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The Social Market Economy

Published online by Cambridge University Press:  18 June 2009

Norman Barry
Norman Barry
Affiliation:
Politics, University of Buckingham
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Extract

The collapse of Communism in the regimes in Eastern Europe and the former Soviet Union has brought forth a plethora of alternative political and economic models for the reorganization of those societies. The vacuum that has been left could be regarded as an ideal laboratory for the testing of competing theories, and the temptations to experiment with the more benign forms of constructivist rationalism are likely to prove irresistible. If liberal capitalism is to be successfully created, it will clearly not have the same biography as it has had in the Western European and Anglo-American countries, where its emergence was the result of slow evolution: often its appearance and survival were due to a quite fortuitous combination of circumstances. In those countries it was not the result of any deliberate democratic choice but the outcome of a happy confluence of traditional rules and customary practices, and the participants in them had little idea of the form of the system that they were creating. Indeed, ideological sanctification was almost an afterthought, and democratic approval was belated and in most cases not enthusiastic. Britain was a liberal capitalist society, and possessed the necessary body of private law, some time before the franchise was significantly democratized (which did not occur until 1867). It is, of course, recent theoretical and empirical research which has revealed that the political choice mechanisms that developed haphazardly after the success of the market are a potential threat to it.

Type
Research Article
Information
Social Philosophy and Policy , Volume 10 , Issue 2 , Summer 1993 , pp. 1 - 25
Copyright
Copyright © Social Philosophy and Policy Foundation 1993

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References

1 “Constructivist rationalism” designates that style of thinking which supposes that it is possible to impose on a social system a pattern of social and economic organization which is derived from a notion of human reason uninformed by experience and the lessons of tradition. It is most clearly exemplified in systems of centralized economic planning which dispense with the price signals provided by spontaneous markets. Constructivist rationalism presupposes that a single mind or institution is capable of organizing the necessarily dispersed knowledge in society. Its most articulate critic is F. A. Hayek, who does not limit his critique to rationalistic economic planning but includes refutations of attempts to design whole legal systems from a priori principles. See his Rules and Order, vol. 1Google Scholar of Law, Legislation, and Liberty (London: Routledge and Kegan Paul, 1973).Google Scholar

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