Political Failure by Agreement

Political Failure by Agreement

Learning Liberalism and the Welfare State

New Thinking in Political Economy series

Gerhard Wegner

The purpose of this book is to reconsider economic liberalism from the viewpoint of political liberalism. The author argues that advocates of economic liberalism largely overlook empirical political preferences which, in many societies, go far beyond a limited role of the state. Recent difficulties of reforming the welfare state provide evidence that political preferences are at odds with liberal economic policy in numerous cases. This fact challenges a political conception which demands a limited state role but also claims that citizens’ preferences ‘as they are’ should determine the content of policies. Using an evolutionary perspective on economic liberalism, the book develops new arguments about how economic liberalism can be brought into line with political liberalism.

Chapter 2: The Liberal Model of Market Order: The Evolutionary View

Gerhard Wegner

Subjects: economics and finance, political economy, public choice theory, welfare economics, politics and public policy, political economy, public choice, social policy and sociology, welfare states


2.1 INTRODUCTORY REMARKS At the outset I drew the attention to a role of economic liberalism which differs from the legitimation approach in recent conceptions of economic liberalism. Unlike this approach, I leave aside the normative question of deriving a legitimate political order or a new constitution. By accepting the constitutional status quo I do not, however, deem different democratic constitutions to have equal legitimatory status. For instance, there are good reasons to distinguish between the legitimacy of direct and representative democracy, or between centralized political systems and federalism; these political systems differ with regard to the extent to which they allow citizens to articulate and follow their political preferences. Neither do I argue that economic liberalism cannot contribute to conceiving criteria for gauging the legitimacy of alternative democratic constitutions. Rather, I suggest that one consider the extant political order and its political output in a preliminary sense as legitimate, leaving aside reflections which challenge the legitimacy of economic policy. I presuppose, here, that the focus be limited to democratic political regimes. My premise is motivated by the need to explain the potential conflict between current (which I tentatively qualify as legitimate) politics and the emergence of welfare in the market order. To question the legitimacy of democratic politics in general is beyond my scope here, for even in cases of political failure, the legitimacy of democratic politics can remain intact, as I show later on. It is then more interesting to explain why non-liberal...

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