Are declining economic growth rates likely to have undesirable impacts on social attitudes?

 

Research for an earlier essay on this blog led to the conclusion that declining economic growth rates in high income countries are likely to cause an increasing proportion of the population of those countries to feel that their standard of living is worse than that of their parents at a comparable age, and therefore to experience lower average life satisfaction. In this essay I extend that analysis to consider the social attitudes of people in the USA, Britain and Australia who feel worse off than their parents.

In the previous study I used data from the World ValuesSurvey to examine the relationship between the perceptions of respondents about their standard of living relative to their parents at a comparable age and economic growth in the countries in which they reside. That data was then linked to average life satisfaction.

The main findings were:

• Perceptions of standard of living relative to parents are positively related to past economic growth experience of the countries in which people live.
• In the high-income countries, low growth has a greater adverse impact on young peoples’ perceptions of their standard of living relative to parents than on the corresponding perceptions of old people.
• The perception of having a lower standard of living than parents at a comparable age has a substantial adverse impact on life satisfaction ratings.

These findings imply that lower economic growth rates would be likely to result in an increasing proportion of the population having lower living standards than their parents, and hence, lower average life satisfaction. The psychic costs of adjustment to lower economic growth would initially fall most heavily on young and middle-aged people.

Those findings raise questions about likely changes in social attitudes if economic growth prospects continue to decline in high-income countries, resulting in an increasing proportion of people who feel worse off than their parents were at a comparable age. This essay uses World Values Survey data to explore how some of the social attitudes of people who perceive themselves to have a lower standard of living that parents differ from those of the rest of the population.

I focus on three high-income countries – USA, Britain and Australia. The USA survey was undertaken in 2017, the British survey in 2022, and the Australian survey in 2018.

Figure 1 provides further evidence that people in the USA, Britain and Australia tend to have lower average life satisfaction if they perceive that their standard of living is lower than that of their parents.

 

Demographics

Figure 2 indicates that people who perceive themselves to be “worse off” than their parents tend to be concentrated in the 25-54 age groups.

 

Figure 3 suggests that the sex composition of those who feel “worse off” than their parents differs somewhat by age group in the countries considered, but I have no idea why. There appears to be a higher percentage of young women in that category in Australia, a higher percentage of women in the 30-49 age group in Britain and a higher percentage of older women in the United States.

 

Work and Success

Figure 4 indicates that those in the “worse off” category are less likely to agree that hard work brings a better life.

 

Attitude to Migrants and Migration

The only conclusion I can draw from Figures 5 and 6 is that Australians who feel “worse off” than their parents tend to have more negative attitudes toward migrants and immigration than those who feel better off or about the same.

 

Trust

Figure 7 suggests that a lower percentage in the "worse off" category say most people can be trusted.

Figure 8 suggests that a lower percentage of those in the "worse off" category have confidence in the justice system.

Priority given to Freedom

Figures 9 and 10 suggest that there is not much difference between the three groups in terms of priority given to freedom. Slightly fewer of those in the “worse off” category tend to give freedom higher priority than equality. Surprisingly, in Australia and Britain, slightly more of the people in that category tend to give freedom higher priority than security.

 

Government objectives

Figure 11 indicates that those in the “worse off” category are more inclined to want government to take more responsibility to ensure everyone is provided for. The percentages shown are for the top 3 ratings on a 10 point scale.

 

Figure 12 indicates that those in the “worse off” category are less inclined to give high priority to economic growth. Respondents were asked to select from a list which national aim should be given highest priority. Other items on the list include having strong defence forces and individuals having more say in decision making.

 

Politics

Figure 13 suggests that those in the “worse off” category are no more interested in politics than other people in the countries considered.

 

Figure 14 suggests that people in the “worse off” category are no more likely to consider that it is good to have a strong political leader.

 

Figure 15 suggests that people in the “worse off” category are no less likely to consider that democracy is important.

 

Figure 16 suggests that people in the “worse of” category are less likely to be satisfied with political system performance than are people in the other categories.

 

Figure 17 suggests that people in the “worse off” category are as strongly opposed to political violence as are people in the other categories.

 

Conclusions

The social attitudes of people who perceive their standard of living to be worse than that of their parents at a comparable age are similar in many respects to those of people who perceive their standard of living to be better or about the same as that of their parents.

However, there are some important differences. People who perceive their standard of living to be worse than that of their parents at a comparable age are more inclined to:

• Skepticism about hard work bringing a better life;
• Pessimism about trustworthiness of others and lack of confidence in the justice system;
• Collectivism in terms of responsibility for the wellbeing of citizens;
• Negativity about giving high priority to economic growth; and
• Dissatisfaction with political system performance.

That combination of attitudes seems likely to be self-perpetuating because it is likely to promote policy responses that will lead to lower economic growth and a further increase in the proportion of the population who perceive their standard of living to be worse than that of their parents. Adoption of more market-friendly economic policies to facilitate higher economic growth seems unlikely to occur before that course of action becomes more obviously necessary to avert major economic crises.   

How can dialectics help us to defend liberty?

 

This guest essay by Dr Edward W. Younkins is a review of Chris Matthew Sciabarra’s book “Total Freedom”, which was published 25 years ago. The epigraph is from page 354 of that book.

Ed Younkins is Professor of Accountancy and Business at Wheeling University, and Executive Director of its Institute for the Study of Capitalism and Morality. He is author of a trilogy of important books on freedom and flourishing: “Capitalism and Commerce”, “Champions of a Free Society”, and “Flourishing and Happiness in a Free Society”. Ed has numerous other publications, including an essay reviewing books by David L. Norton, which was published here in January.    

 Ed Younkins’s review was previously published in 2001 in “Le Québécois Libre”. 

There are two reasons why it is appropriate for it to be re-published now.

First,“Total Freedom” deserves more attention, and the 25^th anniversary of its publication is a particularly appropriate time for that to occur.

Second, in the light of declining economic and personal freedom in many parts of the world, the defense of liberty has become more urgent than it was 25 years ago. Ian Vásquez and his colleagues responsible for measurement of human freedom for Cato and the Fraser Institute have noted that on a world-wide basis, and using a population weighted comparison, a high point for freedom occurred in 2005–2007, followed by a steady decline through 2019, and a precipitous descent in 2020 through 2021 associated with government responses to the Covid virus (“The Human Freedom Index 2024, pp. 21-25). The latest data suggest although some recovery has occurred since, human freedom remains lower than in the year 2000.

Younkins ended his review by noting that he was “looking forward to seeing what Sciabarra will offer us next that will contribute toward the development of a comprehensive defense of freedom.” Chris Sciabarra has continued to make important contributions in this field even though illness has somewhat constrained his efforts.

Here is Ed Younkins’s review of:

Sciabarra, Chris Matthew, Total Freedom: Toward a Dialectical Libertarianism (Pennsylvania State University Press: 2000).

In Total Freedom, Chris Matthew Sciabarra offers a provocative, scholarly, and original work in social theory for the analysis of society and human liberty. The author aims to reclaim the dialectical method, the art of context keeping, in the name of liberty and from the authoritarian left in order to make it the foundation for a radical (i.e., one that goes to the root) defense of libertarianism.

The necessity of context

Sciabarra is convinced that a successful libertarian project must stress the necessity of context – the totality of systemic and dynamic connections among social problems. More specifically, the libertarian ideal cannot be isolated from the context upon which it depends and freedom cannot be defended successfully when separated from its broader requisite conditions. The author proposes in Total Freedom a metatheoretical foundation upon which to construct a comprehensive libertarian social theory. Rather than making a convincing argument for liberty, he offers a means for structuring the methodology of social inquiry. The book is about how a context-sensitive methodology can be used to defend freedom. In order to think about freedom, people need to grasp the totality of its prerequisites and implications. Emphasizing the indivisible unity of theory and practice, Sciabarra says that any effort to understand or change society requires an analysis of its many related aspects.  

Sciabarra explains that dialectics emphasizes the centrality of context in the intertemporal analysis of systems. It is a thinking style that stresses the contextual analysis of systems across time. Dialectics may be viewed as a method of analysis, a mode of inquiry, or a type of meta-methodological orientation or set of assumptions about how we approach the object of our study. Dialectics is an approach to thinking that attempts to grasp the full context of a philosophy or social problem. Dialectical thinking endeavors to understand the whole through differential vantage points and levels of generality and by a systemic and dynamic extension of analytical units. 

The author emphasizes that dialectical thinking necessitates that we do not engage in context dropping, but instead make every possible effort to see interconnections between seemingly disparate branches of knowledge. Such an approach compels scholars to investigate empirically the potential connections between various spheres in an effort to attain integrated knowledge of the full context. Since people are not omniscient, understanding a complex world thoroughly requires an on-going investigation of its many interrelated facets from shifting vantage points. 

Down to earth dialectics

As a methodological orientation, dialectics has been employed in the analysis of systems of argumentation, philosophy, ethics, linguistics, history, culture, psychology, social theory, political economy, etc. One of Sciabarra's goals is to capture the essence of the many dialectical approaches that have appeared throughout intellectual history. He argues that in its origins dialectics is not an especially Hegelian or Marxian tradition, but rather in its inception it is firmly Aristotelian. 

Sciabarra explains that, although the pre-Socratics and Plato were the earliest practitioners of dialectics, it was Aristotle, the true father (or fountainhead) of dialectical inquiry, who first articulated its theoretical principles and techniques. Plato had connected dialectics to an idealist ontology that entailed the search for comprehensive transcendent truth. Plato's unrealistic epistemological standard was for human beings to somehow attain a synoptic perspective on the whole society. 

Aristotle brought the dialectic down to earth by severing its principles from their Platonic-idealist formulation. The Aristotelian idea of dialectics eliminates cosmology from philosophy and relies on a minimalist metaphysics that states that existence is what it is, that consciousness is our means for understanding it, and that everything that exists is part of one reality. The history of dialectics is filled with battles between the synoptic Platonic idealist conception and the contextual Aristotelian realist understanding. As a dialectical reality, Sciabarra tells us that we should rightfully criticize those who form dialectical abstractions with no regard for their relationship to the facts of reality. 

Sciabarra explains that Aristotle advocates shifting our viewpoints on any object of study in order to illuminate different aspects of it. In this way, Aristotle keeps the Platonic predilection for organic unity, but acknowledges the central importance of context. Aristotle's principles of inquiry call for us to constantly shift our perspective on any object of study. Each point of view provides a different context of meaning. It is by piecing together the various perspectives that a person can gain a comprehensive understanding of the full context of the object. 

Like Aristotle, the Medieval Scholastics applied dialectical principles to the argumentative arts. Sciabarra observes that they brought dialectics to the consideration of Biblical texts and thus began the centuries-long journey toward the secularization of the human mind because they were brave enough to subject the scriptures to analysis, something that was disapproved of for centuries before.  

Sciabarra argues that Hegel's conception of the dialectic harks back to the Ancient Greek ideal of organic unity and to the Platonic penchant for the divine. In turn, Marx anchored dialectics to investigations of the real world. However, Marx's vision presumed god-like planning and control of many nuances, tacit practices, and unintended consequences of social action. He also presumed a total grasp of history and often attempted to study the present as if from an imagined future. When Marxists suggest that history can lead to a victory over human ignorance, they are implying privileged access to total knowledge of future social conditions. This is inherently utopian and undialectical since it is unbounded by the context that exists and is based on a « synoptic delusion, » a belief that one can live in a world in which every action produces consistent and predictable outcomes.

The art of context keeping

 If dialectics is the art of context keeping, then historical materialism proposes a theory of history that places the theoretician outside the context of the human condition. The problem occurs when Marx steps into the future to evaluate the present. He assumes the information needed by future planners will be available despite the fact that these planners will have destroyed the context (i.e., the price system), which permits such information to be generated and socially traded. By holding this incorrect assumption, Marx is placing himself outside the historical process that he analyzes. Sciabarra observes that it is as though Marx is permitting himself privileged access to information about a future that is ontologically and epistemologically impossible. Such a Utopian way of viewing the world is essentially an a-contextual, a-historical search for human ideals with no understanding of the limits or nature of reason. It is as if people can step outside the bounds of culture and society to re-create the world. 

Sciabarra goes on to explore the manifestations of dialectics among those from the liberal tradition including Herbert Spencer, Carl Menger, Mises, Hayek, Rand, and especially Murray Rothbard. The author's goal here is to show how classical liberal and modern libertarian approaches embody conflicting orientations. He also describes how these thinkers have been richer, more complex, and more context-sensitive than their critics have been willing to acknowledge. Total Freedom documents how a contextual-dialectical approach informed many of the classical liberal, and libertarian thinkers of the 19th and 20th centuries. 

A large portion of the second half of Sciabarra's work involves a comprehensive case study of the writings of Murray Rothbard, one of the major libertarian thinkers of the 20th century. Sciabarra attempts to identify the dialectical and undialectical aspects of Rothbard's wide-ranging anarcho-capitalist analytical model. Rothbard's work is used to expose and analyze the dialectical strengths and nondialectical weaknesses that are typical in modern libertarian social theory. 

Sciabarra observes that Rothbard, for most of his life, believed that libertarianism did not require a theory of culture. Rothbard appeared to think that his axiom of non-aggression could resolve social and political problems by itself. Like many other libertarians, he simply dropped the larger context which freedom requires in order to flourish and stressed libertarian goals without considering the problem of meeting them. He insisted that libertarianism was a political philosophy that could accommodate any culture. For example, Rothbard believed that men could simply use their reason to develop a permanently fixed Libertarian Law Code in accordance with anarcho-capitalist principles.  

Sciabarra questions the efficacy of such an imposition because it does not take into account the philosophical, cultural, and historical context upon which libertarian principles depend. The acceptance of a Libertarian Law Code in the real world would require a deeper understanding of personal and cultural factors. Rothbard had abstracted a single principle of non-aggression and created a dualistic tension between theory and reality by declaring that state institutions are at odds with human nature. This led Rothbard to universalize the market as a means of destroying the state.  

Sciabarra points out that later Rothbard realized that proponents of a free society needed a fully articulated theory of culture, since some cultures foster, while others threaten, a free society. Rothbard's later greater dialectical sensibility is exhibited in his theory of structural crisis which was simultaneously historical, political, economic, and sociological and in the foundations of his non-Marxist theory of class struggle. 

In need of an effective strategy

Toward the end of his book, Sciabarra briefly surveys the growing dialectical trend among libertarians such as Peter Boettke, Douglas Den Uyl, Don Lavoie, Douglas Rasmussen, Mario Rizzo, and others. Sciabarra is convinced that libertarianism as a social theory is valuable and offers a valid perspective on the nature of the crisis in modern society and that voluntary social relations, with all their preconditions and effects, are morally and consequentially preferable to the status quo and to statism in all its varieties. However, he does not believe that libertarian theorists have presented the best formulations and arguments in the context of social conditions that exist. Freedom cannot be defended successfully when severed from its broader requisite conditions. Libertarians must pay greater attention to the broader context within which their goals and values can be realized.

Sciabarra's message is that libertarians need an effective strategy that recognizes the dynamic interrelationships between the personal, political, historical, psychological, ethical, cultural, economic, etc., if they are to be successful in their quest for a free society. He explains that attempts to define and defend a non-aggression axiom in the absence of a broader philosophical and cultural context are doomed to fail. Libertarians must pay greater attention to the broader context within which their goals and values can be realized. The battle against statism is simultaneously structural (political and economic), cultural (with implications for education, race, sex, language, and art) and personal (with connections to individuals' tacit moral beliefs, and psycho-epistemological processes).

The author wants people to understand both the necessity for objective conceptual foundations for a free society and the need for cultural pre-requisites in the battle for the free society. The fight for freedom is multidimensional and takes place on a variety of levels with each level influencing and having reciprocal effects on the other levels. Dialectics require that people take into account and pay attention to all the levels and structures that a politics of freedom depends upon. Sciabarra contends that it is possible to look at society from different angles and on different levels of analytical generality in order to obtain an enriched portrait of its total form. Change must occur on many different levels and cannot be dictated from the realm of politics – it must filter through all the various levels.

The goals of Total Freedom are to defend the need for a dialectical libertarianism that synthesizes multiple disciplines and to reclaim dialectics as a viable methodology for libertarian social theory. The author accomplishes this in his well-documented, innovative, and academic treatise. He offers libertarianism as a valid and valuable perspective that is preferable to the status quo and to statism in all its varieties. However, Sciabarra stops short of developing his own substantive dialectical libertarian social theory. 

His work is primarily methodological and only articulates the view that a dialectical libertarianism is essential to the future of both dialectics and libertarianism. He has taken the first step by offering a metatheoretical structure for social inquiry, rather than a comprehensive argument for liberty. Sciabarra cautions that much work needs to be done to test the validity of various libertarian theories. I am looking forward to seeing what Sciabarra will offer us next that will contribute toward the development of a comprehensive defense of freedom.

Addendum

Readers may also be interested in an essay that Chris M. Sciabarra recently published to mark the thirtieth anniversary of the first two books in his "Dialectics and Liberty Trilogy": "Marx, Hayek, and Utopia" and "Ayn Rand: The Russian Radical," and the twenty-fifth anniversary of "Total Freedom." This "Trilogy Anniversary" essay can be found on both Notablog and Medium:

https://notablog.net/2025/06/09/a-trilogy-anniversary/

https://medium.com/@cm.../a-trilogy-anniversary-6265b10c1258

What role has political entrepreneurship played in changes in human freedom this century?

 

For the purposes of this exercise, I have used the Human Freedom Index, published by Cato and the Fraser Institute, to identify which countries have experienced greatest change in human freedom this century.

In my view, this index provides the best available information on the state of liberty throughout the world. The latest publication in this series, The Human Freedom Index 2024, by Ian Vásquez, Matthew D. Mitchell, Ryan Murphy, and Guillermina Sutter Schneide, provides measures of personal and economic freedom in 2022 for jurisdictions covering 98% of the world’s population. The accompanying data set enables change in personal and economic freedom to be assessed for 157 countries over the period from 2000 to 2022.

This study is associated with my recent research efforts directed toward attempting to understand the role of political entrepreneurship in institutional change. The research reported here links most directly to some previous research which suggests that levels of personal and economic freedom in some countries have been more strongly influenced by political entrepreneurship than by underlying cultural values of the people.

The idea behind the current study is that if we can identify the countries that have experienced greatest change in economic and personal freedom and know a little about the recent political history of those countries, we will better placed to make judgements about the factors responsible for institutional change. The question I ask myself is whether changes in freedom can be attributed to the efforts of a political entrepreneur with an ideological mission, as opposed to other factors such as cultural change in the broader community, responses to economic crises, and external factors including advice of foreign governments and international agencies.

In this essay, I first consider the above graph which shows changes in personal and economic freedom this century for the full data set (157 countries) and then consider a second graph showing the same data for countries with above median human freedom in 2022.

Jurisdictions with greatest change in human freedom

The human freedom index reflects the combined impact of economic freedom and personal freedom. In the graph shown above, the 10 countries with greatest improvement in human freedom are labelled and identified with a green marker and the 10 countries with the greatest decline in human freedom are labelled and identified with a red marker.

An initial point worth noting about the graphs is the relatively small number of countries in the bottom right quadrant with an increase in personal freedom accompanied by a decline in economic freedom. That result is consistent with Milton Friedman’s observation that economic freedom “promotes political freedom because it separates economic power from political power and in this way allows the one to offset the other.” Hopefully, the people in counties in the top left quadrant, who have experienced substantial increases in economic freedom under oppressive governments, will subsequently be able to experience greater personal freedom as well.

It is not difficult to identify political entrepreneurs who have made a major contribution to repression of liberty in jurisdictions that have experienced the greatest declines in human freedom since 2000. Peronism remained a dominant force in Argentinian politics in the first two decades on this century, even though Juan Peron died in 1974. The political landscape in Venezuela was dominated by Hugo Chavez and Nicholas Maduro, who have both pursued policies inimical to economic and personal freedom. In Venezuela, Daniel Ortega held the presidency for extended periods. Chad was subject to authoritarian rule by Idriss Deby Itno until his death in 2021. Iranian politics has been dominated by Supreme Leader Ali Khamenei since 1989. Much of the decline in economic and personal freedom in Egypt has occurred since 2014, under the presidency of Abdel Fattah el-Sisi. In Turkey, economic and personal freedom have also declined substantially since 2014, when Recep Erdogan came to power. The ruler of Syria, Bashar al-Assad, imposed substantial additional restrictions on personal freedom following the outbreak of civil war in 2011. Personal freedom in Hong Kong has been increasingly restricted since 2012 when Xi Jinping came to power in China. The decline in personal freedom in Bahrain since 2010 reflects the response of the government of King Hamad bin Isa Al Khalifa to an upsurge of political opposition.

It is more difficult to identify political entrepreneurs who have made a major contribution to expansion of liberty in jurisdictions that have experienced the greatest improvement in human freedom since 2000. That may partly reflect poor media coverage of good news stories in Africa. Substantial improvements in human freedom occurred in Liberia under the political leadership of Ellen Johnson Sirleaf, and in Gambia, under the leadership of Adama Barrow.

Some of the other countries that have experienced substantial improvements in human freedom have had governments that have tended to favour free markets consistently. Countries in that category include Lebanon, Armenia, Sierra-Leone and Colombia.

In some countries, including Timor-Leste, international agencies have played an important role in encouraging policies to strengthen government institutions and reduce corruption.

Many of the countries that have experienced substantial increases in human freedom have improved from a low base and still have human freedom levels well below the world average. Countries in that category include Angola, Lebanon, Laos and Sierra-Leone.

 Changes in freedom in relatively high freedom countries

 

When we focus on countries which currently have relatively high levels of freedom, a substantially different set of countries emerges as the 10 with largest declines or increases in economic freedom. Argentina is the only country with reduced human freedom which is common to both groups. Timor Leste and Armenia are the only countries with increased human freedom that are common to both groups.

Among countries with reduced human freedom, political entrepreneurs who have played a prominent role in implementing restrictive policies include Victor Orban in Hungary, Pravind Jugnauth in Mauritius, Evo Morales in Bolivia, and Andrzej Duda in Poland.

The decline in human freedom in Guyana, Greece, France, UK, and USA seem to have occurred mainly via gradual slippage rather than deliberate policy. In addition, restrictions on freedom imposed in those countries during the coronavirus epidemic had not been fully removed in 2022.

It is difficult to identify political entrepreneurs who have played a prominent role in promoting economic and personal freedom in the countries with greatest increases in human freedom. However, Maia Sandu played a prominent role in Moldova. Bidzina Ivanishvili has played a prominent role in politics in Georgia since 2012, during a period of improvement in human freedom, but it is unlikely that his more recent political endeavours have had a positive influence on human freedom.

The countries with greatest increase in human freedom generally have policies which strongly favour free markets. The main exceptions seem to be the governments of Malawi and Timor Leste, which have been less supportive of economic freedom.

Conclusion

This essay has focused on countries that have experience substantial changes in human freedom over the period from 2000 to 2020 in an endeavour to assess the role of political entrepreneurship in those changes.

The Human Freedom Index, published by Cato and the Fraser Institute, has been used to identify countries with greatest changes in freedom levels. Information on the recent political history of those countries has then been used to assess whether the changes could be attributed to the influence of political entrepreneurs with an ideological mission.

The study first considered changes in freedom in the full data set of 157 countries and then at changes in freedom for countries with above median freedom levels.

My general conclusion is that, at least during the period considered, political entrepreneurship has played a larger role in bringing about substantial declines in human freedom than in bringing about substantial improvements in human freedom.

Where did Carl Schmitt go wrong in his critique of democracy?

 

I first became aware of Carl Schmitt about 30 years ago while reading Friedrich Hayek’s book, Law, Legislation and Liberty. At that stage I was left with the impression that while Schmitt still had influence among German legal philosophers, his views were mainly interest to people wondering how a respected academic could become a Nazi. Over the last year or so, however, I seem to be coming across increasing references to the relevance to contemporary politics of Schmitt’s views about friend-enemy distinctions and the autonomy of the political.

The Stanford Encyclopedia of Philosophy provides the following biographical information about Schmitt:

“Carl Schmitt (1888–1985) was a conservative German legal, constitutional, and political theorist. Schmitt is often considered to be one of the most important critics of liberalism, parliamentary democracy, and liberal cosmopolitanism. But the value and significance of Schmitt’s work is subject to controversy, mainly due to his intellectual support for and active involvement with National Socialism.”

My reading of the full entry about Schmitt in the Stanford Encyclopedia (written by Lars Vinx) reinforced the impression I previously had that Schmitt’s political philosophy is inherently authoritarian. However, the conclusion that Peter C. Caldwell reached in his literature review is ambivalent:

“What Schmitt’s real message is remains disputed. Fifty years after the first reflections on his work began to appear, his interpreters still battle over whether he was primarily a brilliant lawyer and theorist of constitutional democracy or a gravedigger of democracy and apologist for authoritarianism; an intellectual adventurer and opportunist or a serious analyst of modernity; a conservative trying to save what could be saved of the European heritage or an antisemite and Nazi.”

(‘Controversies over Carl Schmitt: A Review of Recent Literature’, The Journal of Modern History 77, June 2025)

The focus of this essay has been determined largely by a couple of books that I have read recently. I focus on three aspects of Schmitt’s critique of liberal democracy. First, I consider Adrian Vermeule’s synthesis of Catholic integralism and Carl Schmitt’s view that politics is war. Second, I consider the link between entangled political economy and Carl Schmitt’s concept of the autonomy of the political. Finally, I reconsider Friedrich Hayek’s view of Carl Schmitt’s legal philosophy.

Vermeule’s synthesis of integralism and Schmittian illiberalism

My initial source for the discussion of integralism was Kevin Vallier’s book, All the Kingdom’s of the World (2023). I recently reviewed Vallier's book in an essay entitled, ‘Are integralists opposed to natural rights?’, but neglected to mention Vermeule’s affinity with the political philosophy of Carl Schmitt.

Vallier refers to Vermeule’s article, The Ark of Tradition, which is a review of Schmitt’s book, Roman Catholicism and Political Form. Vermeule writes:

“My suggestion, which is consistent with Schmitt’s vision, but goes beyond what he articulates, is that the Church serves as a kind of ark, whose vocation is to preserve the living tradition of the Verbum Dei amidst the universal deluge of economic-technical decadence, and the eventual self-undermining of the regime.”

He goes on to quote Schmitt:

“Should economic thinking succeed in realizing its utopian goal and in bringing about an absolutely unpolitical condition of human society, the Church would remain the only agency of political thinking and political form. Then the Church would have a stupendous monopoly: its hierarchy would be nearer the political domination of the world than in the Middle Ages.”

My understanding of what Schmitt meant by “an absolutely unpolitical condition of human society”, is a condition in which people would no longer be interested in drawing “friend-enemy distinctions”. Schmitt claimed that life in a completely de-politicized world would be shallow, insignificant, and meaningless.

Such views seem to me to be mistaken and to have potential to cause a great deal of unnecessary misery. In fields of human endeavour such as business and sport, friendly rivalry obviously helps to make life meaningful for many people. However, friendly rivalry does not require friend-enemy distinctions. Opportunities for human flourishing are enhanced in societies where individuals tend to seek mutual benefit from voluntary (and friendly) interactions with other people, rather than seeking to benefit from the friend-enemy distinctions associated with coercive political processes.  

Lars Vinx notes: 

“Some interpreters have explained Schmitt’s hostility towards liberal de-politicization as being grounded in the view that a willingness to distinguish between friend and enemy is a theological duty.”  

That made me wonder, very briefly, whether a theologian could argue that it is necessary for Christians to be able to distinguish between friend and enemy in order to follow Jesus’s exhortation to love one’s enemies. Before wasting too much time, however, I reminded myself of Erasmus’s message about refraining from wars over theology, which seems to me to remain as relevant today as at the time of the Protestant Reformation. (If further explanation is required, please read something I wrote about Erasmus a few years ago.)

Autonomy of the political

In my recent essay entitled “How does entangled political economy help us to understand political entrepreneurship?”, I drew heavily on Richard E. Wagner’s book, Politics as a Peculiar Business,. However, that essay doesn’t discuss the link that Wagner draws between entangled political economy and Carl Schmitt’s concept of the autonomy of the political.

The concept of autonomy of the political describes power relations and the behaviour of those who hold political power in society. The surface impression is that a small number of rulers dominate larger masses of citizens, but power is ever present in society and can be manifested in a variety of different ways. Wagner’s concept of entangled political economy “rests on the twin autonomies of the political and the economic in society, and the interaction between those autonomies being a source of turbulence within society.”   

Wagner writes:

“For Schmitt, the autonomy of the political rested on exceptional circumstances and the friend–enemy distinction. Exceptional circumstances mean that a rule of law cannot be articulated that will cover every possible point of decision that might arise. The presence of exceptions is a point where the autonomy of the political enters into society. The friend–enemy distinction is a feature of the crooked timber of humanity that surely intensifies with increases in societal complexity and the hierarchical ordering in terms of status that comes in the wake of growing complexity.”

Schmitt argued that even if constitutional arrangements are crafted to support private ordering of societal interaction, the autonomy of the political will assert itself in the guise of exceptional circumstances. As the scale of the polity expands, consensual action tends to give way to factional action, wherein some factions gain at the expense of others. For example, whereas application of general rules and principles might require a few pages of tax codes, factional action to achieve concessions generates thousands of pages of tax codes.

To consider Schmitt’s proposed remedies for factional politics, I have looked beyond the references to Schmitt in Wagner’s book. My main source is the Stanford Encyclopedia entry written by Lars Vinx.

Schmitt’s views about the problems of democracy and the need for strong political leadership are similar to those of Max Weber and Joseph Schumpeter (discussed in earlier essays, here and here). However, while Weber and Schumpeter defend liberty, Schmitt regards constitutionally guaranteed freedoms as concessions of the state to the individual.

Weber and Schumpeter emphasize the importance of constitutional procedures, but Schmitt’s view of constitutions seems ambivalent. Schmitt understands democracy as the self-rule of the people. He argues, however, that since the will of the people is not necessarily reflected in the majority view, representative government is not necessarily any more intimately connected with the principle of democracy than a dictatorship in the name of the people. 

Schmitt denies the possibility of changing the fundamental nature of an established constitution via use of rules contained within it. Nevertheless, he acknowledges the possibility of suspending a constitution through a sovereign decision on the exception. He also acknowledges that a people, in a renewed exercise of their constituent power, might legitimately choose a non-liberal and non-parliamentarian form of democracy. 

Friedrich Hayek’s view

Hayek held similar views to Schmitt concerning the ability of the majority in a representative assembly with unlimited powers “to confine its activities to aims which all members of the majority desire, or even approve of”. The majority can only be kept together by “paying off each of the special groups by which it is composed”. (LLL, V3, 138)

In a footnote to that passage, Hayek suggested that in the 1920s “the weakness of the government of an omnipotent democracy was very clearly seen by the extraordinary German student of politics, Carl Schmitt.” However, Hayek added that “Schmitt regularly came down on what to me appears both morally and intellectually the wrong side.” (LLL, V3, 194-5)

The passage quoted in the epigraph at the top of this essay appears in Volume 1 of Law, Legislation and Liberty (p 71). It is immediately followed by the assertion that “long before Hitler came to power” Carl Schmitt “devoted all his formidable intellectual energies to a fight against liberalism in all its forms”. (Hayek’s perception that Schmitt was so clearly opposed to all forms of liberalism has been disputed. Some of Schmitt’s writings apparently give the impression that he was trying to save Europe’s liberal heritage.)

Later in the same paragraph, Hayek explains that Schmitt’s final formulation of his central belief about the law entailed “concrete order formation”. Schmitt posits that law is fundamentally a form of political and social organisation grounded in a community’s values, and that the state is the embodiment of the community’s legal order. Hayek argues that under that view of law, individuals are “made to serve concrete purposes”.

Hayek contrasts Schmitt’s view of law with his own view that law consists of “abstract rules which make possible the formation of a spontaneous order by the free action of individuals through limiting the range of their actions.”

While Schmitt saw the state as giving expression to the values of the dominant community group, Hayek saw law as consisting of rules of just conduct that have evolved to protect individual liberty.

Conclusions

Carl Schmitt is remembered as a prominent German legal and political theorist who became a Nazi. However, Schmitt’s political affiliations have not prevented frequent reference being made to views about friend-enemy distinctions and the autonomy of the political in contemporary discussions about political institutions.

This essay has focused on three aspects of Schmitt’s critique of liberal democracy: Adrian Vermeule’s synthesis of Catholic integralism and Carl Schmitt’s view that politics is war; the link between Richard Wagner’s concept of entangled political economy and Carl Schmitt’s concept of the autonomy of the political; and Friedrich Hayek’s view of Carl Schmitt’s legal philosophy.

Schmitt argued that if economic liberalism succeeded in bringing about an absolutely unpolitical condition of society – a condition where people were no longer interested in making friend-enemy distinctions – the Catholic church would be able to dominate the world. He reasoned that that this religious organisation would dominate in those circumstances because it would be the only agency still engaged in political thinking. I am puzzled as to why he thought a religious organisation would be last to abandon the habit of making friend-enemy distinctions. It seems to me that criminal organisations would be likely to pose a greater obstacle to establishing an unpolitical utopia because friend-enemy distinctions are more intrinsic to their activities.

Schmitt presented a valid argument that constitutional arrangements crafted to support private ordering are prone to corruption by interest group politics. The autonomy of the political exerts itself as some groups argue for exceptions to general rules to obtain benefits at the expense of others.

Other political theorists have proposed stronger executive government as a remedy for problems that interest groups pose for the functioning of liberal democracies. However, Schmitt proposed more extreme remedies. For example, he suggested that under exceptional circumstances a government could make a “sovereign decision” to suspend a constitution.

Friedrich Hayek acknowledged that Schmitt had clearly seen the weakness of omnipotent democracy in the 1920s, but suggested that he “regularly came down on the wrong side” in proposing remedies.

Hayek argued that under Schmitt’s final formulation of his beliefs about the law, individuals are made to serve concrete purposes determined by the state. By contrast, Hayek viewed law in terms of abstract rules of just conduct that have evolved to protect individual liberty.

In my view Schmitt went wrong in his critique of democracy by seeking authoritarian remedies rather than changes in the rules of the game to address the specific problems that he identified.

What role does political entrepreneurship play in institutional change?

 

One of the reasons I quoted that passage by Douglass North is because it mentions political entrepreneurship. I went looking for a quote from North in Institutions, Institutional Change and Economic Performance because I was particularly impressed by that book when I first read it about 30 years ago. (The quoted sentence appears on page 87.)

As defined by North, institutions are “the rules of the game of society” that shape human interaction. He argued that formal institutions—such as constitutions, laws, and regulations—make up only a small proportion of the sum of constraints that shape choices. Informal constraints include codes of conduct, norms of behavior, conventions, and customs. They may be internalized in personal values, rather than imposed by others.

North acknowledged that political entrepreneurship plays a role in institutional change. He doesn’t have much to say about political entrepreneurship, but his analysis implies that political entrepreneurs may play an important role in reducing transactions costs associated with institutional change.

Path dependence and institutional stickiness

The transactions costs of institutional change are high because of the path dependence of institutions. As institutions evolve, ideologies tend to evolve to support them. Organizations and interest groups that have grown up under existing institutions often have a stake in maintaining them.  

The most important point I had remembered from reading Institutions … is that countries with similar formal institutions – constitutions, property rights etc. – can have vastly different economic performance outcomes if informal institutions (cultural settings) are different. Governments and international agencies that have sought to transplant formal institutions to foreign countries have been slow to recognize that point.

The implications of path dependence have been further explored by Peter Boettke, Christopher Coyne, and Peter Leeson in “Institutional Stickiness and the New Development Economics”, Chapter 6 in Culture of Economic Action, ed. Laura E. Grube and Virgil Henry Storr (2015).  The authors contend that the ability of a new institutional arrangement to take hold when it has been transplanted depends on that institutions status in relations to indigenous agents in the previous time period. They suggest that institutional transplants are unlikely to stick if they are inconsistent with indigenously introduced endogenous institutions.

The analytical framework used by Boettke et al is also relevant to considering the challenges faced by endogenous political entrepreneurs in bringing about institutional change.

Entrepreneurship (political and economic)

As discussed recently on this blog, political entrepreneurship has characteristics that differ from economic entrepreneurship. I suggested that it might be reasonable to assume that political entrepreneurs are motivated largely by the satisfaction they obtain from constructing ideological narratives and selling them, and from exercising the political power required to implement policies.

Nevertheless, there are similarities between political and economic entrepreneurship that become apparent when economic entrepreneurship is considered in a cultural context. In his article, “The discovery and interpretation of profit opportunities and the Kirznerian entrepreneur”, reproduced as Chapter 3 of Culture and Economic Action (cited above), Don Lavoie writes:

“Entrepreneurship necessarily takes place within culture, it is utterly shaped by culture, and it fundamentally consists in interpreting and influencing culture.” (p. 50)

He suggests:

“entrepreneurship is the achievement not so much of the isolated maverick who finds objective profits others overlooked as of the culturally embedded participant who picks up the gist of a conversation.” (p. 51)

Later, he observes:

“Most acts of entrepreneurship are not like an isolated individual finding things on beaches; they require effort of the imagination, skillful judgements of future costs and revenue possibilities, and an ability to read the significance of complex social situations.”

In the following chapter of Culture and Economic Action, Virgil Henry Storr and Arielle John suggest that rather than viewing Lavoie’s contribution as a critique of Kirzner’s theory of entrepreneurship it is more appropriate to view it as a suggestion as to how that theory may be fruitfully amended. The amendments suggested by Lavoie seem to me to make the role of the economic entrepreneur seem similar in some respects to the role of a political entrepreneur.

Max Weber’s understanding of political entrepreneurship

Douglass North seems to have given minimal acknowledgement of Max Weber’s work as a social theorist, even though there was considerable overlap in their areas of interest.  Francesca Trivellato has noted that in one publication North does refer to Weber as a scholar of “the role of belief and values in shaping change”. Weber is, of course, most often remembered for his theory of the Protestant ethic but he also made other important contributions.

Weber’s writings on charismatic and demagogic leadership shed some light on the nature of political entrepreneurship in democracies. The following points summarize an article by Xavier Márquez, entitled “Max Weber, demagogy and charismatic representation”, published in the European Journal of Political Theory (2024).

• Weber argued that effective leaders must be able to fight for ‘causes’ beyond the narrow immediate interests of economic groups or party organisations and thus to struggle against the impersonal forces of bureaucratization (the subsumption of politics under bureaucratic and technical imperatives). Effective leaders must therefore have a charismatic form of authority – the only form of authority capable of overcoming the constraints of organisation, legality and tradition.
• The need to appeal to mass publics in modern democratizing societies selects for leaders who have a talent for mobilising large groups of people through rhetorical means. In the context of mass politics, charismatic authority manifests as demagogy. Weber thinks of the masses as unorganized and irrational and argues that even ‘democratically’ elected leadership is a form of ‘dictatorship which rests on the exploitation of the emotionality of the masses.
• Weber's praise for charismatic and demagogic leadership is tempered by the worry that political leaders must also be responsible. This is so in a twofold sense: objectively, a political system must be able to hold leaders accountable for their actions; and subjectively, leaders must display an ethics of responsibility, and thus be able to ‘take responsibility’ for their actions.
• Elections formalize the recognition of charisma. If charismatic leaders capable of mobilizing and representing broad masses will tend to arise in any case, it is better if the recognition of their charisma is subject to periodic formal tests rather than informal, extra-legal events.
• Charismatic authority in the broadest sense tends to appear in moments of deep, even existential crisis, where the charismatic leader performs a ‘miracle’ for a group that feels otherwise impotent and deeply threatened, and can sustain itself only when the leader can provide such ‘miracles.
• The charismatic demagogue produces a wondrous or miraculous representation of the people as a charismatic community but also a ‘wondrous’ representation of himself.
• Weber argues that charismatic leaders must provide evidence of benefiting their charismatic community if they are to retain their authority. The implicit ‘bargain’ between leaders and followers that exists even in cases of strong charismatic authority allows us to speak of a degree of accountability and influence.
• Instead of distinguishing between the ‘mere’ demagogue and its antithesis, the statesman, in terms of whether or not they deceive the demos or act for the common good, Weber stresses the ethical distinction between the politician who is responsible for their cause, and thus capable of intentionally and rationally directing state power towards its achievement (in what is, strictly speaking, a value–rational way), and the politician who is not.
• Lack of objectivity (wishful thinking, extreme overconfidence, ignoring inconvenient information) in assessing a situation leads to irresponsible political action, insofar as it leads to a misunderstanding of the means necessary to achieve particular ends and the physical, social and political constraints on the use of such means. All leaders are susceptible to these vices, but the situation of the charismatic demagogue, surrounded by adoring followers and capable of summoning the adulation of crowds, makes these vices extremely common occupational hazards.
• Weber hoped that training in committee or party work would hone the political judgement of leaders so that they would be more likely to see the consequences of their decisions and to take responsibility for them. 

Márquez argues that Weber's conception of charismatic authority allows some demagogues to play a genuinely democratic role in modern societies when viewed through contemporary theories of representation. He suggests that a Weberian analysis of democracy points to the need for strong accountability mechanisms and for institutions that socialize potential leaders into productive habits of adversarial conduct and responsibility, while preventing easy ‘buck passing’.

Márquez observes that although Weber provides a stronger sense of democratic possibility than did Joseph Schumpeter, he is very much the ancestor of the ‘minimalist’ model of democracy that Schumpeter first articulated explicitly in Capitalism, Socialism and Democracy. (I wrote about Schumpeter’s model of democracy here in 2012.)

Directions of future research

This essay is the second in a series in which I am attempting to obtain a better understanding of political entrepreneurship. The first essay can be found here.

My next step is to read Robert Faulkner’s book, The Case for Greatness (2007). I am wondering whether the ancients thought it was possible for a charismatic demagog to also be a "great-souled" leader who is keen to promote liberty and opportunities for individuals to flourish. 

After that, I will consider how the concept of political entrepreneurship fits in with modern public choice literature.

Summary and Conclusions

This essay briefly considers the context in which political entrepreneurship is most relevant, some similarities between economic and political entrepreneurship, and the role of charismatic and demagogic leadership in political entrepreneurship within democracies.

The essay begins by considering the role that Douglas North saw for political entrepreneurship in bringing about institutional change – i.e. change in the rules of the game of society. Political entrepreneurship is required to overcome high transactions costs of change that arise from the path dependent nature of institutions. Building on the concept of path dependency, Peter Boettke, Christopher Coyne and Peter Leeson developed an analytical framework to consider the consequences of institutional stickiness for foreigners engaged in institution building exercises that seek to transplant institutions from one country to another. That framework is also relevant to considering the challenges faced by political entrepreneurs seeking to bring about institutional reforms in their own countries.

The essay then turns to consideration of the relevance to political entrepreneurship of Don Lavoie’s view of economic entrepreneurship. Lavoie suggests that entrepreneurship takes place within culture and is concerned with interpreting and influencing culture. He makes the role of the economic entrepreneur seem similar in some respects to that of the political entrepreneur.

The other major topic considered in the essay is the contribution that Max Weber makes to our understanding of political entrepreneurship through his writings on charismatic and demagogic leadership. Weber makes the case that charismatic and demagogic leadership may be required to overcome the impersonal forces of bureaucratization within democracies. He also sheds light on the circumstances in which demagogic leadership can be consistent with democracy.

North and Weber both add to our understanding of the role of the political entrepreneur in overcoming obstacles to institutional change. However, the fundamental question that both leave aside is how to ensure that institutional change enhances liberty and opportunities for individuals to flourish. 

 

Addendum

Do ideas play a larger role than interests in bringing about institutional change, or is the opposite true? Prominent economists have been associated with opposing views on this question. Keynes and Hayek emphasized the role of ideas; Stigler and Becker emphasized the role of vested interests.

Perhaps the respective influence of ideas and interests depends on the narratives constructed by political entrepreneurs. The role of political entrepreneurs in constructing narratives has been discussed briefly in an earlier essay.

Some recent research suggests that political entrepreneurs discover “memes” (narratives, cues, frames) that invoke voters’ identity concerns (interests) or shift their ideas about how the world works. (Ash E, Mukand SW, Rodrik D, Economic Interests, Worldviews, and Identities: Theory and Evidence on Ideational Politics , Research Paper, May 2024). The authors identify a potential complementarity between worldview politics and identity politics and illustrate how they may reinforce each other. The authors develop a model which predicts that adverse economic shocks will lead to a greater incidence of ideational politics in affected regions. The results of empirical work using televised political ads seem to be consistent with their model predictions.