(...) The simultaneity of the successful campaign to repeal the Corn Lawsㅡopposition to the high symbol of state interference in the economyㅡwith the beginning of serious social legislation in Great Britain (and on Continent) is strong evidence for Brebner's dictum(1948, 107) that what was really happening was not a shift to laissez-faire but a shift "from intervention by the state in commerce to intervention by the state in industry." The classica economists and liberals were in fact aware of this and always took a nuanced position on laissez-faire, from Adam Smith to Bentham to Nassau Senior[n77], as did even the great neoclassical economist Alfred Marshall.[n78] The distinction between recognizing the "value" of laissez-faire and preaching it as an "absolute dogma" was fundamental to all the classical economists (Rogers, 1963, 535).[n79] They were all aware that "one man's laissez-faire was another man's intervention" (Taylor, 1972, 12)[n80]
Still, Europe's liberals felt that the Repeal of the Corn Laws was a great event, which guaranteed economic progress.[n81] (....)
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Adam Smith was not a doctrinaire advocate of laissez-faire ... He did not believe that laissez-faire was always good, or always bad. It depended on circumstances." (Viner, 1927, 271-272). Furthermore, "Smith had himself undermined what is ordinarily regarded as his principal argument for laissez-faire, by demonstrating that the natural order, when left to take its own course, in many respects wroks against, instead of or, the general welfare" (p. 218). "The classical economists as a whole were always prepared to assign a significant role to the state. ... Moral and social improvement ... was the characteristic aim of the classical economists rather than ^laissez-faire as an end in itself... [I]n the writings of Bentham himself, there was no doubt of the importance attached to state action as a level for reform" (Gash, 1979, 45). Nassau Senior, generally considered one of theose most resistant to social legislation, was also the one who called laissez-faire "the most fatal of all errors"(^Social Economy^, 2: 302, cited in Sorenson, 1952, 262). Some analysts are a bit more reserved. Walker(1941, 173) says the classical economists "differed widely in their attitudes." And Ward, having read Brebner, Sorenson, and Walker, says(1962, 413) that "the conclusion to be drawn from the researches is generally a modification rather than a denial of the traditional view. The 'classical economists' might relent on children, but not on adults."
Alfred Marshall, in the autumn of his life, in the eighth edition of ^Principles of Economics^, published in 1920, summed up his reflections on laissez-faire thus: "It has been left for our own generation to perceive all the evils which arose from the suddenness of this increase in economic freedom [during the industrial revolution] ... Thus gradually we may attain to an order of social life, in which the common good overrules individual caprice, even more than it did in the days before the sway of individualism had begun." (app. A, 752, cited in Evans, 1978, 134).
This contradiction was inbuilt in liberalism, as Halevy saw with such precision. Discussing John Stuart Mil as a centrist, torn betwwen what Halevy called the philosophy of Westminster and the philosophy of Manchester, Halevy(1994, 287) ends by noting that Mil, when "faced with authoritarian democracy[,] made the objections of liberalism, but [when] faced with the philosophy of competition, he made the objections of socialism. The contradiction between these two fundamental principles of utiitarianism has become clear to everyone. Philosophica radicalism exhausted its activity, in the history of English thought and legislation."
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The quote of Taylor is in: Arthur J. Taylor, Laissez-faire and State Intervention in Nineteenth-Century Britain, London: Macmillan, 1972