All wars suffer casualties on both sides.  Worse, there is always substantial collateral damage.  The wars against liberal civilization, both hot and cold, that punctuated the Twentieth Century were no exception.  Liberalism emerged triumphant, but hardly unbloodied.
Not all casualties are physical.  The depraved political events of the last 8 years in particular are to some significant degree the result of the intellectual struggle against socialist planning waged so effectively, particularly by Ludwig von Mises and Friedrich Hayek.  They demonstrated that the ideal of deliberately planning a complex economy was impossible, and that what we now call the networked market economy is inevitably better.
The collapse of the attempt to implement socialism was the coup de grace.
But along the way economists came increasingly to define what was called classical liberalism, and with its intellectual triumph, their prestige rose immensely in all forms of liberalism.  Along the way the traditional liberal concern with the rights of individuals was eclipsed with concern for the prosperity of the consumer, making possible their less than noble role over the past 8 years.    “Neoliberalism” has been the result of many classical liberal insights being adopted by economists outside of classical liberal circles.  While neoliberalism has its own very serious shortcomings, I want to focus on the tragedy of classical liberalism.
After WWII classical liberals were on the intellectual defensive, despite their in retrospect decisive critiques of socialism.  Their mistaken belief that any increase in government activity led to the slippery slope of socialism, and consequent denial (NOT so much by Mises and Hayek) of any significant ameliorative role for government led them to look for allies wherever they could find them.
The result was to ally themselves with conservatives. Conservatism, which is illiberal, also opposed attempts for an expanded government role domestically.  But the principles of the American Revolution and the Constitution are not conservative.  Intellectually conservatism has long tied its standard to defending class, status, and hierarchy, usually as goods in themselves.  So American conservatism started with an internal contradiction.  Classical liberalism added another: a praise of the market as a competitive and socially and economically transformative process.
The resulting alliance was intellectually and ethically incoherent (as demonstrated by the civil rights era where liberal principles warred with Southern conservatism). But it was politically significant in the short run.  When the religious right was added as another “conservative” voice, the result for a while was an electoral majority purchased at the price of complete intellectual incoherence.  The most obvious initial evidence of this incoherence was the Terri Schiavo affair, where families, science, state autonomy, and the rule of law were overridden by ignorant and dishonest politicians and their theocratic supporters.  Most recently, the coddling of big business, protecting it from its mistakes, demonstrates the utter irrelevance of classical liberalism today in the political party to which t hitches its political influence. And there are so many other examples.
One casualty was the collapse of classical liberal intellectual standards with almost the sole exception being some libertarians.  For example, Thomas Sowell started out as an insightful economist dealing with racial issues, but ended up calling for a military coup against “degenerate” Democrats, should they have the temerity to win in 2008.
When one’s intellectual standards are incoherent, arguments are best won by character assassination, lies, and promoting division (wedge issues).  Party lines become more important than reason, loyalty more important than evidence.  The period of the Bush II. Administration marked what I hope is the nadir of classical liberal thought.
A  few years ago I attended a session of the Mt. Pelerin Society, once the center for classical liberal thought, to hear endless denunciations of Democrats, praise of corporations, and charges that Rachel Carson was guilty of “genocide” (see here and here) along with utter silence regarding the Bush administrations dismantling of the Constitution and claims to executive supremacy.  After all, the Bushies opposed big government regulating the economy, even if they expanded government everywhere else.  The consumer was happy (in the short run) even if the citizen was not.
Today in my opinion classical liberalism is largely a spent force, mostly bereft of an older generation of creative scholars, for so many became right-wing apologists and hacks.  Some of its key ideas have penetrated deeply, but creative use of classical liberal insights is increasingly being done by other-than-classical liberals.  Co-opted first by conservatives, then by the ‘Christian” right, Neocons, and others, they have become associated in many minds, including my own, with apologists for torture, aggressive war, authoritarianism, and Caesarism.
And yet an obituary may be premature.  I recently returned from a conference where creative younger scholars, and not just economists, applied classical liberalism’s most valuable insights about emergent orders to a variety of important problems.  Perhaps the best of classical liberal scholarship still has a future ahead of it in working out the modern world’s new concern with emergent orders  in markets, ecologies, science, democracies, and elsewhere.
But for this to happen classical liberals must give up their love affair with their political partners in the Republican Party.
I hope they do.