For the Tokyo meeting of the Mont Pelerin Society September 1966 THE PRINCIPLES OF A LIBERAL SOCIAL ORDER by F.A. V. Hayek 1. By "liberalism" I shall understand here the conception of a desirable political order which in the first instance was developed in England from the time of the Old Whigs in the later part of the seventeenth century to that of Gladstone at the end of the nineteenth. As its typical representatives in England may be regarded David Hume, Adam Smith, Edmund Burke, .Macaulay and Lord Acton. It was this conception of individual liberty under the law which in the first instance inspired the liberal movements on the Continent and which became the basis of the American political tradition. A few of the leading political thinkers in those countries like B. Constant and A. de Tocque- ville in France, I. Kant, Friedrich von Schiller and Wilhelm von Humboldt in Germany, and James Madison, John Marshall and Daniel Webster in the United States belong wholly to it. 2. This liberalism must be clearly distinguished from another, peculiarly Continental European tradition also called "liberalism" of which what now claims this name in the United States is a direct descendant. This latter view, though beginning with an attempt to imitate the first tradition, interpreted it in the spirit of a constructivist rationalism prevalent in France and thereby made of it something very different, and in the end, instead of advocating limitations on the powers of government, ended up with the ideal of the unlimited powers of the majority. This is the tradition of Voltaire, Rousseau, Con- dorcet and the French Revolution which became the ancestors of modern socialism. English utilitarianism has taken over much of this Continental tradition and the late nineteenth century liberal party, resulting from a fusion of the liberal Whigs and the utilitarian Radicals, was a product of this mixture. 3. Liberalism and democracy, although compatible, are not the same. The first is concerned with the extent of governmental power, the second with who holds this power. The difference is best seen if we consider their opposites: the opposite of liberalism is totalitarianism, while the opposite of democracy is authoritarianism. In consequence, it is at least possible in principle that a democratic government may be totalitarian and that an authoritarian government act on liberal principles. The second kind of "liberalism" mentioned before has in effect become democratism rather than liberalism. 4. It should be specially emphasized that the two political philosophies which both describe themselves as "liberalism" and lead in a few respects to similar conclusions, rest on altogether different philosophical foundations. The first is based on an evolutionary interpretation of all phenomena of culture and mind and on an insight into the limits of the powers of the human reason. The second rests on what I have called "constructivist" rationalism, a conception which leads to the treatment of all cultural phenomena as the product of deliberate design, and on the belief that it is both possible and desirable to reconstruct all grown institutions in accordance with a preconceived plan. The first kind