Post-liberalism – Politics and the Economy after Thatcher

Adrian Pabst, Lecturer in Politics at the University of Kent, UK, Visiting Professor at the Institut d’Etudes Politiques de Lille (Sciences Po) and at IBS Moscow

Dr Adrian Pabst, Senior Lecturer in Politics, School of Politics and IR, University of Kent; Visiting Professor, Institut d'Etudes Politiques de Lille (Sciences Po), specially for

In my essay on the legacy of Margaret Thatcher, I argued that the neo-liberal settlement has neither led to a sustained economic recovery nor favoured democratic consolidation. Instead, both the economy and democracy have undergone a period of unprecedented volatility that culminated in the global crash of 2008/09, followed since then by a phase of flat-lining – with little growth and growing popular alienation from both ‘old’ and ‘young’ democracies.

Amid the current clash of financial oligarchy and virulent populism, a distinctly post-liberal politics is coming to the fore. It focuses on the excesses and unintended consequences of socio-economic liberalism, as evinced by the current crisis of capitalism and democracy. Far from being nostalgic or reactionary, post-liberalism emphasises the glue that holds society together – the social bonds and civic ties that are more primary than either abstract rights or commercial contracts (or indeed both at once). As such, it challenges the confluence of both social-cultural and economic-political liberalism that can be traced to the neo-liberal revolution, which was ushered in by Margaret Thatcher and Ronald Reagan and which has been the dominant ideology for the past thirty years or so in the West and elsewhere.

The twin triumph of the two liberalisms

To make this argument, it is crucial to understand the nature of contemporary liberalism. Since Francis Fukuyama proclaimed the ‘end of history’ and the triumph of the liberal West, liberalism’s claim to universality is collapsing under the weight of its own inner contradictions. Instead of a global convergence towards Western market democracy as the “final form of human government”, the post-cold war era has witnessed a ‘great divergence’ between East and West as well as North and South – both geo-politically and geo-economically. Repeated wars and economic crises in the 1990s and 2000s put paid to the liberal promise of peace and prosperity.

Contrary to the idea of boundless progress, the fallout from the global Great Recession of 2008-09 has led to falling living standards for several decades and levels of social immobility not seen since the 1920s. The West itself has become deeply divided and increasingly torn between a financial oligarchy and technocratic rule, on the one hand, and widespread popular anger and rabid populism, on the other hand. Even if liberalism continues to be the chosen creed of our governing elites, its ideological sway seems to be in decline.

For the past forty years or so, the mark of politics across the West and perhaps beyond has been the twin triumph of economic liberalism and social liberalism. Beginning in the 1960s, the liberal left won the social and cultural argument. And from the 1980s onwards, the liberal right won the political and economic argument. Both forms of liberalism champion ‘negative liberty’ (Isaiah Berlin), i.e. unfettered personal choice and freedom from constraint except the law and private conscience.

The trouble is that this conception of liberty privileges purely individual rights and abstract values at the expense of shared ends and the practice of virtue. But since neither rights nor values are ‘right’ or ‘valuable’ in themselves (without reference to some universal principles and particular practices). Values are valuable because they originate from an ‘invaluable’ source and because they are ordered towards an equally ‘invaluable’ end – a transcendent principle that provides an intelligible account of what is valuable and how it ought to be valued, blending the empirical with the normative.

For example, the sanctity of life and the dignity of the human person underpin the principles of liberality like fair detention, fair trial or habeas corpus that are central to notions of freedom, equality and security. Crucially, this argument shifts the focus away from unilateral practices centred on self-interest and individual entitlements towards more reciprocal arrangements that rest on the balance between rights and responsibilities – what the English IR theorist Martin Wight called the link between ‘common interest’ and ‘common obligation’.

So if neither rights nor values serve as a proper basis, then the confluence of social-cultural and economic-political liberalism is little more than an ideology of private choice backed by a strategy of mindless modernisation.

At the same time, the two types of liberalism subordinate the two liberal principles of freedom and equality to a new imperative of systemic security. In this manner, we have moved from a world of concrete and tangible threats to a world of nebulous risks that replaces notions of good government (and cognate concepts such as the exercise of substantive justice or the quest for the common good) with technocratic risk management (political, military, financial, environmental, epidemiological, etc.). Thus, social-economic liberalism has fashioned a freely-choosing, reflexive, and risking individual who is increasingly removed from the relational constraints of nature, family, and tradition.

Paradoxically, the twin triumph of both types of liberalism engenders societies that are simultaneously more atomised and more interdependent. The philosopher Michael Sandel puts this well: “In our public life we are more entangled, but less attached, than ever before”. As such, the collusive convergence of economic and social liberalism has produced an underlying liberal consensus that is compatible with political forces that are variously more left- or more rightwing and accordingly more state-centric or more market-driven.

Since then, decades of liberalisation have led to the gradual transgression of moral codes and traditional taboos as well as the erosion of the social bonds and civic ties on which vibrant democracies and market economies depend. These trends are evinced by the fall in levels of social capital, the decline in associative activity, and the evolution towards a polity that is both post-democratic and post-humanist.

Arguably, this evolution is part of a wider and deeper change in global geopolitics and geo-economics. The dominant modern conceptual dualities and ideological paradigms since the French Revolution have entered a zone of ‘in-distinction’ where nominal distinctions remain in place but real differences between the state and the market, ‘left’ and ‘right’, and democracy and authoritarianism have begun to dissolve. Just as in many Western countries and elsewhere the central state and the ‘free market’ have colluded at the expense of intermediary self-regulating institutions and local government, so too the left and the right are converging and increasingly becoming the same. This convergence tends to replace a real contest of ideas with a post-ideological bureaucratic managerialism. This mode of politics nevertheless masks a more profound commitment to the centrist status quo embodied by the neo-liberal hegemony whose conspicuous failure is now plain for everyone to see.

The shape of things to come: post-liberal principles and policy ideas

Post-liberalism seeks to overcome the abstraction from the relational constraints and possibilities of family, community and tradition that the post-democracy market-state has exacerbated. It thereby accentuates principles of reciprocity and mutuality that translate into practices of reciprocal giving and mutual assistance in order to bring about a balance between rights and responsibilities or duties and deserts.

In the West the two liberalisms have represented merely the interests of the metropolitan elite (which is mobile, secular, graduate, working in liberal professions and affluent). This is reminiscent of Jean-Jacques Rousseau’s famous criticism of those “supposed cosmopolitans” who “boast of loving everyone so that they might have the right to love no one”. By contrast, post-liberalism reflects the values of a silent majority (which is rooted, often religious, vocationally trained and struggling to make ends meet). Arguably, this majority is increasingly alienated from formal politics precisely because politicians speak about abstract rights, unilateral entitlements and communities in name alone. By contrast, many of the people outside the elite care as much – if not more – about responsibilities, contribution and real, embodied communities. For example, there is growing demand for a contributory element in welfare, integration on the parts of migrants and a fair system of social housing.

More specifically, the kind of post-liberal vision that this paper proposes offers a transformative account of politics, the economy and society. Far from being nostalgic and reactionary, post-liberalism appeals to perennial principles like the common good, the good life, mutuality, reciprocity, participation, and association. Such and similar notions can translate into transformative practices of reciprocal giving, mutual assistance and cooperation across the public, private and so-called ‘third’, voluntary sector. Thus, a genuinely post-liberal political economy encompasses the state, the market, and civil society.

Politically, post-liberalism advocates pluralising the state by, first of all, rebalancing the relations between government, parliament and the courts; secondly, by devolving power to regional, local, communal levels as well as European and global stations (in accordance with the Christian principle of subsidiarity that stipulates action at the most appropriate level in order to safeguard human dignity and the flourishing of the person); thirdly, by associating all the mediating institutions of civil society (professional associations, universities, manufacturing and trading guilds, etc.) to public policy- and decision-making. Concretely, this involves a greater role for assemblies, guilds and professional ethos in order to counterbalance the writ of the executive, political parties and the managerial bureaucracy of the central state.

Economically, post-liberalism argues for the mutualisation of markets that shifts the emphasis from short-term profits and pure price competition towards longer-term, sustainable profitability and competition centred on quality and the wider social impact (including environmental ‘externalities’). Linked to this are principles and practices of cooperation beyond pure self-interest and the distribution of assets (e.g. asset-based welfare, employee ownership and cooperatives, including in the public sector).

Crucially, mutualising markets involves abandoning the current separation of profit and risk between investors and money-lenders, on the one hand, and customers and employees, on the other hand, in favour of alternative arrangements whereby debt is converted into equity and both profit and risk are shared more equitably rather than divorced from one another. Examples include, first, mortgages with long-term, fixed interest rates; second, debt equitisation schemes for over-leveraged banks and corporations; third, the introduction of growth warrants in addition to ordinary national or corporate bonds.

Socially, post-liberalism promotes the active association and participation of the citizenry – individually and in groups – to the governance of the public realm. Here the guiding principle is in some important sense Aristotle’s notion of ‘mixed government’ where the rule of the ‘one’ (the nation), ‘the few’ (virtuous elites in all professions and sections of society) and ‘the many’ (the populace) are blended in mutually balancing and augmenting ways. Whether Edmund Burke’s ‘little platoons’ or G.D.H. Cole’s guild-like professional associations, ‘the few’ mediate between families, households, communities, localities, one the one hand, and national state and transnational markets, on the other hand. So configured, ‘the few’ have a constitutional role that helps secure the autonomy of the mediating institutions that constitute civil society. Ultimately, what this requires is a wide range of diverse individuals and institutions that are committed to a sense of individual virtue and public honour which translates into transformative social practices.

Likewise, guilds have sought to develop and protect standards of excellence and honourable practices – if necessary by means of punishment and exclusion based on an ethos that combined extensive rights with strict duties and moral codes. Frequently organised as confraternities, craft-guilds participated in the life of the polity based on their own distinct ‘legal personality’ – just like virtually all major business corporations are also legal persons in their own right, with certain entitlements but also responsibilities and duties which they often subordinate to the pursuit of private profit. If the political left truly believes in worker self-organisation, it should encourage the introduction of a constitutional status for professional and other associations.

This, coupled with a pluralised state and mutualised markets, can help build a civil covenant that blends proper political representation with greater civic participation. At the international level, one can argue for a civic commonwealth of nations and peoples as an alternative to the seemingly rival projects of republic nationhood and cosmopolitan internationalism – a new compound wherein communities, localities, cities, regions, and nations are given a proper voice in the governance of the public realm. By emphasising real relationships within and across localities, regions and nations, post-liberalism offers an alternative vision to the hegemony of social and economic liberalism. The new post-liberal agenda is to reconnect politics and business with the idea of a good society and a moral economy.


The mark of contemporary politics, both in the West and across the wider world, is the twin triumph of economic liberalism and social liberalism. Decades of liberalisation have contributed to eroding the social bonds and civic ties on which vibrant democracies and market economies ultimately depend for trust and cooperation. Paradoxically, the two liberalisms have engendered societies that are simultaneous more interdependent and more atomised – tied to global finance that undermines the real economy and further fragments society. Linked to this is a growing centralisation of power and concentration of wealth, as evinced by a variety of indicators such as the GINI coefficient and measures of asset ownership.

Pluralist alternatives to liberalism emphasise principles of reciprocity and mutuality, which seek to balance individual rights with social responsibilities and promote a sense of honour, duty, and just desert. This speaks to growing popular demand in the USA, the UK and continental Europe for a contributory element in welfare and just rewards regarding remuneration in both the public and the private sector. Connected with this are growing calls for a variety of related policy ideas, including caps on interest rates (charged on so-called ‘payday loans’ and similarly usurious practices) and a ‘living wage’ (rather than a mere minimum wage).

Interestingly, these and other measures have already been adopted in London in the wake of successful campaigns by London Citizens (now CitizensUK) – an umbrella civic movement that brings together more than 150 groups, associations, and faith traditions. Blending the principles of Catholic social teaching with the practices of community organising, it has persuaded both City Hall and multinational corporations such as KPMG to pay their staff the ‘living wage’. With its overtones of ‘a family wage’, this policy commitment would seem to symbolise a new combination of economic egalitarianism with an updated social conservatism, supportive of family loyalty without wanting to decree in what a ‘real’ family should consist.

Such a combination is crucially characteristic of a new ‘post-liberal’, paradoxical politics that seeks to combine greater economic justice with a new role for individual virtue and public honour. Thus, the main fault-line in politics is no longer between the left and the right, but rather between the liberal left and the liberal right, on the one hand, and post-liberal politics, on the other hand. The shape of contemporary post-liberalism is paradoxical insofar as it strives to blend a more progressive egalitarian economics with a more radically conserving politics.