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Why Liberalism Failed

Updated: Aug 19, 2019

(Classical) Liberalism has failed—not because it fell short, but because it was true to itself. It has failed because it has succeeded (Deneen, 2019b, loc 401) (Note: This is not Liberalism as in describing Liberals v. Conservatives; Deneen is talking about the original meaning of Liberalism going back to the late-1600s, in what is now referred to as Classical Liberalism, which was all about the freedom and liberty of individuals)



In a book by this title, Deneen (2019b) makes the broad claim that classical liberalism as it has evolved out of the Enlightenment, starting in the late-1600s, has massively failed, in both Market and Government. In Metaeconomic terms, we might say that the Enlightenment led to Bad Capitalism, and Bad Government, as related to a wide array of Economic, Social and even Public Health problems now being experienced. The reason is that the classical liberalism frame enables an autonomous individual, an individual with complete freedom and liberty, an individual that is “free to choose” to do whatever one wants to do in both the Market and Government decision forums. Unfortunately, this freedom to choose tends to lead to excesses... it is in our genes, in our DNA, take as much as we can, as in the classic Tragedy of the Commons problem. It can have a very negative impact for the larger economy and society when there is excess in the pursuit of both wealth and power, and especially in wealth&power jointly pursued (e.g., in business&government cronyism, as in lobbyists gaining special concessions).


Why is there excess? There is nothing to temper and bound or otherwise condition …as represented in the idea of homonomy… the autonomous wants and demands, which are insatiable. There is a lack of Self-governance, Self-control leading to excessive consumption (perhaps resulting in too much debt), overuse and abuse of natural systems, among other excesses. Also, unless consciously designed otherwise, there are also few to no outside controls in classical liberalism due to the requirement of a minimalist Government. That is, there is to be little or no heteronomy, as represented in Regulations and Law enforced by the Government, controlling aspects of the autonomous Market (See Angyal, 1965, for further elaboration of these constructs of autonomy, homonomy and heteronomy). Yet, excessive Community and Government influence or control can also be counterproductive; there is a need to focus on balance, as Metaeconomics posits.


So, said somewhat differently, if Self-interest is maximized (autonomy) without regard for the Moral Dimension (homonomy) or Law (heteronomy), both of which are essential to Good Capitalism, we could instead arrive at a state of Bad Capitalism, and related Bad Community, as Smith (1759; 1776) also made clear. Deneen (2019b) claims this failure in the Moral Dimension and the Law is the current state of what started out to be a good thing, in the Enlightenment, as represented in releasing, giving freedom and liberty to autonomous individuals in both the Market and Government. Classical liberal democracy is now, instead, leading to both bad Market and bad Government, and, overall, on the economy side to Bad Capitalism, and Bad Community outcomes.


What more exactly is the story? We now take each Chapter in Deneen (2019b) in turn, covering the essence of the argument, and giving the Metaeconomic interpretation of what it means. Also, as we consider the main themes in the book, keep in mind it is not a refutation of Fukuyama (2006), per se, who proclaimed classical liberalism the winner over socialism, communism and fascism, and over combinations, e.g. over capitalism&communism as in "autocratic" capitalism, as well as capitalism&socialism in the social democracies. Rather, the point is that classical liberalism still holds the greatest potential, with the best overall performance, but needs a lot of work if Capitalism is to be Saved from itself.


The End of (Classical) Liberalism

(classical liberalism)…conceived humans as rights-bearing individuals who could fashion and pursue for themselves their own version of the good life. Opportunities for liberty were best afforded by a limited government devoted to “securing rights,” along with a free-market economic system that gave space for individual initiative and ambition (Deneen, 2019b, loc 386)


As noted, this all starts in the late-1600s, with what came to be called the Enlightenment, and was in full blossom by the time Adam Smith wrote his books, The Theory of Moral Sentiments (Smith, 1759), which saw homonomy, as represented in an Empathy based Other (shared with others)-interest in a shared Community, and the Government it represented, a Government that would enter into heteronomy when homonomy failed, and On the Nature and the Causes of the Wealth of Nations (Smith, 1776), which was all about the autonomous, individual pursuit of Self-interest in the Market. Also, it is very clear that Smith saw a definite role for Government, especially in protecting the consumer from the predatory practices of business and industry, but also in ensuring some wealth for even the poorest of the poor. Smith (1759) was very concerned that the more primal Self-interest only drive of those Making wealth (autonomy) had to be tempered and restrained, otherwise extreme Greed would result in going beyond Making to Taking (as Cronyism would set in). Smith 1759) called for this tendency to be restrained within the Own-self by the Impartial Spectator, the Moral Dimension within Own-self (homonomy), and, when this failed, by Law (and Regulation) through Government (heteronomy).


The Enlightenment idea of freedom and liberty for individuals also influenced the US Declaration of Independence in 1776 and the Constitution in 1787, both of which focused largely on the autonomous individual. Neither the Declaration nor the Constitution directly said much about the role of the homonomous Community, and, in fact, worked to limit the heteronomous role (i.e. favoring minimal control, minimal regulation, minimal influence) of Government. Yet, both homonomy and heteronomy are clearly in substantive parts of both documents.


Deneen (2019b) is railing against the autonomous individual having the liberty and freedom to pursue an unfettered Self-interest without limits or bounds. The concern is with ignoring homonomy (albeit he does not use this term), which is the loss of Community, especially local Community, and more broadly, the loss of Moral Community that tempers, bounds, and brings Self-control and Self-discipline to that otherwise autonomous individual. The concern is also with inadequate attention to heteronomy (again, he does not use this term), the Government, that gives inordinate freedom and liberty for individuals to do pretty much as they individually choose. Deneen is concerned that classical liberalism means Government is giving ever more rights to autonomous individuals, leading to moral decay.


As Deneen (2019b, loc 401) would have it, referring to the Enlightenment framed notion of a liberal democracy based system of Market and Government, and how it has failed on many fronts from "titanic inequality" to ironically, undermining freedom:

A political philosophy that was launched to foster greater equity, defend a pluralist tapestry of different cultures and beliefs, protect human dignity, and, of course, expand liberty, in practice generates titanic inequality, enforces uniformity and homogeneity, fosters material and spiritual degradation, and undermines freedom. Its success can be measured by its achievement of the opposite of what we have believed it would achieve…To call for the cures of liberalism’s ills by applying more liberal measures is tantamount to throwing gas on a raging fire. It will only deepen our political, social, economic, and moral crisis (Deneen, 2019b, loc 401- 402)


That is, the Conservative call for "Free" Unregulated Markets, or the Progressive call for creating more individual, unrestrained rights through Government, throws fuel on the raging fire of excessive Self-interest, when instead there should be development of a moderating Other-interest. Technically speaking, Metaeconomics suggests the extreme focus on Self-interest only puts individuals and the system on path 0G outcomes, due to not paying sufficient attention to the Moral Dimension, the Moral Community, as represented on path 0M. The Enlightenment, it was hoped, would put us on path 0Z, but there has been massive Market-failure and Government-failure to bring path 0M into the decision choices of individuals, resulting in path 0G outcomes. Fixing the problem means evolving a better Moral Community, a better Other-interest, which would hopefully operate on Self-control, and, if that fails, bring Government forward, in Law (and Regulation) based Other-interest, but, it has to be Good (Moral, Ethical) Government.


So, as Deneen (2019b) argues, classical liberalism has led to a new Aristocracy of the extremely wealthy and extremely powerful, and these often go hand in hand, one that harkens back to the pre-Enlightenment period. That is, extremes in wealth caused by less than tempered Markets have led to another kind of aristocracy, not too much different from what the Enlightenment was intended to temper and restrain, and eventually eliminated with time, as represented in the 17th century Monarchy,Religious leaders and their Business Cronies. Going down the income and wealth (and power) ladder, in turn, we find individuals with ever less to no economic or political influence, many if not most feeling “left behind,” not feeling (and, this is based on reality, on experience) a part of either the Market or the Government (see Payne, 2017; Stiglitz, 2019). This is the main reason for the explosion of populist sentiment, as well as blaming others (e.g. immigrants, the evil rich, etc.), when in fact the problem is in the economic and political philosophy operating in the background, framing our approach. In effect, the Invisible Hand of classical liberalism has pretty much led us right back to where we were located before the Enlightenment. As Metaeconomics makes clear, due to Self-interest being more primal, this can only be addressed with a very Visible Hand, a conscious and focused approach to tempering the Self-interest... which is also a main theme in Deneen (2019b): We need to consciously move to new framing and theory.


On the Government side, Deneen (2019b, loc 458) claims the problem is largely due to shifting the power away from the Congressional and Judicial branches over to the Administrative branch. This is also a theme in Will (2019), albeit he is still a strong supporter of classical liberalism on the Market side, while wanting to eliminate much of what has been built in the Administrative branch of Government, not seeing that this branch has actually made for more liberty and freedom for individuals. That is, to Deneen (2019), Administrative power has given freedom and liberty to do things not possible if there was only Law from Congress along with interpretations, enforcement from the Judicial branch. Deneen (2019) believes being totally free to choose (e.g. abortion or not, sexual choice, bailing out businesses who are “too big to fail,” giving extended patent rights to those who have not really created anything new, among other things) is counterproductive to a sustainable culture, economy and society. Such Administrative action has led toward too much in the way of free choice.


The educational system, especially at the university level, too, has failed, as the emphasis has shifted away from teaching the liberal arts toward teaching about how to do business and make money (Deneen, 2019b, loc 458). The liberal arts focus on how to actually practice liberty and freedom, while teaching how to make more profit, and to live only for the money, ultimately takes away from the very liberty and freedom that is being sought. Metaeconomics illustrates this by teaching to put individuals on path 0G rather than on a life well-lived path 0Z, the latter considering all the wonders and challenges of truly living as addressed in the liberal arts, as represented on path 0M.


Deneen (2019b, loc 539), intriguingly, also connects classical liberalism with the notion of control and mastery over nature, which in using Metaeconomics Framing, is to again to say only the Self-interest of the individual is to count, without regard to the Other(shared with others in sustaining the Spaceship Earth system, including the other, non-human creatures in it)-interest. Deneen (2019b, loc 539) wants to return to a time when Humans live within the Spaceship Earth system, working to integrate with (as Metaeconomics, due to being based in thermodynamic reality, also suggests) rather than focusing only on “control,” “mastering” or acting as if in a “war” against nature.


As Deneen (2019b, loc 558) says it, “…our environmental crisis—climate change, resource depletion, groundwater contamination and scarcity, species extinction—are signs of battles won but a war being lost… Our carbon-saturated world is the hangover of a 150-year party in which, until the very end, we believed we had achieved the dream of liberation from nature’s constraints.” This argument does have merit in the sense that the autonomous individual touted in classical liberalism will naturally go to the extreme, as the primal Ego based urge and drive is to “take-it-all” without regard to others, leading to the classic Tragedy of the Commons state of the system. Only Empathy based homonomy, shared Other-interest in sustaining the Spaceship… or if homonomy fails, outside heteronomy, generally Government (e.g. US EPA regulations), can temper the Self-interest, and, ironically, save it.


Intriguingly, Deneen (2019b) sees the Government (Statism, as he refers to it) enabling autonomous individuals in the Market, while such autonomy in the Market demands Government assuring same. Due to “Claiming to liberate the individual from embedded cultures, traditions, places, and relationships, liberalism has homogenized the world in its image—ironically, often fueled by claims of ‘multiculturalism’ or, today, ‘diversity’ (Deneen, 2019b, loc 519).” In Metaeconomic terms, however, whether it is a problem to lose said homonomy, influence of Local Community, or not, depends upon where one draws the border of the Other-interest, pragmatically speaking. Perhaps the content of the shared Other-interest on a Spaceship Earth scale works better in some cases, e.g. in dealing with the greenhouse gas/carbon problem. Also, multiculturalism could blend into one new and improved culture, which gets adopted (or adapted) locally, perhaps even being an improvement. Diversity can also lead to new resilience and viability, especially creativity. An extremely homogeneous local community has its downsides, too. These are Meteaeconomic based empirical questions.


Unsustainable (Classical) Liberalism

Deneen (2019b) clearly wants to draw tight borders around many narrower Other-interest frames, rather than drawing the border around a multicultural or diverse frame. Metaeconomics suggests, albeit this is an empirical question, that perhaps building something completely unknown before, in a new shared Other-interest that draws upon what works best in many different realms, could be a very good thing, and only a problem to those who prefer the status quo. Yet, Metaeconomics, too, would point to the reality that the focusing on Self-interest only does lead to “…corrosive social and civic effects… a disease that arises from the cure of overcoming the ancient reliance upon virtue… loosening of social bonds in nearly every aspect of life—familial, neighborly, communal, religious, even national—reflects the advancing logic of liberalism and is the source of its deepest instability (Deneen, 2019b, loc 729, 748).” Metaeconomics makes it clear that the Other-virtues represented in the Other-interest must temper the Self-interest.


Deneen (2019b) points to the pre-liberal view of Human as needing to temper and other-wise control their more hedonistic tendencies, accomplished through cultivation of the virtues. Also, Humans were framed as part of the Spaceship Earth (Natural) system, with limited to no control over it. Intriguingly, as classical liberalism move away from these frames, two kinds of liberalism emerged, and are still resident today. Deneen (2019b) points to Conservative Liberalism and Progressive Liberalism. The Conservative frame sees Human nature as very much fixed, especially with respect to the notion of a hedonistic, egoistic orientation represented in the Self-interest, best expressed through Markets, also focusing on mastering and controlling the Spaceship Earth (Natural) System. The Progressive frame also seeks to master and control that system, but also holds out that Human nature, too, can be molded and changed, perhaps even changing the more primal tendency to Self-interest.


In Metaeconomics, both some pre-liberal and both more modern classical liberalism represented in Conservative&Progressive frames, are included. Metaeconomics sees the Spaceship Earth System as something that can be mastered and controlled to some extent, but sees the inherent reality of thermodynamic limits. It also sees and acknowledges the more primal tendency represented in the Egoistic based Self-interest expressed in the Market, as in the Conservative Frame. It also sees, however, the very real possibility of tempering and restraining that tendency, perhaps over time even molding it into better balance. This is accomplished through enhancing Self-control by building the Other Virtues in an Empathy based Other(shared with others, while internalized within)-interest. While Human nature perhaps cannot be dramatically changed, it can indeed be influenced, through the Moral Dimension and Law, through both the internalized Other-interest represented in the Moral Dimension and the external Other-interest of Law.


Ironically, moving to the end state of classical liberalism necessitates a strong Government, in that the many familial, community and other norm base organizations and institutions are set aside to facilitate the autonomous individual, the individual pursuing an unfettered Self-interest. As Deneen (2019b, loc 865) indicates: “Liberalism thus culminates in two ontological points: the liberated individual and the controlling state.” Also, this liberated individual operates largely in the Market environment, often requiring controls by the Government to keep it on a reasonable path. The response to the Community, rather than being freely chosen in the sense of tempering the Self-interest with the Other-interest, finding balance in the Own-interest through Self-control, is now mandated by regulations and law.

Uniting Individualism and Statism

The individualism arising from the philosophy and practice of liberalism, far from fundamentally opposing an increasingly centralized state, both required it and in fact increased its power …individualism is not the alternative to statism but its very cause (Deneen, 2019b, loc 1151).


In effect, Individualism requires Statism (Government), and Statism requires Individualism (Market). This is the case because it was essential for the Government (the State, Statism) to create the rights of the Autonomous Individual to operate freely as an entrepreneur in the Market, in the very beginning of the Enlightenment, due to the fact individuals had to be broken lose from the bounds of the Monarchy and the Religious leaders who supported them. So, it was essential for a strong Government, acting within the rule of the Common Law, and, in fact helping evolve that Law, to create individual rights, which in turn helped in forming more free Markets. Individuals needed that Government in order to not only create those rights but also to maintain same through time. Said somewhat differently, the Market (favored by Conservative Liberals) reinforces the Government, and the Government (favored by Progressive Liberals) reinforces the Market. And, yes, both Conservatives and Progressives favor autonomous individuals doing their own thing, it is just that the "thing" differs! How does this work?


Deneen (2019b, loc 1173 ) makes the case this way:

The ways in which the individualist philosophy of classical liberalism and the statist philosophy of progressive liberalism end up reinforcing each other often go undetected. Although conservative liberals claim to defend not only a free market but family values and federalism, the only part of the conservative agenda that has been continuously and successfully implemented during their recent political ascendance is economic liberalism, including deregulation, globalization, and the protection of titanic economic inequalities. And while progressive liberals claim to advance a shared sense of national destiny and solidarity that should decrease the advance of an individualist economy and reduce income inequality, the only part of the left’s political agenda that has triumphed has been the project of personal and especially sexual autonomy.


This case also includes the contention that this rise in individualism (mainly in the Market) simultaneous with the rise of central political power (in the Government) has resulted in a weakening of all the institutions and organizations inbetween; in effect, people are indeed ever more bowling alone, and even families may not be as functional as they could be. In Metaeconomic terms, the integration of Market&Government very much means an integration of Self&Other-interest, but the Other-interest is arising mainly in Regulations and Law rather than in the Moral Community of the institutions and organizations inbetween the Market and the Government; the building blocks of a civil society (as Goldberg, 2018, has also argued) have deteriorated. As Metaeconomics makes clear, uniting Individualism&Statism, Market&Government, if done with attention to balance in Ego&Empathy, Self&Other-interest can be a very good thing, indeed.


(Classical) Liberalism as Anticulture

Community is more than a collection of self-interested individuals brought together to seek personal advancement. Rather, it “lives and acts by the common virtues of trust, goodwill, forbearance, self-restraint, compassion, and forgiveness (Berry, 1994, p. 120, quoted in Deneen (2019b, loc 1386).”


…liberalism’s great failing and ultimate weakness: its incapacity to foster self-governance (Deneen, 2019b, loc 1431).


This is to say, in Metaeconomics terms, there is a Community represented in the Other(shared with others in trust, goodwill, etc.)-interest, and not only represented in the Other-interest holding the Regulations and Law of Government. Such a Community arises out of Empathy, not just the Ego of Self-interest, which without Empathy requires control through Regulations and Law. Also, as Metaeconomics highlights, albeit this is always an empirical question: Without Self-discipline, Self-control… Self-governance as Deneen would have it… the Other-interest, even if well developed, will not be effective in tempering and conditioning the Self-interest, due to the incapacity of Self-interest to restrain itself. Encouraging Self-interest only, as classical liberalism is prone to do, holds a huge potential for failure, in that Self-control needs to bring the Other-interest to bear in finding balance. The only solution, then, arises in the Regulation and Legal control from Government, and, this may also prove inadequate, in that extreme Greed (i.e. Self-interest without Self-governance, Self-control) drives the individual at best to the limits of the Law, and, unfortunately, often beyond it. Just because it is barely legal does not make it Right.


Intriguingly, Deneen (2019b, loc 1431) claims: “While our main political actors argue over whether the liberal state or the market better protects the liberal citizen, they cooperate in the evisceration of actual cultures.” In Metaeconomic terms, the claim is that the Government represented on both the Conservative and Progressive Isles, through actions being taken to either push for Markets (mainly Conservatives) or Government (mainly Progressives), in effect work to potentially have very negative impacts on families, local communities due to both Isles relying on more all encompassing Rule of Law, which keeps things within bounds, but does not encourage the proactive application of the Moral Dimension of the local Community.


Deneen (2019b, loc 1203 ) especially sees globalization of the Market as taking away from the role of local norms, the freely chosen Other-interest of Metaeconomics. Another example provided is that of losing the local norms for what would be approved in a home mortgage… traditionally home mortgages were provided locally, such as in savings and loans, with trust and confidence going in both directions… as this went national, especially as related to the unregulated derivatives trading in the secondary mortgage markets, contributing in substantive ways to the 2008 financial crisis (Deneen, 2019b, loc 1472). In Metaeconomics terms, this free to choose, anything goes (short of violating a specific law, and, in some cases even pushing a bit too far) environment in the mortgage markets (Conservative Liberal framing), which fails to restrain the extreme Greed that naturally evolves, leads to calls for control (Progressive Liberal framing), which also fails to restrain same, in both cases the problem being that autonomous individuals are operating without the restraints of the Moral Dimension in Community, i.e. in Self-interest without enough influence from the Other-interest.


A note of caution here, keeping in the mind the empirical side of this question. Metaeconomics would suggest that we empirically explore just which of these local cultures, norms are good to perhaps keep and which are bad and need to be replaced, perhaps even drawing on some cultural norm in an entirely different part of the Spaceship Earth system, found through globalization. An especially stark example of this was the local norm of slavery prior to the Civil War, and the local norms of segregation still operant 100-years after the slaves were technically freed. Local norms are not always good norms, something Deneen (2019b) fails to highlight. Self-governance as related to shared, local Other-interest can only be good if the content of the shared Other-interest is good, an empirical point made clear in Metaeconomics.


Liberalism (Classical) Against Liberal Arts

…(classical liberalism) undermines liberal education … by detaching the educational enterprise itself from culture and making it an engine of anticulture … (and) … by replacing a definition of liberty as an education in self-government with liberty as autonomy and the absence of constraint (Deneen, 2019b, loc 1794).


These contentions do have some obvious empirical support as many Universities have been forced by shortfalls in budgets due to tax cutbacks at both the State and Federal levels to find places to cut money. With both students and parents wanting to ensure a job offer upon graduation, often exposure to courses in the liberal arts have been cut back in favor or more “prudent” courses like in business schools. So, the virtue of Prudence has gained attention, while the virtues of Temperance, Fortitude, Justice, Faith, Hope and Charity… the virtues on which the liberal arts have always been focused, have been said aside. Neoclassical Economics, with the focus on Prudence only, as in autonomous individuals work single-mindedly (Single Interest Theory) to maximize Profit and the Utility it can buy in the Market, is especially favored. Community, which evolves and reflects the Other Virtues, has been set aside. As Deneen (2019b, loc 1810) says it:

An education fitting for a res publica is replaced with an education suited for a res idiotica—in the Greek, a ‘private’ and isolated person… (but need res publica in order to have true) liberty (as it) is not a condition into which we are naturally born but one we achieve through habituation, training, and education—particularly the discipline of self-command. It is the result of a long process of learning. Liberty is the learned capacity to govern oneself using the higher faculties of reason and spirit through the cultivation of virtue.


In Metaeconomics Framing, one needs a liberal education in order to understand the content of the shared Other-interest on path 0M; res publica gives one the understanding of path 0M. A res idiotica education, e.g. lots of “applied” business and finance, a good dose of Microeconomics (Neoclassical Econmics with the focus on Self-interest only), and other technical courses, prepares only the autonomous individual to operate on path 0G. With education that helps one understand both realms of Self-interest on path 0G and Other-interest on path 0M, one is then prepared to make best choices on path 0Z.


As empirical research in Metaeconomics suggests, too, in effect supporting the Deneen (2019b, loc 2051) claim “… liberation from all obstacles is finally illusory, for two simple reasons: human appetite is insatiable and the world is limited….liberty is not liberation from constraint but rather our capacity to govern appetite and thus achieve a truer form of liberty—liberty from enslavement to our appetites and avoidance of depletion of the world.” This is to say: Self-interest is primal (leading to insatiable wants) and needs to be tempered and restrained lest we exceed the thermodynamic limits of this Spaceship Earth. A liberal education, which in many ways is an Empathic in contrast to an Ego education… concerning itself with how to temper and restrain Ego with Empathy… is essential to long term sustainability in the Community represented among the Travelers on this Spaceship Earth.


The New Aristocracy

…(classical) liberalism’s most fundamental wager: the replacement of one unequal and unjust system with another system enshrining inequality that would be achieved not by oppression and violence but with the population’s full acquiescence, premised on the ongoing delivery of increasing material prosperity along with the theoretical possibility of class mobility (Deneen, 2019b, 2166)


Prior to the Enlightenment, cronyism abounded (see Hodgson, 2019), in shared wealth and power among the Aristocracy which included the Monarchy, Religious leaders, and Business supporters who were given special license. Deneen (2019b) claims that while classical liberalism based democracy and capitalism eliminated that Aristocracy, it created a new Aristocracy, with in many ways even more dramatic inequality, as represented in those who were not free to be the “industrious and rational,” who made immense amounts of wealth. Unfortunately, later generations of these those how perhaps truly Made wealth are not involved in Taking wealth, as inheritance of wealth and power does not guarantee any degree of industriousness or rationality on their part. In many ways we are right back to the “querulousness and contentiousness” of the triad represented in the 17th century Monarchy&Religion&Business that ruled, with that system not encouraging being industrious and rational. No wonder we now have a growing public health problem as associated with that rising Aristocracy of privilege (see Payne, 2017), characterized by extreme wealth and the extreme political and economic power it buys. As Deneen (2019b, loc ) would have it:


Humanity has confronted both the limits imposed by nature, as the costs of two centuries’ economic growth become increasingly evident in today’s accelerating climate change, and the decreasing likelihood that market capitalism will generate increasing prosperity for every part of society.


Metaeconomics, too, sees the Thermodynamic limits, especially apparent in overuse and abuse of the Spaceship Earth System, the atmosphere, to hold and process carbon. It also sees the extreme Greed, as the main feature of Bad Capitalism, needs to be tempered, restrained and bounded by an Other-interest shared by everyone, one that searches for the right amount of inequality, one which does not have as a main feature dramatic public health problems.


Metaeconomics sees the possibility wherein there will always emerge an Aristocracy, due to the more primal Self-interest that drives it. The only way to offset it, keep it bounded, is with a shared Other-interest broadly shared.


The Degradation of Citizenship

A degraded form of citizenship arises from liberalism’s relentless emphasis upon private over public things, self-interest over civic spirit, and aggregation of individual opinion over common good (Deneen, 2019b, loc 2364).


In Metaeconomic terms, citizenship is degraded from too much emphasis on the Self-interest, which is also the concern in this quote, and not enough on the Other-interest, the latter representing the public things, civic spirit and common good. Citizenship flourishes with good balance in Self&Other-interest, also characterized by Self-governance, Self-discipline and Self-control. In such a system, the sum can indeed be greater than the sum of the parts, as we build on the synergy between the Ego&Empathy, I&We, Self&Other, Private&Public, and, on a higher plane, in Market&Government.


Deneen (2019b, loc 2380) claims that classical liberalism only encourages and otherwise supports democracy in very selective ways, in particular, to ensure the autonomous individual can do pretty much whatever is decided by that individual: “Democracy is … an acceptable legitimating tool only as long as its practices exist within, and are broadly supportive of, liberal assumptions.” So, the unfettered, unbounded Market is encouraged (which also means acting as though one can totally master Spaceship Earth systems, without bounds), and Government is used to create rights for individuals, whether leading to tempered and conditioned behavior or not. It follows that if the majority wants to do something else, they need to be ignored.


Is this good or bad? Metaeconomics would ask empirical questions about mass choice based rule v. minority choice based rule. As Deneen (2019b) documents, drawing on many sources, often the wider base of voters, the majority, are not well informed. So, majority rule could easily lead to underinformed decisions. There are intriguing twists on this, with a good example in the matter of greenhouse gas overload in the Spaceship Earth System, leading to extreme weather events and massive climate change. The intrigue comes with the reality that the majority see there is an issue, but the politicians, in this case the Conservative Liberals who want keep mining and pumping carbon at the fastest rate possible, are keeping the majority from the preference for polity and programs to deal with it. Ironically, in this case the supposedly “uninformed majority” is more in tune with the scientific evidence of overloading of the atmosphere with such gases, evidence that is overwhelming. So, the Deneen point that oft times the classical liberals will ignore the majority, democratic rule, is well taken.


Deneen (2019b) also is concerned with Market globalization, which is not favored by the majority, as has been revealed in recent elections in several Western (classical liberal) nations. The argument is that globalization, which would require sharing in a much broader, Spaceship Earth-wide system of norms and values, would take away from local culture, the local Other-interest is lost, which appears to be the current majority view. Intriguingly, both the Conservative Liberals and Progressive Liberals have favored globalization of the Markets, albeit for quite different reasons. The Conservative Liberals see this as Market opportunities in the less regulated Spaceship Earth realm; the Progressive Liberals see this as a way to move away from the restraints of local custom and tradition, changing the shared Other-interest to represent the broader sets of norms and values on a the global level. Metaeconomics would frame this quite differently, and not necessarily favor either perspective, or the perspective of the majority, but rather asking which Other-interest works better, pragmatically speaking.


Deneen (2019b) may have a point about the Conservative Liberal, who wants unfettered, in effect, free-for-all, Markets, both locally and globally. That is, while the majority of voters would likely prefer more tempering of the Market, not only less globalization, but also more reasonable CEO pay, better salaries and wages for employees, and more concern for working conditions, how consumers are treated, and how the Spaceship Earth System is utilized (all of these matters in the Moral Dimension), the Conservative Liberals see less need for tempering and influencing such behaviors. Again, these are really empirical questions, about what works best.


The critique of the Progressive Liberal, however, needs some further analysis, in that while acknowledging this perspective has led to encouraging majority involvement in the acts of initiative, recall, and referendum, the call for a professional civil service, which draws especially on social and political science in their work, is rejected by Deneen (2019b, see esp. loc 2420). That is, political appointees, representing the majority who put that political party into power, are to be preferred, no matter their attention to science or other empirical reality? Metaeconomics questions this frame on empirical grounds; that is, Metaeconomics always points to asking what works best, empirically speaking.


Yet, Deneen (2019b, loc 2462, 2666) may have a point, about classical liberalism shifting attention to only Self-interest and away from the need to evolve and be influenced by a shared Other-interest, which is the message here:


The persistent absence of civic literacy, voting, and public spiritedness is not an accidental ill that liberalism can cure; it is the outcome of liberalism’s unparalleled success. It is an aim that was built into the “operating system” of liberalism, and the findings of widespread civic indifference and political illiteracy of past and present social scientists are the expected consequences of a successful liberal order… Democracy is not simply the expression of self-interest but the transformation of that what might have been narrow interest into a capacious concern for the common good.


Citizenship in a truly viable democracy requires being part of the evolving Other-interest (i.e. searching for and acting on the common good), and then having the Self-control to temper the narrow Self-interest.


Liberty after (Classical) Liberalism

…(classical) liberalism’s apologists regard pervasive discontent, political dysfunction, economic inequality, civic disconnection, and populist rejection as accidental problems disconnected from systemic causes, because their self-deception is generated by enormous reservoirs of self-interest in the maintenance of the present system (Deneen, 2019b, loc 2690).


This is to say, in Metaeconomics Framing, the focus on Self-interest only serves to maintain the present classical liberal based system characterized by loss of Community, populist rejection of “free market” outcomes, tribalism, and extreme wealth inequality, leading to all manner of social and public health problems like dysfunctional families, and addiction. Many if not most individuals in the Western countries are just simply giving up on the possibility of ever living the dream of progress, moving upward and onward, promised by the liberal democracy capitalism systems. So, what do about this problem? Deneen (2019b, loc 2724) suggests efforts on three fronts. These three fronts also are framed by the reality that other main economic and political frameworks and theories that have been tried on this Spaceship Earth, e.g. communist, fascist dictatorships, autocratic "capitalism", to list a few, have not done anywhere as well as liberal democracy based capitalism. The three fronts point to ways of building upon and improving classical liberalism, not replacing it.


Acknowledge the Achievements of (Classical) Liberalism


Deneen (2019b, loc 2742) points to how movement toward a more humane economic and social (community) system requires not leaving behind fundamental principles underlying classical liberalism, including “…liberty, equality, dignity, justice, constitutionalism… the dignity of the individual, the concept of the person, the existence of rights and corresponding duties, the paramount importance of civil society and a multiplicity of associations, and the concept of limited government…” These kinds of components are essential to the shared Other-interest of any new variety of economic, social and political framework that might emerge. Deneen (2019b) wants, however, to bring back the pre-liberal notion that humans are fundamentally both social and political, the nature of which cannot be addressed in a Self-interest only frame or theory of reference (such as in Neoclassical Economics, with Microeconomics Framing and Single Interest Theory). In Metaeconomics Framing (and Deneen would likely agree), individuals are better described as having Dual Interests, as represented in the more primal Self-interest and the shared Other-interest (many of these) that works to influence it, the Other Virtues within the Other-interest at work to influence the Prudence Virtue of Self-interest, through Self-governance, Self-control.


Deneen (2019b) neglects to also point to the wonders of wealth creation since the start of the Enlightenment, as argued by Pinker (2018). The part of the Spaceship Earth System most influenced by (classical) liberal democracy based capitalism has achieved wealth far beyond what could possibly have been imagined… this reflecting the Good Capitalism that has helped in creating Wealth… by the Enlightenment thinkers of the 17th and 18th century, including Adam Smith. Yet, Deneen (2019b) also sees the reality of a great deal of Bad Capitalism also at work, which especially starts in the early-1980s (as Stiglitz, 2019, makes clear), a time when classical liberalism turned into the notion that the Market can do no bad (there is only presumed to be Good Capitalism) and the Government can do no good (no such thing as Good Government). Actually, what has been unwinding since the early-1980s has been both Bad Market (Capitalism) and Bad Government, and (just watch the news and social media, especially the Tweets!) generally a lack of Happiness.


As Deneen (2019b) argues, in many ways we are back to the problem of an elite Aristocracy, due to both Bad Capitalism and Bad Government, which in pre-(classical)liberal times involved the cronyism of money and power represented in the Monarchy, Church, and favored Business, and, now, represented in cronies in Government and the Market who operate on Power purchased with Money (see Munger and Villarreal-Diaz, 2019, on evermore cronyism at work in a great deal of Bad Capitalism; in fact, it may be the natural end-state of the kind of liberal democracy based capitalism we currently have, as Deneen, 2019b makes clear). Also, while wealth has increased dramatically, overall, the current extreme inequality in income and wealth (e.g. CEO pay at 200-300 times the pay of labor; top 1-percent owning/controlling over half the wealth, and buying power with it) is actually become a public health problem (see Payne, 2018), and certainly does not work to ensure a stable economic and social system. There is no small wonder we are seeing the evolution of populism, tribalism, and nationalism, as well as dysfunctional families and communities (see Golberg, 2018; Will, 2019). As Metaeconomics suggests, there is the need to pay more attention to the Moral and Ethical Dimension, as represented in the shared Other-interest in a Moral Community, as well as the shared Other-interest in Government, which will overlap when it is pragmatically speaking, useful to do so, with both tempering the Self-interest.


Outgrow Ideology and Evolve a Humane Theory of Politics and Society (and Economics)

…a viable postliberal political theory will arise, one that begins with fundamentally different anthropological assumptions not arising from a supposed state of nature or concluding with a world-straddling state and market, but instead building on the fact of human relationality, sociability, and the learned ability to sacrifice one’s narrow personal interest not to abstract humanity, but for the sake of other humans. With the demise of the liberal order, such countercultures will come to be seen not as “options” but as necessities (Deneen, 2019b, loc 2894 ).


Speaking from the frame of economics, the notion of an autonomous individual, Self-interest only focused nature of Human nature, which is at the core of the notion of liberal democracy based capitalism, is truly an ideology. It is ideological in that real…as understood both in experience and in science.. Human nature is both Self-interested and in need of the Other, as represented in both Social and Political Relationships, arising through the Other-interest.


Also, Self-interest is more primal, which is not an ideological matter, but is based in scientific reality, also pointing to the scientific reality that it needs to be tempered, conditioned and bounded when Self-control fails. Due to being an ideology rather than a science based political, social and economic theory, Deneen (2019b) classical liberalism based democracy, and the Market and Government that has evolved from it, has massively failed, with lots of Bad Capitalism and Social Ills of all kinds being the outcome. In order to save and otherwise build a Good Capitalism, a truly Good Market and Good Government to match, we need something akin to Metaeconomics Framing and Dual Interest Theory, which builds upon and represents a vast array of other findings in Behavioral Economics. So, Deneen (2019b) calling for “building on the fact of human relationality, sociability, and the learned ability to sacrifice one’s narrow personal interest not to abstract humanity, but for the sake of other humans” is easily understood in Metaeconomics as facilitating, and, perhaps nudging, or regulating when all else fails, individual choice onto path 0Z.


Metaeconomics Postscript


Intriguingly, liberal (classical) democracy based capitalism, represented in the realm of economics by Neoclassical Economics, Chicago-style (Microeconomics Framing and Single Interest Theory), speaks only to path 0G, so is not helpful in fixing the problem. Also, Neoinstitutional Economics, which is largely atheoretical, due to putting perhaps too much emphasis on path 0M, especially in using Government for controlling when Self-control fails, in a heteronomy sort of way, also misses the mark, albeit there is a need for Government as well as Market. Metaeconomics Framing and Dual Interest Theory, due to integrating across these frames, and highlighting the Moral Dimension as a force to “nudge” better choices through Community, and outside Control with Regulation and Law through Government when that fails, does hold the potential to solve the problem of the failure in classical liberalism as argued in Deneen (2019b). As Tomer (2017) makes clear, Dual Interest Theory, which is the analytical machinery of Metaeconomics Framing, holds the potential to be the new kind of Humane (Economics) Framing and Theory needed.


References

Angyal, Andras. Neurosis and Treatment: A Holistic Theory. New York: The Viking Press, 1965.

Berry, Wendell. “Sex, Economy, Freedom, and Community,” in Sex, Economy, Freedom, and Community: Eight Essays. New York: Pantheon, 1994.

Deneen, Patrick J. "A Defense of Conservatism That Veers toward Liberalism." Opinion, Washington Post (Washington, DC), Digital ed., June 21, 2019a.

Deneen, Patrick J. Why Liberalism Failed. New Haven: Yale University Press, Kindle ed., 2019b.

Fukuyama, F. The End of History and the Last Man. New York, Free Press, 2006.

Goldberg, Jonah. Suicide of the West: How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics Is Destroying American Democracy. New York: Crown Publishing Group, 2018.

Hodgson, Geoffrey M. "Capitalism, Cronyism, and Democracy." Independent Review: A Journal of Political Economy 23, 3 (2019): 345-56.

Marglin, Stephen A. The Dismal Science: How Thinking Like an Economist Undermines Community. Cambridge, Massachusetts: Harvard University Press, 2008.

Munger, Michael C. and Villarreal-Diaz, Mario. "The Road to Crony Capitalism." Independent Review: A Journal of Political Economy 23, 3 (2019): 331-44.

Payne, Keith. The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die. New York: Penguin Books, 2017

Smith, A. The Theory of Moral Sentiments, edited by D.D. and A.L. Macfie Raphael. Indianapolis, Indiana: Liberty Fund, Inc. , 1759/1790.

Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations

edited by E. Cannan. New York: Random House, 1776/1789/1937.

Stiglitz, Joseph E. People, Power and Profits: Progressive Capitalism for an Age of Discontent. New York: W. W. Norton and Company, 2019.

Tomer, J.F. Advanced Introduction to Behavioral Economics. North Hampton, MA: Elgar, 2017.

Will, George F. The Conservative Sensibility. New York: Hatchette Books, Kindle ed., 2019.

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