CAPITALISM/DEMOCRACY/PROTESTANTISM:
What happens when liberalism loses? (Mani Basharzad, 9 June 2026, CapX)
Liberalism loses when it attaches itself only to economics. Yes, it is easy to blame the populist movements of both Left and Right that seek to undermine liberalism. But on one point, liberals should look at themselves. A liberalism that defines itself solely in terms of economic freedom cannot win the battle of ideas. Free markets are part of classical liberalism, but they are largely a by-product of the more important principles and institutions of a free society. When you have the rule of law, you can have property rights and effective contract enforcement. When you have the liberal attitude of tolerance, you can have the Royal Exchange, of which Voltaire wrote that when you enter, ‘all nations assemble for the advantage of mankind’, and ‘the Jew, the Mahometan, and the Christian bargain with one another as if they were of the same religion, and bestow the name of infidel on bankrupts only’.
To win the battle for liberalism, liberals must not confine themselves to the material benefits of free markets, but also emphasise the moral superiority of free societies. Hayek met Churchill only once, after ‘The Road to Serfdom’ had gained popularity. Churchill knew of him because of that book. When they were introduced, Churchill was, as Hayek put it, ‘stock drunk’. Churchill said to him: ‘You are completely right [about ‘The Road to Serfdom’]; but it will never happen in Britain’. As Hayek continued, ‘Half an hour later he made one of the most brilliant speeches I ever heard’.
Why, despite travelling some distance down the road to serfdom, did Britain never lose its political freedom? Why, in Churchill’s words, would this ‘never happen in Britain’? Because there is something more to liberalism than economics. Those deeper foundations resisted the road to serfdom in Britain, and they enabled its revival through Thatcher’s conservative revolution.
Liberals have failed to shape the climate of opinion and practical politics, relying too often on what Russell Kirk described as soulless ‘pleasure and pain equations’. China today is the example of a state that, viewed solely through an economic lens, appears impressive, yet has become a threat to freedom.