8. This is economic individualism. At its simplest,
this is a belief in economic liberty; it amounts to the
justification of certain culturally specific patterns of
behavior and a consequent presumption against eco-
nomic regulation, whether by Church or State. Ever
since Weber and Sombart, economic historians and
others have argued about when and how these patterns
of behavior emerged in the West, and in particular
about their relation to the various forms of Protestant-
ism, which often provided their early justification
(Weber, 1904-05; Tawney, 1926; Robertson, 1933). It
was, however, not until the mid-eighteenth century
that their justification could make use of a coherent
economic theory, with the work of Adam Smith in
Britain and of the Marquis d'Argenson, the physiocrats,
and Turgot in France. Henceforth, economic individ-
ualism became both an economic theory and a norma-
tive doctrine, asserting (if so complex a tradition or
set of traditions can be reduced to a formula) that a
spontaneous economic system based on private prop-
erty, the market and freedom of production, contract
and exchange, and on the unfettered self-interest of
individuals, tends to be more or less self-adjusting; and
that it conduces to the maximum satisfaction of indi-
viduals and to progress.
The nineteenth-century liberal economists carried
the theory and the doctrine further. The whole subse-
quent history of (non-Marxist) economic analysis can
be seen as an ever-more sophisticated elaboration of
the model of this system, with all political and social
factors removed. Léon Walras and Alfred Marshall
provided the fullest nineteenth-century versions of that
model, but thereafter some, though not all, economists
sought to distinguish theory from doctrine, and did not
necessarily wish to make reality conform to the model.
Only those who do are to be counted as adherents of
economic individualism, which is essentially the view
that universal economic liberty is both efficient and
desirable. Its rejection is, perhaps, a generic negative
definition of “socialism”—a term coined in the 1820's
in explicit opposition to its assumptions (Swart [1962],
p. 81).
The most systematic and clearcut contemporary
defender of economic individualism is F. A. Hayek,
who sees it as a matter of preserving those “sponta-
neous formations which are the indispensable bases of
a free civilisation,” in particular an “effectively com-
petitive market” ([1949], pp. 25, 21, and passim for
a somewhat tendentious survey of this position's intel-
lectual ancestry). Throughout its history there have
been disagreements about the best political means for
achieving this result: at one extreme there is doctrinal
laissez-faire (from Frédéric Bastiat to Ludwig von
Mises), at the other, various forms of selective inter-
ventionism (from Adam Smith himself to J. M. Keynes).
