Saving liberalism | The Enlightened Economist
I liked Thomas Aubrey’s short book, All Roads Lead to Serfdom: Confronting Liberalism’s Fatal Flaw. It could alternatively be called, Confronting the weaknesses of the Anglo-Saxon economic model. But it does this in a thoughtful way, contrasting the utilitarian tradition of UK/US economic policy with (West) Germany and the “underlying ordoliberal principle of power dispersion.” It is quite a philosophical book, which concludes that private and public power must be dispersed across labour markets, product markets and the activities of the state (as well as the liberal market basics of secure property rights and a stable currency). As well as stressing the importance of ideas, though – and I wholeheartedly agree – the book calculates power dispersion indices (“to provide a potential alternative framework to the current utilitarian welfarist approach”) and has a serise of proposals for how to disperse power in the three domains.
The empirics turn out broadly as you might expect. Canada, Switzerland, Denmark and Sweden turn out to have widely dispersed state power, as does the US, and the Scandinavian countries cluster near the top of all three rankings. The UK is near the bottom of all three rankings, while the US is near the top for state power dispersion but not labour or product markets. This seems to me to understate the traction economic power delivers in terms of political power, albeit through sometimes indirect channels.
The book’s compare and contrast with the German model is interesting although Aubrey concludes Germany itself has not delivered on ordoliberal ideals. I rather agree with its final conclusion: “If liberalism is to have a future, it will require those who believe in liberal values to make the case for an alternative ethical foundation; one where freedom and equality can be contsnatly manufactured by the continuous dispersal of public and private power.” Ideas are indeed important for winning hearts and minds. The naive utilitarianism underlying the eocnomic policy playbook of the past 40 or 50 years has lost hearts and minds. But I’m not sure framing what’s needed in terms of ‘ordoliberalism’ with all its free market and Hayekian baggage will be an easy sell, hearts and mind-wise. (And the book has been priced only for libraries by its publisher, Bristol University Press, so it won’t even get much chance to influence people.)