Matt Lucky reviews Daron Acemoglu’s “What Happened to Liberal Democracy?: Remaking a Politics of Shared Prosperity,” now out at Penguin Press.
Over the last two decades, liberties and rights have declined globally, marking a worldwide democratic recession. In What Happened to Liberal Democracy?, Nobel Laureate and MIT professor Daron Acemoglu aims to diagnose democratic ailments and prescribe a course of reform. Focusing on the United States, he contends that liberal democracies have been betrayed by “the postindustrial educated elite [who] abandoned many of the key precepts of liberalism, including the commitment to self-government, community, and shared prosperity, which were critical for liberal democracy’s past success.” This betrayal cuts across the political economy and philosophical foundations of liberalism, as well as American liberalism as a political movement.
Liberal democracies thrived in the twentieth century, Acemoglu recounts, because their industrial foundations delivered widespread prosperity. Mid-century manufacturers had an enormous appetite for labor, which pushed up wages and, critically, did so for blue-collar workers without college educations. The industrial economy also engendered salubrious forms of community life. As Acemoglu relates, “mass production resulted in a high concentration of workers in cities and factories. The repeated contact and solidarity…became the basis of the labor movement.” What is more, this economy integrated communities across class and educational lines, as those with and without college educations lived and worked together. This common lifeworld helped Americans foster some consensus on cultural issues.
The advent of widespread automation and computing sundered that shared lifeworld. The fortunes of Americans bifurcated as, Acemoglu argues, “the burden of automation fell on blue-collar employees, and especially those engaged in tasks that were being automated by advanced digital equipment and industrial robots.” Roboticized manufacturing lost its appetite for well-paid blue-collar labor. Simultaneously, “computers required workers with numeracy and broader cognitive skills and more than basic education; they enabled mainly the college educated to become more productive and perform new tasks.” The net result was stagnating and declining incomes for the non-college-educated masses, and the ascendency of college-educated elites. The trouble here was not merely that inequality grew, but that the social integration of the old economy evaporated. That is, “as the college educated have become politically more powerful, they have also diverged further from the less educated in their geographic locations and their social lives, reducing their ability to empathize with the latter’s problems.” Acemoglu contends that this educational segregation set in motion the process of liberal college-educated elites betraying philosophical liberalism by imposing their cultural values on the working-class they had left behind. (For the most part, Acemoglu omits conservative elites from consideration as political actors, instead positioning them primarily as a reactive force to liberal overreach.)
That betrayal, in Acemoglu’s account, can also be traced back to a perennial conflict between what John Gray articulated as the Two Faces of Liberalism, denoting the distinction between philosophical liberals who attempt to derive universal moral principles from reason and a second lineage centered on the inevitability of value pluralism that must be negotiated across diverse communities. We will return to the latter when considering Acemoglu’s prescriptions for reform. Concerning the former, he attributes the congenital fault in universalist liberalism to their employment of social contract theories by thinkers such as Immanuel Kant, Jean-Jacques Rousseau, and John Rawls, who “don’t seek the actual consent of individuals and communities to public choices by a process of deliberation, communication, and debate. Rather, they attempt to circumvent any opposition by invoking high-level precepts without broad buy-in from the population.” That is, these liberals assume the public hypothetically consents to the principles of a theorized social contract because the higher conception of liberty within it takes priority over actual preferences. For instance, Rousseau, who serves as Acemoglu’s prototypical example here, advocated for legitimate political societies to be guided by the general will expressed through community deliberations, which, in Rousseau’s definition, is always correct. If individuals disagree, they may be “forced to be free” in accordance with the general will. Thus, Acemoglu argues, that in “every application of the social contract lies a contradiction: If it is the general will that supports true freedom, then true freedom must entail violations of individual freedoms conceived (or misconceived) differently from those enshrined in the general will.”
Drawing the threads of the political economy of philosophy together, Acemoglu charges that ascendant college-educated liberals, reasoning under the influence of social contract liberalism, undertook to impose their particular values on all Americans through social engineering. Though in Acemoglu’s narrative, these impositions occur mostly through civil society, the workplace, and decentralized educational institutions, rather than through a top-down government initiative. More precisely, contemporary initiatives such as workplace diversity, equity, and inclusion (DEI) programs and an emphasis on the history of marginalized groups in secondary and post-secondary education are presented as modern versions of thought policing and indoctrination. These programs do receive some support from the government through DEI requirements in contracting and procurement (at least before the Trump administration ended these requirements). Acemoglu writes, “the social engineering of educated elites, [is] often rooted in ideals of creating a better, fairer, and more tolerant society,” and yet, despite their benevolent intentions, these liberals indulge in “the imposition of one set of values and viewpoints on the rest of society without deliberation or attempts to activate self-government.” Thus, in the pursuit of theoretical universal principles, American liberals have routinely violated individual liberties in practice, especially the freedom of thought and expression of non-college-educated Americans. Notably, however, this connection between philosophical liberalism and HR liberalism’s DEI initiatives is merely posited; we are offered no evidence that HR managers are diligent readers of Rousseau, Rawls, Kant, or any political philosophers, for that matter. Indeed, given the consistent findings of widespread ideological innocence in the American mass public, it would be shocking to discover sophisticated students of political philosophy hiding in mid-level corporate management.
Further, Acemoglu undermines his discussion of liberal social engineering by continuously comparing it to the Soviet Union, the Chinese Cultural Revolution, the East German Stasi, and the Spanish Inquisition. He is aware that these are invidious comparisons, as he repeatedly walks back the equation of HR liberalism with totalitarianism by noting that American liberalism, for instance, “was neither violent nor totalitarian and left room for contrary views,” and likewise that “an authoritarian state—is missing from [America’s] postindustrial social engineering. This is why efforts in advanced economies have focused on persuasion and argumentation.” He notes that every society engages in forms of social engineering, ranging on a spectrum from benign educational efforts to impart shared culture (e.g., America’s Founders aiming to inculcate republican virtues in future generations) up to Soviet totalitarianism. Acemoglu’s analysis would be stronger if he had selected comparisons to historical social movements along that spectrum that shared the characteristics he attributes to liberal social engineering: being non-violent, decentralized and preferably grassroots, working through persuasion, and emerging from an uncoordinated cultural consensus among elites.
Turning to remedies, Acemoglu advocates for reconstructing liberalism to save it, particularly by embracing what he describes as “working class liberalism,” which addresses liberalism’s failures in political economy and philosophy. Regarding the economy, his account centers on redirecting the current trajectory of the artificial intelligence industry “away from a focus on AGI and toward pro-worker AI—more emphasis on domain-specific applications aimed at providing greater capabilities and better information to workers and less emphasis on mimicking human cognition.” That is, instead of constructing AI systems to favor replacing humans in their current task sets with AGI, we need to develop systems that create new categories of tasks for humans to address in conjunction with AI. By redirecting the course of AI through changes to institutions and the tax code, Acemoglu hopes that we can rebuild the liberal political economy of the past that delivered wide material prosperity and thus fostered a sense of legitimacy for liberal institutions that can deliver the goods.
On the philosophical side, Acemoglu advocates for reviving the second face of liberalism that opposes the imposition of general principles in the guise of a social contract. What we need, he instructs, is an epistemic and pluralistic liberalism founded on humility and open-mindedness to debate and new ideas. That is, we must accept that “every belief, proposition, or piece of knowledge we hold could be wrong, even spectacularly wrong. This humility should be the starting point for any discussion.” Therefore, individuals must be free to challenge ideas in public discussions and be afforded the personal liberty to pursue experiments in living without the fear of cancel culture’s social disapprobation. In place of social engineering, liberalism must advance through critical deliberations so that people come to accept its principles through the moral force of a stronger argument, rather than through schemes of indoctrination.
What is more, Acemoglu’s liberalism recenters the primacy of actual rather than hypothesized consent. Therefore, “deliberation and compromise based on shared moral principles provide the best path forward. Put differently, liberalism must strive to get broad buy-in from society for its policy priorities.” To wit, actual communities must reach shared moral agreements. Acemoglu’s “liberalism calls for giving individuals and communities maximal room and resources to experiment. Nondomination and self-government are about providing the resources for such experimentation and also enabling self-governing communities to try new arrangements.” His nondomination argument for self-governance follows from classical republican principles, holding that the people’s liberty requires that they live under rules they give themselves, and that requires actual, not hypothetical, agreement on those rules.
What this amounts to in sum is a call for a dual-layered structure to politics. At the top level, we have community self-governance through forms of deliberative democracy. That deliberative layer rests on a foundation of non-negotiable basic liberties. For instance, Acemoglu writes that “freedom of expression will always have to be a redline for liberalism,” and that “liberal democracy…should never accept community traditions and practices that suppress basic individual freedoms.” To wit, in order for deliberative self-governance to be possible, society must protect fundamental rights such as freedom of thought and expression that are necessary conditions for deliberations. Thus, even if Acemoglu places primacy on deliberative self-governance over universal moral principles, the latter are, in part, a necessary condition of the former.
While I concur with Acemoglu that there are good philosophical grounds for favoring an epistemic approach to liberal democracy, I have a set of concerns with how his case is presented. For one, given that much of liberal social engineering acts through civil society and private sector institutions, it is not clear what is to be done beyond admonishing liberals to be less of a nuisance. That is, there isn’t a central policy power switch to turn off a diffuse social movement. If the solution here is to construct a more deliberative democratic society that can foster buy-in and change opinions on mass, then I believe a more thorough examination of the practical requirements of mass-level deliberative democracy is in order. I offer this not to dissuade from embracing a more deliberative society. Indeed, I welcome it. But merely to invite recognition is no small ask.
Another reservation is that Acemoglu’s hermeneutical approach sacrifices nuance and potential insights by collapsing diverse social contract theorists such as Kant, Rawls, and Rousseau into a single bucket and then kicking that down a slippery slope to totalitarianism. Examined more closely, I contend that Acemoglu is actually closer to those philosophers than he acknowledges in What Happened to Liberal Democracy? To take just one example, there is a fair case to contest Acemoglu’s casting of Rousseau as the archvillain of his narrative. Admittedly, there are influential accounts of Rousseau that read him as a totalitarian thinker, yet many scholars have articulated more charitable interpretations. I would offer that one way to read Rousseau’s discussion of the general will is that it is the product of actual small-scale public deliberations within a community that shares sufficient values that they can literally will the same laws. Rousseau explicitly informs us in The Social Contract that the general will emerges “when a sufficiently informed populace deliberates,” and again later, Rousseau is explicit about preferring deliberations over uncritical acclimation for policies, equating the latter with servitude. Moreover, when Rousseau contends that in a legitimate society individuals “obey no one, but only obey their own will,” we can read that as a republican commitment to non-domination; that is, communities are free precisely when they are the authors of the rules they abide by. If Acemoglu were to give greater credit to Rousseau’s explicit arguments, then he might find an ally in the republican politics of local-level community deliberations, rather than a nemesis.
A further critical question for evaluating working-class liberalism’s capacity to ameliorate Americans’ contentious identity politics is whether the substance of those political disagreements resides in 1) Acemoglu’s deliberative layer, where communities have the flexibility to choose policies based on their particular values, or 2) the universal basic core of liberties that he entrenches behind a nonnegotiable red line? If identity politics is primarily about the former, then Acemoglu’s project will serve. However, if identity politics is about the latter, that is, fights over whether groups of people can be excluded from basic liberties, then Acemoglu is in the same non-negotiable position centered on universal moral principles as the liberals he critiques. To take one example from his concluding chapter, Acemoglu contends that communities ought to be able to express antigay views, but they ought not to be allowed to infringe on the basic liberties of LGBTQ citizens. Many of Americans’ contemporary political disputes, alas, do involve questions of those basic rights, such as public accommodation, protection from employment discrimination, and rights to free public thought and expression. While it is true that one could assemble counterexamples that reside clearly in Acemoglu’s deliberative layer, the point stands that many of today’s political fights concern basic liberties. Therefore, Acemoglu’s emphasis on deliberations cannot, in practice, diffuse these types of identity politics disputes because they concern his redline items.
Ultimately, I want to applaud Acemoglu’s emphasis on reviving the classical republican tradition of liberty before liberalism, expressed as the principle of non-domination as a worthy counterpoint to contemporary liberalism. Likewise, I concur that epistemic approaches to democracy hold strong normative grounds, and that we vigilantly guard that epistemic core against the threats of both state repression and more mild yet still suffocating regimes of social intolerance. Alas, his handling of the individual political philosophers was frustratingly coarse, and it is not clear that his liberalism is ultimately all that distinct on a practical level from thinkers he casts as opponents.
Listen to Bethany McLean and Luigi Zingales talk with Daron Acemoglu about his new book on the most recent Capitalisn’t episode here.
Author’s Disclosure: The author reports no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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