In This Review

Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-first Century
Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-first Century
By Deepak Lal
Princeton University Press, 2006, 334 pp
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Lal, an Indian-born University of California, Los Angeles, economist, provides a spirited defense of classical liberalism in the economic arena. Americans have muddied the linguistic waters by often calling this position "conservative," but Lal takes pains to distinguish, as Friedrich Hayek did, between conservatism, with its adherence to tradition and its resistance to change, and liberalism, which embraces change, especially in the material conditions of humankind. His argument has two major prongs. The first extols the positive role of Anglo-Saxon capitalism in generating material prosperity through innovation and investment. The second expresses skepticism about government interventions, even when theoretically justifiable on grounds of market failures, to improve outcomes. Typically, governments are not run by benevolent guardians assuming responsibility for the well-being of the general public but rather are captured by special interests and rent seekers. In arguing his case, Lal aggressively attacks the "new dirigistes" of the last half century, including economic planners in India and elsewhere, and many environmental groups today for too often pursuing agendas antithetical to improvements in the living standards of poor people around the world. Lal displays exceptional erudition and provides an enormous sweep of historical and intellectual perspective, and he writes in a vigorous style.