Can Realism and Liberalism Be Reconciled

    

What does political realism tell us about liberalism? Rosolino Candela and Richard Wagner, with their recent posts, brought us back to this question. With splendid eloquence, they are somewhat restating a point that was first made in Federalist 51: "If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself".[9] This is a succinct and clear statement of a classical liberal program as any.

In what sense does a politically realist perspective undermine such program? Pareto maintained that "among the forces that drive human will, theories and homilies are the lesser, whereas interests and sentiments are the stronger, and become absolutely preponderant in the case of great changes."[10] 

How can sentiments and interests help in framing a classical liberal political order? It seems to me that we (as I place myself in the classical liberals' basket too) are very good in being realist on what government can achieve - and we rightly see that grand legitimising formulas are very often fig leaves for special interests. We know that protectionism claims to defend national business, but in fact awards privileges to cronies. We know that the laudable intention of fighting poverty is often used to feed an ever growing bureaucracy, with political intermediation taking the lion's share of whatever redistribution scheme. We know that in foreign policy (perhaps, especially in foreign policy) well-sounding statements are more often than not fraudulent.

Now, are we sure we do take account of all this when we draw up programs for a change in the direction of freedom, as the classical liberal understands it?

Quoting Sowell and Hayek, Rosolino mentions that we often stumbled upon institutions that were compatible with a "constrained" vision of human nature, and therefore successful. These institutions can be seen as the building blocs of a classical liberal vision: I say building blocs because, although they would fit well together, they did not necessarily present themselves all at the same time. 

Contrary to other sets of political ideas, one peculiarity of free societies is that more often than not they do not come with all the building blocs properly set in place. You may have, for example, a high degree of respect for property rights and yet economic protection; or you can have strong constitutional guarantees for privacy and free speech and yet a government that continuously practices foreign policy aggression, under the mantle of the pursuit of the greater good for all. Another peculiarity of free societies seems to me to be that their economic success sometimes eats up their very freedom. Pareto makes the point of aggressive wars (imperialism) being more easily sustained after periods of strong economic growth: in part this is due to sentiments, in part this is due to the fact that a healthier economy allows for more credible promises of new redistributive schemes, which are needed to boost consensus for foreign adventures. A commonplace argument is that prosperity is the mother of regulations: economic growth makes it possible to reduce working hours, to decide not to engage in highly polluting industrial production, et cetera. Sometimes supply and demand adjust, for example, to the environmental sensibilities of the public, which would be consistent with whatever classical liberal view one holds. Most of the time government steps in and regulates, which is not. In any case, it is not easy to disentangle genuine changes of the public's sensibilities from those which are driven by special interest lobbying.

How these "building blocs" come about, is per se a different matter. We stumble upon them, as Rosolino reminded us. Deirdre McCloskey has provided us with a persuasive historical narrative of how a liberal set of values came to prevail, and hence allowed for widespread innovation. For McCloskey at a certain point the "bourgeois deal" replaced the "aristocratic deal". So goes the "bourgeois deal": "You accord to me, a bourgeois projector, the liberty and dignity to try out my schemes in voluntary trade, and let me keep the profits, if I get any, in the first act—though I accept, reluctantly, that others will compete with me in the second act.  In exchange, in the third act of a new, positive-sum drama, the bourgeois betterment provided by me (and by those pesky, low-quality, price-spoiling competitors) will make you all rich."[11] Before that, honour was given to land-lords and priests, and economic activity was not considered that respectful.

Yet the two attitudes coexisted. The "aristocratic deal" is more than just convenient for those who benefit from it: it is well entrenched in our psychology, the bourgeoisie included. Attitudes and instincts (as Pareto would say) or virtues (as McCloskey would say) are there well before the emergence of industrial, complex societies of the kind we live in: the challenge is to understand how to cope with this new setting. If a wider recognition of dignity to traders and businessmen put society on the path "from status to contract", other forces push and pull the other way. So, those "building blocs" of a more classical  liberal society are sometimes there, but we can say that they are seldom accepted with general enthusiasm, and very rarely are considered part of a consistent program of betterment and progress.

The future is open, and society is indeed a perpetual earthquake, as Professor Wagner suggests.

But identifying interests and sentiments that may bring us in a more classical liberal direction ain't easy. On the interest side, one may think about businesses that are new entrants in a particular market: of course, they are inherently weaker actors than established ones, in the political process. As soon as they are stronger, they may be driven to seek protection rather than allow free entry, as businesses most often do. When it comes to sentiments and instincts, Pareto's remarkable ambivalence about combination and persistence suggest we should abstain from mythologizing entrepreneurs. The instinct of combinations is prevalent in businessmen and speculators, and is necessary for innovation in society, and yet it fosters the expansion of government, as innovators happily exploit it. I don't want to mean that the bourgeoisie are very eager to trade the "bourgeois deal" with power or status, though sometimes they are. It is simply that government is so pervasive, and potentially ever more so, that naturally entrepreneurs see it as an opportunity. This doesn't mean they are "worse" businessmen.  Many people on the right love to vilify Elon Musk, for his business ventures have greatly benefited from government subsidies . But this fact doesn't necessarily challenge Musk's entrepreneurial genius, for a good entrepreneur takes advantage of any opportunity, public funding included.[12]

Sometimes combination and change lead to government growth, sometimes persistence and attachment to somebody's roots stop it. Most assuredly we can't stop this dialectic, neither should we. But how can a classical liberal program be worked out, knowing that interests and sentiments (think about the new rise of nationalism) tend to go in the other direction? Is the belief in individual liberty bound to be a value that only a handful of people share? How can we reconcile our realism in looking at politics, and perhaps human nature too, with hope—however dim—that the bad guys won't prevail, at the very end?

[9.] George W. Carey, The Federalist (The Gideon Edition), Edited with an Introduction, Reader's Guide, Constitutional Cross-reference, Index, and Glossary by George W. Carey and James McClellan (Indianapolis: Liberty Fund, 2001). <https://oll.libertyfund.org/titles/788#Hamilton_0084_925>.

[10.] Pareto V. (1918), "Il futuro delle finanze di Stato", L'economista, 13 ottobre.

[11.] McCloskey D. (2016), Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, Chicago, University of Chicago Press.

[12.] Jared Whitley, "Elon Musk Wants to End Government Subsidies," The Weekly Standard, July 27, 2017. <https://www.weeklystandard.com/jared-whitley/elon-musk-wants-to-end-government-subsidies>.