introduction: some insights from western social theory

World Development, Vol. 21, No. 8, pp. 1245-1261, 1993. 0305-750X/93 $6.00 + 0.00 Printed in Great Britain. 0 1993 Pergamon Press Ltd

Introduction: Some Insights from Western Social Theory

LAURENCE WHITEHEAD* Oxford University

Summary. -This introductory paper surveys a variety of Western analyses of the emergence of a liberal social order, ranging from the Scottish enlightenment, through responses to the French Revolution, and discussions of American exceptionalism, to various Central European reactions to the traumas of the interwar period, to “dependency” theory and Christian Democracy.

It identifies a number of central issues that are reappearing, in somewhat modified form, in the analysis of contemporary economic liberalization and political democratization issues in the South and East. Contrary to some recent triumphalism, most Western social theory has been deeply preoccupied with the fragility and reversibility of economic cum political liberalization processes.

1 .INTRODUCTlON

This special issue contains revised versions of various papers that were originally commissioned by the Social Science Research Council (SSRC) for discussion at a conference held in the European Centre for the Study of Democratiza- tion, in the Palazzo Mangelli, at the Forli campus of the University of Bologna in April 1992. This conference was the first of a series sponsored by the Joint Committee on Latin American Studies of the SSRC, to study the interrelationships between contemporary processes of economic liberalization and of democratization. Although there is a strong Latin American focus to this project (and indeed the Forli participants included a number of prominent Latin American scholars and policy makers), this central theme is of much more general interest, following the collapse of Soviet communism, and the Euro- pean Centre helped ensure that perspectives from Southern and Eastern Europe were also prominent. The Forli conference was concerned with “conceptual ground clearing”, and deliber- ately concentrated on the most general level of analysis. Future stages in the SSRC project will include a range of empirical work and case studies, but that kind of work has been excluded from this special issue.

This paper considers how far, and in what ways, classical Western social theorizing can provide us with a “stock” of ideas, or a source of inspiration for concept formation, that may be

drawn upon as a guide to current theorizing. Next is a paper on the liberal tradition by the

late lamented Brazilian political analyst and diplomat JosC Guilherme Merquior. The remain- ing papers in the collection are more contemporary in focus, and tend to concentrate on the question of the appropriate role and function of “the state” in contemporary democratizing and liberalizing regimes. The concluding paper in the series represents my personal views on these issues and to some extent draws together suggestions from the other contributors.

This paper takes stock of some key ideas that can be derived from the long history of Western social theory that may help us orient our understanding of contemporary economic liberalization cum political democratization experiments. “Western” social theory is not the only possible place one could look for such inspiration, of course.’ But it is a primary and direct source of guidance, especially to liberals in Latin America and Eastern Europe, where the idea of transition to market pluralism is closely associated with the notion of “joining” or “catching up with” the developed West. Moreover, the very categories

*An earlier draft of this paper was presented to the Southern California Workshop on Political and Econo- mic Liberalization, at the University of Southern California, on November 23, 1992. This revised version benefited from numerous comments and suggestions, including those of Ellen Comisso and Geoffrey Haw- thorn.

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we deploy to analyze the relationships between economic and political processes in “modern” societies are so imbued with conscious or implicit references to this corpus of writing and debate that we necessarily need to revisit this terrain if we are to adapt our conceptual apparatus to the requirements of a contemporary analysis.

Before embarking, however, on what can of course be no more than the most superficial and selective survey of an extremely rich and complex body of ideas, the paper makes some brief comments on the vexed issue of how far, and in what ways, our “stock” of classical analysis and concept formation can be drawn upon to guide present-day theorizing. There are two possible standpoints that would render this exercise point- less. One could assert (or more probably assume) that all the worthwhile and durable insights from Western social theory are already and unprob- lematically embodied in our current consensual apparatus of analysis, in which case there would be little point in poring over the halting process by which we have arrived at our current state of illumination. Or, in a stance that may appear opposite to the first but that in fact mirrors its approach to theory construction, one could argue that past theorizing about the foundations of political pluralism and economic liberalism refers to situations so different from the contemporary scene that it provides us with virtually no helpful guidance. (In particular this stance was a surface plausibility in connection with the transform- ations currently underway in a range of ex- Communist countries, where the breadth of the changes required and the speed with which they are being pursued may be described as historically unprecedented.) Either we already know more or less all that our forebears had to teach us about how to analyze the interaction of economic liberalization and political democratization processes, or what they knew applied only to their own circumstances and is unsuitable for applica- tion to the post-Cold War world.

In the first case, the strategy of enquiry explored in this paper would be unecessary, and in the second, unhelpful. By contrast, the claim made here is that many of the problems which troubled earlier Western theorists of liberalism (and of the emergence of liberal capitalism) can be profitably reexamined by those seeking orientation over current attempts to construct politically open market economies. We should not assume that the outcome of those debates has already been settled so that all we need to do is apply the known results; and we should resist any overhasty conclusion that a failure of contemporary transitions to develop in accordance with our initial theories would indicate the inapplica-

bility of inherited knowledge, rather than the need to sift and reassess with more discrimi- nation. As Collingwood observed

it is a familiar fact that every generation finds itself interested in, and therefore able to study historically, tracts and aspects of the past which to its fathers were dry bones, signifying nothing.’

If this is so. then those seeking to analyze the prospects for economic and political liberalization (and their interaction) in the post-Cold War world are likely to discover new lessons - or rediscover old ones - from rereading classical social thought in the light of their contemporary preoccupations.

Obviously this should not be our sole strategy of enquiry (this is only one paper in a series, and it represents only one step in a larger project of investigation). Nor should we suppose that the exposition of adaptation of “lessons” drawn from the thinkers of an earlier generation is either a mechanical or an unproblematic procedure’ (least of all when grappling with postcommunist realities). We must not overlook the glaringly evident differences between then and now. Earlier Western theorists often relied upon a distinctly restrictive conception of “democracy” (e.g., they seldom held contemporary views about gender equality); their notion of the “market” reflected an earlier era of technological development and economic organization; they may well have been highly Eurocentric; the “rule of law“ and “civil society” probably referred to rather specific arrangements that only reached a quite narrow, educated and propertied sector of the community (“the bourgeoisie”); the role of the state was typically quite limited, even in those societies where the theorists warned of unstoppable bureaucratization: and of course, the triumphs and frailties of “really existing socialism” had yet to be demonstrated. Consider- ations such as these must obviously limit the scope for any wholesale transfer of earlier ideas into the present.

Such limitations, however, apply to the transfer of all categories of social analysis - not only to any new insights we might uncover by rereading the classics, but also to all the old ideas we have plucked from Jefferson, or Montesquieu, or Smith, and imported without caution into our daily discourse. A contextually sensitive rereading of the ideas of the classical theorists ought both to generate some new hypotheses that might help guide our analysis of contemporary liberalizations and to raise doubts about some of the old verities we thought we had inherited from our forebearers.

An early exponent of the idea that the “free

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play” of market forces should be sufficient to promote the rise of prosperous and open society was Adam Ferguson in his (1767) Essay on the History of Cd Society. A major theme in Ferguson,4 Hume and Smith was that the development of private property and the advance of “commercial arts” (we might now say the division of labor) was enough to produce an increasingly large autonomous and self-reliant community of practical-minded people (“middle class” in more recent parlance) who would demand their rights and therefore underpin an open and responsive system of political organization (these underpinnings could be called a “civil society”). That could provide the driving force for what we would now call the consolidation of market- based pluralism. What the Scottish enlightenment thinkers had in mind here was equal protection under the law, and personal autonomy in the sense of the absence of dependence on clan chiefs, landlords or nobles. The liberty of Fergu- son’s “civil society” reflected the rise of commerce in the Scottish lowlands (in contrast to the “rude” conditions of clan life in the highlands). It did not yet extend to “democracy” in the sense of a universal franchise, and equality of political rights and representation.

Such Scottish enlightenment thinkers were neither the unbridled optimists nor the unqualified materialists of latter-day liberal triumphalism. This is hardly surprising, considering the incipient and fragile freedoms they were observ- ing, and the very slow pace at which more traditional forms of authority were retreating. Consequently, they regarded the advance of civil society as a delicate and potentially reversible process. Although the development of the division of labor was thought to enhance liberty and promote individualism, they worried over the dangers that would need to be countered by prudent temperaments and sound institutions. The advance of individualistic inclinations might promote liberty, but is also tended to replace cooperation by inequality and oppression.” Con- sequently the surest path to a consolidated civil society was not necessarily the shortest, still less the most participatory. Following David Hume’s interpretation, too rapid and indiscriminate a process of social change might damage the structures of authority needed to stabilize a liberal order, and could even erode the stability of the more elementary units of social cooperation (e.g., the family, the neighborhood) which were essential for curbing the destructive potential of unbridled individualism. Adam Smith was still more fearful, worrying that business owners would combine against the public, and that labor would sink into stupidity, unless the state inter-

vened energetically to forestall combinations and to provide education. Thus, in the Scottish enlightenment tradition the development of market pluralism was always viewed as only one powerful tendency, whose beneficient results depended upon the achievement of an appropriate interweaving with other inherited features of the social order - the constituted structure of political authority, respect for the wisdom and achievements of one’s forebearers, and the embedded patterns of (nonrational) sociability which they took for granted as the inevitable texture of everyday life. They never supposed that the free market was “the only game in town,” or that the ultimate social order could be constructed entirely by reason (least of all entirely by the self-regarding and purely rational calculations of asocial individuals).

It is true that later theorists of the development of capitalism came to regard these authors as unduly parochial, unconsciously reflecting certain 18th century Scottish lowland assumptions which could not be generalized across Europe and the world. As Geoffrey Hawthorn discusses later in this issue, a more self-confident and assertive variant of liberalism was generated first in the unusually favorable conditions provided by the 13 colonies on the east coast of North America after 1776, and then in postrevolution- ary France, where he draws our attention particularly to the arguments of Benjamin Constant. In both cases traditional authority crumbled so fast that we can speak of “revolutions” in the wake of which political democracy forced itself onto the agenda as a counterpart and/or competi- tor to the advancement of economic liberty, commerce, and in due course, capitalism. But even in the United States and France the crumb- ling of a traditional system of order and the extension of economic and political freedoms can in no way be equated with the eclipse of hierarchical assumptions, “irrational” values, or parochial collective identities. Most famously, Weber attempted to add to the range of extra- material factors required for the development of capitalism by invoking religion (more specifically “the protestant ethic”). The point here is not to reevaluate that great debate, but to underline the point that most classical Western liberal theory was concerned with a wide range of contextual factors external to the unfolding of market pluralism as such. The interaction between such external “nonmaterial” or even “irrational” factors and the liberalization process was virtually always held to be of central importance in shaping the success and stability of the latter.

Similarly, it is quite misleading to quote Smith’s passing references to the “invisible hand”


of the market, and thus invoke his authority in the name of unqualified laissez-faire. He too, like Ferguson, was extremely conscious of the premarket and preliberal context out of which a pluralist and law-governed market economy must grow, and of what more contemporary theorists have called the “noncontract” elements required to stabilize contract and exchange. It must always be remembered that Smith wrote two related major treatises (The Wealth of Nutions and The Theory of Moral Sentiments) and his theory of politics, and of the motivations of actors, can only be understood by taking them together. In reviewing these works it emerges

that sub-rational instincts play a crucial part in both works; that in consequence a low priority is accorded to calculating forms of rationality; and that the adjustment of means to ends in society at large is frequently explained, therefore, in terms of unintended consequences. Men act on what they perceive to be their interests and have a great capacity for self-deceit, both as to the worth of the ends and the appropriateness of the means of achieving those ends. Since considerable emphasis is placed on the social setting within which these perceptions are formed, there are problems of interdependence between individuals and groups which cannot be encompassed by any of the simpler economistic models of interaction: Smith does not make use of the construct known as “economic man”. Self-interest is not directed solely by pecuni- ary motives toward economic ends: honor, vanity, social esteem, love of ease and love of a domination figure, alongside the more usual considerations of commercial gain as motives in economic as well as in other pursuits for both Hume and Smith the significant connections between property and power rest on beliefs and opinions formed in society. rather than on objective material forces alone .’

The assumed stability of social values and context within which 18th century authors theorized about the emergence of market liberalism is typically forgotten by their contemporary succes- sors. Yet the language of the original is clear enough if we go back to the sources, rather than being swayed by subsequent interpolations. For example, the French physiocrats, now remembered chiefly for coining the term “fuissez-faire,” in fact took it for granted that this prescription was subordinate to the idea of a divine plan that could be discovered by human reason. Thus “laissez-faire” in fact meant that when this moral order had been found, no hindrance should be placed in its way.

Thus, what follows from this approach to choice and motivation is certainly not straight liberal triumphalism over the collapse of communism or the relative failure of less ambitious strategies of state-led modernization. any more

than one set of islanders would celebrate when a hurricane hits their neighbors. Beyond question, Smith’s strictures against “men of system” would apply to overzealous itinerant salesmen of “shock therapy” (even those funded by the Adam Smith Institute) as well as to socialist planners. If individuals with mixed motives are prone to self- deception; if decisions are often made for sub- rational reasons, and may well produce unintended consequences; and if some major social systems are too complex for predictive modeling and instead may produce more than one ‘right answer” or may even undergo “chaotic” shifts of state; then analyses derived from rational choice theory will at the least need to be sup lemented by a consideration of social norms. P In more traditional language “public morality” must re- enter the stage.

One manifestation of this is the prominence of the religious sentiments emerging in the course of many democratic transitions. and the influence (at least in Latin America) of Catholic social thought as a counterweight to the doctrines of unfettered market liberalism. But public morality is by no means reducible to religion. More generally it consists of shared values and beliefs about human rights, personal freedoms, steward- ship of the environment, and so forth. For example, the norm against human enslavement arose historically (it was not always a self-evident “natural law”) and eventually prevailed over all contrary religious teaching and practice. It is now so strong and universal that theories of rational choice take it for granted without explanation. One choice simply not on the agenda is the explicit practice of slavery, precluded by public morality. More generally, there are a range of social norms within which rationality is b0unded.s

On this view the process of consolidating democratic institutions and stabilizing market relationships is not just a matter of extending the machinery whereby individuals are empowered to make autonomous decisions. it also involves the affirmation of a revised and elaborated code of public conduct.” New laws and conventions must be adjusted to new (or at least newly expressible) social norms. Following the Scottish enlightenment view, therefore, liberalization involves the production and administration of a consensual public morality.

In addition, of course, enlightenment theorists such as Ferguson, Rousseau and Smith typically devoted considerable attention to specifying the historical, geographical and social context (or prerequisites) that might favor (or be essential for) the emergence of a liberal economy cunr polity. This went much beyond the relatively

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formalistic discussions we have inherited concerning “size and democracy,” etc. It addressed the broadest issues of geographical configura- tion, resource and human endowments, social structure and degree of “civilization.” The speci- fications favored by these 18th century thinkers were typically Eurocentric and condescending no doubt. (In contrast, Tocqueville took up the same themes from a - for Europeans - less flattering perspective when he developed his account of the exceptionalism of American democracy in the 19th century.) But our attention need not dwell too much on the details of their inevitably superseded answers. Rather it is the breadth and significance of their questions about contextual factors that should retain our attention. Contemporary theorizing, tending to assume a global society in which the same prescriptions will produce comparable results whether in Albania, Burma or Zaire, would seem cavalier in the extreme to these thinkers. In addition, the truth is that even if our explicit frameworks of analysis no longer encourage us to make the kind of distinctions between societies that they did, practical men, policy makers and, even in their less official moments, social scien- tists will invoke these traditional considerations when stumped for an explanation of the intract- ability of the new realities they are confronting.

All these considerations, drawn from the writings of 18th century theorists of political cum economic liberalization, point to the dangers inherent in the process. A successful outcome is by no means assured; there is no triumphalism, but rather a sense that tender shoots of individual freedom require constant shelter and protection, or else they could easily wither. With the French Revolution these hopes and fears intensified.

One current of opinion, deriving from the French philosophes, threw Scottish prudence to the winds, and sought to press ahead with not just a “political liberalization” (accompanied by the drastic extension and transformation of the French market economy), but with the creation by conscious design of an entire new society, founded of course on the principles of liberty, equality and fraternity (note the third term in the trilogy). Of more significance for the purposes of this paper - seeking as it does guidance for the analysis of liberalization processes in the post- Cold War world (i.e. following the collapse of the communist utopia which in many ways developed out of Jacobinism) - is the opposite current of opinion, that of former liberals who reacted with fear and dismay to the destruction of all the props to the old order on which they had relied to guide and stabilize the progress of liberty.

Burke’s strictures on the folly of pursuing

ideological visions of the future, to the disregard of all past structures of custom and tradition, are normally invoked by conservatives to denounce revolutionaries. There is, indeed, a flowery but grimly prophetic passage in his Reflections on the Revolution in France (1790) which foreshadows the darker face of postcommunism as it is emerging in parts of Eastern Europe today -

if commerce and the arts should be lost in an experiment to try how well a state may stand without these old fundamental principles, what sort of a thing must be a nation of gross, stupid, and at the same time, poor and sordid barbarians, desti- tute of religion, honour, or manly pride. possessing nothing at present, and hoping for nothing hereafter?‘”

As usual with Burke, the language is so impas- sioned that it is difficult for a contemporary reader to sift the more durable ideas from the flood of his rhetoric. For this reason I shall limit myself to the reanalysis of his ideas recently provided by Macpherson, an undoubtedly selective and controversial interpretation, but one provided by a respected authority, and one who has the merit of explicitly considering the contemporary relevance (or otherwise) of Burke’s message.

First, Macpherson notes Burke’s explicit rejection of a priori theorizing, which reinforces the points we have already made about the stress placed on social context by many British 18th century theorists of liberalism -

he proceeds by amassing concrete observable facts against abstract formulations. He declares that attention to real conditions must override a priori reasoning, and that actual conditions must be judged by moral standards.”

Indeed, in pursuit of this strategy Burke’s writings provide an extensive and powerful critique of most aspects of the British system which he was subsequently to defend against the contamination of Jacobinism. (Following this example, a contemporary Burkean would not hesitate to expose the hypocrisy and failings of “really existing” liberal capitalism, and would distrust ideological prescriptions for the export of liberal theories.) In other words, the conservative Burke who was invoked against Soviet totalitarianism is not the only Burke. He would be no friend of post-Cold War liberal overconfi- dence, and would find the idea of just imposing a liberal order paradoxical, if not foolhardy.

Second indeed, far from believing that the advance of liberal capitalism was inevitable and irreversible, Burke was acutely conscious of its destructability. Macpherson presents as “the


crucial point” of Burke’s political economy as

follows:

Accumulation is essential. It is possible only if the body of the people accept a subordination which generally shortchanges them. That subordination is natural and customary; the common people will accept it if they are not seduced by it.”

French democrats and English egalitarians threatened to destroy the fragile basis of that subordination. Burke was willing to invoke divine authority, aristocratic prejudice, and real or imagined national tradition as counterweights to the threats they posed, because he did not believe that the radicals were capable of estab- lishing an alternative system in which accumulation could prosper. They may have been acquisi- tive and individualistic, but they lacked the large capital and long-established structures which he felt were needed to guarantee sustained prosper- ity. By rapidly and indiscriminately extending political rights to a mass of petty and inexperi- enced producers, the democrats would merely destroy the material and social foundations for lasting economic advance.

His genius was in seeing that the capitalist society of the late eighteenth century was still heavily dependent on the acceptance of status. Contract had not replaced status; it was dependent on status an intcrnalised status differentiation which rested on nothing more than habit and tradition; that is on the subordinate class continuing to accept its traditional station in life. With no more solid basis than that it could easily be undermined.”

In conclusion, Macpherson turns to the question of Burke’s relevance in the late 20th century. This passage is interesting because, although Macpherson was published only 12 years ago, his reasons for asserting that Burke had little to teach our generation have quickly become dated.

In spite of the persuasive efforts of a few economists such as Milton Friedman, it is no longer politically realistic for conservatives to try to take us back to a pure laissez @ire economy. Of course, Burke’s insistence on the rule of law, on constitutional versus arbitrary government, and on the respect due to property, is agreeable to both conservatives and liberals. And his case for letting a ‘natural aristocracy’ interpret and implement the real will of the people would be welcome enough to both. The real difficulty seems to be in Burke’s idea of distributive justice; the just distribution of the national product is that which the free market allots to those who enter the market from positions of class domination and subordination. I4

Macpherson says that this doctrine would have

no relevance in a late 20th century characterized

by the existence of a quite strongly organized and relatively politically conscious Western working class. Yet in the post-Cold War world that obstacle to the embrace of Burkean principles of distribution seems much weaker than before. Moreover, especially in the newly liberalized economies of Latin America, and in the incipient market economies of the former Soviet bloc, there seems (for the time being at least) to be much less resistance to the accumulation of advantages by those who enter the recently opened markets from a background of class privilege (owners of flight capital, in the first case, members of the old nomenklatura, in the second) than Macpherson would have expected. In this respect, at least, Burke’s diagnosis could well enjoy a new lease on life and in particular his emphasis on constitutional and institutional de- fences against arbitrary rule and the abuse of power (although the authority of tradition, the stock of trust, and the long experience of leading a market economy, all of which he saw put in jeopardy by the French democrats, cannot be replicated in any newly established liberal democracy, not at least in less than several genera- tions).

Certainly in the case of contemporary Latin America it would be most unwise to under- estimate the extreme strength and resilience of status differentiation, and the continuing lack of commitment to impartial arms-length exchange transactions, or to the sanctity of contract. Theorists who ignore these social traditions and simply presume that the lifting of oppressive restraints is sufficient to produce the flowering of a liberal society will be singularly ill-equipped to analyze the processes of political articulation and economic reorganization underway in the newly liberalized societies of the South and the East. ” It will take many years before most of these actors master the logic and assumptions either of the liberal theory of citizenship or of lasting participation in an unrigged market economy (if indeed that is what their future holds, which remains unclear). Most prospective “rational actors” have not yet even begun to learn their lines in the new play, let alone to internalize the new values and disciplines of a liberal market economy.”

Following the spectacular collapse of communism it is hardly surprising that Burke should be enjoying a revival, but of course most Western social thought (include a dominant current of liberalism) drew inspiration and encouragement from the French Revolution, even though its initial hopes were unfulfilled. Those on the left who find Burkean reactions to the collapse of communism uncongenial can turn to more ‘*pro-

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gressive” social theorists for parallel interpretations. Thus, for example, Herzen responded to the failed revolutions of 1848 by concluding that after all history has no goal - and so much the better for individual freedom, since that meant it was no longer reasonable to require such huge sacrifices in the present for the sake of a hypothesized future.”

In particular there is one aspect of this great debate which has a bearing on contemporary discussions of political cum economic liberalization. In current parlance the issue at stake is “sequencing.” Is the cause of liberal democratic institutional and social consolidation best served by promoting the security of property and the development of the market (while downplaying the promotion of political rights)? Or is it more effective to carry out a rapid and comprehensive democratization (universal suffrage, regular impartial elections, a consciously designed constitutional structure, etc.), if necessary absorbing the consequent economic dislocation, in order to create the political framework for subsequent capitalist development with accountability? Or, thirdly, is it possible, desirable or currently inevitable that both processes be undertaken simultaneously?

The first view has already received sufficient attention here, for it was the consensus opinion in 18th century Britain,‘* where prior to the French Revolution the debate over political rights concerned “democratization,” but certainly not full democracy. In the 20th century the Austrian liberal school (most notably Hayek) reelaborated the viewpoint. But in most of Europe (and much of the Americas) for most of the 19th century the democratic impulses ema- nating from Paris were more powerful, and the second alternative gained precedence over the first. Obviously the immediate results of the French Revolution could not be counted as a success by those who gave democratization priority, but they drew the conclusion that the errors of the first democrats must be corrected, rather than that the enterprise itself was hopeless. It is true that arguments about how to construct a more viable representative republic continued to plague France for the next century or more. It is also broadly true that each successive French republic ushered in a new period of market- driven economic expansion. If British success with gradual and delayed democratization can be quoted in favor of the first approach to “sequencing,” French experience over the same long dun&

hardly provides a convincing refutation of the alternative argument. In truth, both experiences were far from linear, and what should surprise us most is how relatively similar the outcomes were

(in terms of eventual liberal democratic consolidation) if we compare the two countries one or two centuries after the parting event. Certainly this verdict would have astonished Burke, and it deflates much of the passion that divided alternative schools of European liberalism in the 19th century.

In relation to current discussions about “sequencing” several points must be made. First, of course, the timescale of contemporary policy debates is far shorter. (Which sequence is more viable for the next five or 10 years, at most, rather than over the next century or more?) Second, current discussions attribute policy makers with greater latitude for conscious choice than was traditionally assumed. Burke had no illusions that he could influence the course of events in Paris - all he sought to do was stiffen the resistance of the English aristocracy. Toc- queville hoped to instruct the Europeans in the ways of American democracy, but he explicitly repudiated any idea of the export or unilateral transfer of a political system from one setting to another.

What I have seen among the Anglo-Americans induces me to believe that democratic institutions of this kind prudendy introduced into society so as gradually to mix with the habits and to be interfused with the opinions of the people might exist in other countries besides America. I’)

In Europe, therefore, he thought he could imagine a democratic nation

organized differently from the American people Might not a democratic society be imagined in which the forces of the nation would be more centrahsed than they are in the United States; where the people would exercise a less direct and less irresistible influence upon public affairs, and yet every citizen invested with certain rights. would participate, within his sphere, in the conduct of government?‘”

Thinkers within this tradition would probably regard current discussions about which “sequencing strategy” to choose as recklessly unmindful of the distinctive national customs and traditions within which any such strategy would have to fit in order to become viable. Third, as liberal thought developed in 19th century Europe it became increasingly difficult to sustain all mono- causal, or mononational claims concerning the “correct path” to liberal democracy.

Indeed, Guido de Ruggiero’s interpretation of the history of European liberalism identified not so much alternative paths as distinctive constitui- tive principles in different European states. Following J. G. Merquior’s highly compressed version of the argument, the 19th century English


approach to liberty valued personal indepen- dence; the French approach aimed at self-rule; and the German variant sought self-realization. The political environment of the English theory was the classical liberal party: the political environment of the French theory was the democratic principle; and that of the German theory was the “organic” state, a mix of traditional and modernized elements. In consequence, what differed between these three countries was not just their starting points, or the routes they pursued, but also the desired liberal democratic end-states they envisaged. For example, whereas the English liberal paradigm was to limit state power, the French objective was to strengthen state authority in order to ensure authority before the law.” If these national differences were of such importance in differentiating the texture of state-society relations in these closely interrelated and parallel Western European democracies, it is reasonable to anticipate a considerably wider range of desired (let alone achieved) outcomes of liberalization and democratization processes in more scattered and diverse areas of the contemporary world.

Thus, for example, the consolidation of a liberal democratic market-based Swiss Confeder- ation as a result of the 1848 revolutions in Europe highlighted the fact that there were multiple influences at work, and that different paths might be appropriate for different countries.” Where the historical and geopolitical circumstances dic- tated it, a country might simultaneously establish a new framework of representative constitutional democracy, and create a new more unified and liberal internal market capable of generating sustained capitalist expansion.

Clearly the Swiss route to economic and political liberty and stability was not the last word in the development of Western social thinking on these issues. A powerful and highly developed alternative view was exemplified in practice by Bismarck and analyzed in theory by Weber. The idea of creating a powerful unified market, united under a single highly uniform system of law and bureaucracy, with political representation extended as a means of stabilizing popular allegiance to what would otherwise seem a remote and unresponsive system of decision making, has fascinated Western thinkers for more than a century.2’ Its continuing appeal (and perils) are currently exemplified by the unilateral incorporation of East Germany into the Federal Republic, by the trials of Maastricht, and by the competing tendencies toward unity and disintegration in Italy and Spain.

Elsewhere I have written about the rival logics of “incorporation” and “convergence” as paths

toward the stabilization of a liberal democratic order,24 and the intellectual background to these alternatives needs to be reconstructed.

Another relevant body of social theory was generated by the central European intelligentsia whose relatively secure and even to some extent liberal environment was shattered by the two World Wars, the Soviet revolution, and perhaps above all by Nazism. These traumatic experiences produced deep reconsideration of a range of previously accepted verities, and forced a new search for the foundations of a stable and acceptable modern social order. The deep disillu- sionment - some would say pessimism, or even despair - of many of these authors may seem starkly in contrast with the optimism - in some cases euphoria - generated by the democratizing wave of the 1980s. Certainly there is a great contrast here which precludes mechanical transfer of social interpretations from the context of the 1940s to that of the 1990s. Nevertheless, these thinkers are also worth revisiting in the light of our contemporary preoccupations, in part as an antidote to any present liberal complacen- cy, in part because some of the stark realities they faced in the harsh climate of post-lY14 Europe can be found emerging once again, perhaps a little further east or south than before. (With Sarajevo returning to the headlines, and Creditanstalt reopening in Budapest, it would be rash to dismiss a gloomier era of social theorizing as entirely irrelevant to the present.)

In this light it is worth rereading, for example, Schumpeter’s Capitalism, Socialism and Demo- cracy , an exercise which is almost bound to induce a certain amount of humility about the robustness of current theorizing. There are, after all. few contemporary statements on the question of democracy with the rigor, tough-mindedness and realism that infused Schumpeter’s work. Moreover, it was of direct relevance to our theme, given that he wrote as an economist primarily concerned with how to reconcile the requirements of effective modern economic man- agement with at least some variant of popularly accountable government.

Writing 50 years ago, with the WWII as a backdrop, Schumpeter concluded that classical bourgeois capitalism was on the road to extinction and that some form of socialist society would necessarily take its place. The interesting questions therefore became -what kind of socialism (under what historical conditions) would work, and would this be compatible with democracy. Schumpeter’s answers were that in a mature economy, provided the transition was handled smoothly and not too much stress was placed on redistribution of income, a socialist system might

INTRODUCTION 1253

well in time realize all the possibilities of superior performance inherent in its blueprint; whereas in an immature economy (i.e. Russia, China, or what later was called the Third World) there would be no benefit, either in the short or the long run, except to those who engineer the seizure of power. Concentrating then, on the hypothesis of socialism in a mature economy, he asked whether this could be compatible with democracy, and concluded that although there was no necessary connection, a socialist democracy was at least possible - provided democracy was understood as “that institutional method for arriving at political d&isions in which individuals acquire the power to decide by means of a competitive struggle for the people’s vote” (Schumpeter. 1950. p. 269). This method would, in his opinion, only prove a success under the following four conditions: (a) the human material of politics should be of sufficiently high quality; (b) the effective range of political decision should not be extended too far; (c) the government must be able to command the services of a well-trained bureaucracy; and (d) the society must be perme- ated by an ethos of democratic self-control (pp. 290-295).

So Schumpeter espoused a conservative - indeed “elitist” - theory of democracy, and even so he only considered this system viable under highly restrictive conditions, which may perhaps apply to contemporary Western Europe and North America, but which clearly offers little encouragement to the new or emerging democratic regimes of the Third World or the ex-Second World. But we should remember the basic assumption of his analysis (as well as the historical context in which it was formulated). He assumed both that classical capitalism was on the road to extinction, and that both in theory and perhaps even in practice socialism was economically superior. On these two assumptions he thought the grounds for optimism about the viability of democracy were slim indeed. After all, historically modem democracy (“liberal democracy” as we might wish to call it) had risen along with capitalism, and he saw good grounds for thinking that it might also disappear as classical capitalism was eclipsed. “The bourgeois scheme of things limits the sphere of politics by limiting the sphere of public authority. . . It is easier for a class whose interests are best served by being left alone to practice democratic self-restraint than it is for classes that naturally try to live on the state” (Schumpeter, 1950, pp. 298-298).

Nevertheless he concluded that the “present- day forms and organs of democratic procedure” did not “have to disappear along with capitalism. General elections, parties, parliaments, cabinets

and prime ministers may still prove to be the most convenient instruments for dealing with the agenda that the socialist order may reserve for political decision” (pp. 300-301). Democracy and socialism, thus conceived, however, could only be reconciled in a “mature” economy, with an experienced bureaucracy, and on the assumption that the “vast majority of the people in all classes are resolved to abide by the rules of the democratic game and . are substantially agreed on the fundamentals of their institutional structure” (p. 301). Since a socialist society would lack the automatic restrictions imposed upon the political sphere by the bourgeois scheme of things, he seemed to recommend that the agencies that are to operate the socialist economic engine should be “so organized and manned as to be sufficiently exempt in the fulfilment of their current duties from interference by politicians, or for that matter by fussing citizens’ committees or by their workmen” (p. 299). Thus the conditions he specified for a viable socialist democracy were considerably more restrictive even than those specified in his account of liberal democracy.

Half a century later, we have no examples of successful socialism established in “mature” economies, but instead we are witnessing the bankruptcy of a series of socialist economies that were established by force and in conditions he would have labeled “immature.” The radical shift of analytical focus since the 1940s (e.g.. from investigating the highly restrictive conditions under which a democratic regime might remain viable to the apparently almost limitless range of conditions in which a transition to democracy may be undertaken) may be said to reflect academic adjustment to the unforeseen flood of world events rather than the advance of theoretical knowledge in this subject. If so, further unanticipated political developments may well render current analyses redundant in rather less than the half-century required for Schumpeter. In any case, only parts of Schumpeter’s analysis have failed. Other aspects, e.g., his observations about the need to insulate economic policy makers from the pressures of day to day politics - “No responsible person can view with equanimity the consequences of extending the democractic method, that is to say the sphere of ‘politics,’ to all economic affairs” (p. 299), occupy a more central position in the contemporary debate than he could have foreseen.

As Schumpeter’s star has waned, the reputa- tion of another Austrian economist turned social theorist has soared to such an extent that many political figures in the new democracies of Latin America and Eastern Central Europe regard Friedrich Hayek as their intellectual mentor, and


a primary source of inspiration about how to reconcile the political and economic dimensions of liberty. 25 His central proposition can be labeled the “indivisibility of liberty,” according to which it is only by attaining and cherishing economic freedom (a most exacting project on the Hayek definition) that there is any real prospect of preserving the other freedoms - civil and political. In this view, what Benedetto Croce dismissively labeled as “liberismo” (a stunted form of liberalism that only values private property) becomes the necessary - though still not sufficient - condition for global liberty. The consequence of this position is that it justifies the most strenuous efforts to extend and virtually universalize the scope of market transactions, while at the same time permitting a remarkably far-reaching critique of “really existing” democracies for “politicizing” matters that belong in the private realm. It is important to note that Hayek’s theories share some features with those of Schumpeter, which differentiate them from liberal triumphalism. Both Austrian thinkers were deeply pessimistic about the prospects for entrenching market-based democracies, both feared the abuses and misallocations that might follow from popular rule, and neither regarded the calculations of “rational actors” as the driving force of social change (to the contrary, Schum- peter invoked the “animal spirits” of entrepreneurs, and Hayek thundered against “con- structivism”). Both, it may be thought, were traumatized by the impossibility of stabilizing a liberal democracy in the truncated and unba- lanced society that was interwar Austria before the anschluss. If this context influenced their thinking, the appearance of analogous situations in contemporary Eastern Central Europe could be expected to enhance the relevance of their analyses.

Contrary to Schumpeter’s expectations liberal democratic capitalism proceeded to stage an amazing recovery, first and foremost in precisely those “mature” economies he had accepted as ripe for socialism. Eastern Europe, however, was artificially shielded from participation in this process by the Red Army, and Latin America also failed to participate in a fully satisfactory manner. In consequence a major countercurrent in Western social analysis, particularly in the 1960s and 197Os, was provided by an array of center-periphery theories, both in economics and in politics and sociology. These were not originally Marxisant ideas (indeed they ran explicitly counter to the teachings of classical Marxism) but as the “new left” acquired growing academic respectability in the West, it embraced and popularized center-periphery ideas that became

increasingly garbed in Marxist terminology. As a result, the current discredit of Marxism has also discredited nearly all of this so-called dependency theory.

Nevertheless, it is instructive to recall a few of the most central ideas from within this tradition, particularly as they bear on economic cum political liberalization. First, they were against diffusionism, saying that what worked in the center would not necessarily function in the same way at the periphery, and indeed that as liberal capital interests flourished at the center they would tend to block the emergence of replicas in the “latecomer” countries. Influences from the center would arrive in a perverse and distorted form at the periphery. Specific examples of this were said to be the dissolvent effects of the arrival of mass consumer aspirations, prior to the local capacity to satisfy such wants; the tendency of peripheral elites to mimic and subordinate themselves to counterpart interests at the center, seeking external protection for the mass of discontented and marginalized population at home; the consequent difficulties obstructing the organization of national political systems and alliances capable of tackling the development needs facing peripheral societies as a whole. Results included economic instability as policy vacillated from one priority to the other and the emergence of exclusionary or authoritarian regimes dedicated to the promotion of economic growth through the suppression of political rights, and the pursuit of inegalitarian patterns of capital accumulation.26

As we know, the policy recommendations implied by radical dependency theory have proved consistently disastrous, and some of the most influential thinkers in this tradition have switched over to emphasizing the priority of democratic conciliation and reform within each peripheral country, counting on at least partial support from the center and accepting market- based conditionality. Still, many of the intellectual positions sketched out (or overstated) by the dependency school of the 1960s deserve a better fate than mere oblivion. These arguments were often poorly specified and incomplete, but my impression is that they arose from real experience, and that the conditions generating such experience have not all disappeared with the ending of the Cold War.

There is an alternative stream of Western social theorizing which also needs consideration here. Before the Papal Encyclical Rerum Novar- urn (1891), it could be argued that dominant Catholic doctrines concerning political and economic liberalism were in the strict sense “reac- tionary,” and therefore only relevant to our

INTRODUCTION 1255

theme as sources of condemnation and rejection. However that may be, the ensuing century has witnessed a flowering of more constructive Catholic social thought, much of it spurred by theological or cultural responses to secularizing liberalism and/or godless Marxism, but responses which paid increasing attention to the substantive social analyses proposed by mainstream liberal and socialist thinkers. Consequently, both at the intellectual level and in socio-political terms, Catholic social thought has come to play an increasingly influential and participatory role in shaping Western ideas about liberalization. This is especially true of Latin America and Catholic Europe, where Christian Democracy has emerged as a major current of thought, usually in opposition to Marxism but also in important respects influenced by it (notably in the case of liberation theology).

The key idea in this Catholic tradition is to assert the moral value of the human person (who is, after all, thought to be endowed with an immortal soul). This standpoint overrides secular, individualist, and utilitarian arguments for personal freedom, and locates the individual firmly in a moral and social universe that stands outside history and beyond calculating self- interest. Thus, for such Catholic thinkers what links economic and political liberalization is a moral code. The essential argument is that human rights, political rights, and economic rights (including the right to property, but tem- pered by its social obligations) are all deeply embedded in the consciousness of ordinary people (or if they are not, they can and should be, under the guidance of the church and the Christian family). This underlying popular commitment to irreducible moral values is what eventually forced the authoritarian regimes of Latin America, and even the authoritarian/ totalitarian communist regimes of Eastern Europe, to democratize and to grant economic freedoms. The same basic moral values should also be deployed in post-transition societies to temper the extremes of amoral “savage capitalism ,” and to steer the new democracies toward the rule of law and social justice. Given the widespread search for trustworthy sources of guidance in these disoriented and demoralized societies, where previous (secular rational) sources of authority seem to have disintegrated, it is hardly surprising if this kind of Catholic social theory gains a wider popularity, The message is, after all, extremely clear and direct, and in many of these societies it can invoke a tremendous weight of traditional authority. In the last analysis, however, the moral foundations of this theory have to be taken on faith. The

question therefore arises how the theory applies to those citizens of the new democracies who do not share the implicit core moral values, but who nevertheless (in an economically and politically free society) have the right to conduct their lives and to arrange their economic affairs as they choose, within the limits of the law.

The history of Catholic social thought does not suggest that it can easily or straightforwardly resolve the tensions between economic and political liberalization in societies where liberal value pluralism is enshrined. For example, despite persuasive efforts by some theorists to demonstrate the basic harmony between Catholic teachings and capitalism,27 the very title of the first “social” encyclical Return Novarum makes it clear that the church found it a challenge to reconcile its traditional doctrines with the new demands of the liberal market economy. Although liberation theology, for example, may currently be the target of a systematic Vatican campaign against erroneous doctrines, it is in fact only the most recent in a long history of church teachings which, for fundamental reasons, op- pose a higher morality to the unrestrained logic of the market. Church teachings on democracy are even more recent, and more equivocal, if for no other reason than the obvious one that a democratic polity may in theory - and frequently has in practice - not only dispossess the church of its inherited property and its educatio- nal privileges, but may also enact legislation, e.g., on questions of personal morality (divorce, abortion, etc.) which are incompatible with the assumed higher moral law.

Given these deep underlying tensions between this worldly liberalism and irreducible Catholic theory, a balanced account would have to consider all the ingenious ways in which the post- 1945 church has sought to reconcile its basic positions with the economic and political rights typically accorded to all citizens (regardless of their faith or morality) in a modern market democracy. Many postwar Christian Democratic teachings have unquestionably enriched Western social theory, and have helped to stabilize fragile liberal regimes. In the history of the Catholic church, however, these ideas are recent and they do not express the whole of church teaching. Instead they emphasize those elements which are most likely to prove acceptable to secular authorities and electorates. They have flourished mainly in countries where Catholics faced intense competition for popular allegiance from a secular left. So it remains to be seen how far these teachings - like those of liberation theology - may prove subject to revision and even retraction in circumstances in which the church hierarchy


could believe that it now has the opportunity to rebuild society as a whole in accordance with fundamental Catholic convictions.

A balanced conclusion would be that postwar Christian Democracy does not provide a complete and unvariable solution to the basic problems of reconciling economic and political liberalization and stabilizing fragile liberal democracies. On the other hand, it does constitute a major barrier to the restoration of frankly anti- democratic and illiberal church teachings such as those associated with France’s Spain. In consequence what we should now expect are Catholic efforts to shift the emphasis of law toward their moral standpoints and to redefine the boundaries of political and economic freedom in accordance with their core doctrines.

Thus contemporary Catholic social theory is unlikely to provide either a complete integration of the processes of political and economic liberalization (via a unifying moral consensus) or a direct and frontal challenge to such liberalization processes (via the articulation of a coherent alternative model of the good society). Instead, like various other questionably liberal Western theoretical traditions - including nationalism and indeed what remains of Marxism - Catholic thinkers are likely to work within the broad framework of liberal democracy, promoting a variant that is as congenial as possible to their core values. None of these currents can be relied upon to uphold tolerance and value pluralism as the cornerstone of a liberal order; all can be expected to pay some lip service to this cause, but at the same time to construe it selectively.

Clearly this paper cannot hope to cover all the possible insights from Western social thought that might assist us in theorizing about the interrelationship between current economic and political liberalization processes. It can only be illustrative and exploratory, not authoritative. Other papers in this issue direct our attention to complementary sources of insight. Merquior brings out the diversity of thought within the liberal tradition. and reinforces the case for intellectual pluralism, and for situating social theory within specific historical contexts and traditions, rather than relying on ahistorical and u priori deductivism or contractualism. Goure- vitch uses an abstract logical point of departure for an analysis which becomes progressively more historical. contextual, and contingent as it proceeds. Streeten argues eloquently against what he called neoclassical political economy and state “minimalism,” but he too appeals to experience as much as to abstract reason, to bolster his deconstruction of these sweepingly prescriptive doctrines. Hawthorn and Manning are both

explicit in testing general theoretical claims (those of Constant in the first case, and of Marshall and Habermas in the second) against the diverse liberalization experiences currently underway.in specific southern and eastern countries. Wtlhamson expresses more confidence than the other contributors in almost universal appli- cability of a series of specific propositions about economic liberalization, but beyond the points of certainty he identifies in his paper, he also recognizes the existence of a range of other questions (particularly those concerned with social equity) which require settlement by democratic process rather than in accordance with the dictates of technical necessity. Bresser, Pereira and O’Donnell both focus on the key question of how to redefine the role of the state, the first taking a very long-term “cyclical” view of the issues, and the second focusing much more sharply on the immediate dilemmas and structu- ral problems (it is difficult to escape the word “crises” in these discussions) associated with fiscal bankruptcy and the disarticulation of inter- ventionist development strategies. Although these two authors are less explicit in their references to general social theory, the ideas of Kondratieff and Weber respectively can be de- tected running through their analyses (together, of course, with influences from numerous other Western theorists).

One huge area of theoretical reflection appeared in many of these papers. and was explicitly highlighted by discussants at the Forli conference. This was the question of “civil society,” widely viewed as the essential underpin- ning to a stable liberal democracy in which both economic and political rights can be harmonized and secured. But when such social underpinnings are initially weak or absent how are they likely to be built up? Experience suggests that simply rolling back the state and allowing free rein to the market will not necessarily produce that effect - in many of the countries under consideration it might rather enthrone what the earliest contrac- tarian theorists described as a “state of nature.” Consequently, reflections on civil society lead to consideration of the “rule of law,” which in turn leads to more general reflections on the potentially “enabling” role of the liberal state (not a new-fangled idea. but one that can be traced right back to the foundations of liberal thought, at least in relation to education as the basis for a liberal order, as can be seen in the writings of both Locke and Smith). Western social theory offers many competing, if not conflicting, views on the interrelationships between these elements, even in fully consolidated liberal democracies. The question of how they may be built up

INTRODUCTION 1257

in transitional societies where the existing traditions and structures are unsupportive is an even larger and less settled issue. In addition to the insights that might be derived from Weber, Marshall and Habermas (as discussed elsewhere in this issue), it would also be essential to take into account some of the insights provided by Bobbio. For this postwar Italian social liberal the “rule of law” cannot be confined to the realm of criminal justice, as Herbert Spencer and the state minimalists would prefer. In modern liberal democracies it must be expanded and adapted to govern the very different issues raised by the welfare state and the mixed economy - to universalize full citizenship - and therefore Bobbio in From Structure to Function (1977) regards shrinkage of the scope of public law as an indicator of social decay. Here there is a pro- found contrast with Hayek (for whom law is “found” not “made,” and for whom the key to the rule of law was the barrier that a very limited and entrenched set of fundamental general rules should provide against the deployment of discre- tionary state power). A key issue confronting the liberalization cum democratization processes in transitional regimes is precisely this. How will the inherited authoritarian and statist legal system be reshaped? Will it both foster a broad-based and autonomous civil society and define a suitably supportive and unpredatory role for the state? Western social theory (and practice) has much to suggest about the range of possible alternatives, and about the possibilities and dangers of each.

2. CONCLUSION

Readers may disagree with my interpretations of the writers mentioned, or with my choice of authors or themes, without invalidating the thrust of this paper. My claim is not that every one of the statements is the uniquely accurate and relevant lesson to be drawn from Western theory by students of contemporary political cum economic liberalizations. This paper seeks to establish a much more modest (but still controversial) proposition, namely that revisiting authors such as those I have discussed, can uncover fresh insights and productive hypotheses for the study of the present. My particular selection of such propositions will fill out the rest of this conclusion, but if you are not satisfied by my choices it would be sufficient for my purposes if I can stimulate you to produce your own. What this paper seeks to establish at a minimum is that such endeavors can be fruitful; we are not in com- pletely unknown terrain, bereft of any possible sources of orientation. More positively, it also

aims to stir resistance to any casual invocation of past social theorizing as authority for possible contemporary policies of “export” or “imposi- tion” (whether the commodity being transmitted is political democracy, market economics, or some amalgam of the two).

Perhaps the strongest single theme running through the diversity of authors I have quoted (and those I would have wished to quote) concerns the obstacles and difficulties which impede the “advance of liberty”; the problem of overcoming the inertia of tradition, without so drastically destabilizing the social order that the resulting insecurity breeds a new demand for coercive authority; the need for constant vigi- lance and willingness to court unpopularity to keep the state honest, and to strengthen and enlarge the impartiality of the law, and to preserve and extend the constitutional order; the fear that the expansion of individual political and, above all, economic rights may dissolve the bonds of social solidarity required to underpin the whole liberal edifice, producing unacceptable inequalities, fanning invidious comparisons, and stimulating anti-social forms of self-regard; the need to extend liberal democracy and the market economy to those countries where it is absent (in order to preserve the security of these arrangements at home) combined with the uneasy awareness that not all societies are equally receptive, and that the very enterprise of “exporting” a domestic system or values could be fraught with dangers, and may itself be a source of intolerance and illiberalism. This list of wor- ries is by no means exhaustive, but it should suffice to demonstrate that Western social theory has been constantly preoccupied with the fragility and potential reversibility of all economic cum political liberalization processes. It provides very little intellectual authority for any assertion that the “end of history” can be readily at hand, with the irreversible and global ascendancy of a liberal democratic market hegemony.

Beyond this obvious point of agreement, there emerges a vast spectrum of different opinions and prescriptions (based on a wide variety of distinct historical experiences - including a major contrast between liberalization processes within already well-insulated and clearly constituted national states, and those occurring at the same time that national unification or state formation is being attempted). Nevertheless (and notwithstanding some deceptive impressions created by a too literal reading of social contract theory), a dominant and recurrent theme would seem to be that liberal institutions and structures are not simply the “natural” state of affairs in the absence of external interference. They have to be


historically constructed, and this is a complex enterprise which takes a long time and involves a variety of interacting processes. Even those theorists who placed most trust in the workings of the division of labor as the motor force of liberal progress were aware of the problems arising from the prior existence of powerful premarket and traditionally hierarchical structures, which would have to be accommodated until the course of material progress had completed its work. The “noncontract” basis of contract (to use Dur- kheim’s language) was therefore a recurrent preoccupation; and despite continual references to Adam Smith’s “invisible hand,” the role of the state was seldom cast in purely negative terms. Indeed the whole enterprise of social theorizing would soon become redundant if the sponta- neous processes of individual self-advancement automatically produced equilibrium (or optimal) social outcomes in the absence of any public authority. Far from believing that, most Western social theorists presumed that a liberal order must rest on certain moral foundations, and that public authority could be guided toward the protection and strengthening of such an order through exercises of persuasion (which would, of course, be directed both toward “public opinion” - i.e. society and toward those holding political office).

Thus crudely materialist interpretations of the rise of civil society were quickly supplemented by arguments concerning the force of tradition; the existence or absence of a supportive social and historical context; and the role of international- ity, conscious design, and explicit negotiation. Although most social theorists have displayed an understandable (and justified) doubt about the prescriptive power of their interpretations, they have generally assumed that rational analysis and persuasion can contribute something to the course of social progress - enough at least to justify the publication of their books. Neverthe- less a careful reading of most of the classical Western theorists suggests numerous grounds for doubt about the soundness of analyzing the processes by which a liberal democratic order may be constituted in terms of the narrowly “rational” calculations of self-regarding actors. This may well be to assume the existence of the very thing one is trying to explain. To return to our starting point, many social theorists from Ferguson onward have frequently explained the growth of a liberal order as the result of men’s actions, but not the product of their conscious designs. Of course, in a very general way we may

classify nearly all social action as “rational“ in the sense of purposive, but constraints within which such purposes are pursued mean that even in very secure and well-informed settings this rationality is highly “bounded.” Moreover, both theorists with a sense of the nature of traditional society (e.g., Ferguson and the Gaelic-speaking highlanders) and those with experience of mas- sive social crisis (the 20th century Austrian school) have dwelt at length on what may be called the “flight from rationality” that can easily follow from the disintegration of traditional structures, the discrediting of long-standing systems of belief or the experience of deep social instability.

In contrast the French philosophes, of course, were extremely optimistic about the likely results of their endeavors to apply reason to human affairs. For a while, their ideas seemed capable of destroying the greatest edifice of traditional power and privilege in Europe, and of refound- ing the entire structure of economic and political life (not only in France, but for all mankind) upon a new theoretical basis. Most social thought since the French Revolution has consisted either of a retreat from this program, a critique, or an attempt to reformulate it on sounder footing. Ironically, the collapse of the Soviet model (which may be regarded as the most ambitious and durable attempt to extend and vindicate the French revolutionary impulse) may have cleared the field for an alternative project of equal ambition (and perhaps recklessness?) namely to refound the entire structure of economic and political life, for all mankind, on uniform theoretical principles drawn from the theory of possessive individualism. In this new context we would be well advised to revisit the arguments for and against French strategy for universalizing the rights of man. We are likely to find that most of the “deep” reasons adduced for repudiating the Utopian social engineering identified with the Jacobin and Marxist left can now be applied with remarkably little alteration to the analogously utopian proposals for engineering a post-Cold War liberal democratic Utopia. In particular a priori reasoning from abstract principles to de- duce the rules of political and economic organiza- tions that should apply to all societies, regardless of their distinctive settings, traditions, and perceptions, could be regarded as a fundamentally illiberal, as well as misguided and unrealistic enterprise, whether undertaken in the name of socialism or liberal democracy.

INTRODUCTION

NOTES

1259

1. For example, Schrecker (1991) offers some glimp- ses of Chinese social theory which suggest parallels to some of the themes discussed here (and also some intriguing inversions). In particular he suggests that Sun Yat Sen’s “Three Principles of the People” (Nationalism, Democracy and Economic Equality) were not purely Western importations, but also built on some strong indigenous theoretical traditions.

2. Collingwood (1961), p. 305. Indeed, for Colling- wood history contains not so much a “stock” as a ‘flow” of knowledge - i.e. past ideas, intentions and experiences with which the historian can debate. The content of all historical debate will accordingly be influenced by the historian’s own contemporary beliefs and preoccupations (which vary over time as history flows on).

3. Many of the problems are well elaborated in Tully (1988).

4. An early and insufficiently appreciated exponent of the idea that the “free play” of market forces should be sufficient to promote the rise of prosperous and open society was Ferguson (1767), the Scottish enlightenment philosopher and colleague of Adam Smith. Ferguson was not disposed to rule out soundly based measures of redistribution and reform where these were designed in order to reduce offensive inequalities without impairing freedom and the vitality of commerce. But his emphasis was on incrementalism, and the need to adjust legislation and administrative practices to suit the temper of the people. For it was in civil society, rather than the activities of the state, that he saw the keystone of civil liberty: “We must admire, as the keystone of civil liberty. the statute which forces the secrets of every prison to be revealed, the cause of every commitment to be declared, and the person of the accused to be produced, that he may claim his enlargement, or his trial, within a limited time. No wiser form was ever opposed to the abuses of power” (Ferguson, p. 167).

5. “Whether in great or small states democracy is preserved with difficulty, under the disparities of condition, and the unequal cultivation of the mind, which attend the variety of pursuits and applications that separate mankind in the advanced state of commercial arts. In this, however, we do but plead against the form of democracy after the principle is removed; and see the absurdity of pretensions to equal influence and consideration, after the characters of men have ceased to be similar” (Ferguson, pp. 187-188).

6. Winch (1978), pp. 167, 169.

7. A conclusion recognized by Elster (1989), although he offers various suggestions why social norms may have lost predominance in the modern world, which he evidently assumes to have become more rational. mobile, and fluid.

8. Traffic flows on a modern highway permit personal choices to be made by every driver, but all this occurs within a complex and interactive system of regulation and socialization which -when well established - very much limits the probabilities of both individual mishap and of collective paralysis. (By contrast the whole point of the prisoner’s dilemma metaphor is that it abstracts from such social norms.) This point is developed further in the concluding paper in this collection.

9. Although somewhat overstating the case, Mac- pherson rightly underlines the centrality of this issue in classical liberal theory when he writes that “Locke’s individualism, that Of an emerging Capitalist Society, does not exclude, but on the contrary demands the supremacy of the state over the individual” (Macpher- son, 1962, p. 256).

10. Burke (1968 edition), p. 174. Intriguingly, although Dahrendorf borrowed from Burke’s title for his reflections on a postcommunist Europe, he chose not to discuss Burke’s gloomy prognosis that failed revolutions produce a return to the “state of nature.”

11. Macpherson (1980), p. 19. For such reasons Murrell (forthcoming) invokes Burke as one of his authorities in his critique of “shock treatment“ strategies of marketization in Eastern Europe.

12. Macpherson (1980), p. 61.

13. Macpherson (1980). p. 69.

14. Macpherson (1980), pp. 71-72. Compare Arkady Volsky, President of the Russian Union of Industrial- ists and Entrepreneurs - “Power belongs to those who have property and money. At present it is not the government but the industrial managers who have both.” Volsky has promoted a coalition of “moderate” parties who now form the powerful Civic Union (supported by Russia’s largest trade union federation). “He wants privatization - not through giving the population the right to own shares, via vouchers, but through a system giving more direct control to industrial managers,” Finuncial Times (London, November 2, 1992) p. 32.

15. One recent and very widely circulated Latin American contribution which fits this description is de Soto (1989). Despite the very sweeping claims for this study, in particular those made in the foreword by Mario Vargas Llosa, it is in fact largely concerned with some very context-specific problems of government (particularly city government) regulation of the “infor- mal” sector in Lima, Peru. The relevant social traditions which it disregards are usefully portrayed in Gotte and Adams (1987).

16. Reddy’s emphasis on the enhanced social disci- pline and political authority associated with monetary


cxchangc in post-revolutionary France is pertinent for today’s newly liberalized market democracies “the real political power of wealth became at once invisible and also the true foundation on which most political authority would rest in the new society. This happened because greater personal freedom had seemed for a long time to result from money transactions, and in fact had resulted from some money transactions. But a greater margin of freedom for some is not the same thing as freedom itself. This was one source of frustration and confusion that afflicted defenders of the Revolution in subsequent years” (Reddy. 1Y87), p. 143.

17. “Letter of a Russian to Mazzini.” (Quite a contrast with the sacrifices currently being demanded of most citizens in many new democracies in pursuit of Fukuyama’s elusive final goal.)

18. Though not that of the 17th century. See, for example, Winstanley (1973 edition). Burke might stem another exception, in that he supported the American Revolution. but that was because he regarded the British monarchy as having breached its contract with the colonists, whose inherited rights he was promoting.

19. Tocqueville (1945 edition), Vol. 1, p. 336. In an apparent allusion to slavery (abolished in France in 1791), he added that “As the laws of America appear to me to be defective in several respects” he remained open to the view that democratic institutions could “succeed in a nation less favoured by circumstances if ruled by better laws.”

20. Tocqueville (1045 edition), pp. 334-335.

21. de Ruggiero. as condensed in Merquior (1991), p. 13.

22. Kahn, following Karl Jaspers, summarized this enduring current of European liberal thought. as exemplified by the Swiss experience (Kahn, 1956). Rather than prescribing one path or the other. Kahn notes the mutual interactions between alternative experiences. Thus in response to the French Revolu-

tion the liberals of Holland, Switzerland and the Anglo- Saxon world developed or rejuvenated “a nationalism compatible with an unshakeable respect for individual liberty and local self-government.” Similarly “The principles themselves which were proclaimed with such sudden splendour and enthusiasm in France in 1780 owed their origin largely to their much slower growth in England, Anglo-America and Switzerland. When they radiated back to France from these countries they were slowly and firmly assimilated. stage by stage, into the national traditions and structures” (p. 14).

23. The relationshlp between the construction of the nation-state, the extension of the market and the entrenchment of citizenship was of central concern not only to 19th-century European social thought, but also to such Latm American writers as Sarmiento and Albcrdi. Alberdi, whose “conservative” variants of liberalism are compared to their French and German counterparts and evaluated in Merquior (1991), chap- ter 4. For Mcrquior “conservative’. liberalism is the strand “generally intent on slowing the drmocrafizufion of liberal politics” (p. 97).

24. “Democracy by Convergence and Southern Europe” in Pridham (1991) and Lowenthal (1991).

25. Those who actually read Hayck find surprising proposals that for the present seem unlikely to be taken up by even the most committed acolytes. Thus. for example Mario Vargas Llosa seems rather bemused by the idea that regular parliaments ought to be checked by separate assemblies responsible for the enshrining of fundamental rights, the latter being composed and elected by those aged 45 and above and to serve for 15 year terms. Vargas Llosa (1992), pp. 41-42. Similarly, many ncoliberal economists hesitate to endorse the complete denationalization of money.

26. For a striking, if overdrawn, restatement of his currently deeply unfashionable views. see Prebisch (1981).

27. See, for example, Novak (1989).

REFERENCES

Bobbio. N., From Struc~urr fo Fun&on (Minneapolis: Ferguson, Adam, Essay on the History of Civil Society University of Minnesota Press. 1977). (1767) (Edinburgh: Edinburgh University Press.

Burke, Edmund, Reflections on the Revolufion in 1966). France (1790) (Harmondsworth: Penguin, 196X). Giitte, Jurgen, and Norma Adams, Los Cuballos de

Collingwood. R. G., The Idea of HIstory (Oxford: Troya a de 10s invusores: Esfrufegias Campesinus en Oxford University Press, 1961). la Conquisla de la Gran Lima (Lima, Peru: Institute

Dahrendorff, Ralf, Reflections on the Revolution in de Estudios Peruanos, 1987). Europe (London: Chatto and Windus, 1990). Herzen, Alexander, “Letter of a Russian to Mazzini,”

de Ruggiero, Guido, The History of European Liberal- Vom Anderen Lifer (Hamburg: Hoffman und ~&I (Oxford: Oxford University Press, 1927). Campc. 1850).

de Soto, Hernando, The Ofher Path: The Invisible Kahn, Hans, Nationalism (2nd Liberty - fhe Swiss Revolurion in fhe Third World (London: I. B. Tauris. Example (London: Allen and Unwin, 1956). 1989). Lowenthal, Abraham. Exporting Revolution: The

Elster, Jon, The Cement of Sociefy (Cambridge: Cam- Unifed Sfufex and Latin America (Baltimore: Johns bridge University Press, 1989). Hopkins University Press, 1991).

INTRODUCTION 1261

Macpherson, C. B., Burke (Oxford: Oxford University Press, 1980).

Macpherson, C. B., The Pohtical Theory of Possessive Individualism (Oxford: Oxford University Press, 1962).

Merquior, Jose Guilherme, Liberalism: Old and New (Boston, MA: Twayne, 1991).

Murrell, Peter, ‘Conservative political philosophy and the strategy of economic transition,” East European Politics and Society (forthcoming).

Novak, Michael, Catholic Social Thought and Liberal Insfiturions (New Brunswick, NJ: Transaction, 1989).

Prebisch. Ra61. “On Friedman and Havek.” CEPAL Review, No. 15 (December 1981). .

Pridham, Geoffrey (Ed.), Encouraging Democracy: The International Context of Regime Transiiion m Southern Europe (Leicester: Leicester University Press, 1991).

Reddy, William M., Money and Liberty in Modern Europe: A Critique of Historical Understanding (Cambridge: Cambridge University Press, 1987).

Schrecker, John E., The Chinese Revolution in Histori- cal Perspecfive (New York: Greenwood, 1991).

Schumpeter, Joseph, Capitalism, Socialism and Demo- cracy, Third edition (London: Allen and Unwin, 1950).

Smith, Adam, An Enquiry into the Weahh of N&ions (1776) (London: Methuen, 1961).

Tocqueville, Alexis de, Democracy in America, Vol. I (1835) (New York: Vintage. 1945).

Tully, James (Ed.), Meaning and Confext - Quentin Skinner and his Critics (Cambridge: Polity Press, 1988).

Vargas Llosa, Mario, “Muerte y Resurrection de Hayek,” Ciencia Politica (1992111).

Winch. Donald. Adam Smith’s Politics: An Essay in Historiographic Revision (Cambridge: Cambridge University Press, 1978).

Winstanley, Gerrard, The Law of Freedom and Other Writings (1651) (Harmondsworth, UK: Penguin, 1973).

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