The era of big government never ended: taking stock of the challenges to freedom.

• Author: Oliver, Charles
• Position: The Challenge of Liberty: Classical Liberalism Today - Book review

The Challenge of Liberty: Classical Liberalism Today, edited by Robert Higgs and Carl P. Close, Oakland, Calif.: Independent Institute, 422 pages $19.95

IT HAS BEEN just 17 years since the Berlin Wall fell. It has also been 17 years since the socialist economist Robert Heilbroner proclaimed that "the contest between capitalism and socialism is over: capitalism has won.... Capitalism organizes the material affairs of humankind more satisfactorily than socialism." And it has been only a little more than a decade since Bill Clinton declared "the era of big government is over." Classical liberalism--the liberalism, that is, of the 18th and 19th centuries, when the word denoted individual rights, free trade, rule of law, and, above all, private property--seemed, even to its critics, to have triumphed intellectually. It was expected to triumph politically as well.

It hasn't quite turned out that way. No, classical liberalism doesn't face the grand theoretical challenges posed by a rival ideology like Marxism. Rather, the threat to personal freedom and property rights--in the United States, at least--advances under several banners: public health, the environment, national security, and plain old pork-barrel politics.

The Challenge of Liberty--edited by the economists Robert Higgs and Carl Close of the Independent Institute--attempts to examine just how well liberalism is dealing with these challenges and to provide some answers to them. Libertarian heavyweights such as Thomas Szasz and James Buchanan tackle subjects ranging from the role of ideology in national defense to group loyalty. The essays, originally published in The Independent Review during the last decade, always prove edifying, though some of the more policy-oriented contributions may seem less urgent than they did when first published. But on the whole, the volume leaves you with the impression that liberal intellectuals have only begun to recognize the challenges to liberty in this era.

The book's first essay--"The Soul of Classical Liberalism," by Nobel laureate economist James Buchanan--asks what may be the key question: Did the collapse of socialism and the election of politicians who mouthed small-government rhetoric lull libertarians into believing there is greater support for their agenda than there actually is? Buchanan believes it did.

"Classical liberals who do have an appreciation of the soul of the whole two-century enterprise quite literally went to sleep during the...