"Classical liberalism asserts as its major idea an opposition to all
but the most restricted and minimal forms of state intervention in
personal or social life. Well this conclusion is quite familiar,
however the reasoning that leads to it is less familiar and, I
think, a good deal more important than the conclusion itself."
....coexisting uneasily with indefensible authoritarian
practice."
So he's rejecting the well-known conclusions of classical liberalism, but extending classical liberalism's lesser-known reasoning. (At least Humboldt's form of it.)
^^^^^^^ CB: A big weakness of this understanding of the state is it is not based in an analysis of economic classes. This is a general weakness of _lib_eral and _lib_ertarian theory. The state , the socialist state, should intervene in social life substantially to abolish the capitalist class. "Authoritarianism" is a abstract and flawed liberal and libertarian concept, because it is based in lack of understanding of the role of the state in the transitional phase out of capitalism to communism.
1. The State: A Product of the Irreconcilability of Class Antagonisms
Summing up his historical analysis, Engels says:
“The state is, therefore, by no means a power forced on society from without; just as little is it 'the reality of the ethical idea', 'the image and reality of reason', as Hegel maintains. Rather, it is a product of society at a certain stage of development; it is the admission that this society has become entangled in an insoluble contradiction with itself, that it has split into irreconcilable antagonisms which it is powerless to dispel. But in order that these antagonisms, these classes with conflicting economic interests, might not consume themselves and society in fruitless struggle, it became necessary to have a power, seemingly standing above society, that would alleviate the conflict and keep it within the bounds of 'order'; and this power, arisen out of society but placing itself above it, and alienating itself more and more from it, is the state." (Pp.177-78, sixth edition)[1]_The Origin of the Family, Private Property and the State_
This expresses with perfect clarity the basic idea of Marxism with regard to the historical role and the meaning of the state. The state is a product and a manifestation of the irreconcilability of class antagonisms. The state arises where, when and insofar as class antagonism objectively cannot be reconciled. And, conversely, the existence of the state proves that the class antagonisms are irreconcilable.
http://www.marxists.org/archive/lenin/works/1917/staterev/ch01.htm