Classical Liberalism and the Future of Public Policy
New Thinking in Political Economy series
Chapter 4: Exit, Trust and Social Capital: The Challenge of Communitarianism II
1 INTRODUCTION Though it is an important theme in the arsenal of communitarian arguments that challenge classical liberalism, the case for deliberative democracy is by no means the only such theme. A related set of concerns focuses on the moral norms necessary to sustain social institutions, and the wider relationships between commerce, democracy and civil society. At issue here are the concepts of trust and social capital. Contemporary communitarians suggest that an excessive reliance on markets and market-like processes disturbs the ‘social capital’ essential to the functioning of any society and actually undermines the morals needed to maintain the market economy itself. On the one hand, it is argued that markets ‘need’ the state if they are to function effectively and that the pursuit of an ‘unregulated’ or ‘free market’ system is chimerical. On the other hand, communitarians argue that in order to sustain social capital the commercial ethos should be counterbalanced by institutions based on different operating norms. According to this view, active or enabling government action provides an outlet for more community-centred norms and can help to build the behavioural traits that sustain the social fabric. This chapter examines the relationship between classical liberalism and social capital. The next section sketches both the negative case against market processes and the positive case for government action in helping to promote or to ‘build’ trust. The subsequent three sections question the robustness of these arguments in the following vein. First, it will be argued that communitarians misunderstand the type of...
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