polycentricity: the case for a (very) mixed economy

I haven’t really studied Quinn Slobodian’s history of neo-liberalism, Globalists: The End of Empire and the Birth of Neoliberalism, nor Nancy MacLean’s Democracy In ChainsThe Deep History Of The Radical Right’s Stealth Plan For America. I am following the controversy about the latter, but don’t have anything useful to add to it. I would, however,  offer a perspective that may be a little unusual and that would influence how I’d assess any arguments in this domain.

I am deeply committed to polycentricity. I believe that a society ought to encompass a democratic national government, regional and local governments, an independent legal system with its own logic, a civil service and regulatory agencies, bureaucratic firms, markets, voluntary associations, religious denominations that vary from hierarchical to congregational, labor unions, parties and political movements, an institutionalized press, autonomous scholarly and scientific bodies and institutions, loose networks, and various kinds of families–each as centers of power. None should dominate. Each should check the others.

I believe in polycentricity because unitary political systems degenerate into tyranny regardless of their objectives. The Chinese Communist Party has evolved from a radically egalitarian movement into a club dominated by rapacious billionaires. How could that happen? Because, in the long run, it doesn’t matter what you believe or say you will do. It matters whether and how your power is checked.

I also believe in polycentricity because I accept the Hayekian argument that we are incapable of designing highly complex systems that are any good. We are better off with emergent social organization. However, I disagree with those Hayekians (not necessarily including Hayek himself) who claim that a market plus common law is the perfect manifestation of emergent social order. Markets are actually designed systems, and they tend to colonize the other domains if unchecked. A truly emergent society encompasses many different forms and allows people to choose among the forms and innovate within them. In other words, a society that has an assertive state and a strong market is more Hayekian than one with only a market (as if that were possible.)

Therefore, I am not surprised to observe people trying to build up strong democratic states that have powers to tax and regulate, nor am I surprised to see people working to create pro-market institutions that are insulated from democracy, such as international trade regimes. Both efforts should be expected in a pluralist political economy. I don’t assume that the builders of welfare states are trying to command the heights of the economy so that they can suppress individual freedoms (as some hard-core libertarians would argue), but I also don’t assume that the designers of pro-market rules are trying to subvert democracy. It’s all part of the expected give-and-take of polycentricity.

This is not to minimize the stakes. Whether or not countries a sign free-trade agreement has real implications–good, bad, or both–for jobs, for the environment, and for other institutions, from governments to unions. It even affects cultures and mentalities. These are matters of grave concern. But I don’t interpret them as signs of a doomsday struggle between “the market” and “democracy.”

How conflicts are resolved has different effects on different people. For example, a free trade agreement might benefit consumers and firms but cost some people jobs, which, in turn, can damage and even shorten their lives. Therefore, it is appropriate to assess any arrangement from the perspective of distributive justice. However, if you think that you can design one sovereign institution–such as a government–that will consistently, wisely, and fairly define and enforce principles of distributive justice, then I want to see how this entity will be structured and who will be in charge of it–not only today, but once their grandchildren inherit their privileges. Even more important, I want to know how you will move our world from not having such an institution to having it, in the face of resistance.

My bias is that people must assess and enforce distributive justice, and we should do so through the various institutions available to us: a whole range of governments, movements, courts, media forums, etc. This is a citizen-centered rather than a state- or market-centered model. It doesn’t negate the significance of struggles between states and markets, yet it doesn’t assume that the relationship must be zero-sum. We could have stronger democratic states and more efficient markets (consider Denmark). I’d also emphasize that states and markets are only two of a dozen or more important types of institution through which people exercise authority.

See also: should all institutions be democratic?against state-centric political theorythe right to strikeChina teaches the value of political pluralism; and why the deliberative democracy framework doesn’t quite work for me. And see Paul Dragos Aligica’s Institutional Diversity and Political Economy (Oxford, 2014) for a generally congruent view.

About Peter

Associate Dean for Research and the Lincoln Filene Professor of Citizenship and Public Affairs at Tufts University's Tisch College of Civic Life. Concerned about civic education, civic engagement, and democratic reform in the United States and elsewhere.
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