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 4: The Underestimation of Political Opportunity Costs

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


4.1 INTRODUCTION AND OUTLINE OF THE ARGUMENT In the last chapter I discussed limitations on admissible politics in democracy which derive from individual autonomy in democracy. In so doing I have distanced myself from positions which conceive democracy as a pure decision rule for collective choice and thereby ignore individual autonomy as a constitutional constraint on politics. Instead, and in contrast to conservative political theorists such as Hayek, I stress that democracy is committed to the rule of law, which makes the distinction between preferences and choice a key point in the realm of democratic politics. However, one cannot take it for granted that citizens are aware of the peculiarity of political acting when they articulate their political preferences. This means that the practice of successful democratic politics becomes a matter of learning to acknowledge the real capacity of democratic politics and thus the feasibility of political preferences. I have thus prepared the ground for the argument which I put forward in the following: the coexistence of individual autonomy in politics and markets explains why individuals misperceive their political preferences;1 that is, their self-interest when they act as political agents. I will not explain this misperception by questioning the rationality of citizens nor, alternatively, by emphasizing their ignorance concerning political affairs which could result from rational behaviour of individuals who know their political preferences will not make a difference (for example in analogy to rational ignorance of voters). Rather, I stick here to an ideal conception of...

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