To understand why, despite the recent funeral orations, liberalism is very much alive, you have to go back to the 1860s and the abolition of slavery in two key countries. To be precise, 1863, when – in one of the great coincidences of history – the proclamations of liberty for the American slaves and the Russian serfs came just five weeks apart.

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Both liberations were great victories for anti-slavery campaigners, more than half a century after the first successes of the campaign against the slave trade. But they were also great disappointments for radicals. Because, in both cases, the slaves and the serfs were catapulted from bondage into poverty.

In the US, slavery was replaced by peonage and debt bondage. In Russia, the land was valued at three and a half times its market value, and the impoverished serfs had to pay this to their former owners over a period of 49 years. It became clear that it wasn’t enough to release the slaves – you had to release them from debt, monopoly and the economic tyranny that replaced it.

By then, the basic tenets of free trade had been set out by economists, but it was liberalism that turned it into a political objective. Richard Cobden, Liberal MP for Rochdale – the man most responsible for the repeal of the corn laws in 1846, allowing the price of bread to fall – knew that if you just set slaves free, they could then potentially be bound just as firmly by controlling where they could buy what they needed, or by putting them in debt.

So the original idea of free trade was not a simple licence to do whatever you wanted, if you were rich and powerful enough. It was designed as a means of liberation – so that the small could challenge the big, the poor could challenge the rich with the power of a new approach, an alternative provider, an imaginative, liberating shift. It was an antidote to the old pattern that employers could control not just what you were paid, but also what you paid for the things you needed to live.

But recent decades have seen this central liberal economic doctrine become its own opposite – permission for the rich to ride roughshod over the poor, an apologia for monopoly and an extractive discipline that prevents the all-important challenge from below. It became instead a potential tool of enslavement.

Why? Because of what happened in the US as a result of Friedrich Hayek’s 1944 attack on scientific central planning and his manifesto for economic liberalism, The Road to Serfdom, a hymn of praise to the idea that people needed to buy what they wanted, where they wanted – and that anything else was a recipe for tyranny.

Facebook Twitter Pinterest Milton Friedman’s book Capitalism and Freedom marked the break between liberalism and neoliberalism. Photograph: George Rose/Getty Images

The book was praised by John Maynard Keynes and George Orwell, yet its message – and Hayek’s alliance with the doyen of American liberalism, Henry Simons at Chicago University – led, in a few short decades, to something known as neoliberalism.

Simons killed himself in 1946 but not before he and Hayek had raised the money, from a furniture manufacturer, to write a version of his book for a US audience. Two economists failed to finish it. It wasn’t until 1962 that it was completed, by Simons’s pupil Milton Friedman, who published it as Capitalism and Freedom. This also marked the break between liberalism and neoliberalism, as I explain in my new book The Death of Liberal Democracy?. Friedman argued that intellectual property was a kind of property, and must be defended as such, rather than – as it actually is – a temporary suspension of free trade to encourage innovation. That is why draft agreements such as the Transatlantic Trade and Investment Partnership (TTIP), which purport to be about free trade, are actually about defending investments and trademarks.

Even more seriously, Friedman argued that monopoly didn’t matter, and – if it did happen – it was the fault of the government for over-regulating.

The first error led to the great heresy of neoliberalism, that corporations should be treated like human beings in legal terms. The second was a rejection of the most fundamental element in liberal economics, a defence against the over-concentration of market power. It was the very opposite of liberal free trade.

It explains why the dead hand of neoliberal orthodoxy has ignored monopolies as a problem as they grow in power over our lives, as we fall into the tyrannical clutches of companies we are virtually forced to buy from, such as Visa, Google or Amazon, or some toxic future merger, say TescoVirginWalmart.

So when Martin Kettle says that the era of post-liberalism is at hand, he is not talking about political liberalism – which is suddenly a relevant critique of monopoly power – he is talking about a liberal heresy called neoliberalism, which means almost precisely the opposite. And when John McDonnell hails the same post-liberalism (which actually sounds more like pre-liberalism) in his Labour conference speech – a vision of rival nations propping up their own steel industries (precisely the kind of waste that free trade was supposed to tackle), forced to pay more and more as the rivals pay more and more – he is missing the point.

In fact, liberalism is alive and well and awaiting a champion for diverse economies. Because there are monopolies waiting to be broken up.