Book review: ‘Liberalism and its Discontents’, by Francis Fukuyama, and ‘Cathonomics’, by Anthony M. Annett

There was much Western hubris when the Soviet Union collapsed three decades ago. Political scientist Francis Fukuyama made his name heralding the ‘End of History’. The Cold War gave way to unipolar Pax Americana. The peaceful rise of China was to be accommodated within the architecture of neoliberal globalization. The onward march of social and economic liberalism seemed assured.

In 2022, however, revanchist Russia seeks to turn back the clock while China flexes its military muscles. Universal liberal democracy looks increasingly utopian while even some of its supposed exemplars in the West have flirted with an authoritarian turn. So, has Liberalism failed? Two new books address different aspects of this question.

*** A version of this book review was first published in The Irish Times on 19 March 2022 ***

Echoing past titles by Sigmund Freud and Joseph Stiglitz, who diagnosed the ills of Civilization and Globalization respectively, the aforementioned Fukuyama looks at Liberalism and its Discontents. In the preface, he disavows Vladimir Putin’s assertion that it is “obsolete”, but acknowledges “that liberalism has been in retreat in recent years”, facing ideological challenges from both right and left.

In the ten short, sharply argued chapters that follow, the author builds his argument from what he sees as the sound origins of liberalism in the 17th Century writings of Thomas Hobbes and Jonathan Locke, through the American and French revolutions and beyond.

At heart, this classical liberalism was an ideological framework for ensuring life, peace and security while allowing for pluralist tolerance as a counterpoint to the stifling religiosity that had come before. It faced ideological challenge from reactionary conservatism, nationalism, fascism and communism before its supposed triumph in 1989.

Interestingly, Fukuyama now identifies not the ‘End of History’, but the post-WWII decades as the apogee of liberalism. Not only was this the era of post-colonialism and democratization, it was also, as historian Tony Judt has labelled it, the “social democratic moment” in Europe during which there was rapid economic growth and increasing social equality. In the 1960s, movements for racial and gender equality further “pressured societies to live up to their liberal principles of universal human dignity.”

Then the wheels came off. Fukuyama argues that liberalism has since “seen its core principles pushed to extremes by advocates on both its right and left wings, to the point where those principles themselves were undermined.” That is to say, liberalism turned on itself. Where previously, liberalism valorized “the freedom to act within established moral frameworks”, in its post-modern manifestation it has metastasized into a justification for individuals “to choose the framework itself.”

The ‘core principle’ of individual autonomy was taken to the extreme of hyper-individualism, on the right, through the neoliberal doctrine of market fundamentalism. On the left, meanwhile, he argues that it “centred around individual self-actualization” and “began to erode its own premise of tolerance as it evolved into modern identity politics.” The manifestation of these extremes has given rise to backlash in the form of both right and left-wing populism.

For Fukuyama, the answer is not to be found in the temptation of “illberal alternatives”, but in moderation and retreat from the abovementioned extremes. This requires a policy reset to bolster our liberal democracies, to reduce inequalities, to pursue the ‘common good’ and to harness the inclusive identity of a pluralist nationalism.

Meanwhile, Anthony M. Annett, an Irish economist who spent a decade as speechwriter to successive IMF Managing Directors, brings us Cathonomics, a fascinating perspective on how Catholic Social Thought (CST) can inform efforts “to create a world economy that is more prosperous, inclusive, and sustainable for all.” The focus is exclusively on economic matters, while it should be accessible and relevant to those of all faiths and none, and to all political persuasions.

Cathonomics is a book of two halves. In the first the author erects the intellectual scaffolding with which to build in the second his critique of our modern economy as a motor for social inequality and environmental destruction.

Annett first traces the evolution of what we now know as CST from ancient Greek philosophy through Jewish and Christian scripture, the medieval synthesis of Thomas Aquinas, and latterly the Papal encyclicals from Leo XIII’s Rerum Novarum (1891) to Pope Francis’ Laudato Si’      (2015) and Fratelli Tutti (2020). Thus, we see a single thread from timeless moral framework to contemporary policy advocacy. In essence, he argues, that “every economic decision is a moral decision” and “every economic decision has a moral consequence”. Adam Smith, the “sophisticated moral philosopher”, would surely have concurred. The author helpfully summarizes in ten concrete principles of CST.

For the purposes of comparison and critique, he then presents the 18th century emergence, and late-20th century ascendancy of neoclassical economics. In particular, he compares the ethical frameworks of modern CST and those underpinning – or absent from – the prevailing neoliberal hegemony.

In the second half of Cathonomics, Annett’s approach is more orthodox to the genre. Drawing on the canon of leading progressive economists, he dedicates chapters to globalization, third-world development, the environment and the appropriate scope of activity of, respectively, government, business and trade unions. Balance and moderation are the watchwords: none of the three legs of that stool, according to Annett, should be dominant nor emasculated. Always, the diagnosis and prescription is made with reference to CST, as outlined in the Papal encyclicals, in particular.

Echoing his ten CST principles, Annett concludes with “ten key practical solutions of a virtue economy”. These are concrete, progressive policy proposals that “transcend confessional divides” and “have as their goal the inculcation of virtue across all corners of the global economy”.

Reading both books, what is striking is, from Liberal and Catholic perspectives, there is such convergence in their economic critique, their elevation of the ‘common good’, and their broad policy approach to addressing inequality. Fukuyama, explicitly, and Annett, implicitly, see much of merit in the US context of a ‘social democratic’ economic policy platform along the lines of, and sometimes more radical than, that advocated by Bernie Sanders – himself neither a Liberal nor a Catholic.

At root, both authors fault the hyper-individualism evident in modern Western society, which they attribute to post-enlightenment liberalism taken to extremes in the second half of the 20th century. Both see scope for incremental progressive reforms to maximize the ‘common good’, as opposed to maximizing ‘individual autonomy’. From the global financial crisis, through the Covid pandemic, what is abundantly clear to this reviewer is that our liberal democracies are under threat from the centrifugal forces of rising inequalities, environmental degradation and hyper-individualism. Social, political and economic orthodoxies of yesteryear no longer hold. Both Fukuyama and Annett imagine a better future, suggesting stepping stones to get there. It behooves us to pay heed.

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