The Parasitic Liberalism Thesis Revisited

The Institutional-Cultural Roots of Liberal Aristocracy

Note: The newsletter returns to its regular activity after the summer break. Posting may still be sparse until the end of the month, though. Anyway, today’s post reflects on one of my summer readings.

Among the readings I’ve done over the last month are Matt Zwolinski’s and John Tomasi’s The Individualists[1] and Patrick Deneen’s Why Liberalism Failed.[2] Though the books are largely unrelated, they both offer an examination of liberalism and liberal thought and, in the process, give clues about the causes of the failure of a strand of liberalism (Rothbard’s kind of libertarianism in the case of Zwolinksi’s and Tomasi’s book) or, concerning Deneen’s book, of liberalism in general. Today’s essay is about the latter and more specifically about an interesting aspect of Deneen’s account of the self-undermining nature of liberalism.

Why Liberalism Failed has had quite a significant impact when it was published back in 2018 and it’s not difficult to understand why. The book exposes in simple prose the core of the cultural post-liberal critique that underlies the New Right ideology and more generally that feeds far-right populism in America and Europe. If the book has attracted so much attention, it’s probably because it makes the effort to give an academic envelope to oft-repeated claims about the decadent nature of the West made by Orban, Putin, and other populists of the same breed. I don’t intend here to discuss the whole book as many reviews have been written on it,[3] though I shall give some general appreciation at the end of the text. I will instead focus on one specific point that I found more particularly interesting regarding the mechanism accounting for the emergence of a new “liberal aristocracy.”

Deneen’s book explores and defends a variant of what has sometimes been called the Parasitic Liberalism Thesis (PLT). Deneen indeed uses himself the expression in the chapter dedicated to the so-called “anticulture” of liberalism. In this context, liberalism is parasitic in the sense that what it calls “culture” is actually a simulacrum that displaces and destroys genuine cultures grounded in traditional ways of life. However, reading Deneen, we understand that liberalism is parasitic in a broader sense:

“liberalism has drawn on a preliberal inheritance and resources that once sustained liberalism but which it cannot replenish… The triumphant march of liberalism has succeeded in at once drawing down the social and natural resources that liberalism did not create and cannot replenish, but which sustained liberalism even as its advance eroded its own unacknowledged foundations.”[4]

This claim has been made hundreds of times under different variations. We find it for instance at the core of Karl Polanyi’s account of the “great transformation” making the market society the cradle of totalitarianism – it is therefore not surprising that Deneen discusses Polanyi at length. More surprising however is that the PLT has been also entertained by liberal authors largely in favor of free market institutions and policies and whose commitment to individualism cannot be doubted. Deneen’s admiration of Alexis de Tocqueville doesn’t come from anywhere, as Tocqueville emphasizes the downsides of the kind of individualism fostered by democratic equality.[5] We could also mention a long list of 20^th and 21st-century liberal thinkers who, in one way or another, suggested that the extension of market relations could undermine the moral fabric on which moral institutions are built, e.g., Frank Knight, Wilhelm Röpke, Friedrich Hayek, Isaiah Berlin, John Gray, or Gerald Gaus. While it is obviously false that liberals are unaware that liberal institutions can have detrimental moral and cultural effects that deplete the cultural stock without which liberal institutions cannot strive, it might be true however that this is more concern for “conservative” or “classical” types of liberals than for “progressive” ones.[6] This is an interesting point on which I return below.    

The PLT has been discussed more formally by the economist Samuel Bowles.[7] Bowles develops a model that helps in general to better understand the claims made by the PLT and, more specifically, the originality of the variant developed by Deneen. Bowles frames the PLT in terms of a preference-institutions co-evolution model where a society settles at a cultural-institutional equilibrium that is characterized by the extent of civic virtues and values (e.g., family or religious solidarity, trust, …) that prevail in the population on the one hand, and the development of market institutions on the other hand. Following the PLT, we assume that the extension of market institutions is negatively related to the importance of civic virtues – markets “economize” on virtues by displacing them, favoring instead more impersonal forms of social relations. We also assume that the development of market relations tends to directly destroy civic virtues through a “crowding-out” mechanism. Moreover, while civic virtues are grounded in traditional ways of life, market institutions tend to undermine tradition over the long run. Hence, the more developed market institutions are at time t-1, the more traditional ways of life are destroyed and unable to sustain civic virtues at time t. This can be given a simple graphical representation:[8]

The figure above only represents a temporary institutional-cultural equilibrium. To fully capture the PLT, we have to introduce some dynamics. Basically, the degree of development of market relations at any point in time will determine how pervasive traditional ways of life will be in the future. The PLT holds that developing market institutions entails the destruction of traditions and, in turn, of civic virtues. Over the long-run market institutions erode traditions and therefore deplete the stock of virtues on which they build.

The key assumption of the PLT is that civic virtues are necessary for human flourishing. At the minimum, while markets contribute to individual and social welfare, they cannot properly function without strong moral and social norms that foster reciprocity, trust, accountability, and so on. Moreover, even if markets contribute to material wealth, human flourishing also depend on living fulfilling lives and the latter require more than material wealth, but also social bonding, deep friendship, community fraternity… The destruction of civic virtues is thought to undermine all this. Implicitly, what the proponent of the PLT are assuming is a kind of social welfare function that responds positively to the development of civic virtues. The worst-case scenario is one where the v function is not linear but where the level of virtues is relatively stable for low and high degrees of market institutions development, as illustrated in the figure below:

Building on cross-cultural experiments using in particular several variants of the ultimatum game and public good game, Bowles argues in his article that the PLT is probably false. As it happens, individuals living in societies where market relationships are largely developed tend to display more pro-social behavior that individuals living in traditional societies. It doesn’t mean that market institutions don’t destroy the traditional moral fabric but rather that their development is correlated with the emergence of different kinds of norms, values, and virtues that sustain market relationships. Bowles discards the doux commerce hypothesis (that Deneen also rules out) and instead favors the thesis that market institutions are associated to the promotion of a liberal civic culture through non-market institutions such as the rule-of-law:

“Liberal states have neither the information nor the coercive reach to eliminate opportunism and malfeasance, but they can protect citizens from worst-case outcomes, whether these be personal injury, loss of property, or other calamities. The result, writes Norbert Elias, is a “civilizing process” based on the fact that “the threat which one person represents for another is subject to stricter control . . . everyday life is freer of sudden reversals of fortune [and] physical violence is confined to the barracks.” This attenuation of calamity is accomplished through the rule of law, occupational and other forms of mobility, and (in the past half century or so) by social insurance.”[9]

The liberal civic culture thesis (LCCT) thus claims that the development of markets is co-extensive with non-market institutions that promote the very same virtues that according to the PLT are destroyed by market institutions. The difference is that civic virtues are rather promoted in the context of impersonal market and bureaucratic relations rather than through the kind of personal relations that are developed within traditional institutions like the family or the clan. Graphically, the LCCT goes something like this:

It’s arguably difficult to adjudicate between the PLT and the LCCT. The kind of experimental evidence on which Bowles mostly relies to make his claims only has limited demonstrative strength, owing on the problems of internal and external validity that they face. What can be noticed however is that the LCCT does not contradict Deneen’s variant of the PLT on one point at least. Deneen is keen indeed on insisting on the fact that the rise of “individualism,” understood here as the development of market relations, is co-extensive with the rise of the liberal state. Indeed, according to Deneen, liberal individualism entails the destruction of traditional forms of authority, opening the door to all kinds of abuse. Appealing to the state is the last recourse to prevent them. There is from this perspective a self-reinforcing loop between individualism and statism. Where the two theses depart is with regard to the normative assessment of this loop. For Deneen, the kind of impersonal bureaucratization that the development of liberal state institutions entails is only an additional contributor to the destruction of traditional ways of life and thus of civic virtues.

Leaving this issue here, I would like to finish this essay by discussing a different point that Deneen makes in the chapter called “The New Aristocracy.” Here, Deneen argues that while liberalism, both as a philosophy and a political doctrine, has been developed against the domination of the aristocracy constitutive of pre-liberal regimes and societies, it ultimately lead to the creation of a new aristocracy grounded in rising economic inequalities but also cultural separation. While this again echoes some of Tocqueville’s fears, Deneen is here especially targeting the Millian conception of liberalism:

“Society today has been organized around the Millian principle that “everything is allowed,” at least so long as it does not result in measurable (mainly physical harm). It is a society organized for the benefit of the strong, as Mill recognized.”[10]

“From the outset, liberalism held forth the promise of a new aristocracy composed of those who would flourish with the liberation of the individual from history, tradition, nature, and culture, and the demolition or attrition of institutional supports that were redefined as limits or obstacles to liberty.”[11]

This suggests that the model above is too much aggregated. The relationship between markets and virtues may actually vary with the segment of the population under consideration. What Deneen’s critique of the Millian nature of liberalism implies is that, while there are a few persons (the liberalism’s new aristocrats) who indeed flourish under the impersonal institutional environment of the liberal state and markets, most of the individuals actually suffer from the evolution of the liberal culture and morality that promotes negative freedom and autonomy at the price of weakened traditional institutions. For these individuals, the situation looks rather like this:

If correct, this analysis entails that the inequalities that growingly separate the liberal aristocracy from the rest of the population are not only economic but also cultural and moral. They result from the fact that some lucky individuals have the abilities and resources to flourish in a world where social relations mostly rely on impersonal and general rules and where individuals have to behave autonomously, while the rest suffer from the disappearance of traditional social ties and forms of solidarity. This echoes recent accounts of the rise of populism, which situate the new divide political divide no longer between the left and the right but rather between the “anywhere” and the “somewhere,” or between the individuals who want to live in an open society and those who feel more at home in a more closed one.[12]

The plausibility of the analysis doesn’t mean that it is correct. There are, though, contemporary liberal authors who have identified the cultural risk of uncompromising forms of liberalism that automatically disparage any form of tradition. Hayek’s critique of the abuse of reason and constructivism was not only targeting economic planning but more generally the rationalistic hubris of the small tribes of intellectuals imagining that they can redesign society along a small set of principles with complete disregard for cultural evolution. In his last book, Gerald Gaus claims that “Millian progressive liberalism is fundamentally hostile to culture itself.”[13] In tones that at times are striking similar to Deneen’s, Gaus attacks the rejection by Millian liberalism but also liberal social contract theory of any kinds of reasons and beliefs that betray an adherence to religious and traditional forms of life. Like Deneen, Gaus is not impressed by the kind of “normalized diversity” and inclusiveness of progressive liberalism that, while it claims to be open to a great variety of ways of life, only expresses contempt for many of them on the ground that they reflect traditional practices.

Now, even if we agree with this diagnostic, there is still no clear remedy. Deneen has nothing better than reactionary half-suggestions to propose here. Unsurprisingly, he idealizes traditional ways of life that nonetheless were truly oppressive and undermining any hope for human flourishing. Even if liberalism has given rise to a new aristocracy, that doesn’t mean that this new state of affairs is not better than the previous one. The current equilibrium may however be unstable. The question is therefore how – if possible at all – to achieve “true inclusivity,” i.e., how to make sure that everybody can somehow enjoy all the benefits of modernity, not only economic but also moral and cultural.

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[1] Matt Zwolinski and John Tomasi, The Individualists: Radicals, Reactionaries, and the Struggle for the Soul of Libertarianism (Princeton University Press, 2023).

[2] Patrick J. Deneen, Why Liberalism Failed, Reprint edition (New Haven London: Yale University Press, 2019).

[3] See in particular the thorough critical review published by the Niskanen Center: https://www.niskanencenter.org/revisiting-why-liberalism-failed-a-five-part-series/

[4] Deneen, Why Liberalism Failed, pp. 29-30.

[5] As the reviewer of the Niskanen Center rightly points out, we may quarrel with Deneen’s otherwise one-sided and misguiding reading of Tocqueville, but I leave this point aside.

[6] On the other hand, it could be argued that progressive liberals have historically been taking more seriously the possibility that liberal institutions can cause a destruction of the natural capital that sustain them.

[7] Samuel Bowles, “Is Liberal Society a Parasite on Tradition?,” Philosophy & Public Affairs 39, no. 1 (January 1, 2011): 46–81, https://doi.org/10.1111/j.1088-4963.2011.01201.x.

[8] For readers who want to understand how the m(v) function is constructed, see the short appendix at the end of the text.

[9] Bowles, “Is Liberal Society a Parasite on Tradition?”, p. 71.

[10] Deneen, Why Liberalism Failed, p. 148.

[11] Ibid., p. 150.

[12] See for instance Fareed Zakaria, Age of Revolutions: Progress and Backlash from 1600 to the Present (New York: W. W. Norton & Company, 2024).

[13] Gerald Gaus, The Open Society and Its Complexities (Oxford University Press, 2021), p. 101.