The new consensus: II. The democratic welfare state

Abstract

The goal of the left has been predominantly libertarian: the realization of equal individual freedom. But now, with the demise of leftist hope for radical change that has followed the collapse of “really existing”; socialism, the world is converging on a compromise between capitalism and the leftist impulse. This compromise is the democratic, interventionist welfare state, which has gained new legitimacy by virtue of combining a “realistic”; acceptance of the unfortunate need for the market with an attempt to libertarianize capitalism as much as possible, by intervening in its operation and redistributing the wealth it produces.

Since the neoliberal economic critique of socialism seems to have been borne out by the events of 1989, neoliberal economists might now be expected to provide a similar critique of the new interventionist consensus. Yet there are few signs of their interest in doing so. This might be due to their acceptance of an erroneous interpretation of liberty which equates it with capitalist property relations, and which, they believe, provides an overarching moral justification for their opposition to state intervention in the market. Acceptance of this moralistic, “libertarian”; version of neoliberalism may obscure the need for a synthetic critique of the new consensus which would integrate the many extant consequentialist arguments against it.

Before reviewing the libertarian motives behind both socialism and intervention‐ism, criticisms of moralistic neoliberal “libertarianism”; are offered. These are intended to clear the way for a consequentialist critique of the interventionist welfare state. Finally, it is suggested that the problems with such a critique point toward a different project: a critique of the culture that gives rise to interventionism.

Notes

My thanks to Peter J. Boettke, David L. Brooks, Barbara Friedman, Greg Johnson, Don Lavoie, Donald N. McCloskey, Elliot Neaman, David L. Prychitko, Paul Rosenberg, Chris Sciabarra and Aaron Wildavsky for their generosity in offering helpful comments on earlier drafts.