Introduction
I’m a “child of Margaret Thatcher”. Schooled in the 1980s, I was fed the ‘limited government’ supply-side narrative: Free market good; coercive state bad. As I sought economic knowledge, the scholarly foundations for this morality tale were revealed. We can thank the great Economist Friedrich von Hayek for the construction of this Thatcherite prose. He writes: “It is indeed probable that more harm and misery have been caused by men determined to use coercion to stamp out a moral evil than by men intent on doing evil”. Like most economics, the intuition is straightforward. It’s essentially an economic celebration of the ‘power corrupts’ cliché. The politician may start with the noblest intention, but the end result will be undeniably destructive: “By giving the government unlimited powers, the most arbitrary rule can be made legal; and in this way a democracy may set up the most complete despotism imaginable”. Above all, fear the socialist. They may appear to celebrate equality, but they will really only condemn us to a coerced hierarchical order. It is an enforced inequality which will prevent the individual from truly flowering. Liberty is necessarily an argument against monopoly. And it is statism which cuts us to the monopolistic bone.
But might there be a problem with this narrative? For my outlook in this blog, there are two itches nagging away at the back of my mind:
- Hayek ultimately failed in his anti-socialist endeavour. To reject socialist calculation, he offered powerful insights into the philosophy of knowledge. Knowledge is dispersed. Economic planning, devoid of the market price as an ‘information surrogate’, is almost certainly a damp squib. And knowledge is tacit. It’s entrepreneurial wizardry which drives economic success. History is littered by the failure of the analphabetic socialist planner, with the demise of the Soviet Union sitting pretty. However, the great irony of Hayek’s contribution is that it merely made the socialist more entrepreneurial. Rather than piggybacking off the Walrasian Auctioneer in neoclassical economics’ perfect competition, she wedded Marxist and Austrian Economic perspectives. Becoming a celebration of the individual which sees the state as the protector of worker property rights, it is socialism with the anti-authoritarian shine. Socialism is libertarianism.
- The second itch is less theoretical. Recent history simply fails to point fingers at the curse of socialism. Freedom House, for example, wrote in 2021: “Authoritarian actors grew bolder during 2020 as major democracies turned inward, contributing to the 15th consecutive year of decline in global freedom”. This period can’t be recognised as one associated with an upsurge in the pursuit of socialism. It therefore stands to reason that authoritarianism must reflect some other variable. But what might that be?
So today I’ll be asking a simple question: What might explain the growing threat of authoritarianism, home and abroad?
Preferences
The orthodox microeconomist will grandly pronounce that we are utility maximisers, but then shyly offer little detail. That can be left to the other social scientists, the psychologist and such ilk. But that simply won’t suffice here. Might we be able to explain an increased threat of authoritarianism through changes in preferences? Might we be able to embed the Authoritarian Personality within our modelling (Adorno et al., 1950, The authoritarian personality. New York: Harper & Row)? Psychologist World offers a neat description, but I’ll go into efficiency overdrive with the following summary of this personality type:
- Conventionalism: A binary understanding of right and wrong, encouraging a more homogeneous outlook.
- Elitism: A belief that authority requires strong leadership exhibiting uncompromising ‘moral’ power.
- Aggression: A tolerance for the repression of those that are deemed to be non-conventional in their lifestyle or their thinking.
- Hate: A generally negative view of human nature, with a sliding scale of badness according to ethnicity, gender and culture.
Thus, we can refer to how this anti-socialist authoritarian personality impacts on political decision-making. That, adapting the approach originally constructed by Tullock (1974, The social dilemma: The economics of war and revolution. Blacksburg: University Publications), can be summarised as a dilemma of three choices: revolt against democracy; support for the democratic status-quo; or apathy where you effectively abstain from political activity. The ‘revolt’ choice is made more difficult through ‘insider-outsider’ complexities. It can be difficult for ‘outsiders’ to challenge the perspective of the ‘insiders’. The outsiders have to form a political coalition. They have to ensure that this coalition is watertight and capable of challenging a status quo with the full weight of accepted thinking behind it. But this, for the authoritarian, is made easier by their relative homogeneity and their preference for aggressive action. They therefore can punch above their weight and ensure a greater level of influence on politics. Such influence might encourage a drift towards greater authoritarianism. The government increasingly mimics the authoritarian personality.
But there is something still missing in our analysis. Surely, we can’t just glumly pronounce that people have got nastier? There needs to be a catalyst driving changes to preferences. Let’s turn to that now.
Gaming
A perusal of the economic literature into public governance will lead you to one constant, the importance of resource competition. Perhaps the most explosive example is the ‘resource curse’. Here, profit from raw material abundance sparks off a rent-seeking feeding frenzy. The corrupted government succumbs to the few profiteering at the many’s expense. To maintain the flow of such ill-gotten gain, we can expect political violence and repression. The democide of ‘blood diamonds’ is but one recent example of such phenomena. But such a curse tends to focus on countries exhibiting weak governance systems. We need to widen our net to offer a more general understanding of resource competition?
To do that, let’s introduce the concept of the ‘authoritarian bargain’. This opens up an additional trade: giving up political freedoms in return for economic security. The government’s motivation is survival. They minimise an objective function capturing the risk of it losing power. In more traditional climes, that will be dominated by driving popularity through economic instrument. Mass unemployment becoming a threat? Then adopt macroeconomic stimulus through fiscal policy. But might we widen the scope of discretionary policy? Suppose, for example, there is an increased risk of poverty. Could the government instead decide to further fragment the people? Might the bounded rational voter be convinced that it’s the immigrant to blame? Might the government be encouraged to introduce legislation to blunt irksome costly protestors? Could we naturally see a willing shift to a more authoritarian outcome without even a shift of preferences? People, after all, are too busy surviving to worry about luxury goods such as liberty.
Conclusion
Authoritarianism is often condemned in terms of political mismanagement. Vocabulary such as coup, genocide and civil war trip off the tongue. Given the wonders available through individualism, the authoritarian regime must coerce in order to survive. But might ‘pacifying the masses’ be a much more common trait? Might we embed authoritarianism within a standard individualist outlook? That proposition should concern you. The journey to authoritarianism is no longer a revolutionary deluge. It becomes a steady drip, enabled by the emotional hole of economic insecurity. In an era of a “cost-of-living crisis”, where trading luxury political rights for economic security can appear as a necessity, additional vigilance is highly recommended.
Banner Image by Garneys Studio