the following discussions, we will look at the arguments and implications for organizing social, political and economic life of individuals from this perspective.

At the outset, we may note that the arguments of classical liberalism, both in the political and economic realm, draw on the understanding of human nature and human psychology. Hobbes’s individual desires good and decries evil, Locke’s individual seeks to replace pleasure for pain, Bentham’s individual yearns for happiness, Smith’s individual is self-interested and so is that of Ricardo and Malthus. If such is the nature and psychology of a human being (read man as they all referred to), the individual either by way of instinct or reason, will seek what is good in his/her interest. But then the pursuit is to ensure that there also remains a society or community out of these self-interested individuals. This is ensured by the very minimalist state, a state least interfering in the activities of people but nevertheless there as ‘a necessary evil’ (Paine) and by the ‘invisible hand’ (Smith), ‘whereby “the private interests and passions of men” are led in the direction “which is most agreeable to the interest of the whole society”.’²