Liberalism in Illiberal States : Ideas and Economic Adjustment in Contemporary Europe

This book analyzes how national liberal traditions have shaped trajectories of economic reform in France, Germany, and Italy since the early 1990s. In some advanced industrial countries, neoliberal programs of expansive market making, characterized by assaults on non-market arrangements such as welfare states, robust regulatory frameworks, and systems of collective bargaining, have assumed quasi-hegemonic status. Rejecting these neoliberal recipes, many continental European countries have charted their own courses, negotiating the transition to a more liberal economic order while preserving or even expanding policies and institutions that serve as buttresses for processes of economic adjustment. In so doing, they have drawn on much older liberal traditions that are defined by nationally distinctive conceptions of the role of the state and its limits, the structure of the social order, and attendant conceptions of the scope and character of state responsibility. The book analyzes developments in fiscal policy, labor-market policy, and finance, three areas that have been central to the evolving relationship between state and market in advanced industrial countries during the contemporary era of transnational neoliberalism. In each domain, authorities have worked to reconcile their political economies to a more liberal order while preserving a significant role for the public institutions in facilitating adjustment. The book argues that outcomes in the three countries cannot be explained solely by recourse to conventional institutional and interest-based accounts and that ideas act as powerful drivers of patterns of economic adjustment in ways that yield strikingly consistent policy trajectories across economic, institutional, and partisan contexts. After the end of the Cold War, liberalism emerged as the world's dominant political-economic ideology, and economic liberalism seemed to have achieved global hegemony. In Liberalism in Illiberal States , Mark Vail acknowledges the dominance of economic liberalism, but argues that its implementation in specific countries is always unique and dependent upon powerful historical factors. He focuses on France, Germany, and Italy--countries that many scholars do not view as "liberal" at all--and contends they have in fact developed distinct forms of national liberalism, of which their postwar models of capitalism were merely one manifestation. Vail argues that these states' political economies have been shaped by centuries-old liberal traditions, which have continued to inform national alternatives to transnational neoliberalism in the contemporary era. He presents case studies that show how nationally-specific interpretations of liberalism are flexible and responsive to local realities, especially in times of economic uncertainty. By demonstrating how variegated the practice of economic liberalism actually is, Liberalism in Illiberal States will reshape our understanding of liberal political economy in the contemporary world. Cover 1 Half title 2 Liberalism in Illiberal States 4 Copyright 5 Dedication 6 Contents 8 List of Tables 10 Preface 12 Acknowledgments 14 Abbreviations 18 Introduction— National Liberalisms in Illiberal States: Competing Conceptions of Economic Order in Contemporary Europe 22 1 National Liberalisms in Historical Perspective: Conceptions of State, Society, and Economy in Illiberal States 48 2 Degrees of Freedom and Constraint: French Statist Liberalism and Economic Citizenship in the Shadow of Maastricht 90 3 Economic Adjustment through Group Subsidization: Managing the Social Market Economy under German Corporate Liberalism 130 4 Group Capture and Political Sclerosis: The Failed Synthesis of Italian Clientelist Liberalism 172 Conclusion— The Contested Politics of Economic Change in a Neoliberal Age 215 Notes 234 Index 282 Liberalism in illiberal States acknowledges the dominance of economic liberalism, but argues that its implementation in specific countries is always unique and dependent upon powerful historical factors. This book focuses on France, Germany, and Italy - countries that many scholars do not view as "liberal" at all - and contends they have in fact developed distinct forms of national liberalism, of which their postwar models of capitalism were merely one manifestation