Creating New Institutions: Discovering the Road to Freedom

Before the Enlightenment human beings were generally considered in terms of how they fit into social hierarchies and communal institutions, but following enlightenment the view was that the individual rather than society as a whole, is the most important entity. Enlightenment thinkers argued that liberty was a natural human right and that reason and scientific knowledge – not the state or the church – were responsible for human progress. During the Enlightenment successes in understanding the physical world through processes of logic and observation encouraged the belief that similar progress might be made in the area of political economy and social relations. For Hegel (1770-1831), freedom is realized through self-determination and self-actualization. Hegel sees ideas in the abstract but embodied in society and institutions that change. He believed there is no role for individual freedom, even though one may behave as he likes, he is not free. Freedom is more than one’s own capacity for decisions.

Hegel stresses a state needs a strong and effective central public authority, and in resisting the Estates who are trying to live in the feudal past. Hegel rejects violent popular action and sees the modern state the principal force for reform in governments and the estates assemblies, and he thinks reforms should always stress legal equality and the public welfare. The democratic element in a state is not its sole feature and it must be institutionalized in a rational manner. Moreover, Hegel repeats the need for strong state regulation of the economy, which if left to its own workings is blind to the needs of the social community. The economy, especially through the division of labor, produces fragmentation and diminishment of human life and the state must not only address this phenomenon but also provide the means for the people’s political participation to further the development of social self-consciousness.1

George Orwell (1903-1950) was attending university at the end of the First World War. The young men returning from the war were angry at their elder’s incompetence for having led them to such mass slaughter. This mood of rebellion in Britain spread to rebellion against the old class system, which, in most people’s minds, was inextricably linked to capitalism. After university, Orwell served a five-year stint in the Civil Service with the Indian Imperial Police Force in Burma. During this time he became convinced that the British Empire was run by a non-productive corrupt upper class that exploited her colonial possessions for financial gain and left the native population and England’s own working classes in poverty and squalor “… the Empire was under-developed, India slept in the Middle Ages, the Dominions lay empty, with foreigners jealously barred out, and even England was full of slums and unemployment. Only half a million people, the people in the country houses, definitely benefited from the existing system.”

For Friedrich Hayek (1899-1992), freedom is not the absolute liberty to do as one pleases, rather it is the recognition of the necessity of law and morality in order to ensure that human interaction is cooperative and orderly. Freedom of action within the law gives rise to market phenomena such as prices and profits, both of which make the private knowledge of actors socially accessible to others, which in turn generates economic coordination. Basically, we need freedom within the law not because we know what to do and freedom allows us to do it, but because we are ignorant of what to do and freedom allows us to discover the best ways of doing things. Unlike true conservatives, who see in both the present and the past, traditions to be recaptured and preserved at almost any cost, Hayek recognizes that society is the product of continuing evolutionary processes that are unintended consequences of the choices and values of the humans who constitute them.

For Hayek, what matters is whether the institutions in question are performing a valuable function, not whether they perform the same function they always have, or whether they take the same form we have always known.2 In the second decade of the 21st century the top 5% control economic resources of the world. A new social hierarchy that forms a global community or class system connected by interest and ideology has appeared. This new hierarchy opposes (change) increases in their taxes and the tightening of the regulations of their economic activities. They believe this (low taxes) is driving the whole system. The new global hierarchy is a system in which privileged groups in both developed and developing countries act (often in concert) to protect their own position at the expense of others. Right-wing think tanks subsidize the research of intellectuals to develop free market rhetoric that is elaborate and intellectually vacuous in order to distract the public and legislators from focusing on issues.

Neoliberals insist that they are agents of change. They aim to reform society by subordinating it to the market. Their goal is essentially to erase any distinctions among the state, society and the market. A major challenge of the neoliberals is how to maintain their pretense of freedom as non-coercion when, in practice, it seems unlikely that most people would freely choose the neoliberal version of the state. Their answer is to treat politics as if it were a market, and promote an economic theory of democracy while redefining the shape and functions of the state. In this manner, pretend one can replace ‘citizen’ with ‘customer’ and create a system based on market logic. In this system there is no special status of human labor. The human being is reduced to a bundle of investments and skill sets involved in an entrepreneurial strategic pursuit of advantage. The individual no longer has a special status; classes disappear as every individual is both employer and worker simultaneously. This vocabulary disarms discourse around such issues as social justice.

Neoliberal ideology claims the market ensures everyone gets what they deserve. In the era of neoliberalism, human beings are made accountable for their challenges or conditions according to the workings of the market as opposed to finding faults in larger structural and institutional forces like racism and economic inequality. The distinctive characteristics of this new postmodern period are evident in many areas of social life, including personal relationships, lifestyles, and identity formation at the micro level and restructuring of economic hierarchies, increased cultural fragmentation and relativism, and globalization in all its different dimensions at the macro level. Neoliberal economic and political policies have oriented society towards specific conceptions of individualism that detached subjects from their ethnic and cultural identities where these were antithetical to the imperatives of global capitalism.  Individual neoliberal subjects were constituted to think of themselves primarily as consumers whose primary agency was to make decisions about what commodities to acquire and how to engage in the economy as market actors looking after their self-interest.

David Harvey explains, “For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in common sense understanding that they are taken for granted and beyond question.” Neoliberalism has successfully reached this point in postmodernity, making it postmodernity’s defining ideological feature. The Great Recession of 2008 saw the rich get richer and the poor being ripped off. The Occupy Wall Street protests challenged the excess of corporations in general, and in particular, a government controlled by corporate money, and the insecurity of job tenure and the menace of layoff that it implies. The consequence of this was that many people became attracted to reactionary politics which emphasized a return to traditional identity and its values, the destruction of the elites responsible for undermining it while retaining the neoliberal skepticism about “objective” truths which were barriers to the pursuit of one’s interest – heralded the rise of the populists.

At one time the economic elite were content with manipulating the oil market to create spikes in stock value, now they manipulate news stories to influence voters. Foucault observes elites determine, often based on self-interests, the standards of normality. Once one method has been selected over others, alternatives become deviant. This creates tension between the elites and the masses. The economic elite do not hesitate to present their ideology as interpretation of truth. The real problem is the economic elite who now have the capabilities to propagate narratives in the media irrespective of who owns it. The answer to build an alternative to the neoliberal ideology will not be by petitioning the economic elite to fix things for us, rather it will be by citizens participating in the challenge of the task of creating new institutions that better serve the needs of the community.

Hegel’s concept of freedom can best be regarded as the answer to a problem – the problem of how a man can be free in a universe which is governed by necessary laws. You must find your own point in history, claims Hegel, and start to reflect on yourself in relation to the world. When asking searching questions of yourself, realize that freedom resides not in the brain, but in the traditions of critical thought and skeptical reason. Hegel believed in a freedom of action that included struggle through rational deliberation – when we cease to strive to realize a potential then we live by habit, by rote. A new definition of freedom has emerged during the second decade of the 21st century that eludes the majority of citizens – the freedom of choices to reach their full potential. We will change institutions by electing progressive candidates with policies to begin the process to end big money’s grip on politics, an issue that lies at the core of the debate on freedom and equality.

1 Hegel: Social and Political Thought. Internet Encyclopedia of Philosophy https://www.iep.utm.edu/hegelsoc/

2 Steven Horwitz. Hayek and Freedom (1 May 2006) https://fee.org/articles/hayek-and-freedom

This entry was posted in economic inequality and tagged , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.