Economic Opportunity, Civil Society and Political Liberty

The paper, by Ralf Dahrendorf, takes as its theme the dilemmas associated with “squaring the circle” of wealth creation, social cohesion and political freedom in the OECD countries. As the metaphor of square and circle implies, these three essential goals of development are not necessarily compatible and may even conflict with each other — particularly within the context of advancing globalization characteristic of the present day.

Globalization creates what Dahrendorf calls “perverse choices”: to become and remain competitive in international markets requires the kind of flexible use of resources which threatens social cohesion and political freedom in a number of ways. The expansion of the global market has, for example, been associated with the creation of new forms of inequality and social exclusion. “Inequality”, Dahrendorf notes, “can be a source of hope and progress in an environment which is sufficiently open to enable people to ...improve their life chances by their own efforts. The new inequality, however, is of a different kind; it would be better described as inequalization..., building paths to the top for some and digging holes for others, creating cleavages, splitting”.

The advanced industrial countries are faced not only with the prospect of long-term unemployment for 5-10 per cent of the population of working age, but also with the growth of an underclass of the truly disadvantaged, who are excluded in both economic and social terms. They are, in fact, unnecessary:
“The rich can get richer without them; governments can even get re-elected without their votes; and GNP can rise and rise and rise.”

In this context, social conflict is less likely to take the form of collective efforts to improve the lot of the disadvantaged than to be manifested in “individualized conflict” which heightens personal insecurity and produces a growing sense of anomie. Such a situation threatens the very basis of a civil society, which rests upon the free association of people to pursue their interests. Civil society is made up of citizens; but the polarizing effects of global markets can bring the concept of citizenship under heavy attack.

Growing insecurity gives rise to authoritarian temptations. In the fourth section of his essay, Professor Dahrendorf explores the possibility that growing numbers of people in the OECD countries might be inclined to ensure the two goals of social cohesion and economic competitiveness through partially sacrificing the third goal of political freedom. The authoritarian model of governance in many economically successful Asian countries is frequently commented upon with favour in Western societies threatened by economic instability and crime.

The paper concludes with six “modest proposals” for improving the likelihood that a workable balance can be maintained between wealth creation, social cohesion and political freedom in advanced industrial societies. The first of these proposals is “to change the language of public
economics”, rejecting the simplistic tenets of “an economism run amok”. Others include recognizing the changing nature of work in contemporary Northern societies, delinking basic entitlements from particular jobs but ensuring that all young people have some experience in the job market; taking immediate measures to prevent the formation of “tomorrow’s underclass”; reinforcing the power of local communities; recognizing the role to be played by “stakeholders” — not just “shareholders” — in business decisions; and defining an acceptable role for government in the provision of
public services.

In the last analysis, squaring the circle of economic, social and political wellbeing in an increasingly interconnected world is a project which cannot be limited to any single region or country: “the very values of an enlightened and civilized society demand that privilege be replaced by generalized
entitlements — if not ultimately by world citizenship then by citizenship rights for all human beings in the world”. This conclusion, which was also reached by UNRISD in its report for the Social Summit (States of Disarray: The Social Effects of Globalization), merits a great deal of reflection. It will be systematically addressed in the future work of the Institute.