America these days is a nation stalked by anxiety. One source of that creeping anxiety is the nagging suspicion that we’re off the inked parts of destiny’s map, and that, in the blank white spaces into which we have wandered, there is no point trying to seek out historical precedent to guide us forward. There’s no point, either, in relying on obsolete ideological templates. We’re all pragmatists now, President Obama not least among us. When the President said in his Inaugural Address that “The question we ask today is not whether our government is too big or too small, but whether it works”, he sounded the anthem of an era that has moved beyond flinging political labels as epithets. There’s a lot to be said for pragmatism, especially if the alternative is some kind of dogmatism. But pragmatism in politics is not the absence of ideology; it’s only the absence of self-aware ideology. It’s a mistake to ignore precedent, and it’s a mistake to dodge the task of discerning what our political principles—in particular, liberalism—actually mean in the current context.

Context really is critical. As most know, liberalism arose some centuries ago, mainly in Britain, as a form of anti-statism. Liberals opposed mercantilism and extortionary taxation, military impressment and property expropriation. Liberalism meant markets freed from government regulation, societies freed from officially mandated inequality. The context back then ensured that to be a liberal also meant, as John Stuart Mill so gracefully expressed it, to support rights for women and minorities, the abolition of slavery, and equal and due process for all. It thus meant the opposite of conservatism, which upheld autocracy and social inequality.

If we fast-forward to the 1960s and a bit beyond, we encounter a context in which American liberalism came to mean in many respects the opposite of its namesake: expansive government, higher taxes, intrusive state programs of social engineering and greater centralization of political authority. Forty years ago, the anti-statist core of 19th-century liberalism was more convivial to Republicans than to Democrats, even though these Republicans were called conservatives despite the fact that America, founded as a liberal project, has never had a conservatism that favored autocracy and social inequality (aside from the elites of the antebellum, pro-slavery South). And so the recipe: Take two abstract terms, add one ocean and a century-and-a-half, shake well, and the terms come out upside-down.

We all know this, more or less. What we tend to forget, however, is that for the entire sprawling period between the effective end of Reconstruction and...