Individualism has a bad name. It has become a term that no longer communicates what it originally did, having been distorted by its collectivist and socialist opponents into a caricature of selfishness, uncharitableness, and malevolence.
True individualism as a meritorious personal philosophy has a long and distinguished history, going back to John Locke and Adam Smith and Alexis de Tocqueville. What are its essential characteristics?
First, it concerns how people exist together in society. It has nothing to do with isolated or self-contained individuals. In fact, the only way to understand society is through our understanding of individual actions directed toward other people and guided by expectations of others’ behavior. Individualism offers the opposite theory of society to collectivism, which treats society as a unit, existing independently of the individuals who compose it.
By tracing the effects of individual actions, we understand how many of our institutions – such as money, markets, and education – arose through the independent interactions of human behavior and not through the grand designs of kings, presidents, parliaments or legislative bodies. The spontaneous collaboration of free individuals often creates things that are greater than the individuals themselves can comprehend.
The social results of these individual interactions include economic prosperity, abundance rather than scarcity, safety, security, peace, law and order, learning, and health.
This is the case because reason is always fully and equally available to all individuals. When left free to collaborate and co-ordinate with each other, people often achieve more than they could individually, and more than conscious design by a powerful or privileged elite could ever achieve. People do not need a “social contract” or to delegate their individual powers to a government or planning body. Great achievements will emerge from free association, free collaboration, and free co-ordination. The social system of individualism does not require the brilliance or greatness of any boss or ruler. It results from unleashing free individuals in all their variety and complexity.
Some of the confusion about individualism stems from the famous Adam Smith quote: “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own self-interest”. The term “self-interest” became translated as a kind of adversary capitalism, the producer exploiting the consumer. But back then, the “self” in whom the butcher etc. was interested was taken to include family, friends, and community – people for whom the butcher cared. Individuals know only a tiny part of the whole society and it is that tiny part that enters into their motives – the sphere they know is where there are immediate effects of their actions.
The individual should be free to make full use of his or her knowledge and skill, guided by concern for the particular things and people of which he or she knows and about which he or she cares. As markets grow and extend, the individual is able to contribute in an extended manner as producer and consumer, even though his knowledge extends no further than the immediate sphere. Individuals strive for what they think is desirable, and markets transmit this striving as exchange and trade that benefits many. The unlimited variety of human gifts and skills is orchestrated by markets even though all the members of society who benefit are unaware of most individuals’ contributions.
Markets exert hard discipline. If the individual is to be free to choose, it is inevitable that he or she should bear the risk attaching to that choice and that in consequence be rewarded, not according to the goodness or badness of their intentions, but solely on the basis of the value of the results to others. We must face the fact that retaining individual freedom is incompatible with a full satisfaction of our views of distributive justice. Individuals must be ready to adjust to changes that may profoundly affect their fortunes and opportunities, even when the causes of those changes are unintelligible to them, or might seem like blind forces.
The alternative to market individualism is despotism and the imposition of the orders of a superior power or group. Centralization is one way in which this comes about. And so is democracy, insofar as it imposes the binding will of the majority on all individuals. The merit of competition in free markets is precisely that it gives the minority a chance to prevail. It can also be the result of trying to make people equal as distinct from treating them equally. De Tocqueville wrote: “Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.”
Individualism teaches us that society is greater than the individual only insofar as it is free.