Robust Political Economy

Robust Political Economy

Classical Liberalism and the Future of Public Policy

New Thinking in Political Economy series

Mark Pennington

This important book offers a comprehensive defence of classical liberalism against contemporary challenges. It sets out an analytical framework of ‘robust political economy’ that explores the economic and political problems that arise from the phenomena of imperfect knowledge and imperfect incentives.

Chapter 3: Exit, Voice and Communicative Rationality: The Challenge of Communitarianism I

Mark Pennington

Subjects: economics and finance, political economy, politics and public policy, political economy, public policy


INTRODUCTION The arguments for classical liberalism articulated in the previous chapter are not widely accepted by mainstream economists, but it would be fair to suggest that the economics discipline provides a degree of support for ‘privatisation’ notable for its relative absence in contemporary political theory. Even authors such as Stiglitz who are critical of classical liberalism are not unsympathetic to at least some of the arguments in favour of markets and competition. One of the reasons for this difference between disciplines derives from the tendency of neo-classical economists to make certain assumptions about human nature, the character of individual action and the purpose of social institutions. These include the view that people are predominantly self-interested and that the primary purpose of institutions is to aggregate individual preferences into an efficient ‘social welfare function’. From the perspective of many political theorists, however, the assumptions of modern economics are highly questionable and support for classical liberal institutions derived from such premises leads to morally questionable outcomes. Building on a broader communitarian critique, it is argued that liberal political economy neglects the ‘situated’ nature of human beings whose preferences and values are determined in large part by the institutional context of decision-making. According to this view, a greater emphasis should be placed on the communicative processes through which people’s preferences are formed and on developing practices that institutionalise a search for the ‘common good’. The favoured alternative to the classical liberal principle of ‘exit’ in this context is a ‘voice-based’ conception of deliberative...

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