Newsletter: The decline of an outdated liberalism - Short Cut with Petra Pinzler and Stefan Kolev on progress

Dear friends and colleagues,

Every time Germany´s liberal FDP falls to new lows in elections, it doesn’t take long to read that the party is simply falling victim to the zeitgeist. In Saxony, the party is now even among the ‘others’, just under one per cent, on a par with the Animal Protection Party. And you can read that liberalism, with its trust in self-responsibility and market processes, is disappearing – because today the ‘ideal of the caretaker state’ dominates, to deliver people from the impositions of freedom.

Such derogatory statements harbour an unshakeable belief that everything would be better if only people were allowed to act on their own responsibility again – evil zeitgeist. Yet this could be the great drama of liberalism as it has been practised in recent decades. Perhaps the insistence on individual forces simply no longer fits as a leitmotif when the challenges include climate change that cannot be stopped by appeals to individual reason. Or the long-term consequences of regional structural disruptions such as in the Rust Belt, in northern England or in many parts of eastern Germany – disruptions that have affected entire regions and which, with the best will in the world, cannot be overcome by individuals. The appeal to self-responsibility sounds like a mockery. These are the strongholds of the populists. This is no coincidence.

The list could be extended – to include a number of contemporary phenomena in which there is a sense of loss of control, even when it comes to migration and crime. If, as modern economics teaches us, there is simply no balance of power in the labour market, the appeal to individual forces sounds like a mockery here too. In recent years, there has also been a pandemic and inflation – also phenomena where appealing to the individual is only of very limited help. These are things that – if you look at them with common sense – can only be solved collectively and together. Which is not to say that communism is coming. It has little to do with fashion. And it could explain why a party that rails against all collective and common simply ends up at the level of the Animal Protection Party in times like these.

But it doesn’t have to be that way. There is still the option of modernising liberalism. However, this includes the admission that real freedom also requires the creation of the right conditions – whether through state infrastructure, proactive regional and industrial policy or minimum wages.

What applies to liberalism as a leitmotif also applies to another major concept: progress. According to the old liberal doctrine, progress is above all what can be measured in terms of productivity and economic performance. And here, too, it could be that this no longer fits the times (if it ever did). We will be discussing this on Thursday in our next New Economy Short Cut with Petra Pinzler from DIE ZEIT and Stefan Kolev from the Ludwig Erhard Forum – 5 September from 4 pm (in German). Register here.

Have a good start to the week,

Thomas Fricke

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