Classical Liberalism and International Relations Theory

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Classical Liberalism and International Relations Theory The Palgrave Macmillan History of International Thought Series seeks to publish the best work in this growing and increasingly important field of academic inquiry. Its scholarly monographs cover three types of work: (i) exploration of the intellectual impact of individual thinkers, from key disciplinary figures to neglected ones; (ii) examination of the origin, evolution, and contemporary relevance of specific schools or traditions of international thought; and (iii) analysis of the evolution of particular ideas and concepts in the field. Both classical (pre 1919) and modern (post 1919) thought are covered. Its books are written to be accessible to audiences in International Relations, International History, Political Theory, and Sociology. Series Editor: Peter Wilson, London School of Economics and Political Science Advisory Board: Jack Donnelly, University of Denver David Long, Carleton University Hidemi Suganami, Aberystwyth University Also in the Series: Internationalism and Nationalism in European Political Thought by Carsten Holbraad The International Theory of Leonard Woolf: A Study in Twentieth-Century Idealism by Peter Wilson Tocqueville, Lieber, and Bagehot: Liberalism Confronts the World by David Clinton Harold Laski: Problems of Democracy, the Sovereign State, and International Society by Peter Lamb The War Over Perpetual Peace: An Exploration into the History of a Foundational International Relations Text by Eric S. Easley Liberal Internationalism and the Decline of the State: The Thought of Richard Cobden, David Mitrany, and Kenichi Ohmae by Per Hammarlund Classical and Modern Thought on International Relations: From Anarchy to Cosmopolis by Robert Jackson The Hidden History of Realism: A Genealogy of Power Politics by Seán Molloy Hugo Grotius in International Thought by Renée Jeffery The International Thought of Martin Wight by Ian Hall Honor in Foreign Policy: A History and Discussion by Michael Donelan Realist Strategies of Republican Peace: Niebuhr, Morgenthau, and the Politics of Patriotic Dissent by Vibeke Schou Tjalve Classical Liberalism and International Relations Theory: Hume, Smith, Mises, and Hayek by Edwin van de Haar Classical Liberalism and International Relations Theory

Hume, Smith, Mises, and Hayek

All rights reserved. First published in 2009 by PALGRAVE MACMILLAN® in the United States—a division of St. Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Where this book is distributed in the UK, Europe and the rest of the world, this is by Palgrave Macmillan, a division of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-37994-1 ISBN 978-0-230-62397-2 (eBook) DOI 10.1057/9780230623972 Library of Congress Cataloging-in-Publication Data is available from the Library of Congress. A catalogue record of the book is available from the British Library. Design by Newgen Imaging Systems (P) Ltd., Chennai, India. First edition: September 2009 10 9 8 7 6 5 4 3 2 1 To Anita This page intentionally left blank Contents

Acknowledgments ix List of Abbreviations xi

1 Introduction 1 2 What Is Classical Liberalism? 17 3 David Hume and International Society 41 4 Adam Smith, War, and Commerce 57 5 Ludwig von Mises, Capitalism, and Peace 75 6 Friedrich Hayek, International Order, and Federalism 101 7 Liberalism and International Relations Theory 125 8 Conclusions and Ways Forward 151

Notes 159 Bibliography 199 Index 225 This page intentionally left blank Acknowledgments

t is with great pleasure that I thank the many people who have helped me during the research and writing of this book. Most gratitude goes Ito my wife Anita, for her constant, enthusiastic support and patience. Therefore the book is dedicated to her. Until now our household has been an example of the seemingly unbridgeable divide between a theorist and a prac- titioner of international relations, but I still entertain the hope that some of the thoughts brought forward in this book will make their way into Dutch or EU foreign policy! This work started out as my PhD thesis and it owes a lot to my supervi- sors. Professor Nico Roos and Dr. Frank van Dun were critical yet construc- tive in their comments, worked incredibly fast and both of them were always available for additional advice or assistance. Above all, they are very kind and genial men to spend time with! Dr. Razeen Sally of the London School of Economics and Political Science (LSE) has been a strong and friendly support for all of my academic endeavors. His work on classical liberalism and international economic relations provided an important source of intellectual inspiration. Over the past years, I have been fortunate enough to enjoy the con- tinual support of the Institute for Humane Studies (IHS) at George Mason University in Arlington, Virginia, USA. I would like to express my deep gratitude to Dr. Nigel Ashford for his interest, enthusiasm, and criticism. I am also obliged to the Ludwig von Mises Institute in Auburn, Alabama, USA, in particular Dr. Mark Thornton for his advice and Pat Barnett, who did everything possible to make my research visit productive and stimulating. The Netherlands Ministry of Foreign Affairs has been a source of financial support through the “Partners Study Fund” of the Spouses and Children Bureau. Thank you Marisa Witte, Monica Vermeulen, and Wilma de Haan! x ● Acknowledgments

A large number of people have also helped me in numerous ways, for which I am grateful: Professors Albert Kersten, Paul Cliteur, and Andreas Kinneging at Leiden University; Professor Christopher Hill, my tutor at the LSE, now Director of the Centre of International Studies at Cambridge University; Professor Nick Rengger at St. Andrews; Professor Robert Jackson at Boston University; Professor Bruce Caldwell at the University of North Carolina; Dr. Aad van Mourik, now at Maastricht Hotel Management School and Catholic University Leuven; Dr. Mark Stout, Dr. Erik Knippenberg and Professors Jaap Hage and Fred Grünfeld at Maastricht University; Elaine Hawley, Chris Nelson, my fellow Summer Graduate Research Fellows, Dr. Colin Dueck, Henrik Rasmussen, Magnus Nordenman, and other people in the IHS network; Mrs. Bettina Greaves, Professor Jeffrey Herbener, and the staff at the Ludwig von Mises Institute; Janet Picken; the library staff at the Netherlands Ministry of Foreign Affairs; Carol Leadenham and her colleagues at the Hoover Institution Archives at Stanford University; Farideh Koohi-Kamali and her colleagues at Palgrave Macmillan; Toby Wahl and Peter Wilson; the anonymous reviewer for the endorsement and the helpful comments; Ambassador Rosario Manalo, Director of the European Studies Program at Ateneo de Manila University; Hans van den Broek, Christward Dieterman, my mother, and last but not least, our beloved son Timothy, for bringing so much joy and laughter in our lives. Mrs. Bettina Greaves granted permission to use her unpublished inter- views with Mises’ wife and friends. Professor Jeffrey Herbener granted permission to use some of Mises’ correspondence that is part of the Ludwig von Mises Archive at Grove City College. Permission to quote from F.A. Hayek’s correspondence and papers was granted by the estate of F.A. Hayek. The British International Studies Association is the copyright holder of my article entitled “David Hume and International Political Theory: a Reappraisal,” published in the Review of International Studies, volume 34, number 2, April 2008, which is partially reprinted with permission in chapter 3. I thank them all. Edwin van de Haar Manila, April 2009 Abbreviations

Works of David Hume E Essays EHU Enquiry concerning Human Understanding EPM Enquiry concerning the Principles of Morals H The History of England (volume numbers in Roman numerals) L Letters of David Hume (by number) THN Treatise of Human Nature Works of Adam Smith C Correspondence LJA Lectures on Jurisprudence (version A, 1762–1763) LJB Lectures on Jurisprudence (version B, 1766) TMS Theory of Moral Sentiments WN The Wealth of Nations Works of Ludwig von Mises EF Economic Freedom and Interventionism HA Human Action L Liberalism MMM Money, Method and the Market Process NSE Nation, State and Economy OG Omnipotent Government S Socialism Works of Friedrich Hayek CL The Constitution of Liberty IEO Individualism and Economic Order LLL Law, Legislation and Liberty (volume numbers in Roman numerals) RS The Road to Serfdom SW Socialism and War xii ● Abbreviations

Other abbreviations EEC European Economic Communities EU European Union GATT General Agreement on Tariffs and Trade ILO International Labor Organization IMF International Monetary Fund IPT International Political Theory IR International Relations LSE London School of Economics and Political Science MPS Mont Pelerin Society NATO North Atlantic Treaty Organization UN United Nations US(A) United States (of America) WTO World Trade Organization