ABSTRACT
This chapter examines the application of laissez-faire to production and exchange. The same liberal policies, without substantial improvements, are advocated in the most recent versions of economic theory. The crisis of liberalism, which Mill illustrates well, is still unresolved. Mill became the founder of a school of liberal eclectics with sympathies for social reform. The two philosophical influences on economic theory, natural law and utilitarianism, were at heart revolutionary doctrines. Economic theory and social policy are treated as a unified science. The theory of the division of labour is based on the labour cost principle which people have seen is of fundamental importance for classical price theory. Liberalism would be immortal, in spite of all its unrealistic assumptions, if it were logically tenable. The decisive argument against liberalism as an instrument of education is, of course, that it is redundant. It is simplest to fight errors as such, without replacing them by new errors.
