The Urgent Need to Delegitimate Laissez-Faire Ideology

Jon Wisman

No 2024-02, Working Papers from American University, Department of Economics

Abstract: Ever since exploitation and extreme inequality became possible with the rise of the state, ideology serving the interests of elites has almost always persuaded non-elites that the prevailing social order is also in their best interest. This ideology was first expressed in religion that evolved to depict extremely unequal social conditions as in accord with sacred forces. Ideology provided a more efficient means of maintaining exploitation than violence. With the rise of capitalism, secular doctrines, and especially political economy and then economics, joined and eventually mostly replaced religion in justifying inequality. Since the late eighteenth century, laissez faire has been the dominant expression of this ideology. Only once, due to the extreme hardship of the Great Depression, has it been sufficiently delegitimated such that public policies were enacted that reduced inequality and significantly improved the quality of life for non-elites. However, laissez-faire ideology resurged to dominance in the 1970s, resulting in policies over the next half century that have led to exploding inequality. The fact that this ideology survived intact the Great Recession following the financial crisis of 2008 poses the question of whether it can again be adequately delegitimated. Yet there is urgency that this occurs prior to the death of democracy and thus capability of avoiding ecological Armageddon. This chapter suggests that only an adequately attractive alternative social vision to that of laissez-faire capitalism might delegitimate laissez-faire ideology. It concludes with a brief sketch of such a vision.

Keywords: Ideology; exploitation; inequality; legitimation; material progress vision (search for similar items in EconPapers)
JEL-codes: B15 N40 Z12 Z13 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-his, nep-hme, nep-hpe, nep-mac and nep-pke
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