On the surface, the decline of classical liberalism continued worldwide in 2022. The adverse political current was so strong and deep that it affected societies both democratic and totalitarian and stretched from Europe to Latin America to Asia, not excepting the United States. The global push against classical liberalism ranged broadly against key elements of the philosophy—from free trade to individual responsibility to limited government.

But as powerful as these forces were, by end of the year a few green shoots for liberty appeared—surprising demonstrations against state power in some of the world’s most authoritarian nations and signs of successful opposition to the increasing power of the state in more democratic ones. These signs of hope underscore some enduring sources for classical liberalism’s power. Classical liberalism draws on a deep desire for liberty and the economic prosperity that liberty’s exercise brings. It is aided by a natural force that springs up through the concrete of even the most regimented societies and sprouts even more abundantly at unexpected times in societies with more porous democratic soil. In some nations, like the United States, it is also protected by strong classical liberal traditions, including law that supports such key premises as the separation of powers and individual rather than group rights.

The United States

One can get a quick snapshot of the weight of the state by looking at government spending and government debt. Both have gone up dramatically in the United States since 2010 with spending up as a percentage of GDP by almost a third and debt by almost half. Some of that was caused by spending directly on the pandemic but by no means all of it. Some of the ostensibly “pandemic” spending in bills was actually directed to interest groups like government employees or to bailing out union pension funds. In any event, the additional debt is now a drag on economic growth and must be paid back either through higher taxes or through inflating the currency.

Happily, the Biden administration failed to get all the spending that it wanted through even a Democratic Congress. The divided Congress that resulted from the 2022 midterms assures that there will be no legislative spending sprees next year. But perhaps the most troubling domestic decision of the year bypassed Congress altogether to spend hundreds of billions of dollars by forgiving student debt by executive order. 

As a matter of policy, blanket student loan forgiveness has nothing to be said for it. It is regressive, because the lifetime earnings of those whose loans will be forgiven are greater than those of the average taxpayer who will foot the bill. Moreover, the decision was carefully timed to energize the youth vote in the midterms. It seems to have helped the Democrats stave off a more substantial defeat: the young were their strongest age cohort. Student debt relief exemplifies one of classical liberalism’s worst nightmares: the party in power uses government largess to stay in power.

Beyond spending, the Biden administration continued to pursue identity politics, supporting aid that went only to certain farmers defined by race and using its regulatory authority to pursue various race-conscious policies. Since classical liberalism is premised on individual rather than group rights, the administration’s ever-expanding push for race consciousness and the identity politics that supports such policies is even more dangerous to the classically liberal society than excessive government spending.

But there has been better news from the Supreme Court. It took up a challenge to the constitutionality of the loan forgiveness plan, likely vindicating the separation of powers by restricting the executive branch’s power to spend without well-grounded statutory authority. From the oral arguments on Harvard’s admission program that discriminates on the basis of race, the Court also appears ready to end such racial and ethnic preferences, ideally through reading Title VI to mean what it says—that universities receiving federal funds cannot discriminate against any race or ethnic group. These developments underscore the power of our classical liberal traditions encoded both in past statutes and the Constitution to arrest the decline of classical liberalism long enough to permit a contemporary democratic counter-reaction.

Other Democracies

Classical liberalism has been in decline in Europe as well. In Great Britain, Liz Truss was selected as Prime Minister, largely on the basis of a Thatcherite platform of cutting taxes and deregulating the economy. But her shambolic implementation of these policies rattled the markets, and she was deposed within a month. She may well have discredited classically liberal economic policies in Britain for a generation.

In France, Emmanuel Macron, a faint-hearted classical liberal working within the unfavorable context of the French dirigiste state, lost his majority to parties of the national right and radical left. The prospects for his domestic economic reform program look bleak. In Italy, the right won the fall election decisively, but the leader hails from the nationalist right descended from the fascist party of Benito Mussolini. Nevertheless, her political program has begun sensibly with efforts at tax cutting and deregulation. There are reasons she is likely to continue on this path. First, her coalition contains more classically liberal parties who might otherwise defect, and she must pursue market-friendly policies to energize growth and pay off Italy’s enormous debts.

Both causes have larger implications for classical liberalism’s resilience. First, fusionism is almost inevitable on the right: there simply are not enough classical liberals ever to be a majority by themselves but they can exert real influence in right-of-center political coalitions. Second, economic reality bites at some point. Unlike the left, the right is dominated by voters, such as small business owners, who depend on a growing economy. That means that even the nationalist right is likely to pursue more classically liberal economic policies than their election rhetoric often suggests.

Almost every nation in Latin America was governed by the left at the start of 2022 and Brazil, the most populous nation in the region, elected yet another leftist as President, even though he had been previously convicted of corruption. But again there were signs of improvement in Chile, the South American nation traditionally most favorable to classical liberalism. In a referendum, its people overwhelmingly rejected a socialist constitution that its government supported, sticking with a classically liberal constitution instead. This victory again reminds us that having a sound constitution is an anchor for society—one that is hard to haul away and destroy.

The Authoritarian Nations 

China, Russia, and Iran, the most important authoritarian nations in the world, all intensified control over their people in 2022. Xi Jinping has cast off the Communist Party’s consensus constraints and assumed almost dictatorial power. Vladimir Putin started a war against neighboring Ukraine and crushed all dissent. Iran under Supreme Leader Ali Khamenei has abandoned any pretense of democracy by disqualifying all moderate candidates and appears ever closer to acquiring nuclear weapons. On the surface, this new axis of evil seems more of a threat to liberty than ever before, both to the citizens of their own nations and to the world outside.

But each of these regimes in the last few months has experienced serious setbacks. China has witnessed the most serious demonstrations in decades against its zero-covid policy. Iran seems to be entering a pre-revolutionary period: the morals police enforcement of a dress code has led to violent demonstrations and nationwide strikes. Putin’s war has proved a striking mistake, requiring him to resort to a very unpopular draft to try to reverse battlefield losses. All these leaders seem less secure than when the year started.

The events show some of the inherent weaknesses of despotic regimes in the modern world. Such regimes are prone to grand miscalculations because their leaders become isolated and lack the feedback loops provided by civil society—a hallmark of the classical liberal regime. Like despots throughout time, they nevertheless can succeed in keeping power by dividing the potential opposition. But in each of these cases, a fundamental miscalculation has united society against them, because it affects an encompassing interest—the liberty of movement in the case of China, the dignity of women in the case of Iran, and the ability to live in peace in the case of Russia.

These failures show that the impulse for freedom can threaten the authoritarian state. Similarly, developments in the United States and elsewhere suggest that the decentralizing power of the market and civil society within democratic states can make a comeback against the centralism of expanding government.