The Liberal Fade

As the twentieth century came to a close liberalism seemed triumphant. Communism, that had offered a comprehensive alternative vision of economic, social, and political relationships had collapsed. A market order seemed on its way to worldwide acceptance. There was hope that this would be accompanied also by the adoption of liberal democratic orders in the world.

As the first quarter of the twenty-first century ends this optimism has faded. Authoritarian political regimes have reasserted themselves and authoritarianism has gained a new appeal even within democracies. Economic organisation also seems to be departing from market principles. The market remains under political control in China and a desire by governments to pursue strategic economic objectives is now prevalent elsewhere, including on both sides of the Atlantic. The growth of international trade has been held back by concerns about cyber security and the dubious integrity of contractual arrangements around labour conditions and environmental standards in supply chains. Fully multilateral rulemaking has become almost impossible. Rulemaking now relies on smaller groupings of like-minded countries to pursue more limited objectives.
 
Against this background, this blog sets out four main challenges faced by liberalism in today’s world.
 
The erosion of democratic norms
 
First, democratic norms appear to be eroding. The apparent loss of appeal of democratic norms is a symptom of other challenges facing democracies but is itself a challenge. Democracies depend on the observance of certain norms of behaviour in political interactions. The liberal tradition identifies norms such as a willingness to participate in democratic activity such as voting, a willingness to discuss our views with others including those with whom we disagree, a willingness to share experience, being willing to listen to reason, a preparedness to arrive at ethical and moral judgements in the light of the facts of a situation, and what is known as losers’ consent, where political reversals or a failure to achieve power in government are accepted as part of the normal swings of political opinion. 
 
The apparent loss of appeal of these norms raises the question as to how far institutional adaptations can encourage their rebuilding. The founders of the liberal approach took human nature as a given. Institutions were designed and to be appraised by the ways in which they discouraged bad traits such as the desire of executives to accumulate power or of uninformed majorities to abuse theirs. Conversely, they were designed to encourage good traits such as to elevate those with knowledge and understanding into law making positions. 
 
On the whole this starting point of taking human nature as a given has continued. In more recent times Hayek asserted the knowledge that lay within and what is referred to as the wisdom of crowds where we benefit from knowledge we do not even know we possess. If we can rely on the wisdom of crowds then the deficiencies of mass electorates become less forbidding. 
 
The challenge to this tradition is the view that institutions can and have to do more than simply respond to human nature; they have a role in shaping the norms of behaviour. For example, power sharing arrangements such as PR might encourage or enforce cooperative behaviour.
 
Distancing 
 
The second area of challenge concerns the distancing that is taking place between citizens and the institutions of democratic government. It devalues the role of consent as a basic element in the liberal tradition. The devaluing of consent tilts the balance of the justification of government towards acceptance based on good intentions and results.
 
The most commonly cited cause of distancing is ‘judicialization’ – the growth in reliance on courts for deciding issues that in the past would have been decided by elected governments. Also feeding a sense of distancing is the reliance of modern policy making on the knowledge branch of government. This comprises those independent agencies that bring epistemic knowledge and practical experience to policy making of a kind not found within the skill-sets of elected politicians. The liberal tradition has itself contributed to epistemic distancing by emphasising the role of reason in making laws, by favouring the separation of epistemic knowledge from the institutions of elected government and by insisting that ethical judgements should be informed by facts and context. 
 
The standard response to the growth of technocratic government and the world of independent agencies is that epistemic bodies are still answerable to a collective model of accountability because their terms of reference make them still the creatures of the political branch. This standard response no longer holds water. The relationship is increasingly a two-way relationship. Expert bodies also hold elected politicians to account. Citizens may face rival claims as was abundantly clear in the case of COVID. The result is mixed messages and confusion.
 
As a symptom both of the growth of judicial authority and specialised agencies, citizens find themselves today at the end of long chains of intermediation when they deal with the world of collective choice. The institutions of democratic politics, representatives and assemblies seem far away and not necessarily well-informed themselves. Even more important, those in representative assemblies may be seen as only weakly representative of electorates. In today’s intercultural societies, assemblies struggle to stand in for those who are not present. 
 
The distancing between citizens and forms of government affects all forms of democratic government but represents a particular challenge to the liberal tradition. Other approaches to democratic organisation that address electoral behaviour more directly, for example by insisting on a policy consensus, or by asserting that values expressed in rights should trump other considerations, appear possibly more relevant and persuasive.
 
Market organisation
 
The third challenge is that market organisation is changing in ways that blur the traditional distinction between coordination in the market based largely on price signals and the coordination of collective processes based on the signalling of political debate. 
 
What has changed in the marketplace is the role of information rather than prices in determining market opportunities and advantage. The switch to information- driven economies places a premium on organisational form. In this world, market organisations must gather the maximum relevant knowledge, find ways of assessing and weighing it and have decision rules that shield them against the well-known traps of group think and other defects in group decision making. What is more the same criteria for organisational form apply also to the institutions for collective decision making in politics. The convenient distinction between markets driven by price signals and politics driven by non-price incentives has disappeared. Both are driven by the same organisational imperatives to process information in complex decision-making environments.
 
The appeal of the liberal tradition has been particularly vulnerable to this development. The superiority of market signals as a means of social coordination and for distinguishing the role of politics was a foundation for claims of the superiority of the liberal order during the post war cold war. The switch to a need to look at common organisational issues that affect equally both market organisations and political organisation is thus a major challenge. 
 
Intergroup relationships
 
Finally, intergroup relationships have become more fraught. Differences centre on group relationships in shared urban settings. The traditional liberal view of human nature emphasised the innate instincts of sociability that lay alongside purely selfish instincts. Sympathy, empathy and civic sense were all seen as innate qualities in people that would lead them to cooperate in the collective action of politics. 
 
In addition to relying on an innate sense of civil association the liberal tradition relied on two other founding assumptions about the social order. First, the founders of the liberal tradition were secularists. Their second assumption was that where major differences between groups occurred, including differences based on religion, such differences could be contained by geographical separation and decentralisation within the state. Federalism provided the answer.
 
Each of these assumptions is challenged in today’s world. Groups provide individuals with positive ways of relating to others but are also sites of defensive and sometimes aggressive behaviours. Religion still colours social and group relationships to an extent that the thinkers of the enlightenment might have found surprising if not shocking. Moreover, geographical separation does not work in the shared urbanised settings of modern societies. Other forms of recognition seem more relevant such as distinctions based on distinctions between policy areas and rights of mutual veto. 
 
The vulnerability of liberalism
 
These challenges face all models of democracy but they pose a particular challenge to the liberal tradition. The erosion of norms questions whether there is a fundamental weakness in the liberal approach to the role institutions play in the cultivation of democratic norms. The blurring of the distinction between market organisation and the organisation of collective choice removes a critical support relied upon by modern liberalism. The liberal account of our social instincts seems inadequate in the face of intergroup frictions in today’s intercultural societies.