Mill distinguishes two ways of living: following custom and exercising genuine individual choice. Custom offers the path of least resistance — it asks no difficult questions about what one values or what kind of person one wants to be. But a life led entirely by custom is a life led as a mechanism, not as a person. The truly human element of existence is the use of faculties: perception, judgment, discrimination, the active weighing of options against genuinely held values.
This does not mean that custom is always wrong or that originality is always right. Mill's point is structural: only a person who has genuinely considered the alternatives and chosen for themselves is living as a free human being. A person who copies the best possible role model has still not used the capacities that make them specifically human. The copy is always worth less than the original who made the choice freely.
Mill draws here on Wilhelm von Humboldt's ideal of Bildung — self-cultivation as the development of all human powers into a rich and harmonious whole. This is not self-indulgence; it is the most demanding possible account of what a human life is for. And crucially, it has a social dimension: the more developed individuals a society contains, the more valuable and stimulating the common life becomes. Individuality benefits not only those who exercise it but all who live among them.
Custom becomes despotism when it is imposed rather than chosen — when society treats non-conformity as a vice to be punished rather than a difference to be tolerated. Mill offers China as a historical warning: a civilisation that achieved remarkable cultural heights, then froze, because its genius for producing excellent customs was paired with an equally powerful genius for enforcing them. A society that crushes individuality in the name of stability achieves stagnation, not virtue.
The argument for individuality occupies Chapter III of On Liberty. Mill's debt to Wilhelm von Humboldt is acknowledged explicitly in the chapter. The comparison with China was controversial when published and reflects the imperial assumptions of Mill's era.