Front Page Titles (by Subject) Modernization, Ideology, and Economic Freedom - Literature of Liberty, July/September 1979, vol. 2, No. 3
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Modernization, Ideology, and Economic Freedom - Leonard P. Liggio, Literature of Liberty, July/September 1979, vol. 2, No. 3 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Modernization, Ideology, and Economic Freedom
“Modernization Theory and the Formation of Modern Social Theories in England and America.” Comparative Studies in Society and History 20 (April 1978): 259–285.
Modernization theory has increasingly come to be seen as a failure. Its basic assumption is that societies develop from traditional to modern through evolutionary stages. Traditional societies, in this approach, tend to stress community while modern socieities place more stress upon individualism, self-development, and economic growth. The basic flaw of the theory is that it does not explain how ideology changes as economic development proceeds.
In point of fact, economic development does not uniquely determine a country's ideology. This may be seen by contrasting social thought in England and America during the seventeenth and eighteenth centuries.
The development of England during the seventeenth century was characterized by the rise of a stronger central government and at the same time the prevalence of a greater degree of economic freedom. Economists of the time tended to lavish praise on the benefits of trade. The tendency is especially noteworthy in the writings of Nicholas Barbon and, of course, in the far more widely known John Locke.
After 1689, however, the direction of British social thought changed. The Whig oligarchy in power emphasized national unity and economic growth through state direction. As measures such as the establishment of the Bank of England (1694) became law, the earlier emphasis on the benefits of trade and individualism ended. Writers now reverted to the older balance of trade theory, which stressed the need for a country to accumulate as much gold and silver as possible.
In the American colonies, the situation was different. Here centralized direction of the economy did not become the basis of an ideological movement. Government interferences with trade were bitterly resented, and American writers strongly favored individualism. For example Thomas Paine opposed social hierarchy and favored limited government. He viewed order as arising from individualism, not as something to be centrally imposed.
The contrast between Britain and America shows that economic development is consistent with different ideologies. The simple cause-and-effect relation between them assumed by modernization theory must be rejected.