Does Aristotle’s assertion that a viable political system requires a supportive culture still have relevance today?

 

Some readers may be wondering why anything written about culture and politics over 2000 years ago could possibly have contemporary relevance. Fred D. Miller J.R. makes a strong case that Aristotle’s views remain relevant in his recently published book, Aristotelian Statecraft. In particular, Miller demonstrates that we can still learn a lot from Aristotle about the relationships between moral character, culture and political systems.

In the first part of this essay I will draw upon Miller’s book, particularly Chapter 15, to explain the basis for Aristotle’s assertion that a viable political system requires a supportive culture. In the second part I will outline Miller’s observations about the contemporary relevance of the relationship between culture and political systems. In the third part I will reflect on implications of Miller’s work for the role political entrepreneurship in institutional change, drawing on my recent essays on that topic.

Aristotle’s thesis

At this point I should explain why I think Aristotle was intending to convey the idea that a viable political system requires a supportive culture in the sentence quoted in the epigraph (Pol. V.9.1310a). The quote appears in a context where Aristotle is writing about laws being democratic or oligarchic. Since he is also referring to a constitution as something that might be influenced by education of the young, it seems reasonable to infer that in this context he sees a constitution as being constituted mainly of mores (i.e. informal institutions).

Aristotle observes that the moral character of a polis reflects the moral character of its citizens. His thesis that a viable political system requires a supportive culture can be seen to stem from his moral psychology. The line of argument is summarized in the following points:

• Individuals develop character traits, including social virtues, through their voluntary habitual actions in social settings. Good character has two components: pursuit of virtuous ends; and practical wisdom to choose the best means to those ends.
• Justice and friendship are the most important social virtues. Justice aims at establishing some kind of equality among individuals whereby they all get what properly belongs to them and can cooperate for mutual advantage. Friendship goes beyond justice. Friends choose what is good for each other, and each believes their own good is chosen by the other. Friendship entails trust as well as respect.
• “When a number of individuals cooperate in an association over a period of time, their shared character traits and practical knowledge become an integral part of the culture of the association.” (p. 370)
• Political friendship – a situation where individuals regard fellow citizens as their friends - is closely related to consensus. It is typically found in a society where the rich and the poor (and others with divergent interests) agree about important issues and trust people in authority to act in the common interest.
• However, if people are not careful to treat each other justly, political friendship will be eroded, resulting in civil strife between parties with divergent interests. As the culture is corrupted “individuals will seek to aggrandize themselves at the public expense and the association will become unjust, unstable, and fragile”.

Miller concludes:

“The practical upshot of Aristotle’s thesis is that legislators and policy makers should be concerned about supporting and advancing culture by promoting education and the institutions and practices necessary for the formation of virtuous character traits.” (p. 371)

Miller’s observations about contemporary relevance

The point about emergence of civil strife among those with divergent interests seems to me to be relevant to explaining the link between interest group politics and growth of populism in Western democracies. I will return to that topic later.  

In discussing the contemporary relevance of Aristotle’s thesis, Miller focuses on the role of culture in the political transition of the countries that emerged following the collapse of the Soviet bloc in the early 1990s. Miller sets the scene for that discussion by noting that Alexis de Tocqueville advanced similar ideas to Aristotle in Democracy in America.

Tocqueville noted that democratic political institutions suited to common traits of Americans could not easily be transferred to Europe. He suggests that traits such as self-help, mutual beneficence, and active participation in voluntary associations made Americans more self-reliant and less dependent upon government support.

Miller also draws upon Douglas North’s views on the path-dependence of culture. He quotes a passage in which North cites examples of unsuccessful attempts to transplant to other countries the constitutions and laws of the United States and other successful Western countries. Those attempts failed because the formal institutions being transplanted were incompatible with the prevailing cultures of recipient countries.

Miller’s observations about the political transition following communist rule draw initially on the work of Svetozar Pejovich (“The Uneven Results of Institutional Change in Central and Eastern Europe: The Role of Culture”, Social Philosophy and Policy, 2006). Pejovich’s theoretical framework rests on the idea that the transactions costs of integrating new formal rules are higher when members of the community perceive the consequences of those rules to conflict with their prevailing culture. He applies that framework to discuss the great disparity in economic freedom among Central and Eastern European countries in 2004, advancing the hypothesis that countries with a stronger Western cultural influence have been more successful in making the transition than those with a tradition of Eastern Orthodox Christianity or Islam. Pejovich observes that culture in the less free and unfree groups has “a bias toward collectivism, egalitarianism, and shared values that predates communism”.

Miller expands Pejovich’s analysis to cover political and personal freedom and extends the period covered to 2002. Drawing upon a range of sources, he identifies three groups of countries in Eastern Europe and the former Soviet Union for 2020-2022: consolidated democracies; consolidated semi-democracies; and hybrid regimes. The consolidated democracies are Estonia, Latvia, Slovenia, Lithuania, Czech Republic and Slovakia. The consolidated semi-democracies are Poland, Bulgaria, Romania and Croatia. The19 hybrid regimes include Russia, Belarus, Ukraine, Serbia, and Hungary.

The author notes that most of the countries that got off to a good start after the fall of communism have continued their trajectories to consolidate democratic capitalism.  He adds: “A notable exception was Hungary, which was demoted to the hybrid zone after a conservative government adopted a new constitution.”

Miller notes that most countries in the hybrid group have made little progress to democratic capitalism. He then adds:

“On the other hand, it is noteworthy that none of these countries have reverted to outright authoritarianism. It is as if they have an inner tendency preventing them from rising above or falling below a certain level. Aristotle’s thesis suggests a plausible explanation of this phenomenon: the parameters of political change are determined to a significant extent by a country’s underlying culture.”

Implications for political entrepreneurship

Miller’s book contains a great deal of information about Aristotle’s view of statecraft which is highly relevant to consideration of political entrepreneurship. In this section of the essay, however, I want to focus on two of my essays discussing the roles of culture and political entrepreneurship as determinants of economic and personal freedom.

The first of these essays is entitled Part II: Can cultural values explain freedom levels? In that essay I observe the existence of a weak positive relationship between economic freedom and an index of facilitating values that I have developed and a strong positive relationship between Christian Welzel’s emancipative values index and personal freedom levels. This research is broadly supportive of the view that culture plays an important role as a determinant of formal institutional settings.

However, my main focus was on outlier countries, whose freedom levels could not be readily explained by culture. I suggested that outlier status can be attributed to the influence of political entrepreneurship. It is relatively easy to identify individual political entrepreneurs who have contributed to institutional outcomes in countries with economic and/or personal freedom ratings substantially lower than might be predicted by underlying cultural values. However, when governments have relatively high regard for individual liberty, political entrepreneurship tends to be more subtle, and less focused on individual national leaders.

Looking at the data base used in this analysis, 24 countries can be identified as belonging to the former Soviet bloc. Of those,10 have both economic and personal freedom levels within a range of plus or minus 1 unit of that predicted by underlying cultural values. Armenia is the only country in which both personal and economic freedom are greater the predicted level; Albania is the only other country where economic freedom is greater than the predicted level. Azerbaijan is the only country with both personal and economic freedom are less than the predicted level and is also the only country with economic freedom less than the predicted level. Apart from Armenia, the countries with personal freedom greater than the predicted level are Bosnia, Bulgaria, Estonia, Georgia, Latvia, Lithuania, North Macedonia and Romania. Apart from Azerbaijan, the countries with personal freedom levels lower than the predicted level are Belarus, Russia and Tajikistan.

This analysis provides some support for the Aristotle/Miller thesis even though it suggests that political entrepreneurship can also play an important role in determining economic and personal freedom levels.

The second of my essays relevant to the role of culture and political entrepreneurship is entitled Part VI: What are the consequences of path dependence? In that essay I argue that the culture of preferment-seeking and plunder currently associated with interest group politics in Western liberal democracies took a long time to reach its current state, but it is now entrenched and will be difficult to overcome. The problem arises from path dependence. Changing the rules of the game to reduce the adverse impact of interest group politics poses a large challenge for reform-minded political entrepreneurs.

The development of my line of argument has features in common with the Aristotle/ Miller thesis outlined above. The most obvious common element is reference to Douglas North’s views on the path dependence of culture.

My line of argument also relies heavily on the views of James M Buchanan about social virtues. Those views have an Aristotelian flavour. Buchanan argues that two norms underpin liberal democracy: that a sufficient proportion of the population can make their own choices and prefer to be autonomous rather than dependent on others; and that a sufficient proportion of the population enter relationships with others based on reciprocity, fair dealing, and mutual respect. My attempt to link Buchanan’s views to Aristotle has led me to John Passmore’s book, The Perfectibility of Man (1970). Buchanan claims that book “remains the definitive work on the history of ideas” related to its title. From the little I have read of Passmore’s book, it is clear that he is influenced by Aristotle (but more critical of Aristotle’s views than I am).

I began my path dependence essay with famous quotes from Frédéric Bastiat about the state being the great fiction by which everyone tries to live at the expense of everyone else; and the universal franchise as likely to result in universal plunder. It is now clear to me, however, that Bastiat’s comments should be viewed in the light of Tocqueville’s observation that democratic political institutions suited to common traits of Americans could not easily be transferred to Europe. In that light, at the time they were made Bastiat’s comments seem to have been more pertinent to continental Europe than to the Anglosphere. Over the last 150 years, democratic political institutions do seem to have had greater resilience in the Anglosphere than in other parts of the world.

However, in my view Aristotle’s warning that social trust will be eroded if people are not careful to treat each other justly has now also become highly pertinent to the Anglosphere. We are seeing increasing evidence that as the culture is corrupted “individuals will seek to aggrandize themselves at the public expense”. Our democratic political institutions now seem to be becoming increasingly “unjust, unstable, and fragile”.

Conclusion

 This essay was prompted by my reading of Chapter 15 of Fred Miller’s book, Aristotelian Statecraft. That chapter discusses how Aristotle’s observation that the moral character of a polis reflects the moral character of its citizens supports his view that a viable political system requires a supportive culture.

In that chapter, Miller also discusses the varied political transition of countries following the Soviet bloc in the early 1990s to illustrate that democratic capitalism is only viable if culture is supportive. He demonstrates that the countries that have been most successful in making the transition have had a history of relatively strong Western cultural influence. Cultural influences in many of the other countries seem to hold them back from either advancing strongly toward democratic capitalism or reverting to outright authoritarianism.

I also considered whether the Aristotle/Miller thesis is consistent with the conclusions of two essays in my series on political entrepreneurship. The findings of my essay on the extent to which cultural values explain freedom levels are broadly supportive of the role of cultural values, even though I emphasize that political entrepreneurship can also play an important role.

My essay on the consequences of path dependence offers strong support for the Aristotle/ Miller thesis in the context of considering the gradual erosion of social virtues in Western liberal democracies. I think we are now observing the consequences of failure to heed Aristotle’s warning that social trust will be eroded if people do not treat each other justly.

Can the rise of populism be explained as a reaction to the rule of experts?

 

In an essay written over 15 years ago I observed that we were beginning to see a populist reaction to the rule of experts in the United States and (to a lesser extent) in Australia. In more recent essays, however, I have tended to see populism as a manifestation of interest group politics. These explanations are not mutually exclusive, but it may be useful to consider how the rule of experts and populism are both entangled with interest group politics.

My 2010 essay

The essay was entitled: Does Australia also have a ruling class? It was prompted by an article by Angelo Codevilla which suggested that Democrat and Republican office-holders in recent governments in the United States had shown “a similar presumption to dominate and fewer differences in tastes, habits and opinions ... than between both and the rest of the community”. He claimed: “They think, look, and act like a class.”

Codevilla discussed several characteristics of this “ruling class”. For example, he suggested that they believe themselves to be “the best and brightest while the rest of Americans are retrograde, racist, and dysfunctional unless properly constrained”. They view the common people’s words as “like grunts, mere signs of pain, pleasure and frustration”.

I concluded that while Australia also had a self-appointed ruling class which could be identified with the public service and the political left, I didn’t think the conservative side of Australian politics was as closely identified with that ruling class as in the United States. That explains why populist politicians were not particularly popular in Australia at that time.

In retrospect, however, I think I also displayed some “ruling class” attitudes in my essay:

“In my view the words of non-experts on complex economic issues do have little more value than a grunt. Whether we are talking about economic policy, brain surgery or plumbing, I think it should be self-evident that the views of experts count for more than those of non-experts.”

I still think that the views of experts should count for more than those of non-experts, although these days I try to avoid being offensive. Apart from the tone of my comment, I should have made clear that there are reasons to doubt that some of those who claim economic expertise know what they are talking about. The claims that some economists make about the potential to regulate complex market systems to produce better outcomes deserve no more respect than the similar claims of non-experts.

In his book, Expert Failure, published in 2018, Roger Koppl brings an economic perspective to “the problem of experts”. I will briefly consider Koppl’s line of argument in the following section.

Expert Failure

Koppl acknowledges that we must rely on experts even though experts may not be completely reliable and trustworthy sources of the advice we require from them.

 He defines an “expert” as anyone paid to give an opinion. That definition leaves open the question of whether experts are reliable or unreliable.

 Koppl adopts the Hayekian view that knowledge is generally emergent from practice, often tacit, and embodied in our norms, habits, practices, and traditions. His comparative institutional approach leads to the conclusion that expert error and abuse are more likely when experts have monopoly power, and less likely in a “competitive” market for expert opinion.

I expect most economists would view that as commonsense, but it is far removed from standard practice in many fields which rely on expert knowledge. Based on his study of the use of expert witnesses in law, Koppl observes that it is common to encounter the view that it is scandalous for the opinions of men of science to be challenged, even by other scientists. It is often held that the knowledge of expert witnesses is or should be uniform, unambiguous and certain. Experts are often encouraged to come to a common understanding rather than to offer competing views.

Koppl observes that the division of knowledge makes it impossible for anyone to avoid a limited and partial perspective, which implies a parochial bias in our perceptions and judgments. That kind of bias cannot be eliminated by blinding protocols – such as the double-blind requirements used in testing of pharmaceuticals.  It can only be mitigated by multiplying the number of experts and putting them in positions of genuine rivalry.

The book contains an interesting discussion of epistemic systems design in an experimental economics laboratory. In that setting, the experimenter is in the god-like position of defining unambiguously what the truth is and examining how close experimental subjects come to it in different institutional settings. The knowledge gained of which institutional structures promote the discovery and elimination of error is relevant to the real world. Experimental systems design studies offer opportunities to test the role of network structure in producing reliable knowledge in scientific fields.

Koppl comments:

“Rather than attempting to instruct people in how to form true opinions, we might reform our social institutions in ways that tend to induce people to find and speak the truth.”

However, at the end of the next chapter, after considering the problems arising from the monopoly of expert opinion in government -  referred to as the rule of experts or the entangled deep state - the author suggests that the experimental approach of “piecemeal institutional reform (which is mostly borrowed from Vernon Smith) does not have an obvious application to the entangled deep state.”  He concludes:

“If my diagnosis of the deep state is at all correct, reform is urgently required. I freely confess, however, that I have no specific ideas on how we might attempt to roll back the deep state with a reasonable prospect of success.”

Nevertheless, Koppl offers useful insights into the nature of the problem arising from the rule of experts. His conclusion that the problem of experts “mostly boils down to the question of knowledge imposition” is highly relevant to consideration of institutional approaches to determination of public policies.

In the introductory chapter to his book Koppl explains that he values pluralistic democracy and is as much opposed to populism as to the rule of experts.  He argues for pluralism on the grounds that each of us has at best a partial view of the truth:

“In a pluralist democracy, competing partial perspectives on the truth have at least a chance to be heard and to influence political choices. Decisions in a political system – be it populist, elitist, or something else – that override or ignore plural perspectives will be based on knowledge that is at best limited, partial, biased.”

In the process of developing that view Koppl refers to an article by Christopher Bickerton and Carlo Accetti (“Populism and Technocracy: Opposites or Complements?” Critical Review of International Social and Political Philosophy, 20(2), 2015) which describes populism and technocracy as two organizing poles of politics which are both opposed to “party democracy”. I will now discuss that article because it raises the question in my mind of whether party democracy has more in common with interest group politics than with pluralism.

Party democracy, interest group politics and pluralism

 Bickerton and Accetti argue that whilst populism and technocracy are usually assumed to be opposed to each other, there is also an important element of complementarity between them. Both populism and technocracy are predicated on an implicit critique of party democracy. The authors suggest that “if we accept the idea that politics is increasingly structured in terms of this conflict between populism and technocracy, then we find that even the very possibility of articulating a defense of party democracy is excluded from the political spectrum”.

I have no difficulty agreeing with Bickerton and Accetti if they are just using different words to say that both populism and the rule of experts are opposed to pluralistic democracy. Technocracy seems to correspond closely with rule of experts, but “party democracy”, as the authors describe it, seems to me to corresponds more closely to interest group politics than to the role of encompassing political groups in a two-party pluralistic democracy.

The authors define party democracy as a political regime based on two key features: the mediation of political conflicts through the institution of political parties; and the idea that the specific conception of the common good that ought to prevail and therefore be translated into public policy is the one that is constructed through the democratic procedures of parliamentary deliberation and electoral competition. The role of political parties in “mediation of political conflicts” is the focus of my concern.

The authors suggest that an important function performed by political parties is that of “integrating a plurality of particular interests” and moulding them into “an overarching conception of the common good”. When political parties aim to do such things, it seems to me that they end up cobbling together coalitions of interest groups which seek to obtain benefits for themselves at the expense of others. That is essentially what interest group politics is about.

In my view, better outcomes are produced when political parties take on the role of encompassing political groups in two-party pluralistic democracies. In discussing the importance of encompassing political groups in a two-party system of government, Mancur Olson asserted that the leader of a party “whose clients comprise half or more of the society naturally is concerned about the efficiency and welfare of the society as a whole” because this affects the party’s electoral prospects.  (See further discussion and reference here.)

 As I have explained elsewhere (for example in a recent essay on the consequences of path dependence) the growth of interest group politics has tended to contract economic freedom, constrain economic growth and increase public debt levels. As a result, voters have tended to become increasingly disenchanted with conventional politics.

It seems to me that as party politics has increasingly focused on pandering to particular interest groups it has helped to bring about a situation where more people have become more willing to listen to populists who tell them that they are being disadvantaged by the policies of conventional political leaders. Unfortunately, most of those populist leaders advance policies that are likely to produce even worse economic and social outcomes.

The ubiquity of populism, rule of experts, and interest group politics

Looking at recent politics in the United Sates, it might seem appropriate to identify the Democratic Party with rule of experts and the Republican Party with populism. However, that assignment understates the extent of populism in the Democratic Party, which tends to seek popular support by attributing economic woes to the wealthy 1% of the population in much the same way as economic nationalists in the Republican Party attribute economic woes to import competition and immigration. It also understates the extent to which the current Administration relies on commercial expertise – dealmaking – in running the government. It seems that the rule of one group of experts has been replaced by rule of another group with different expertise. The problems arising from the monopoly of expert opinion have changed their character but have not disappeared.

Roger Koppl’s reference to the “entangled deep state” reflects his awareness that the rule of experts is not immune to interest group politics. He notes that participants in the American deep state “have a variety of competing and parochial interests”. More generally, interest group politics is strongly associated with the entanglement of entrepreneurs and interests in private and public sectors.

Interest group politics seems to have attended to the pleas of increasingly narrow groups in recent years. As well as seeking support of broad economic groups such as unions, industry groups, and groups with differing social and environmental attitudes, political parties have increasingly sought the support of narrow interest groups by engaging in identity politics. The progressive side of politics has favoured groups that have previously been disadvantaged by ethnicity, gender and sexual orientation. The conservative side of politics has pushed back against what they label as wokeness, while seeking support from some groups, e.g. young men, who perceive themselves to be disadvantage by it.

Another interesting development in interest group politics in the United States is the emergence of an alliance between conservative populists and the high-tech community. It is not easy to comprehend how populists who claim to be concerned about economic and social impacts of competition from imports and immigration could be complacent about the economic and social impacts of AI. Action by the U.S. government to facilitate rapid development of AI has been accompanied by a change in the economic nationalist narrative away from its populist roots to emphasize the importance of retaining technological leadership in AI in the face of increasing competition from China.

The warning of President Eisenhower, quoted in the epigraph, might now be relevant for reasons that he could not have foreseen. Public policy is not only at risk of becoming the captive of a scientific-technological elite supported by the administrative state, it is also at risk of becoming the captive of a scientific-technological elite controlling the development of powerful AI models.

However, I don’t think we should assume that a future in which AI models will have an increasing influence on social and economic outcomes will necessarily be worse than a future in which the entangled deep state retains its current influence.  It is possible that rivalry between different AI models will ensure that their social and economic impacts are relatively benign and consistent with pluralistic democracy. Even now, greater use of truth-seeking bots has potential to lessen the problem of rational ignorance, and thus to reduce the susceptibility of voters to populists peddling false narratives.

Conclusions

The rise of populism in the Western liberal democracies can be explained to some degree as a reaction to the “ruling class” attitudes of experts within governments.  I have recently tended to see populism as a manifestation of interest group politics, but it is worth considering how the rule of experts and populism are entangled with interest group politics.

The essay has outlined the views presented by Roger Koppl in his book, Expert Failure. Koppl offers the useful insight that the main problem arising from the rule of experts is knowledge imposition. Expert error and abuse are more likely when experts have monopoly power and are less likely when experts are placed in positions of genuine rivalry. Koppl argues that pluralist democracy is superior to both the rule of experts and populism because it enables competing partial perspectives on the truth to have a chance to be heard.

I have also considered the view of Christopher Bickerton and Carlo Accetti that both populism and technocracy are predicated on an implicit critique of party democracy. I suggested that party democracy, as the authors described it, seemed to have more in common with interest group politics than with pluralistic democracy. In my view, interest group politics is largely to blame for the poor economic and social outcomes that have encouraged the growth of populism.

My main conclusion is that the rule of experts, populism, and interest group politics are currently ubiquitous on both the progressive and conservative sides of politics. Populism is certainly not confined to one side of politics and populist governments don’t eliminate problems arising from the monopoly of expert opinion. In the U.S. a populist executive has continued to discourage rival views, while attempting to substitute expertise in commercial deal-making for expertise in statecraft.

The emergence of an alliance between the current U.S. Administration and the high-tech community poses a risk that public policy may become captive to a scientific-technological elite controlling the development of powerful AI models.  We should not assume, however, that a future in which AI models have an increasing influence on social and economic outcomes will necessarily be worse than one in which the entangled deep state retains its current influence. Rivalry between AI models may even have potential to produce better outcomes.

What was wrong with the Washington Consensus?

 

Just as I was reading the final chapters of William Easterly’s book, Violent Saviours: The West, the Rest, and Capitalism Without Consent, the United States government abducted the president of Venezuela to stand trial on drug charges in New York. I was pleased to see Nicolás Maduro facing justice, even if for the wrong reasons, but at the time of writing it remains to be seen whether the U.S. actions will advance the economic and personal freedom of Venezuelans.

 In the light of recent developments, Easterly’s conclusion seem to me to be excessively optimistic. He states:

“Adam Smith’s prophesied movement of “nations into some sort of respect for the rights of one another” had been partially fulfilled. The relation of the West to the Rest, previously based on coercion, was now based mainly on consent.”

Under the presidency of Donald Trump, the U.S. seems to me to be behaving like a colonial power. President Trump makes no secret of the fact that he is more interested in control of additional territory, oil, and other resources than in promoting respect for human rights, free trade, and the liberal international order.

Apologists for President Trump can claim, with some justification, that big powers have always swung their weight around in their own interests despite their rhetoric supporting the liberal international order. Nevertheless, public support for international norms of behaviour has hitherto signaled a willingness to be held to account publicly for breach of those norms.

 Easterly qualifies his statement that the relation of the West and the Rest is now based mainly on consent:

“The trend toward freedom is neither inexorable nor irreversible. As of this writing, new threats to freedom have emerged with proposed increases in US tariffs and possible restrictions on foreign students. It’s a little premature to declare the attainment of a liberal paradise.”

With the benefit of observation of recent events, however, it is difficult to escape the conclusion that the world is currently moving rapidly away from the ideal of relations between nations being based on consent rather than coercion. It is possible, nevertheless, that oppressed people in some countries will manage to achieve more economic and personal freedom over the next few years. The best we can hope for is that before too long Washington will once again embrace the ideal that relations between nations should be based on consent rather than coercion.

Before I discuss Easterly’s view of the Washington Consensus, I will briefly outline what Violent Saviours is about.

The West’s conflicted view of the Rest

Violent Saviours offers a historical account of the conflict between the duelling visions that have influenced the conduct of Western nations toward the rest of the world since the 17^th and 18^th centuries. On the one hand, there are the liberal ideas of consent, self-determination, and equality that make possible positive-sum gains from commerce between groups and individuals. On the other hand, there are the opposing illiberal ideas of coercion, paternalism and racism that yielded a negative sum world of conquest.

Adam Smith was a leading advocate of liberal ideas and a critic of many aspects of colonialism. However, some well-intentioned Enlightenment philosophers (e.g. Condorcet) offered support for the “Development Right of Conquest”. Condorcet sought to justify conquest as offering the hope of eventually “civilizing” the locals.

Over the period from 1776 to 1865, the liberals were mainly on the losing side. They were unable to prevent the West’s adoption of illiberal policies such as colonial conquest and population removal (in countries such as the U.S, and Australia). However, liberals had some victories during that period; most notably, they were able to bring about abolition of the slave trade and of slavery in the United States.

Easterly suggests that over the period from 1865 to 1945 most economists abandoned liberal morality: “Commerce expands but without moral constraints on plunder”. The regression of freedom culminated in World War II, during which liberalism had to fight for its survival.

The period since 1945 has seen the partial victory of liberal ideas with the end of colonialism and a surge in commerce which has partially restored agency to people in the former colonies. Easterly notes that some economists – notably Milton Friedman, P. T. Bauer, and Amartya Sen – revived the idea of individual freedom as “an end in itself”.

It is possible to quibble with some aspects of that account, but I think the important point to focus on is the current state of the conflict between the duelling visions. Easterly writes:

“Yet the legacy of the past is still here. While obviously not equating modern development efforts with slavery, genocide, and colonialism, the question remains of what violations of consent today in the name of progress should be out of bounds.”

That provides the context in which I would like to consider the Washington Consensus.

 The Washington Consensus

The Washington Consensus was the term John Williamson, an economist, invented in 1989 to describe the set of policy reforms that the US Treasury, the World Bank and the IMF believed would be good for Latin American countries. The ten propositions of the Washington Consensus combined fiscal discipline with selective deregulation. They were broadly pro-market but did not entail a vastly diminished role for government. As an advocate of a greater measure of economic freedom than required by the ten points in the Washington Consensus, I recall being bemused to see opponents equate it with “neoliberalism” and “market fundamentalism”. John Williamson had a different reaction. As he discussed in the paper from which I obtained the epigraph, he was concerned that the term was often being used to refer to a more radical pro-market view than he had intended.

The policy ideas in the Washington Consensus were certainly applicable beyond Latin American countries and were not confined to economists in Washington DC. Those ideas were widely accepted by economists with expertise in economic policy in many different countries. I think they are still widely accepted by economists today.

As I was reading Easterly’s discussion of the Washington Consensus, the thought crossed my mind that the era in which it held sway was actually the high point in economic development policy as advocated by the World Bank. The Washington consensus seemed to show more recognition of the importance of economic freedom than subsequent policy approaches emerging from Washington.

One of the problems that Easterly mentions is that many observers thought that pro-market reforms were only desirable if they produced immediate economic gains. The reforms led to anti-globalization protests because they didn’t have an immediate positive impact on economic growth and were often associated with worsening of poverty. As time went on, however, “there was more evidence of growth turnarounds and poverty reduction correlated with movements away from extreme state control”.

As I was reading this, I tried to recollect what I had written in the 1990s about the adjustment process following an expansion of economic freedom. I wrote about some aspects of that question in an article entitled “The New Zealand Model of Economic Reform: A Review” (published in: Agenda: A Journal of Policy Analysis and Reform, Vol. 4, No. 3 (1997), ANU Press). My work suggested that the lack of clear evidence of economic benefits in some countries that had undertaken economic reforms in the 1980s could be attributed partly to the time required for new policy directions to become embedded and for adjustment to occur: 

“Profound changes in behaviour, including changes in the willingness of individuals to learn new skills and business practices, are required as people respond to the incentives that policy reforms provide.  It takes time even for the most innovative firms and individuals to accept that new market incentives are likely to be sustained and to develop and implement new strategies.  Widespread adoption requires sufficient time for these new strategies to become demonstrably successful.”

I am pleased that I wrote that even though I missed an important point that Easterly makes. He suggests that the emphasis “on material results alone – on both sides of the debate – neglected Sen’s and others’ arguments for freedom as an end in itself”.

I don’t see freedom as an “end in itself” – freedom is necessary because human flourishing is an individualized and self-directed process. What I think Easterly means is that institutional freedom would be no less desirable if individuals chose to use it ways that made no contribution to economic growth e.g. by increasing the amount of time they spent on leisure activities.

Easterly also suggests that the manner in which foreign governments were encouraged to adopt Washington Consensus polices was problematic:

“Low and middle-income countries could get badly needed loans from the World Bank and IMF only if they agreed to reforms decreed by Bank and Fund staff. The fatal combination of foreign advisors with some coercion would keep discrediting promarket recommendations made by the World Bank and International Monetary Fund in the 1990s, especially for Africa, Latin America, and Russia.”

A few pages on, however, the author notes that “the association of liberal reforms with a Washington-imposed Consensus did not turn out to be fatal”. He follows that observation with a long list of “homegrown reformers” who have pursued pro-market reforms. (I have reproduced the list here.)

Unfortunately, Easterly’s list of reformers does not include Javier Milei, president of Argentina. It was probably compiled too soon for that to be possible.

Now that I have mentioned Javier Milei it is worth noting that the U.S. government offered a $20 billion bailout for Argentina prior to the country’s recent legislative elections. The offer was apparently made with strings attached — namely, that the funds would be available only if Milei’s party won the election.

It seems to me that if the U.S. president were to promote a general policy of assisting those low-income countries whose political leaders enthusiastically expand economic and personal freedom, he might be worthy of the Nobel Peace Prize.   

Conclusion

William Easterly’s book, Violent Saviours, offers an insightful account of the conflict between liberal and coercive views of economic development since the 17^th and 18^th centuries. He suggests that the legacy of the past is still with us because development economists and policy makers are still confronted by the question of what violations of consent should be out of bounds.

That provided the context in which I considered Easterly’s views of what was wrong with the Washinton Consensus – the moderately pro-market economic policies advocated by the U.S. Treasury, the World Bank, and the IMF during the 1990s. Easterly is clearly sympathetic to espousal of pro-market policies. However, he makes a strong case that such policies should be advocated to promote economic freedom rather than to promote “material results alone”.

The view that Easterly presents is consistent with the idea that liberty is desirable because it provides opportunities for individuals to flourish in the manner they choose.

What questions should I focus on in 2026?

Happy New Year!

If I had asked myself at the beginning of 2025 what questions I should focus over the next 12 months I would have mentioned the implications of declining economic growth rates in high income countries.  I have been particularly interested in the consequences of an increasing proportion of the populations of high-income countries coming to feel that their standard of living is worse than that of their parents at a comparable age. My research suggests that people tend to feel miserable when they assess their standard of living to be lower than that of their parents. I wrote several essays on that topic, including one entitled: How difficult would it be for individuals to adjust to zero economic growth?

I would not have predicted at the beginning of 2025 that during the year I would write an essay entitled: Are integralists opposed to natural rights? That was my most popular essay for the year, with over 4,000 views.

My interest in integralists followed serendipitously from my interest in the role of political entrepreneurship in institutional change. At the beginning of 2025 I was concerned to obtain a better understanding of political entrepreneurship because there seemed to be increasing support in liberal democracies for leaders who proposed changes in the rules of the game which were likely to have detrimental impacts on prospects for individual flourishing. Some essays I wrote on the topic attracted over 3,900 views. I revised those essays during the year and published a series of essays in November addressing issues related to the question: What impact does political entrepreneurship have on freedom and flourishing?

I would not have predicted at the beginning of 2025 that I would have the opportunity to publish four scholarly essays by Edward W. Younkins, on topics that are central to the purpose of this blog.  An essay reviewing books by David L. Norton, was published here in January, a review of Chris Matthew Sciabarra’s book “Total Freedom” was published  here in July, an essay entitled, “How can Austrian Economics be reconciled with the Neo-Aristotelian philosophy of Freedom and Flourishing?”, was published here in October, and an essay entitled, “Can Polarized Moral Politics be Bridged by a Neo-Aristotelian Philosophy of Freedom and Flourishing”, was published here in December. Those essays have all attracted a substantial number of readers.

What next?

It may be possible to predict what I will write about in 2026 from topics that I wish I could understand more fully. Those topics may provide the focus for my future reading.

In a recent post, I have already foreshadowed further reading related to political entrepreneurship and institutional change.

I also feel the need to improve my understanding of the implications of rapid advances in AI. I wrote a series of essays about robots and AI in 2015 and 2016 (one of the better ones is here ) but a lot has happened since then.

Another topic I would like to be able to understand is why birth rates are now below replacement levels in many high-income countries. Can this be attributed to economic insecurity, or has there been a fundamental change in values? Does it pose a threat to civilization, as some have suggested? Does it pose a problem for those of us who believe that human flourishing is an inherently self-directed process?

I don’t expect to be able to push back the frontiers of knowledge in any of the areas mentioned above but it would be nice to end the year with a better understanding of some of the issues involved.

It will be interesting to look back at the end of 2026 to what I have actually written about. I imagine the range of topics touched upon will be broader than the topics listed above. I also hope to be given the opportunity to publish more high-quality guest essays that are consistent with the purposes of this blog.

What impact does political entrepreneuriship have on freedom and flourishing? Further Reading

 Some suggestions for further reading have occurred to me since I published this series of essays on political entrepreneurship. I welcome suggestions for addition to this list.

To ensure that readers are familiar with the context, I will list the essays in the series before presenting suggestions for further reading.

What impact does political entrepreneurship have on freedom and flourishing?

 Preface to a Series of Essays

Part I: How is human flourishing linked to liberty?

Part II: Can cultural values explain freedom levels?

Part III: How is political entrepreneurship similar to economic entrepreneurship?

Part IV: What incentives are political entrepreneurs faced with?

Part V: What information constraints confront political entrepreneurs?

Part VI: What are the consequences of path dependence?

Part VII: What kind of political entrepreneurship is required?

Part VIII: Summary and Conclusions

Further Reading Recommendations

Do free markets and democratic institutions lead inevitably to crony capitalism?

For an interesting discussion of reasons why that might be so, see:

Munger, Michael C., and Mario Villarreal-Diaz. 2019. “The Road to Crony Capitalism.” The Independent Review 23 (3): 331–44.

Munger and Villarreal-Diaz argue that successful capitalism creates institutions and incentives that make collusion between political power and economic power more “profitable,” in the sense of rewarding those who control that power. They suggest that cronyism and the tendency to demand redistributive state interventions should both be viewed as features of free-market capitalism.

For a thoughtful response, see:

Quintas, André and Boettke, Peter J. and Boettke, Peter J., Crony Capitalism, Populism, and Democracy (November 02, 2025). GMU Working Paper in Economics Forthcoming, Available at SSRN: https://ssrn.com/abstract=5696202 .

Quintas and Boettke agree that current democratic institutions breed cronyism. They suggest that in the current institutional setting there is no endogenous path out of cronyism. However, they argue that does not mean that democracy is inherently incompatible with capitalism. The authors outline an alternative vision for democracy drawing on the works of James Buchanan, F.A. Hayek, Vincent Ostrom, and Don Lavoie.

In another paper, Quintas and Boettke discuss the competing visions of cronyism of Randall Holcombe and Richard Wagner, both of whom argue that our current system is more accurately described as cronyism rather than capitalism. Holcombe views cronyism as an unintended but inevitable byproduct of capitalism, while Wagner envisages it as an inherent feature of all economic systems - a fundamental reality of political-economic entanglement. Quintas and Boettke lean toward the latter view. Once we recognize that cronyism existed long before the modern state, the relevant question is not whether capitalism creates cronyism but whether capitalism can escape cronyism’s grip. See:

Quintas, André and Boettke, Peter J. and Boettke, Peter J., Competing Visions of Cronyism within the Virginia School of Political Economy (April 27, 2025). GMU Working Paper in Economics No. 25-16, Available at SSRN: https://ssrn.com/abstract=5280451 .

In Part VII: What kind of political entrepreneurship is required?, I referred to the chapter Vincent Geloso and Alex Tabarrok in the book, Can Democracy and Capitalism be Reconciled. Some other chapters in that book may also be relevant to consideration of political entrepreneurship e.g. William Galston’s chapter on the rise of the new right and Robert Lieberman’s chapter discussing the contemporary relevance of Polanyi’s views.

Issues relevant to political entrepreneurship are also discussed in several chapters of the recently published book, Liberal Emancipation, edited by Mikayla Novak. At this stage, I can only claim to have read the introductory chapter of that book.

What can we learn from the history of colonialism and development planning?

William Easterly has made important contributions. I have now read his latest book, Violent Saviours and have written about it in a post entitled: What was wrong with the Washington consensus?  The following passage quoted from the book lists some political entrepreneurs engaged in pro-market reforms:

 "In the end, many of the promarket reforms in the Rest were led or advocated by homegrown reformers, such as Ngozi Okonjo-Iweala and Charles Soludo in Nigeria, Yegor Gaidar and Anatoly Chubais in Russia, Leszek Balcerowicz in Poland, Václav Klaus in Czechoslovakia, Simeon Djankov in Bulgaria, Hernando de Soto and Mario Vargas Llosa in Peru, a large number of Indian economists, and many other Latin American economists. Political leaders were often reformers themselves, like those in China and India, many other Asian countries, and many Latin American, Eastern European, and African countries."

What can we learn from Aristotle’s discussion of statecraft?

I have referred to Fred D. Miller’s book, Nature, Justice and Rights in Aristotle’s Politics. Miller has recently published another book, Aristotelian Statecraft. I have now read some chapters in that book and have written an essay on the topic: "Does Aristotle's assertion that a viable political system requires a supportive culture still have relevance today?" 

John Kingdon, Agendas, Alternatives, and Public Policies

Gus diZerega - a retired political scientist whose own work emphasizes the importance of liberal democracy as a social system - recommends John Kingdon’s book as “the most careful systematic study of political entrepreneurship”. An abstract of the book suggests that it attempts to answer the questions: How do subjects come to officials’ attention? How are the alternatives from which they choose generated? How is the governmental agenda set? Why does an idea’s time come when it does?

 Does tribalism corrupt politics even when one side is worse?

Dan Williams argues that it does in an excellent Substack article: "Tribalism Corrupts Politics (Even When One Side is Worse", Conspicuous Cognition (Dec 30, 2025). A link is here.

Is populism just as bad as the rule of experts? 

That is one of the issues discussed by Roger Koppl n his book, Expert Failure, published in 2018.  Koppl brings an economic perspective to “the problem of experts”.

I have drawn upon Koppl's views in my essay: Can the rise of populism be explained as a reaction to the rule of experts?

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As noted above, this post will be revised from time to time to add as further recommendations.

Part VIII: Summary and Conclusions

This is the final essay of a series exploring the topic: What impact does political entrepreneurship have on freedom and flourishing? The series commenced with a Preface which provides a synopsis and explains why I think it is important to obtain a better understanding of political entrepreneurship.

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The purpose of this series of essays has been to explore the contribution that political entrepreneurship makes to human flourishing. A central issue is whether political entrepreneurship has a role to play in promoting a political and legal order more conducive to human flourishing.  

Each essay in this series has sought to address a question relevant to assessing the impact of political entrepreneurship on freedom and flourishing. The main points that emerge from each essay are as follows:

1. This series of essays has focused on institutions related to liberty because those institutions are strongly linked to human flourishing. The links between freedom and flourishing are conceptual as well as empirical. Human flourishing is inherently individualized and self-directed. Liberty is necessary to enable individuals to flourish in different ways without the flourishing of some individuals or groups being given structural preference over that of others.
2. At a national level, prevailing culture offers only a partial explanation of differences in economic and personal freedom levels. In several countries, political entrepreneurs and their ideologies have played an obvious historical role in bringing about economic and personal freedom levels that are substantially lower than predicted by underlying cultural values.
3. Political entrepreneurship is similar in some ways to other forms of entrepreneurship. Don Lavoie’s suggestion that entrepreneurs play an interpretive role in complex systems is applicable to all kinds of entrepreneurship. Political entrepreneurs respond to public discourse by using it as a basis for policy innovation.
4. Political entrepreneurship is largely about obtaining and using political power. Political entrepreneurs face incentives to exploit the misconceptions and irrational preferences of voters by making deals with narrow interest groups at the expense of consumers and taxpayers. Innovators among them have incentives to focus on niches in the marketplace of ideas that established parties don’t satisfy. However, political entrepreneurs who engage overtly in interest group politics are not always able to overcome opposition from other politicians who see benefits in seeking to serve broader community interests.
5. Many political entrepreneurs are motivated by a desire to pursue economic, environmental and social objectives that are widely supported in the broader community. However, even modest attempts to steer the market system toward desired economic objectives often obstruct the price signals that convey information from consumers to producers about the most advantageous use of resources. Pursuit of social and environmental objectives is usually a matter of “muddling through” in the face of unintended consequences.
6. Historically, the path-dependence of social norms has played an important role in slowing the emergence of interest group politics in the long-standing democracies. People were once more reluctant to become dependent upon government or to use the political system to obtain benefits at the expense of others than they are today. The erosion of those norms has led to increasing constraints on economic freedom, a decline in dynamism, and rapid growth in public debt. Path-dependence of social norms now poses a difficult challenge for political entrepreneurs seeking to promote policies that are more conducive to freedom and flourishing.
7. The idea that autocrats have sometimes helped to promote greater economic freedom may not be entirely fanciful but empirical evidence certainly doesn’t support the idea that democracy, and the personal freedom associated with it, is incompatible with high levels of economic freedom. It is clear, nevertheless, that the long-standing democracies are experiencing difficulties in maintaining economic freedom in the face of interest group politics. Reform-minded political entrepreneurs in those countries have a great deal to learn from previous reform experiences. The problem of ensuring adoption of government policies that more consistently advance economic and personal freedom cannot be reduced to the question of how to elect better political entrepreneurs to national leadership positions. Institutional change is a complex process involving social movements, media organizations, and interactions between individual citizens, as well as local and national politics.

 In the preface I suggested that it is important to obtain a better understanding of political entrepreneurship at this time because there seems to be increasing support in liberal democracies for leaders who propose rule changes which are likely to have detrimental impacts on prospects for freedom and flourishing. In this series of essays, I have attempted to shed some light on the ways authoritarian leaders seek to appeal to the public but have not attempted to assess the gravity of current threats to liberty.

My concluding message for those who perceive that liberty is under threat is that they should emphasize the potential for positive relationships between democracy and human flourishing. Perhaps the most important thing I have learned in writing these essays is that my previous tendency toward cynicism about democracy was not entirely appropriate. If we want institutions that are more supportive of freedom and flourishing to become entrenched, we will need more supportive citizens engaged in discursive processes at all levels of society – that means more democracy, not less. 

Further Reading

Please see the following post which offers suggestions for further reading.

Part VII: What kind of political entrepreneurship is required?

 This essay is one of a series exploring the topic: What impact does political entrepreneurship have on freedom and flourishing? The series commenced with a Preface which provides a synopsis of the series and explains why I think it is important to obtain a better understanding of political entrepreneurship.

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Can strong political leadership bring about institutional change leading to greater economic and personal freedom?  That idea is easy to challenge. It recalls the oft quoted passage by Lord Acton:

“Power tends to corrupt and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority: still more when you superadd the tendency or the certainty of corruption by authority” (Acton 1887). 

Yet, powerful leadership has attractions to many citizens. I don’t think the question of whether strong political leadership could be consistent with greater economic and personal freedom should be dismissed out of hand.

Restoring order

The attraction of strong leadership is most understandable in chaotic situations where social order has broken down and lives, liberty and property are threatened by groups that have resorted to violence to pursue nefarious ends. Under such circumstances there may be grounds to hope that a strong leader will be able to restore order and protect the rights of individuals.

As Vincent Ostrom pointed out, the ubiquity of coercion means that order and organization in human societies depends upon a Faustian bargain involving use of organized force (Ostrom 1997, p.121). As explained by Paul Aligica and Peter Boettke:

“The implication is that social order and its institutional dynamics are perceived as shaped by and operating under the shadow of the ongoing tension between the threat of chaos and the threat of tyranny” (Aligica and Boettke 2009, p.61).

Benevolent despotism

Some of the best advice for despots who wish to promote freedom and flourishing was provided by Lao Tzu:

“Govern the state by being straight forward; wage war by being crafty; but win the empire by not being meddlesome” (Tzu 1963, LVII p.64).

Aristotle’s politics is somewhat more challenging to libertarians, but Fred D. Miller makes a strong case that it is not anachronistic to attribute to Aristotle a concept of individual rights and support for a moderate degree of liberalism. (Miller 1995, pp.373-378).

Robert Faulkner observes that Aristotle ranks greatness of soul as the "crown" needed to perfect all the virtues, including justice. He writes:

 “Aristotle calls greatness of soul a kosmos. It is an ornament of good character that is also an exalting order: an ordering heightened by an awareness of the grand activities such a soul calls for and is owed” (Faulkner 2007, loc. 250/3375). 

According to Faulkner:

“Aristotle's diagnosis comes to this: the great-souled man is at once drawn above humanity and drawn to humanity. He exhibits his superiority by aiding his fellows, and yet his wish is less to aid them than to avoid being or appearing dependent on them” (Faulkner 2007, loc. 565/3375).

Faulkner suggests that while Nicomachean Ethics seems to imply that greatness of the soul is a desirable attribute of political leaders, Aristotle moderates that view elsewhere in his writings. In Ethics, Aristotle suggests that greatness, especially great power, is overrated: “it is possible for one who is not a ruler of land and sea to perform noble action” (Faulkner 2007, loc. 692/3375).

In more recent times, Max Weber’s argument that effective leaders must have charisma may be relevant in considering the potential role of leaders in restoring liberty. Weber argued that effective leaders must have a charismatic form of authority because that is the only form of authority capable of overcoming the constraints of organisation, legality and tradition:

“Devotion to the charisma of the prophet, or the leader in war, or to the great demagogue in the ecclesia or in parliament, means that the leader is personally recognized as the innerly 'called' leader of men. Men do not obey him by virtue of tradition or statute, but because they believe in him” (Weber 1946, p.79).

Weber argued that charismatic authority is required for leaders to be effective in their struggle against the impersonal forces of bureaucratization. It tends to appear in moments of crisis, when the leader performs a ‘miracle’ for a group that feels otherwise impotent and deeply threatened. Xavier Márquez suggests 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 (Márquez 2024).

Thus far, the discussion suggests that it is not possible to rule out the possibility that a benevolent despot could promote freedom and flourishing if he or she wished to establish supportive institutions and had appropriate leadership qualities. However, that seems unlikely to be a frequent occurrence.

 Does autocracy support economic freedom?

The point was made earlier in this series (Part II) that it is easier to identify individual political leaders who have contributed to low or falling freedom levels than those who have contributed to high or rising freedom levels. That is because political entrepreneurship tends to be less focused on individual leaders in countries where governments have greater regard for individual liberty. 

Nevertheless, the idea that autocrats have sometimes helped produce better outcomes may not be entirely fanciful. There may be some substance lying behind folklore that attributes improvements in economic freedom to autocrats such as Lee Kuan Yew in Singapore, Park Chung Hee in South Korea, Chiang Kai-shek in Taiwan and Augusto Pinochet in Chile.

However, even if it can be shown that in some instances autocrats have fostered greater economic freedom, and that this has been followed by improvements in personal freedom, it does not necessarily follow that a period of autocracy was necessary or justified. People in the countries concerned are better placed than foreign observers to make judgements about the use of force by autocrats in particular circumstances, but the idea that autocrats are more likely to make positive contributions to economic growth than democratic leaders does not stand up to scrutiny. William Easterly tested the proposition by relating economic growth outcomes to the periods during which autocratic and other leaders were in office. He found that “leaders matter very little” (Easterly 2013, pp. 308-26).

There is also strong empirical evidence that democracy, and the personal freedom associated with it, is compatible with high levels of economic freedom.

Which democracies are supporting economic freedom?

Vincent Geloso and Alex Tabarrok have assembled evidence that democracy and economic freedom are highly correlated. Except for Singapore and Hong Kong there are no jurisdictions with high levels of economic freedom that are not also democracies (Geloso and Tabarrok 2025, p.116). Countries which have experienced the greatest democratization (Peru, Taiwan, Portugal, Spain, and Greece) have also experienced improvements in economic freedom. There have also been substantial improvements in economic freedom in the countries of Eastern Europe which experienced democratization following the collapse of communism in 1989 (Geloso and Tabarrok 2025, pp. 125-8). Geloso and Tabarrok provide some strong arguments to explain the correlation between democracy and economic freedom that they observe.

It seems to me, however, that none of the explanations offered for the observed correlation between democracy and economic freedom provide grounds to allay concerns, discussed in the preceding essay, about the future of economic freedom in the long-standing democracies.

Economic freedom levels are beginning to slip in some of the long-standing democracies. While many of the newer democracies have been experiencing increased dynamism, the increasing entanglement of government, industry and community organisations in the long-standing democracies has been associated with a decline in dynamism.

There is not much evidence that either the progressive or conservative sides of politics in the long-standing democracies are currently offering policies to advance economic freedom. The progressive side of politics is tending to pursue social and environmental agendas without regard for their impact on economic freedom, or growth in productivity or incomes. The conservative side of politics is tending to pursue economic nationalist agendas without regard for their impact on economic freedom, or growth in productivity of incomes.

Experience suggests that substantial political support for economic freedom will return only after economic crises threaten to cause widespread misery. That raises the issue of what kind of political entrepreneurship might help to make economic freedom more secure in the long-established democracies.

Learning from previous reform experience

Some prominent political leaders in democracies have been able to pursue reforms directed toward expansion of economic freedom. During the 1980s, Ronald Reagan pursued such reforms in the USA, as Margaret Thatcher did in Britain. The reforms currently being pursued by Javier Milei in Argentina seem to be similarly motivated, but at the time of writing it is too soon to judge how highly Milei’s reforms will rate in terms of broad libertarian criteria. The economic problems confronting the United States and Britain in the 1970s and 80s provided the context in which political leaders could initiate substantial changes in the direction of economic and social policies. That is even more true of the economic circumstances in Argentina prior to Milei’s election.

The reform efforts by Reagan and Thatcher can be viewed as examples of heroic leadership which increased economic freedom. However, heroic leadership of that kind is not solely the prerogative of presidents and prime ministers. Similar reform efforts in New Zealand and Australia were led by government ministers responsible for economic policy, Roger Douglas and Paul Keating respectively, with prime ministers adopting a facilitating role.

Political leaders can rarely claim to be the authors of their reform strategies. Policy development that has led to greater economic freedom has drawn heavily on the ideas of prominent academics including Milton Friedman and Friedrich Hayek, on policy analysis in think tanks and on contributions of a few journalists who understand the issues.

In some instances, advisers within government bureaucracies have also played an important role in policy development. Roger Kerr, who held the position of Executive Director of the New Zealand Business Roundtable following a career in the New Zealand Treasury, provided a highly relevant comment about the need for advisors to focus their advice on their fields of expertise rather than on politics:

“Economists of all people should be conscious that the performance of bureaucrats in trying to pick winners and losers in the policy-advice market is likely to be as unimpressive as in the industrial domain – and for much the same reasons, namely lack of information and incentives. Perceived policy constraints are not always immutable. They can be shifted by reasoned analysis and well-constructed strategies for policy change, developed by interaction between political managers and technical advisers. Second-guessing political reactions can lead to narrowing of policy options and does less than justice, in recent New Zealand circumstances at least, to the intelligence of a number of politicians, on both sides of the political fence, who have been more aware of the gravity of New Zealand’s economic problems and prepared to tell the story like it is than many of their advising bureaucrats” (Kerr 1987, pp. 144-45).

Alf Rattigan is a prime example of a public servant who played a major innovative role in driving economic reforms in Australia.  Rattigan was chairman of Australia’s Tariff Board from 1963 to 1974 when it was replaced by the Industries Assistance Commission (IAC). He stayed on as chairman of the IAC until 1976, when he retired with ill health. Rattigan used his influence in those positions to play a pivotal role in terminating Australia’s long history of industry protection, which in turn, helped open Australia to the global forces that drove further market-based economic reforms. In a lecture presented in 2016, Paul Kelly, Editor-at-Large for The Australian and Australia’s most scholarly journalist, outlined the main elements that contributed to the success of Rattigan’s reform efforts (Kelly 2016). One element of Rattigan’s success was his integrity in taking seriously his legal responsibility as chairman of an independent statutory authority, in the face of opposition from the government of the day which believed that he should “accept the overall tariff policy of the government as given” and work within that framework. Another element was the ability of his professional staff to draw upon the methodology for measurement of effective rates of protection developed by Professor Max Corden. A small group of economically literate journalists played a crucial role in giving publicity to analyses demonstrating the costs of protection. Some groups, including farmers and miners, recognized that their members were disadvantaged by high levels of protection provided to the manufacturing sector and formed a free trade lobby. David Trebeck, an influential figure in the National Farmers Federation, said: “We fired the ‘bullets’ made by the IAC.” More politicians because advocates of free trade and political leaders eventually showed leadership by recognizing that “good policy is good politics”.

Unfortunately, looking back today on the economic reform efforts of the 1980s and 90s, it is apparent that the important reforms in the rules of the game made at that time have not become deeply entrenched. Political leaders obtained sufficient electoral support to implement market-friendly policies, but there does not seem to be much evidence that members of the public improved their understanding of the benefits of free markets in any of the countries in which reforms were undertaken.

Mass movements

The problem of ensuring adoption of government policies that more consistently advance economic and personal freedom is not merely a question of how to elect political entrepreneurs with their hearts in the right place to national leadership positions. Experience has shown that the longevity of reforms cannot be guaranteed even when they are supported by a strong coalition of interest groups and result in more favourable economic opportunities for a large majority of the population.

In recent years, centre-left and centre-right governments which have followed policies that are broadly consistent with relatively high levels of economic and personal freedom have become vulnerable to competition from populist political entrepreneurs who prophesy catastrophic environmental and social consequences if their radical policy proposals are not followed. Populist policy innovators on the left and right sides of politics tend to promote vastly different fears, and to offer vastly different policies. However, one common feature of those populist policy innovators is their attempt to exploit a systematic anti-market bias among electors.

The pertinent question is how the anti-market bias of public opinion can be reduced. History suggests that this has occurred to some extent in the past via complex processes involving, among other things, political entrepreneurship in social movements. For example, Joel Mokyr notes that the move toward free trade in Britain in the first half of the 19^th century involved the influence of post-Smithian political economy, the growing political power of the new industrial elite, and debates about income distribution and food supply. He writes:

“The careers of Victorian free-traders such as Richard Cobden and John Bright and the liberal Tories of the post-1815 era represent the kind of mixture of economic interests and liberal ideology that eventually secured victory for free trade” (Mokyr 2009, p. 153).

Mikayla Novak has noted the importance of entrepreneurship in propelling social movements to extend the effective domain of freedom. In that context she notes that “people such as William Lloyd Garrison, Emmeline Pankhurst, Mohandas Gandhi, Martin Luther King Jr., Lech Walesa, and Nelson Mandela” played an important role in “opposing unsatisfactory institutions and situations” although they, themselves, were not necessarily classical liberals by orientation” (Novak 2021, p. 45).

Is it possible that at some time in the future a broad social movement promoting classical liberal views could become sufficiently influential to ensure that children are offered as much tuition about the spontaneous order of the free market as they are currently offered about the workings of ecological systems in the natural environment? If that ever happens it will occur because of the actions of individuals.  As Edward W. Younkins has suggested, the task of building a free society depends on individual advocates of liberty who are “dedicated to preserving and strengthening the ideological and moral foundations of a free society”. Younkins notes that it is especially through the “numerous interactions with individuals” during their everyday lives that advocates of liberty can “transmit the freedom philosophy to the general public” (Younkins 2011, pp. 168-69).

Please see the final part of this series: Summary and Conclusions

References

Acton, Lord (John Emerich Edward Dalberg-Acton) Acton-Creighton Correspondence (1887) Acton-Creighton Correspondence | Online Library of Liberty

Aligica, Paul Dragos and Peter J. Boettke, Challenging Institutional Analysis and Development: The Bloomington School (Routledge, 2009).

Easterly, William, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor (Basic Books, 2013).

Faulkner, Robert, The Case for Greatness: Honorable Ambition and Its Critics (Yale University Press, 2007).

Geloso, Vincent and Alex Tabarrok. “Two Peas in a Pod: Democracy and Capitalism”, in Scott C. Miller and Sidney M. Milkis (eds.) Can Democracy and Capitalism be Reconciled (Oxford University Press, 2025).

Kelly, Paul., “Economic Reform: A lost cause or merely in eclipse”, Alf Rattigan Lecture (The Australian and New Zealand School of Government, 2016).

Kerr, Roger, “Ideas, Interests, Experience and the Economic Adviser”, World Economy, 10, no. 2 (1987) pp. 131-54.

Márquez, Xavier, “Max Weber, demagogy and charismatic representation”, European Journal of Political Theory (2024).

Miller, Fred D., Nature, Justice, and Rights in Aristotle’s Politics (Clarendon Press, 1995).

Mokyr, Joel, The Enlightened Economy: An Economic History of Britain 1700 – 1850 (Yale University Press, 2009).

Novak, Mikayla, Freedom in Contention: Social Movements and Liberal Political Economy (Lexington Books, 2021).

Ostrom, Vincent., The Meaning of Democracy and the Vulnerability of Democracies (The University of Michigan Press, 1997).

Tzu, Lao., Tao Te Ching, D.C. Lau translation (Penguin Books, 1963).

Weber, Max, “Politics as a Vocation”, in From Max Weber: Essays in Sociology, edited and translated by H.H. Gerth and C. Wright Mills (New York: Oxford University Press, 1946).

Younkins, Edward W. Flourishing and Happiness in a Free Society, Towards a synthesis of Aristotelianism, Austrian Economics, and Ayn Rand’s Objectivism (University Press of America, 2011).