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Francis Fukuyama is right: Socialism is the only alternative to liberalism

In Liberalism and Its Discontents, Francis Fukuyama diagnoses the political and psychological malaise caused by capitalism. His analysis makes one thing clear: liberalism is incapable of addressing the social, economic, and ecological crises it faces.
  
by Samuel McIlhagga 

Part 4 - Liberalism in Peril
 
Indeed, Liberalism and Its Discontents, much like its Freudian forebear, argues that liberal democracy’s two adversaries, “populist conservatism” and “progressivism,” are not outside threats but outgrowths of the liberal tradition itself. As Fukuyama states in his first chapter, “What is Classical Liberalism” — the threat comes from internal economic and social corruptions within liberalism rather than from outside competing models or inherent material contradictions.
 
                         On the right, autonomy meant primarily the right to buy and sell freely, without interference from the state. Pushing this notion to extremes, economic liberalism turned into “neoliberalism” and led to grotesque inequalities. On the left, autonomy meant personal autonomy with regard to lifestyle choices, and resistance to the social norms imposed by the society. Pushed down this road, liberalism began to erode its own premise of tolerance as it evolved into modern identity politics. These extreme versions of liberalism then generated a backlash, which is the source of the right-wing populist and left-wing progressive movements that threaten liberalism today.
 
His solution to these threats is to return to an imagined status quo ante — an uncorrupted, renewed, reformed, and robust historical liberalism that recognizes itself as such. Liberalism and Its Discontents uses the term “classical liberalism” to describe this program, whose capaciousness Fukuyama welcomes. “Classical liberalism is a big tent that encompasses a range of political views that nonetheless agree on the foundational importance of equal individual rights, law, and freedom.” 

In his last chapter, “Principles for a Liberal Society,” Fukuyama claims that classical liberalism “may be understood as a means of governing over diversity.” But this diverse political pluralism requires a strong and trusted state. The failing of liberalism since the start of the neoliberal era, he argues, is that it failed to recognize the central role the state must play in managing this diversity.

Throughout the remaining chapters of Liberalism and Its Discontents, Fukuyama identifies the forces that have damaged public trust in liberal democratic governments and the solutions that classical liberalism can supposedly employ. First, in “From Liberalism to Neoliberalism,” he sees neoliberalism as a dangerous outgrowth of economic liberalism that promotes extreme inequality and threatens the body politic.

While Fukuyama does not abandon a commitment to the capitalist market, he avers that, under neoliberalism, the “valid insight into the superior efficiency of markets evolved into something of a religion, in which state intervention was opposed as a matter of principle.

His second chapter, “The Selfish Individual,” contends with the personal and social effects of neoliberalism. There Fukuyama argues that the economic model of individual rational actors looking to maximize utility has been corrosive to a balanced market that respects competing values like the dignity of labor, family, tradition, and collective altruism. “The individualistic premise on which liberal theory is based is therefore not wrong, but rather incomplete.” Cautiously, Liberalism and Its Discontents suggests that a society that focused on production rather than consumption might help to redress the pathologies of contemporary capitalism. Long gone is the triumphalism of thirty years prior, in its place is a Freudian analysis of the troubled liberal consciousness, which leads Fukuyama to ask, “Would people be willing to sacrifice a bit of consumer welfare in order to maintain the dignity of labor and livelihoods at home?

In other chapters that seek to address noneconomic issues of identity — and their innate exclusiveness, which clashes with liberalism’s supposed universalism — Fukuyama argues for a move back to a capacious set of civic nationalisms and identities. Following the sociologist Max Weber, he insists that liberal rights are meaningless without the enforcement of the state. Indeed, Fukuyama correctly identifies a strong set of problems with liberal democracy, but his solution — a return to the problem’s root cause: historical classical liberalism — is ultimately at odds with his commitment to a group of values that transcend the particular liberal capitalist system in which they operate. Indeed, the threats to liberal democracy Fukuyama finds in neoliberalism (massive inequality, consumerism, lack of state capacity) were initially the values of early nineteenth-century free-trade classical liberals — ideas neoliberal thinkers like Milton Friedman wanted to resuscitate for the late twentieth century.
 

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