27 August 2019

Beware the false clash between ‘liberalism’ and ‘illiberalism’

By Hans Kundnani

There is a widespread perception that politics throughout the West – and even beyond – is now defined by a fundamental clash between liberalism and illiberalism. But this perception is misleading.

Liberalism has a long and complex history, with multiple strands and all kinds of internal tensions. The different elements of liberalism were linked by a concern with the individual – in particular individual rights in relation to the state. But during the last three centuries, the term has evolved and been used in multiple different and often contradictory ways. In short, what exactly is ‘liberal’ and ‘illiberal’ is far from clear – and reducing the current moment to a clash between an undefined liberalism and illiberalism is a dead end.

The narrative of a clash between liberalism and illiberalism is part of a broader prevalent tendency to see politics in extraordinarily binary terms. Thus liberalism and illiberalism are correlated with a series of other terms that are implicitly seen as synonyms for them – ‘populism’ and ‘centrism’, ‘globalism’ / ‘internationalism’ and ‘nationalism’, and even ‘open’ and ‘closed’ visions of society and the world. Often, this clash is described in terms of metaphors like ‘wave’ and ‘tide’ – which not only implies that this is a natural (rather than a political) phenomenon but also suggests that it will somehow pass.

Brexit plays a central role in this narrative. It is often casually included, without explanation, in a list of ‘illiberal’ phenomena around the world that includes Trump, Le Pen, the AfD in Germany, Hungarian Prime Minister Viktor Orbán and even Vladimir Putin. In foreign policy debates, Brexit is widely seen as a comparable threat to the ‘liberal international order’.

But whether or not you support it, can Brexit really be so straightforwardly described as ‘illiberal’? People voted to leave the European Union for many different reasons. But even right-wing Leavers are often hyper-liberal – at least in economic terms. In fact, they wanted to leave the EU because they saw it as over-regulated. For many of them, Brexit is a way to create the conditions to complete the unfinished Thatcherite revolution of the 1980s.

A big part of the problem is the way that the concept of ‘populism’ has come to be the dominant prism through which the current political moment is understood. In the last few years, the concept has been applied to an extraordinary range of figures, movements and parties in Europe – and even, in the case of Brexit, to a decision.

The effect of this inflationary use of the term has been to obscure the heterogeneity of ‘populism’. Analysts make misleading generalisations about the ‘populist playbook’ based on selective examples that are taken as paradigmatic. The assumption is that ‘populists’ are ‘illiberal’ in every sense of the term. In reality, however, different ‘populist’ figures, movements and parties are ‘liberal’ and ‘illiberal’ to different degrees and in different senses.

First of all, it is important to differentiate between kinds of ‘liberalism’ – in particular, between economic liberalism and political liberalism. In each case ‘liberalism’ means something quite different and it is perfectly possible to be ‘liberal’ in one sense and ‘illiberal’ in others – in fact, it is not just ‘populists’ who are actually mixtures of this kind. The American sociologist Daniel Bell famously described himself as a ‘socialist in economics, a liberal in politics, and a conservative in culture’. That kind of complexity seems to have disappeared – you are now either a ‘liberal’ or you are not – and it is those who describe themselves as liberals, as much as ‘populists’, who are responsible for this absurdly binary debate.

It may be in part because of this lack of differentiation between economic and political liberalism in particular that many Western analysts have been so wrong-footed by the authoritarian turn taken by figures like Orbán in Hungary, Recep Tayip Erdoğan in Turkey and Narendra Modi in India who they had previously supported. They looked at these figures who seemed to be economic liberals – in particular because they seemed to be committed to implement structural reforms – and assumed they were also political liberals. It is as if it did not occur to them that people could ‘liberal’ in one sense and ‘illiberal’ in another.

Even establishing what ‘liberalism’ means in the economic or political sense is far from straightforward. For example, who exactly is ‘liberal’ in economic terms? Economic liberalism is now widely equated with neoliberalism – that is, the particular form of economic liberalism that has been pursued in the last 40 years or so.

But it is possible to be an economic liberal while opposing neoliberalism. In particular, some oppose neoliberalism precisely because of its authoritarian tendencies – the Pinochet regime in Chile in the 1970s and 1980s is often seen as a forerunner of the economic policies that were subsequently pursued under under Margaret Thatcher in the United Kingdom and Ronald Reagan in the United States. They talked of a ‘small state’ but in reality shifted spending from the welfare state to policing and prisons.

The neoliberal turn that began in the 1970s can be understood as a reaction to Keynesianism – and in particular to the crisis of Keynesianism, which had produced high inflation. Certainly, anyone espousing Keynesian ideas and policies now – as many left-wing ‘populist’ figures, parties and movements do – is likely to be dismissed as ‘illiberal’. In an essay called ‘National self-sufficiency’ written in 1933, for example, Keynes wrote: “Let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national’”. In other words, he was arguing for protection and capital controls. Yet while he rejected the classical or laissez-faire liberalism of the nineteenth century, Keynes was nothing if not a liberal (and a Liberal).

The ahistorical reduction of economic liberalism to neoliberalism has limited our debate about economic policy. Anyone who advocates tariffs of any kind is seen as ‘protectionist’ – and therefore ‘illiberal’. Conversely, anyone who opposes tariffs is seen as ‘liberal’. Fifty years ago, capital controls were the norm, even within Europe – and seen as completely compatible with economic liberalism. Now, anyone advocating capital controls is dismissed as ‘illiberal’ – though even economists at the International Monetary Fund now say they may be appropriate to prevent and mitigate financial instability.

President Donald Trump is widely seen as a ‘mercantilist’ – that is, the opposite of an economic liberal as the term is usually understood. He has been particularly critical of German economic policy and has threatened tariffs on European automobiles. Yet liberal economists have also been critical of Germany’s huge and persistent current account surplus and often call the economic policy in support of it ‘mercantilist’ too. In short, the prism of ‘liberalism’ and ‘illiberalism’ doesn’t get us far in solving the world’s economic problems.

Political liberalism is similarly complex. In this context, ‘liberalism’ is now widely used as a synonym for ‘democracy’. Thus there is a global struggle between democracy (liberal) and authoritarianism (illiberal). To be fair, there has also been a debate about ‘illiberal democracy’ – a more nuanced term first used by Fareed Zakaria in 1997 to describe non-Western democracies that were “routinely ignoring constitutional limits on their power and depriving their citizens of basic rights and freedoms” and since been applied to ‘populists’ within the West such as Orbán. But when applied to cases like this, ‘illiberal democracy’ is often conceptually indistinct from (, or understood as simply a stage on the way to), authoritarianism. Thus ‘illiberal democrats’ are not really ‘liberal’ in political terms.

Historically, liberal democracy emerged as a compromise between two elements that were in tension with each other – that is, liberalism and democracy. Historically – for example at the time of the American Revolution – liberal arguments tended to focus on the dangers of the ‘tyranny of the majority’ and the need to limit popular sovereignty. What the ‘liberal’ component of liberal democracy means today is checks and balances – for example in the form of a written constitution that is hard to alter, even with a popular majority. In particular, it means guarantees of individual and group rights, and independent (that is, unelected) institutions such as supreme courts. Thus if democracy is understood as popular sovereignty, liberalism actually constrains it.

Even those who see the current crisis of liberal democracy through the prism of ‘populism’ accept that it is, at least in part, a reaction to the growth of non-majoritarian institutions in the context of neoliberalism and what Dani Rodrik has called ‘hyper-globalization’. Another way of putting this is that, in political as well as economic terms, liberalism has gone too far.

Within in the EU, the shift from the ‘popular’ to the ‘constitutional’ pillar of liberal democracy has gone even further than in the rest of the world in the last 40 years. Perhaps the most extreme example of this is the statement by former German finance minister Wolfgang Schäuble (at the height of the euro crisis) , that “elections cannot be allowed to change economic policy”.

In this context, those who argue for a restoration of popular sovereignty relative to non-majoritarian institutions are not necessarily ‘illiberal’. However unrealistic this may be, they want to return to an earlier version of liberalism – or develop a new kind of liberalism in which the balance between popular sovereignty and non-majoritarian institutions is restored.

What liberals should be discussing is what this might look like in economic and political terms. In other words, they should stop asking ‘Are you a liberal or not?’ and start asking ‘What kind of liberal are you?’

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Hans Kundnani is a Senior Research Fellow in the Europe Programme at Chatham House.