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Can Liberal Democracies Avoid the Tendency to Economic Authoritarianism?

Updated: Feb 28, 2022

(Updated February, 2022)

In light of recent events --- in particular, the attempt in an Authoritarian (Russia) takeover of a fledgling Liberal (as in Classical Liberalism based) Democracy (Ukraine), I decided to update the Blog which provides some backgrounding in the problem of Authoritarianism. It is spreading like a Pandemic Virus in way too many economies embedded within the Spaceship system on which we all travel together around the Sun. As addressed in the related Blog, the Pandemic spread of Authoritarianism points to the Road to Serfdom on the Left (Hayek, 1944, in Caldwell, 2007) and Another Road to Serfdom on the Right (Kuran, 2018). People are not going to be happy on said Road, as political economic chaos and economic inefficiency is assured. Yet, it is fully understood why people turn to Authoritarians when the extreme economies on the left (tending toward pure communism) and the extreme economies on the right (tending toward pure capitalism) fail: The Authoritarian always appears and promises to “fix-it” which also turns out to be a huge con, as said kind of “ism” only fixes things for the Authoritarian and cronies in the Oligarchy that are always associated with same. And, then, mix in a bit of "ism" from Religion, too, and, well, we are suddenly back to the pre-Enlightenment, pre-Classical Liberalism frame where a person had no standing, with the controlling "isms" in charge.

I also decided to first provide some technical tools, a construct, for economists to use in representing the "ism" in the analytical system: Single Interest Theory (SIT) in Microeconomics does not have a placeholder for the "ism" while always presuming it is some variant on Classical Liberalism, which sees only self-interest. Dual Interest Theory (DIT) in Metaeconomics suggests an analytical system that can serve to go beyond the limitations of Single Interest Theory (SIT) in Microeconomics, making the "ism" visible through the vehicle of the shared other(shared with the other, yet internalized within the own-self)-interest.

After a brief technical session, the Blog turns to some backgrounding on Authoritarianism as it relates specifically to the failures in classical liberalism based liberal democracies to ward off said “ism.” And, after you go through the Backgrounding here, for more see the Blog on Why (Classical) Liberalism Failed --- not only Communism and Fascism, but also Classical Liberalism has failed --- which is a major driver in Authoritarianism in the Liberal Democracies. Yet, fixing Classical Liberalism is actually the only hope we have left, the only hope for all Travelers on the Spaceship to achieve peace (good political economy) and economic efficiency, and, then, happiness.

So, here we go.

Technical Analysis: Using Dual Interest Theory (DIT) in Metaeconomics to Make Sense of the Role of “isms”

Figure 1 and 2 provide standard ways to represent DIT, with a full discussion of what said curves illustrate provided in the What is Dual Interest Theory part of the Website. DIT is also described in Chapters 4 and 8, with the Mathematical Metaeconomics in the Appendix, in Lynne (2020).

Using Figure 1: Peace (i.e., no political economic chaos) and economic efficiency, and, overall happiness from said peace and efficiency, are only possible in the region between path 0G and path 0M. And, only humane capitalism --- given context by an “ism” path from classical (with ethical reflection) liberalism with a bit of libertarian paternalism at play --- has the capability to reach the good points between A and C, such as at point B.

Using Figure 2: The bad “isms” as represented in communism, fascism, and authoritarianism (and, religionism, especially when practiced with an authoritarianism with a fascism flavor, as described by Hedges 2007) all place little value Vo of IG = 0 on individual people in the economy and society as illustrated at point C. At the other extreme, an “ism” that gives too much liberty --- being too free to choose to do as a person pleases without tempering the excesses --- is also bad, as illustrated at point A: It puts too little Vo of IM = 0, too little value on that which the other can (ethically) go along with, not tempering extremes like Scroogism. A good “ism” --- producing peace (no political economic chaos), economic efficiency, and, the happiness that comes with peace and efficiency --- can only arise at point B. A new and improved form of classical liberalism, one which tempers the extremes as represented in a truly humane capitalism, is the only possible way to reach point B. In more common terms, point B is about a joint and nonseparable balance in Scroogism&Socialism, something more akin to the balance in I&We in the mid-1950s in the US, back when the American Dream was not a nightmare as it is now.

And, how does one move to point B? It represents the expression of the main tenets of classical liberalism which is about tempering the pursuit of the ego-based self-interest with an empathy (ethics) based other-interest (it is not an other-interest characterized by communism, authoritarianism, and/or fascism, or, religionism, either). It is about lots of freedom to choose by each person, tempered by that which the other can go along with. It is about volitional pragmatism in search of sufficient reason (Bromley, 2o06; Lynne, 2007, 2009) to choose point B rather than A or C. Said point can never be found in any of the other isms.


The Whole of Liberal Democracy is in Great Danger at this Moment (Edsall, 2020)

Unity is an anomaly. Polarization is normal. Skepticism about liberal democracy is also normal. And the appeal of authoritarianism is eternal (Applebaum, 2020, p. 56)

The Great Danger proposition is from Edsall (2020), who points to an authoritarian dynamic that appears to be accelerating in many areas on the Spaceship, and especially here in the US. Said dynamic is jeopardizing liberal democracy. The idea of an authoritarian dynamic comes from Stenner (2005, p. 17) who characterizes authoritarianism as a kind of political framing that represents and induces

"…both personal coercion of and bias against different others (racial and ethnic-out groups, political dissidents, moral deviants), as well as political demands for authoritative constraints on their behavior. The latter will typically include legal discrimination against minorities and restrictions on immigration; limits on free speech, assembly, and association; and the regulation of moral behavior, for example, via policies regarding school prayer, abortion, censorship and homosexuality, and punitive enforcement."

Also, as Stenner and Haidt (2018), the dynamic is inherent in a liberal democracy which tends to produce the diversity that authoritarians abhor. Such framing arises out of an authoritarian predisposition interacting with a normative threat, as in disposition&threat leading to authoritarian framing and positioning. An authoritarian wants things orderly, calm, controlled, and viewed through a non-complex lens; any kind of threat that stirs that situation also stirs the predisposition to be an authoritarian, with substantive political consequences. Said framing is at the other end of what might be characterized as being a libertarian, with libertarian thinking a key part of a liberal democracy (at least as long as it is tempered, to avoid the path to excessive greed, see Lynne, 2020).

In short, drawing on Stenner (2005, p. 17), an authoritarian sees social value in obedience and conformity, seeking uniformity, and using group authority and control if necessary to achieve it. In contrast, at the other end of the continuum, a libertarian sees social value in freedom and diversity, seeking more diversity and individual autonomy without group control. The issue becomes, as Stenner (2005, p. 17) argues it, while in citing Duckitt, 1989), finding a “…prudent and just balance between group authority and individual autonomy” and “appropriate uses (or limits on) that authority,” with substantive implications for the survival and viability of a liberal democracy as we go into the future.

Authoritarian Politics Reflects Fear

We first need to understand that authoritarian politics often drives the framing and context for a liberal democracy, and, thus greatly affects the possibility or not for a humane liberalism to form the foundation for a good capitalism. Authoritarians as political actors are quite active in the political process. Authoritarians are also highly susceptible to political influences represented in “…fearful politics and irrational policy shifts … set in motion by our steady diet of negative campaigning, media obsession with political scandals, and the constant ringing of alarm bells regarding societies ‘moral decay’” (Stenner, 2005, p. 326). It is fear politics, a politics of fear over difference-ism. Authoritarians want to eliminate it, reducing their fear, causing substantive challenges for moving a liberal democracy based capitalistic economy forward. Anything new and innovative risks being viewed as driving too much in the way of difference, a different and more diverse economy might emerge. An authoritarian sees such a move to diversity as a threat, leading to the evolving authoritarian dynamic to stop it. Intolerance of difference and diversity works to stop progress, as generally progress means more diversity.

Also, to make economic sense of all this: While authoritarianism is the principle determinant of intolerance of difference, it is not about preserving the status quo, not about precluding support for change toward common goals, not a preference for laissez-faire economics, not against government intervention if it enhances oneness and sameness (Stenner, 2005, p. 327). So, it is not conservatism, although see Stenner (2009), which generally wants to preserve the status quo and/or encourage laissez-faire markets, the latter meaning “free-to-choose” without tempering the self-interest, without any kind of social bounds, that which everyone can go along with.

It is also possible, then, that authoritarianism can arise among extreme elements on the progressive side of economic policy, although it tends to arise more frequently among conservatives wanting to preserve the status quo when that status gets challenged to change. If it arises in an extreme element of progressives, it tends to be something like mandating a right to an abortion, or to fuel standards on automobiles, or a cap on how much sulfur can be released to the atmosphere by a coal burning utility plant. Difference-ism is managed by making everyone comply to the same rule or regulation, making everyone the same.

Authoritarians on Both Left and Right

Now, an essential clarification needs to be made here: The source of the forced move to sameness tends to be quite different among authoritarians identifying as conservatives v authoritarians identifying as progressives. The latter tend to rely more on the complex framing from science; the former tend to rely more on simple rules from sources like religion, or just how it has always been done. So, on something like LGBTQ considerations, a progressive with authoritarian tendencies might mandate rights and rules for how to address the continuum they see in sexual preferences, as documented in science. A conservative with authoritarian tendencies in turn would see only heterosexual framing, simply male or female, rather than a continuum. The simple rule might be based on a verse in an old religious book, and/or projections of their own heterosexual preferences onto everyone else, which makes it all far less complex.

In general, the "ism" of religion, especially the authoritarianism in religions and religious leaders, tends to arise more often on the Right. Hedges (2007) points to the growing authoritarianism with a fascism flavor on the "Christian" Right in the US, which is intent on eliminating the historic separation in the US of church and state. Smith (2022) points to how religion is both supporting and countering the authoritarianism displayed in the Authoritarian driven invasion of the Ukraine by Russia.

DIT in Metaeconomics Points to the Need to Seek Balance

So, how do we make economic sense of the extremes and the possibility for balance? Mainstream economics represented in Neoclassical Economics with its Microeconomics engine has little to no capacity to address the matter of an authoritarian operating in the economy. Microeconomics only accommodates a libertarian, especially in the dominant school of thought represented in the Chicago School of Economics, Libertarian branch. The economy is all about a person with a libertarian predisposition maximizing self-interest in a wide-open environment, with freedom and liberty from social constraints: No social responsibility. The other brand of mainstream economics, represented in Neoinstitutional Economics, is more about a person with an authoritarian predisposition maximizing shared other-interest with a group narrowly defined on similar racial, political, and moral grounds. Lots of social responsibility. Reason is that Neoinstitutional Economics acknowledges the fundamental role of the institution giving context to the market, which could be a coercive, controlling institution. It does not have to be coercive and controlling, but at least that framework could work with whatever the character of that institution.

Metaeconomics sees a role for both libertarian&authoritarian framing. In effect, the task is to find balance in individualism&collectivism, and, in some sense writ large in economy&community, economy&society, and, like Metaeconomics points to, find good balance in market&government. So, Metaeconomics has something to say about the role of authoritarianism, and how it can adversely affect the economy in general and economic efficiency in particular, albeit some attention to normative considerations of difference or not are also key. It can also help make sense of how to keep a viable liberal democracy, and a viable (science&ethics) based capitalism on which it depends. It especially points to how to reduce the danger of authoritarian thinking, especially when based on anti-science based over-simplifications of the complexity on the Spaceship. Metaeconomics sees the liberal democracy as a key partner with the market, as in market&democracy. But, we are getting ahead of ourselves.

Again, consider Figure 1, with path 0G representing the pursuit of self-interest by someone with a more libertarian disposition. In contrast, path 0M represents the pursuit of the shared other-interest, for someone with a more authoritarian disposition. We could put any two goods or products into the figure, as every good and product has a simultaneous joint self&other-interest, and, in the terms of this post, a joint libertarian&authoritarian content.

For an example of the latter, consider the recent case of the Methodist Church over the matter of LGBT rights. The push by libertarians in the church, who believe every person has a right to pursue their self-interest as related to sexual preference, were basically commanded by the authoritarians of the church to abstain from anything other than heterosexual activity. A predisposition to authoritarianism, reflecting old testament declarations by a critical god to drive the behavior of an adaptive child, was stirred by moral threat ---the normative threat as Stenner (2005) refers to it --- which brought out the authoritarian side of the Methodist Church. The normative threat came from the nurturing god in a free child frame coming from those who wished to keep sexual preference a matter of self-interest to the person holding said preference --- representing the libertarian side of the Methodist Church.

So, the nurturing god-free child expression of self-interest along path 0G was trumped by the critical god-adaptive child, a narrowly shared moral command of the shared other-interest among the authoritarian group. A person wanting to pursue self-interest on path 0G in an LGBT frame of reference either had to give into the path 0M requirement or find another church. Can the libertarian&authoritarian frames be reconciled? At this time, not: It appears a split in the Methodist church is on the way, forming two groups, one with the libertarians (more connected to the new testament which has a great deal of empathy-sympathy-compassion at play, seeing all manner of sexual expression as reasonable) and the other with the authoritarians (more connected to the old testament running on perhaps a too simple understanding of what sexuality is about).

Now, intriguingly, the best path for all concerned, in the sense of a science-based recognition of the complexity of the sexual realities among Humans on the Spaceship, is path 0Z. Said path honors the freedom of a person, whether in the LGBT or heterosexual frame, to choose their own path. Yet, it also respects the moral dimension, but now as that dimension is characterized in a complex integration of new&old testament framing. Metaeconomics points to using the original ideas about sexuality, and new findings in science, to help evolve a new ethic, one that everyone can go along with within a joint Methodist Church. So, path 0Z is based in both science&morality, science&ethics, which is what Metaeconomics (see Lynne, in press) brings to understanding on how to deal with the challenges of libertarian&authoritarian framing. Path 0Z is the path of peace, happiness, and, yes, of economic efficiency, in this case for the joint Methodist Church which would emerge on a new plane of a widely shared other-interest that everyone can go along with.

Need to Work at Avoiding the Natural Tendency to Authoritarianism

Applebaum (2020, p. 187) suggests one possible path to avoiding the natural tendency for a liberal democracy to fall off the good path onto the authoritarian path:

"All we can do is choose our allies and our friends .... with great care, for only with them, together, is it possible to avoid the temptations of the different forms of authoritarianism once again on offer. Because all authoritarianisms divide, polarize, and separate people into warring camps, the fight against them requires new coalitions. Together we can make old and misunderstood words like liberalism mean something again; together we can fight back against lies and liars; together we can rethink what democracy should look like in a digital age."

The point is that a liberal democracy based capitalism thrives on diversity which authoritarians cannot tolerate, driven by aversion to complex thinking thinking about. Distortion is also common, sometimes with outright lies: Anti-science and anti-investigative reporting is rampant. Authoritarians also tend to demonstrate on unwillingness to empathize with the other who are different. The problem is, without empathy there is no way an ethic can evolve that everyone can go along with: And, can only get our meat, bread, and beer in a viable, liberal capitalism that works for everyone. Ethics are essential. We fight back with science&ethics.

Overall, authoritarianism can have a devastating impact on a liberal democracy, and, as a result wreak havoc with capitalism which depends on it. Capitalism makes progress by addressing the complexity with solid science: the economy is embedded within a very complex Spaceship system. Capitalism makes progress with continual re-evaluation of the ethical system that makes it work, giving content to that which everyone can go along with. Capitalism does best with a humane liberalism at work, which is all about finding balance in self&other-interest, ensuring the natural tendency to excessive greed is tempered. Authoritarianism is also a form of excess that needs to be tempered, an excessive concern for difference and controlling it: Difference-ism --- and the fear of diversity and difference --- a major feature of authoritarianism, makes for bad capitalism. The hope rests in science&ethics: To clarify that diversity can not only be good but be essential, and that an empathy (ethics) based shared other-interest widely shared is essential to a good capitalism.

Hope Arises With Tempering the Excess

So, yes, the natural tendency to a kind of economic authoritarianism can be tempered, and hopefully avoided entirely. A humane liberalism is possible with adequate attention to science&ethics, which points to the essential jointness of economy&democracy, market&government, while tempering the tendency to self-interest with a widely shared other-interest. Economic authoritarianism cannot survive with each person seeking their own-interest, reflecting good balance in that kind of science&ethics based self&other-interest. Tempering the excess is the point, as made clear in Lynne (2020).


Applebaum, A. Twilight of Democracy: The Seductive Allure of Authoritarianism. New York: Knopf Doubleday Publishing Group. Kindle Edition, 2020.

Bromley, D. W. Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions. Kindle ed. Princeton, New Jersey: Princeton University Press, 2006.

Caldwell, B. (Editor). The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek, Volume 2) . Chicago: University of Chicago Press. Kindle Edition, 2007.

Duckitt, J. H. “Authoritarianism and Group Identification: A New View of an Old Construct.” Political Psychology 10 (1989): 63-84.

Edsall, Thomas B. "The Whole of Democracy Is in Grave Danger at This Moment." New York Times. Digital. (July 22, 2020 2020). Accessed July 23, 2020.

Hedges, Chris. American Fascists: The Christian Right and the War on America. New York: Free Press, 2007.

Kuran, T. Another Road to Serfdom: Cascading Intolerance." In Can It Happen Here?Authoritarianism in America, edited by C. Sunstein. New York: HarperCollins Publishers, Inc., 2018.

Lynne, Gary D. "Review of Bromley, D.W. Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions. Princeton, NJ: Princeton University Press, 2006, 244 pp." American Journal of Agricultural Economics 89, 4 (2007): 1120-1122.

Lynne, Gary D. "Review of Bromley, D.W. Sufficient Reason: Volitional Pragmatism and the Meaning of Economic Institutions. Princeton, NJ: Princeton University Press, 2006, 244 pp." Journal of Natural Resources Policy Research 1, 1 (2009): 118-120.

Smith, Peter. “How is Russia-Ukraine War Linked to Religion?” Associated Press, February 27, 2022.

Stenner, K. The Authoritarian Dynamic. New York: Cambridge University Press, 2005.

———. "Conservativism," Context– Dependence, and Cognitive-Incapacity." Psychological Inquiry 20 (2009): 189-95.

Stenner, K. and Haidt, J. "Authoritarianism Is Not a Momentary Madness, but an Eternal Dynamic within Liberal Democracies." In Can It Happen Here? Authoritarianism in America, edited by C. Sunstein. New York: Harper Collins Publishers Inc., 2018.

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