Peter gay, The Enlightenment and the Ambiguities of Classical Liberalism
By Chris R. Tame
Libertarian Heritage No. 7
ISBN 1 85637 112 3
© 1998: Libertarian Alliance; Chris R. Tame.
Chris R. Tame is founder and Director of the Libertarian Alliance. He edited The Bibliography of Freedom for the Centre for Policy Studies and has contributed to such books as The Case for Private Enterprise, The ‘New Right’ Enlightenment and The Politics of Crime Control. His essays have appeared in such journals as The Jewish Journal of Sociology, Il Politico, Science and Public Policy, The Journal of Social, Political and Economic Studies, Wertfrei, and Economic Affairs.
The views expressed in this publication
are those of its author, and
LA Director: Chris R. Tame
FOR LIFE, LIBERTY AND PROPERTY
"The time will come, then, when the sun will shine only on free men on this earth, on men who will recognize no master but their reason." — Condorcet
In his seminal essay "Left and Right: The Prospects for Liberty", Professor Murray Rothbard delineated a libertarian interpretation of history, an interpretation which saw the larger part of humanity's existence on earth before the 18th Century as dominated by a distinctive "Old Order". Whether in the form of the primitive tribe, Oriental despotism or feudalism, the Old Order was a "society of status" distinguished by tyranny, fixed class or caste, exploitation, stagnation and hopelessness. It is indeed significant, as we shall see, that this interpretation is at once both a libertarian, and, as Karl Popper has put it, a rationalistic one. For Rothbard and Popper alike, the dismal record of human history is interrupted by but a few enthralling periods distinguished by (in Popper's words) "the efforts of men to free themselves, to break out of the cage of the closed society, and to form an open society."Undoubtedly the three most important landmarks on the as yet uncompleted journey to an "open society" were those of Graeco-Roman civilization, the Renaissance, and the Enlightenment. But it was this last period, the Enlightenment of the 18th Century, which provided the most revolutionary fulfilment of what had been in its predecessors at best only a tenuous promise. As the eminent French historian Paul Hazard put it, it was in the period from 1715 that "there became apparent an effervescence and a diffusion of ideas so remarkable in its nature, so far-reaching in its extent as to be without parallel in history."  In essence, it was the age of the Enlightenment that witnessed the creation of a self-conscious and revolutionary radicalism and a new vision of human potentialities, and the possibility of their liberation.
Professor Peter Gay's monumental two volume study, The Enlightenment: An Interpretation  is a work of major importance, and it is a most regrettable fact that it has failed to receive much attention in libertarian circles. For the creation of a sophisticated historical understanding is a vitally important — but all too frequently neglected — part of libertarian analysis, and Gay's work constitutes an outstanding contribution to the development of such understanding. In fact, The Enlightenment is a most refreshing work of scholarship: in a period of increasingly myopic specialization Gay, while undoubtedly in full control of all his materials (a fact attested to by his earlier books and essays and by the extensive and dazzling bibliographic essays at the end of each volume of this work) does not fail to complete the task of scholarship, that of criticism and synthesis in the cause of the grand theme. But what render's Gay's work all the more attractive to the contemporary libertarian is the author's own quite explicit sympathy with his subject, with what he describes as "the permanent value of the Enlightenment's humane and liberal vision ... the permanent validity of its critical method."  Moreover, Gay's own conception of his intellectual task is a threefold one, "to account not merely for the philosophes' ideas and for the interplay of these ideas but also to judge the adequacy or inadequacy of their perceptions",  leads him to take an unabashed evaluative and critical stance vis-à-vis his subject. It is, then, in subject, substance and approach that The Enlightenment possesses a direct relevance and importance so often lacking in more orthodox works of intellectual history. 
I: A Rationalist Interpretation of History
In tracing the genesis of the Enlightenment and its vision of the past, the first volume of Gay's study, entitled The Rise of Modern Paganism, essentially constitutes a powerful documentation of the "rationalist interpretation of history". For Gay, as for the philosophes, Greek civilization was a true revolution in the intellectual history of mankind, a "discovery of the mind", a period which "liberated men from the tyranny of myth and breathed the bracing air of reason".  It was not a revolution at one blow, of course, but rather "a long, laborious conquest of myth by reason" which took place, but it was a revolution nonetheless. Gay draws on the work of a number of scholars, including F. M. Cornford, Jane Harrison, Bruno Snell and Henri Frankfort in support of his thesis. But it is Ernst Cassirer's distinction between two basis patterns of thought, between an essentially pathological "mythopoeic" mentality and rational intelligence, of which he makes the most fruitful use.  And it was undoubtedly to Greece that we are indebted for the revolutionary creation of a sustained critical intelligence which cut through the "web of myth" that had for so long constrained humanity.
For the philosophes of the Enlightenment the decline of Graeco-Roman civilization and the rise of Christianity constituted a terrible tragedy: the Middle Ages were for them truly a Dark Ages, when the power of reason was once more subject to superstition and overwhelming religious and political tyranny. The Enlightenment view of the Middle Ages has, of course, been subject to massive criticism, and it is indeed necessary, as Gay points out, to recognize "the beauty, the learning, and the variety of the Christian millennium",  to observe that it was "not merely an abyss ... but a transmission belt".  In reality, the philosophes were themselves often constrained to make such qualifications. But, as Gay states, their polemics were very much to a purpose: "they treated the past ideologically because they were engaged in an ideological battle that knew no quarter. The Christian millennium ... was part of their political present."  Moreover, the philosophes were fundamentally correct in their view of the Middle Ages; it was a qualitatively different period. As Gay puts it: "behind a tissue of erroneous detail and prejudiced judgment stands a major historical truth, a truth that remains valid and becomes more obvious after its animus has been stripped away and its emotional terminology replaced by neutral language — the Middle Ages were different in vital essence from the ages that preceded and followed them. And they were different, above all, because they introduced — or rather, reinstated — religious myth as the deepest motive power and final purpose of civilization." 
Nevertheless, the seeds of a new society — "seeds of reason" — remained within the womb of the old. For Gay it is the four centuries between 1300 and 1700 that constitute the "prehistory of the Enlightenment", a period "when the critical mind resumed its interrupted conversation with classical antiquity and moved towards independence".  These were the years in which the unity of Christian civilization was increasingly undermined by forces of secularism and rationalism and, indeed, by its own spiritual malaise and lack of self-confidence. If not yet modern, it was an age no longer strictly mediaeval, an age aptly characterized by Gay as the "era of pagan Christianity" when the new forces and spirit were still subsumed under or controlled by the old. The burgeoning of the Renaissance testified, however, to the vigour of the new spirit, to the new sense of man as "free, the master of his fortune, not chained to his place in a universal hierarchy but capable of all things."  But while the Renaissance possessed the same general qualities as the Enlightenment, manifesting most of the same intellectual themes and tensions, it resolved them in a different manner. Rather than a revolution, the Renaissance represented a victory for moderation and "compromise". Gay puts it:
It was, then, to the Enlightenment that was left the task — the honour — of finally breaking out of the "holy circle" (as Gay terms it) and of completing what we might call "the revolution of reason". The "recovery of nerve" manifest in the Renaissance reached its culmination in the sense of life of the Enlightenment, in an ethos in which the possibility of massive social protest no longer wore a mantle of unrealistic utopianism. And this revolution in attitude, as Gay makes clear, was precisely the product and accompaniment of the growing predominance of reason, of critical intelligence, and its fruits in science and medicine. What Gay's work so effectively and valuably underlines is the inextricable linkage of the two basic values of the Enlightenment, between "the supremacy of philosophy and the autonomy of man". For the revolution of reason was simultaneously and of necessity the revolution of liberty. The autonomy of the individual rests only upon the supremacy and exercise of a militant rationalism which blasts aside the pretensions of illegitimate authority and the mystique of the status quo. The revolutionary significance of an unbridled rationalism was indicated most vividly by Diderot's ideal of the philosopher who:
II: Liberty and Capitalism
The political temper and tendency of the Enlightenment was, then, fundamentally libertarian. Its politics was essentially a politics of liberty — a "politics of decency" as Gay sympathetically puts it — which launched a growing attack upon a hierarchical class society, upon slavery and serfdom, upon clerical despotism and upon the barbarity of the criminal law, in favour of a free and humane society open to talent and merit. As Gay states:
Moreover, while hardly a radical libertarian, and frequently manifesting many of the orthodox myths and attitudes (he is, for example, quite capable of speaking about "the bourgeois spirit, which would merely rationalize the cowardice, the greed, and the philistinism typical of the trading mind"!  ) Gay makes it thoroughly clear that economic freedom, the ideal of the free market and laissez faire, was a vital and basic part of the Enlightenment's radicalism. He speaks of Adam Smith's The Wealth of Nations as a "cardinal document of the Enlightenment"  and declares that,
In fact, Gay's — alas too brief — comments regarding the origins of capitalism are remarkably incisive and of some note in an historical area crying out for libertarian revision. Indeed, his remarks lend support to the thesis of Professor Rothbard in his essay "Left and Right: The Prospects for Liberty". They implicitly help refute the view (originated, as Rothbard pointed out, by the late 19th Century German anti-liberal historians) that the growth of the absolute monarchies and of mercantilism was a historically progressive stage necessary for the liberation of the merchants and masses from local feudal restrictions.  Rather, Gay helps show that the genesis of market capitalism was essentially an interstitial one, a development that flourished precisely where coercive authority was exercised less, whether that authority be of feudal lord and guild or royal absolutism and mercantilism. In Gay's words:
III: The Reversal of the Enlightenment
However, as incisive and valuable as Gay's study is, it unfortunately falls short of perfection in one very important respect. Perhaps it is due to the fact that the author is not himself a radical libertarian, but a relevant and central question regarding his subject is notable mainly by its absence: i.e. what became of the Enlightenment's "humane and libertarian vision"? What happened to a seemingly overwhelming intellectual and political movement toward "natural liberty"? That Gay fails to explore this issue is all the more strange since his own principal intellectual mentor, Ernst Cassirer, had himself voiced such questions:
The major part of the answer to such questions can be found, I believe, within the Enlightenment itself. As Paul Hazard wrote regarding the "disaggregation" of the Enlightenment:
In other words, it was the very flaws and ambiguities within the Enlightenment's own philosophy to which we can trace the causes its dissolution and the failure of its libertarian promise. In all fairness to Professor Gay he does partially recognise this. He is quite well aware, of course, that "[t]he world has not turned out the way the philosophes wished and half expected it would."  And he does portray those ambiguities which were to prove so fatal — but implicitly. What he fails to do, unfortunately, is to draw out explicitly the full significance, the political and ideological significance, of those philosophical ambiguities.
What, then, were those fatal ambiguities to which we refer? Drawing especially from the second volume of Gay's work, The Science of Freedom, we can, I think, distinguish four major areas of concern:
IV: The Nature of Reason
Although the Enlightenment was eventually to be subject to especially vehement attack for its allegedly "cold and heartless" rationalism it was, ironically, precisely the status of reason and its relationship to the emotions that constituted a serious ambiguity central to most Enlightenment thinkers. For although committed to rationalism and to philosophy as "the organized habit of criticism", the Enlightenment also stressed a certain "philosophic modesty". In their reaction against the abstractions and dogmatisms of both mediaeval and 17th Century philosophy and theology —against what David Hume termed "an abstruse philosophy which seems to have hitherto served only as a shelter to superstition, and a cover to absurdity and error"  — the philosophes were uncertain as to the nature and ultimate province of reason. As Gay states: "[t]he limits of rational inquiry into ultimate mysteries, the impotence of reason before the passions, were ... themes that haunted the Enlightenment."  Indeed, he is even able to label this aspect of their thought as a "revolt against reason". Moreover, this uncertainty as to the power and province of reason combined with another fatal ambiguity. For the rehabilitation and celebration of man as a natural creature was a rehabilitation of the "whole" man, of the passions as well as of reason, of man as a sensual and emotional being. And to a certain degree this was all well and good; as Gay states, "the Enlightenment's rehabilitation of the passions was essential to its rehabilitation of man as a natural creature."  But the philosophes were unable to successfully resolve the false dichotomy between reason and emotion, and in fact widened it by their vague and dangerous encomiums to the passions. The "emotional" nature of man, the limits — both philosophical and psychological — of individual reason, was a central message of Enlightenment thought. Hume's statement that "[r]eason is, and ought only to be, the slave of the passions ..." was merely one of its most famous manifestations. And thus the Enlightenment had left the path fatefully unobstructed for the progress of those myriad doctrines proclaiming the primacy, psychological, political and moral, of the "passions", for movements seeking the fulfilment of the alleged emotional needs of man, for countless irrationalist theories and cults; in a word, for the statist collectivisms of both "left" and "right".
V: Psychology and Reason
A similar ambiguity in Enlightenment philosophy arose in the area of its dominant psychological concepts, i.e. because of its Lockean "sensationalism" and "associationism". For although the motivation and predominant interpretation of the Lockean approach was undoubtedly libertarian — i.e., in its undermining of "original sin" and the mystique of the status quo, and establishment of the possibility of rational and radical social improvements  — its potential implications were sinister indeed. The whole tendency of empirical psychology following Locke was the minimising, ultimately the complete denial, of the significance — the very existence of "reflection", i.e. of reason. In modern terminology, its vision of man was essentially deterministic and behaviouristic, and the implications of such a vision are, as its more radical and frank exponents were eventually to declare, to render "freedom and dignity" quite meaningless. The logic of determinism and environmentalism is most definitely not the logic of liberty, but that of "social planning", "social control", "social engineering" and other such similar formulas for tyranny.
VI: Natural Law and Natural Rights
But possibly the most immediately striking ambiguity — certainly the most immediately politically significant — within Enlightenment thought was the tension between the tradition of natural law-natural rights philosophy and that of utilitarianism. And that tension was one resolved increasingly in favour of utilitarianism. As Gay puts it: "As the century went on, the philosophes' attitude toward natural law became more and more sceptical, their relation to it more and more tenuous ..."  The significance of this change in attitude indeed held the most serious implications for the Enlightenment's "humane and libertarian vision", for the point is, as Elie Halevy made clear in his classic study of philosophic radicalism, that "[t]he philosophy of utility is not essentially a liberal philosophy — not, in origin and in essence, a philosophy of liberty."  The real nature of utilitarianism was not immediately apparent during the Enlightenment because its exponents and those of a natural rights based liberalism shared many of the same assumptions regarding man and society, assumptions largely libertarian in orientation and result.  But once those assumptions changed, then the logical direction of utilitarianism could be seen clearly for what it was, and that was most definitely not a libertarian one. The example of Jeremy Bentham in this respect is particularly illuminating, and although he stands largely outside the main period of concern even Professor Gay is constrained to comment parenthetically upon him. For Bentham's obsessive fascination with his "Panopticon" model prison scheme, a vision of absolute "efficiency" and authoritarian control, illustrates very well the internal logic of the utilitarian position and its hold on the mind of a certain type of intellectual. Gay's dismissal of this authoritarian, manipulative element in Bentham's thought as an "eccentricity"  simply will not do. It should certainly be considered in the context of the other themes in his work, countervailing themes more libertarian and individualist in essence, but it remained nonetheless a very real and powerful element.  And Bentham's significance in the context of this issue should not be underestimated; Gay is surely right in his description of him as "the arch-philosophe, who took eighteenth-century radical ideas into the nineteenth". 
The Enlightenment's ambiguity relating to natural law is rendered all the more striking, however, when we realise that it was David Hume who delivered the real, the philosophical and epistemological, deathblows to the doctrine. For Hume, in Gay's view, represented "the complete modern pagan", and almost archetypal embodiment of the Enlightenment ethos and dialectic: "in his intellectual pedigree, in his intentions, and in his very world view, Hume belongs with the philosophes, no matter how amiable his disposition, individual his argumentation, and unexpected his conclusions".  Yet Gay is also compelled to recognize that in its attack on "mere philosophic fictions" Hume's thought "marks an epoch in the internal history of the Enlightenment."  If reason constituted the basis of the Enlightenment's radicalism and libertarianism, Hume's denial of necessity in causal relations, his denial of any rational basis to moral judgments, and his declaration of the impotence of reason before the passions, clearly represented a major challenge to that libertarianism. Whatever the complexity of motivation and intellectual orientation in Hume's case, a more penetrating assessment of his historical significance is surely that of Sheldon S. Wolin, who declared that
At this point it should be stressed that Gay is correct in emphasising the "humane and liberal vision" as fundamental to the Enlightenment. The attempt by such scholars as J. L. Talmon and Louis Bredvold,  to portray the philosophes simply as pro-tototalitarians can only be supported by a highly selective and one-sided reading of their work. However, the point is that totalitarian potentialities were implicit in the Enlightenment, within the sort of philosophic ambiguities we have discussed. And Bredvold, in his The Brave New World of the Enlightenment, is certainly correct in his view of the ominous implications of the abandonment of natural law. It is, then, precisely in such ambiguity — as much as in its positive intellectual virtues — that the significance of the Enlightenment lies.
VII: Science and Scientism
Not as immediately important as the abandonment of natural law and the rise of utilitarianism, but undoubtedly as ultimately significant, was a further ambiguity arising from the question of the status and implications of Science. As Gay notes, Science became in the enlightenment a "new mystique", with the figure of Newton being virtually deified.  But in their quite understandable and thoroughly humanistic enthusiasm for the mastery over nature — the liberation — promised, and increasingly achieved, by Science, the philosophes drew conclusions that resulted eventually in unhumanistic — and inhumane — developments. As Gay puts it:
But as he further states:
Unfortunately, however, Professor Gay hardly broaches the full irony, the real ambiguity, of the Enlightenment's vision of science, and why it held such ominous implications. This consists of the fact that it was the methodology of the physical sciences that was to be applied to the study of man and society. Thus there was born that phenomenon we now refer to as "scientism", a development perhaps most thoroughly analysed by Friedrich Hayek in The Counter-Revolution of Science. 44 In
scientism we confront a profoundly unscientific, uncritical attempt to transfer the methodology of one scientific discipline to another, ignoring the crucial and distinctive attributes of their respective subjects — in the case of the study of man, his rational consciousness. Thus, the dominance of scientism has produced "social sciences" characterized by their militant denial of the validity of introspection, by reductionism and determinism, and by methodological collectivism, holism, and historicism. Of course, in the work of the most scientifically inclined of the philosophes — d'Alembert, Turgot, Lagrange, and Condorcet — the full implications of this development were hardly grasped or acted upon. As Hayek observes, they still embraced, both in theory and practice, not insignificant elements of the "abstract and theoretical method" and indeed remained "staunch individualists". But nevertheless, as Hayek also concludes, "in some respects most of these men unwittingly started trains of thought which produced views on social matters very different from their own."  The ethos of science and rationality, of control over nature, was also transformed by other figures into a "scientific" vision of "humanity determining itself", and other rhetorical formulas which glossed over the fact that this could only mean in practice some men "determining" others. Thus, in the "social physics" of Saint-Simon and August Comte, and in the later classic sociology of Durkheim and Mannheim, scientism emerged fully in its true colours — i.e., as a thoroughly anti-individualist, anti-libertarian, and authoritarian movement, a counter-revolution in every sense of the term. Once more, then, the Enlightenment's heritage was an ambiguous one. If Gay can pay tribute to its "humane and liberal vision", then such contemporary advocates of totalitarian social engineering as Ernest Becker  are, alas, equally well justified in tracing to the Enlightenment's search for a "science of man" the roots of their own nefarious and despotic vision.
VIII: The Ambiguities of the Enlightenment
It is, then, a failure to draw out the full significance — the political and ideological significance — of the ambiguities within Enlightenment philosophy that constitutes the major failing of the otherwise so masterly achievement of Peter Gay's The Enlightenment: An Interpretation. Not that he is entirely unaware of such ambiguities, or fails to deal with any of the political aspects of the Enlightenment, of course. He does state, for example, that "politics presented the Enlightenment with a dilemma of heroic proportions".  The issue of whether coercion and manipulation by a paternal and enlightened was justifiable for the attainment of Enlightenment ends was, Gay indicates, a major issue, and one rendered all the more central by the generally environmentalist viewpoint of the philosophes.  The anti-libertarian implications of such environmentalism were in fact seen, as Gay recounts, by Diderot, who criticised the ominously authoritarian direction in which Helvetius' extreme environmentalism had led him.  Yet such points cry out for elaboration, an elaboration they alas fail to receive. Consider the final chapter of the second volume, dealing with Rousseau. What an opportunity, in analysing this paradoxical figure, to sum up all the ambiguity of the Enlightenment and its political meaning. For Rousseau, as Gay does indeed state, while "not wholly in the Enlightenment ... was of it". He was, in Gay's view, at one and the same time "a libertarian who could not get compulsion out of his mind".  He so blatantly manifests, too, that pathological psychological characteristic we so frequently find at the roots of statist-collectivist movements, that "urgent, sometimes frantic longing for community".  In all these things Rousseau gave an unmistakable indication as to the course of future history. And in his typically "dialectical" concept of "the general will", an attempt to offer a solution to "the dilemma between freedom and reform that beset the [other philosophes]",  the path of much future political thought and development could clearly be seen. Professor Gay rightly recognizes that Rousseau was thus more "modern" that his fellow philosophes and that his thought was distinguished by its "anticipation of future problems".  But that Rousseau's solutions "presented glimpses of a future not wholly palatable"  is surely an understatement. In both motivation and thought Rousseau clearly stands, as Crane Brinton has stated, as "one of the prophets of modern collectivist society". 
Although one recognizes that any study of so broad a scope as Professor Gay's is subject to obvious limitations of space, his failure to pursue such important and significant insights beyond a few token sentences or comments is striking — all the more so in comparison with, say, his extremely detailed treatment of such a topic as the aesthetic thought of the Enlightenment.
In The Rise of Modern Paganism, the first volume of his study, Gay had seen a major part of his scholarly task as that of judging the "adequacy or inadequacy" of the Enlightenment's historical vision of itself — i.e. of its significance and place in history. What I find so grieviously lacking (and, as a radical libertarian, so important) in The Science of Freedom, the second volume, is any similar evaluation of the Enlightenment's philosophic-political vision of itself, of the significance and status of its political liberalism and its "science of freedom". In fact, what becomes unmistakable after any serious study of the Classical Liberal tradition is just how ambiguous, how restricted, and how fatally flawed in its libertarianism it was. Its departures from individualist premises, in both normative and analytic respects, were far from infrequent. Thus, we find Adam Smith declaring, in The Theory of Moral Sentiments, that "Man was made ... to promote ... the happiness of all".  As one Smith scholar has concluded: It was not to serve the selfish benefit of the individual that he should be given his head ... the belief that Smith was primarily an individualist ... is the very reverse of the truth. For him ... the interests of society were the end."  Similarly, his very view of the individual was as a highly "social" creature, moulded by his social relationships and extremely vulnerable to the alleged horrors of isolation and loneliness. It was indeed an extremely "oversocialized conception of man" (to use the phrase of Dennis Wrong) to which Smith adhered,  and, as Gladys Bryson has written, "in (the) discussions of Smith's ... which prefigure so much of modern social psychology, there sometimes seem to be no individuals at all, so organic is the relation of person to person conceived to be."  These characteristics were shared by the whole of the "Scottish School" of which Smith was a member — by Hume, Adam Ferguson, Francis Hutchinson, John Millar, Dugald Stewart, the major thinkers who established not merely foundations of political liberalism but much of the basic conceptual framework of modern thought, the intellectual channels in which thought has run since their time. And for the Scottish School, as A. L. Macfie has written, "the ultimate unit is society, and moral obligations consist just in the individual's duty to society, where there is conflict with the claims of 'self-love'."  In the work of Adam Ferguson, for example — which was, significantly, an influence upon Marx — we find an often extreme hostility to individualism and "selfishness", a view of the individual as overwhelmingly socially conditioned, and an early version of the wrongheaded and harmful "alienationist" thesis. 
The same sort of fatal ambiguities and flaws were also present in Classical Economics as a whole. Much of the "communitarian" and nationalistic outlook at the Mercantilists was to remain in the Classical approach. "It was," Professor Lionel Robbins points out in his important study The Theory of Economic Policy in English Classical Political Economy, "the consumption of the national economy which they [the Classical Economists] regarded as the end of economic activity".  And regarding the concept of laissez faire it should also be noted that none of the Classical Economists ever adopted it as a consistent policy proscription. At best it was only conceived of as a vague tendency within the boundaries of legitimate national sovereignty. Any government intervention in the economy, any restriction of "natural liberty", was to be judged on its individual "merits", not against any standard of natural rights.  Moreover, serious technical ambiguities and failings drastically undercut the Classical analysis of the market. Smith's view of the division of labour (like Ferguson's) left the way clear, even encouraged, the later development of alienationist doctrines. More importantly, however, the Classical labour theory of value provided the foundation for very different conclusions which were to be drawn by Marx and other socialists — and even led astray many individualists in their view of profit, interest and rent. In all, then, as Lionel Robbins concluded, "The Classical analysis abounds in pessimistic vistas and revelations of clashes of interest." 
One could elaborate at much further length, but the point should be clear.  Liberalism, from Smith and the Scottish School, through Classical Economics, Bentham and the Utilitarians, to Mill, Spencer and up to the present day has been completely undermined by its own fatal intellectual ambiguities and flaws. It failed to complete the Enlightenment's revolution of reason, to provide a complete and consistent vindication of human liberty. Instead, its conservative and collectivist elements overwhelmed its liberal and individualist ones. As Sheldon S. Wolin has concluded in an important and penetrating re-assessment of the liberal tradition:
Professor Gay's failure to deal with the ultimate political significance of the Enlightenment is in fact rendered all the less understandable by his recognition of the dual nature of its concern with "criticism and power",  in his statement that "[t]he science of freedom (i.e. Enlightenment scholarship) was intended as a practical science".  His conclusion of the second volume on a brief consideration of the American Revolution as "the (Enlightenment) programme in practice", and an assessment of The Federalist as "a classic work of the Enlightenment"  is not only quite inadequate in the depth of its analysis but only serves to underline the fundamental ambiguity of the Enlightenment's politics. For while we can indeed perceive the strong influence of the "eighteenth century commonwealthman", of natural rights libertarianism, in colonial and revolutionary thought, we can also find there, as William Appleman Williams has persuasively argued, strong elements of the mercantilist, nationalist, and conservative traditions. 
If, in the latter half of this examination of Peter Gay's The Enlightenment: An Interpretation I have struck a somewhat critical note, it should not be allowed to detract, however, from the profound admiration it nevertheless elicits in me. In an age in which the forces of unreason and irrationality are ever more rampant, in "counter culture" and "ivory tower" alike, Gay's work provides and eloquent and much needed reminder of — and tribute to — the revolutionary significance of Reason in human history. To enter, via the two volumes of Gay's study, the intellectual world of the Enlightenment is to enter the dazzling realm of the promise of rationalism. If the philosophes failed to fulfil that promise, their work nevertheless still provides us with both inspiration and instruction. Learning from both the achievements and the errors of the past we must, and can, ensure that this time a revolution of reason will not be betrayed, that every vestige, political and intellectual, of the "old order" will at last be deservedly swept into the dustbin of history. And to replace that "old order", which is alas still with us, for the contemporary radical libertarian the inspiring vision is that voiced so movingly by Condorcet, of "[t]he moment ... when the sun will shine only on free men on this earth, on men who will recognize no master but their reason."