What role does political entrepreneurship play in institutional change?

 

One of the reasons I quoted that passage by Douglass North is because it mentions political entrepreneurship. I went looking for a quote from North in Institutions, Institutional Change and Economic Performance because I was particularly impressed by that book when I first read it about 30 years ago. (The quoted sentence appears on page 87.)

As defined by North, institutions are “the rules of the game of society” that shape human interaction. He argued that formal institutions—such as constitutions, laws, and regulations—make up only a small proportion of the sum of constraints that shape choices. Informal constraints include codes of conduct, norms of behavior, conventions, and customs. They may be internalized in personal values, rather than imposed by others.

North acknowledged that political entrepreneurship plays a role in institutional change. He doesn’t have much to say about political entrepreneurship, but his analysis implies that political entrepreneurs may play an important role in reducing transactions costs associated with institutional change.

Path dependence and institutional stickiness

The transactions costs of institutional change are high because of the path dependence of institutions. As institutions evolve, ideologies tend to evolve to support them. Organizations and interest groups that have grown up under existing institutions often have a stake in maintaining them.  

The most important point I had remembered from reading Institutions … is that countries with similar formal institutions – constitutions, property rights etc. – can have vastly different economic performance outcomes if informal institutions (cultural settings) are different. Governments and international agencies that have sought to transplant formal institutions to foreign countries have been slow to recognize that point.

The implications of path dependence have been further explored by Peter Boettke, Christopher Coyne, and Peter Leeson in “Institutional Stickiness and the New Development Economics”, Chapter 6 in Culture of Economic Action, ed. Laura E. Grube and Virgil Henry Storr (2015).  The authors contend that the ability of a new institutional arrangement to take hold when it has been transplanted depends on that institutions status in relations to indigenous agents in the previous time period. They suggest that institutional transplants are unlikely to stick if they are inconsistent with indigenously introduced endogenous institutions.

The analytical framework used by Boettke et al is also relevant to considering the challenges faced by endogenous political entrepreneurs in bringing about institutional change.

Entrepreneurship (political and economic)

As discussed recently on this blog, political entrepreneurship has characteristics that differ from economic entrepreneurship. I suggested that it might be reasonable to assume that political entrepreneurs are motivated largely by the satisfaction they obtain from constructing ideological narratives and selling them, and from exercising the political power required to implement policies.

Nevertheless, there are similarities between political and economic entrepreneurship that become apparent when economic entrepreneurship is considered in a cultural context. In his article, “The discovery and interpretation of profit opportunities and the Kirznerian entrepreneur”, reproduced as Chapter 3 of Culture and Economic Action (cited above), Don Lavoie writes:

“Entrepreneurship necessarily takes place within culture, it is utterly shaped by culture, and it fundamentally consists in interpreting and influencing culture.” (p. 50)

He suggests:

“entrepreneurship is the achievement not so much of the isolated maverick who finds objective profits others overlooked as of the culturally embedded participant who picks up the gist of a conversation.” (p. 51)

Later, he observes:

“Most acts of entrepreneurship are not like an isolated individual finding things on beaches; they require effort of the imagination, skillful judgements of future costs and revenue possibilities, and an ability to read the significance of complex social situations.”

In the following chapter of Culture and Economic Action, Virgil Henry Storr and Arielle John suggest that rather than viewing Lavoie’s contribution as a critique of Kirzner’s theory of entrepreneurship it is more appropriate to view it as a suggestion as to how that theory may be fruitfully amended. The amendments suggested by Lavoie seem to me to make the role of the economic entrepreneur seem similar in some respects to the role of a political entrepreneur.

Max Weber’s understanding of political entrepreneurship

Douglass North seems to have given minimal acknowledgement of Max Weber’s work as a social theorist, even though there was considerable overlap in their areas of interest.  Francesca Trivellato has noted that in one publication North does refer to Weber as a scholar of “the role of belief and values in shaping change”. Weber is, of course, most often remembered for his theory of the Protestant ethic but he also made other important contributions.

Weber’s writings on charismatic and demagogic leadership shed some light on the nature of political entrepreneurship in democracies. The following points summarize an article by Xavier Márquez, entitled “Max Weber, demagogy and charismatic representation”, published in the European Journal of Political Theory (2024).

• Weber argued that effective leaders must be able to fight for ‘causes’ beyond the narrow immediate interests of economic groups or party organisations and thus to struggle against the impersonal forces of bureaucratization (the subsumption of politics under bureaucratic and technical imperatives). Effective leaders must therefore have a charismatic form of authority – the only form of authority capable of overcoming the constraints of organisation, legality and tradition.
• The need to appeal to mass publics in modern democratizing societies selects for leaders who have a talent for mobilising large groups of people through rhetorical means. In the context of mass politics, charismatic authority manifests as demagogy. Weber thinks of the masses as unorganized and irrational and argues that even ‘democratically’ elected leadership is a form of ‘dictatorship which rests on the exploitation of the emotionality of the masses.
• Weber's praise for charismatic and demagogic leadership is tempered by the worry that political leaders must also be responsible. This is so in a twofold sense: objectively, a political system must be able to hold leaders accountable for their actions; and subjectively, leaders must display an ethics of responsibility, and thus be able to ‘take responsibility’ for their actions.
• Elections formalize the recognition of charisma. If charismatic leaders capable of mobilizing and representing broad masses will tend to arise in any case, it is better if the recognition of their charisma is subject to periodic formal tests rather than informal, extra-legal events.
• Charismatic authority in the broadest sense tends to appear in moments of deep, even existential crisis, where the charismatic leader performs a ‘miracle’ for a group that feels otherwise impotent and deeply threatened, and can sustain itself only when the leader can provide such ‘miracles.
• The charismatic demagogue produces a wondrous or miraculous representation of the people as a charismatic community but also a ‘wondrous’ representation of himself.
• Weber argues that charismatic leaders must provide evidence of benefiting their charismatic community if they are to retain their authority. The implicit ‘bargain’ between leaders and followers that exists even in cases of strong charismatic authority allows us to speak of a degree of accountability and influence.
• Instead of distinguishing between the ‘mere’ demagogue and its antithesis, the statesman, in terms of whether or not they deceive the demos or act for the common good, Weber stresses the ethical distinction between the politician who is responsible for their cause, and thus capable of intentionally and rationally directing state power towards its achievement (in what is, strictly speaking, a value–rational way), and the politician who is not.
• Lack of objectivity (wishful thinking, extreme overconfidence, ignoring inconvenient information) in assessing a situation leads to irresponsible political action, insofar as it leads to a misunderstanding of the means necessary to achieve particular ends and the physical, social and political constraints on the use of such means. All leaders are susceptible to these vices, but the situation of the charismatic demagogue, surrounded by adoring followers and capable of summoning the adulation of crowds, makes these vices extremely common occupational hazards.
• Weber hoped that training in committee or party work would hone the political judgement of leaders so that they would be more likely to see the consequences of their decisions and to take responsibility for them. 

Márquez argues that Weber's conception of charismatic authority allows some demagogues to play a genuinely democratic role in modern societies when viewed through contemporary theories of representation. He suggests that a Weberian analysis of democracy points to the need for strong accountability mechanisms and for institutions that socialize potential leaders into productive habits of adversarial conduct and responsibility, while preventing easy ‘buck passing’.

Márquez observes that although Weber provides a stronger sense of democratic possibility than did Joseph Schumpeter, he is very much the ancestor of the ‘minimalist’ model of democracy that Schumpeter first articulated explicitly in Capitalism, Socialism and Democracy. (I wrote about Schumpeter’s model of democracy here in 2012.)

Directions of future research

This essay is the second in a series in which I am attempting to obtain a better understanding of political entrepreneurship. The first essay can be found here.

My next step is to read Robert Faulkner’s book, The Case for Greatness (2007). I am wondering whether the ancients thought it was possible for a charismatic demagog to also be a "great-souled" leader who is keen to promote liberty and opportunities for individuals to flourish. 

After that, I will consider how the concept of political entrepreneurship fits in with modern public choice literature.

Summary and Conclusions

This essay briefly considers the context in which political entrepreneurship is most relevant, some similarities between economic and political entrepreneurship, and the role of charismatic and demagogic leadership in political entrepreneurship within democracies.

The essay begins by considering the role that Douglas North saw for political entrepreneurship in bringing about institutional change – i.e. change in the rules of the game of society. Political entrepreneurship is required to overcome high transactions costs of change that arise from the path dependent nature of institutions. Building on the concept of path dependency, Peter Boettke, Christopher Coyne and Peter Leeson developed an analytical framework to consider the consequences of institutional stickiness for foreigners engaged in institution building exercises that seek to transplant institutions from one country to another. That framework is also relevant to considering the challenges faced by political entrepreneurs seeking to bring about institutional reforms in their own countries.

The essay then turns to consideration of the relevance to political entrepreneurship of Don Lavoie’s view of economic entrepreneurship. Lavoie suggests that entrepreneurship takes place within culture and is concerned with interpreting and influencing culture. He makes the role of the economic entrepreneur seem similar in some respects to that of the political entrepreneur.

The other major topic considered in the essay is the contribution that Max Weber makes to our understanding of political entrepreneurship through his writings on charismatic and demagogic leadership. Weber makes the case that charismatic and demagogic leadership may be required to overcome the impersonal forces of bureaucratization within democracies. He also sheds light on the circumstances in which demagogic leadership can be consistent with democracy.

North and Weber both add to our understanding of the role of the political entrepreneur in overcoming obstacles to institutional change. However, the fundamental question that both leave aside is how to ensure that institutional change enhances liberty and opportunities for individuals to flourish.  

Why is cheap domestic gas a bad policy choice?

 

This is a guest post by my old friend, Geoff Edwards. I refer to him as my old friend not because of his age (he is not much older than me) but because I have known him for a long time. Geoff was my supervisor when I began working in the Bureau of Agricultural Economics in Canberra in 1967, and found a way to give me some interesting research projects to work on. Several years later, Geoff left the Australian public service to pursue an economics career in academia.

The post has its origins in an email message that Geoff sent me a few days ago suggesting that the “east coast gas reservation” plan, recently announced by Peter Dutton, the Leader of the Opposition in the federal parliament, was bad policy. The plan seeks to reduce the domestic price of gas by delivering to the domestic market “an additional 10 to 20 per cent of the east coast’s demand – gas which would otherwise be exported for use in other markets for consumers in those countries.”

Since this proposal was announced at the beginning of the current Australian election campaign, I should make clear that while I agree with Geoff that Dutton’s gas plan is bad policy, I don’t consider Dutton’s Liberal Party to be a greater source of bad policies than any of the other political parties contesting this election. That explains why I have chosen the quote from The Wisdom of Henry Hazlitt to put at the top of this post.

Here is the guest post by Geoff Edwards:

Peter Dutton says his government would separate the domestic price of gas in eastern Australia from the export price.

For efficient resource use for tradeables, whether meat, steel or gas, prices within Australia need to be driven by prices in world markets.

That is fundamental to the liberal trading order long supported by Australia.

Seeking to make the price of gas used in Australia independent of the price in international trade is a policy of distorting the gas market and the broader economy.

Not efficient. Not liberal. Not smart.

High gas prices perform the valuable, albeit sometimes painful, role of discouraging use of environmentally-negative gas in electricity generation and directly.

And imagine the ammunition the domestic subsidy policy would provide to Australia's powerful friend in the US to expand trade restrictions.

In order to relieve pressures on households and small businesses without introducing damaging, incentive-destroying market distortions, cash payments targeted to those judged most in need would be a better way to go.

Geoff Edwards

Kew, Vic, 3101

Addendum

Several comments have been received on Geoff's post other than those below. 

First, here is an exchange between Bernard Wonder and myself on LinkedIn:

Bernard: "Geoff's suggested payments to households could be funded by a reformed resource rent tax."

My response:

It could be funded that way. However, the introduction of such a tax is somewhat complex because the states own the resource (onshore) and mining companies are sensitive to the sovereign risk issues associated with governments extracting a larger slice of rents than companies agreed to pay prior to their investment.

Bernard: "Sounds like a sacred cow, Winton."

My response:

Geoff’s proposal could be viewed as an alternative to the current government’s approach of providing a subsidy to all power users. It is funded from general revenue, which has been boosted by high international gas prices.

Second, an email to Geoff from Neil Bryon:

"I completely agree re Dutton’s gas policy.

Albanese’s house battery proposal is also bad policy, but in a different way - using taxpayer funding to subsidise wealthier citizens to install a very inferior technology.

EV (car batteries) are 4-8 times the KwH capacity of fixed house batteries and a fraction of the cost/unity of storage capacity. If anyone did want a battery to store PV solar power during the day to use at night, (I do not) by far the best and cheapest is a battery on 4 wheels (except Tesla who won’t / can’t do vehicle to house or vehicle to grid). All the Japanese Korean Chinese and most European EVs will.

My general point is that governments are notoriously weak at choosing technology winners ( e.g. many now think NBN was a white elephant once 5G arrived)."

Third, an email to Geoff from David Player:

"Burning gas is a bad thing as it increases the amount of CO2 in the atmosphere which in turn increases the temperature of the Earth, and Global Warming is bad.

BUT

If burning gas significantly reduces the amount of coal being burned, it is the better of the two evils.

Burning coal releases lots of very nasty gases into the atmosphere, while burning 

gas is relatively clean.  Apart from the CO2 of course!"

Can the concept of political entrepreneurship help us to understand authoritarianism?

 

In this essay I discuss the relevance of the concept of political entrepreneurship to an understanding of political outcomes that have substantially affected personal and economic freedom in different countries. The essay has a particular focus on authoritarianism. My understanding of that concept is based on  the view of Hans Eysenck that people who have an authoritarian personality are attracted to the possibility of oppressing others. People who have authoritarian values see such oppression as justified. Authoritarian governments oppress people by restricting their personal and economic freedom to a greater extent than other governments.

The essay focuses on political outcomes which seem incongruent with underlying cultural values in a range of countries. It suggests that political entrepreneurship has influenced the ideologies currently reflected in personal and economic freedom in those countries. It also considers the current role of political entrepreneurship in harnessing cultural and economic grievances to pursue a range of different ends in the liberal democracies.

The essay draws on some of my previous research on the extent to which cultural values can explain authoritarianism and on the influence of cultural backlash and economic grievances on political outcomes in liberal democracies. That research is summarized prior to considering the nature and relevance of political entrepreneurship.

Can cultural values explain authoritarianism?

My answer to that question is that cultural values do not fully explain authoritarianism – the ideologies of some governments are at variance with cultural values. The best way to explain how I came to that conclusion is by referring readers to the accompanying graph which shows levels of economic freedom and personal freedom for 85 countries. Please note that the personal freedom scale on the vertical axis is in reverse order with highest levels of personal freedom at the bottom. (The graph has previously been published in an article in The Savvy Street in 2023.)

Please focus on the labelling of data points. I have attached country labels only to those data points where freedom ratings are substantially different from predicted levels based on indexes of emancipative and facilitating values which were constructed using World Values Survey data. The methodology for constructing these indexes is explained in the Savvy Street article and on this blog (here and here).

The colour of the labelled points depends on whether freedom is greater than or less than predicted—green if greater than predicted, red if less than predicted. The size of the labelled points is larger if both personal and economic freedom are greater than or less than predicted.

It is clear from the graph that freedom ratings of most of the countries with low personal and economic freedom are substantially lower than predicted by corresponding emancipative and facilitating values. The countries in which both personal and economic freedom is less than predicted include China, Iran and Venezuela. It seems obvious that suppression of liberty in those countries is a product of the ideologies of the governments concerned rather than the cultural values of the peoples.  

The graph also shows that a substantial number of countries with relatively high personal and economic freedom are performing better in that regard than can readily be explained on the basis of prevailing values. Most of the countries concerned are not the high-income countries of North America, Western Europe, Oceania, and East Asia that come to mind when one thinks of countries with relatively high levels of economic and personal freedom.

The existence of countries in which freedom levels are substantially greater than predicted by facilitating and emancipative values suggests that government support for economic and personal freedom may precede or accompany the evolution of facilitating and emancipative values. The transition to high levels of economic freedom often takes place over an extended period. As market-friendly economic reforms promote the growth of economic opportunities, this could be expected to lead to the gradual evolution of facilitating values supporting higher levels of economic freedom. The growth of economic opportunities could be expected to encourage people to place higher value on personal autonomy and to become more trusting of others.

Milton Friedman observed that economic freedom “promotes political freedom because it separates economic power from political power and in this way enables the one to offset the other” (Friedman, Capitalism and Freedom, 1982, 9). As economic development proceeds, the evolution of emancipative values provides additional support for personal freedom.

The correlation between economic and personal freedom is strikingly evident in the graph. There are not many countries with relatively high personal freedom and low economic freedom, or vice versa. Argentina—which stands out as the only country having high personal freedom despite low economic freedom—helps illustrate why that is so. In the published article, I suggested:

“In Argentina, the decline in economic freedom over the last 20 years has been accompanied by worsening economic prospects, which seem likely to lead, before long, to an economic and political crisis. Hopefully, the political response to the crisis will be to restore greater economic freedom and make personal freedom more secure, rather than to restrict personal freedom to suppress criticism of government policies.”

A few months after that comment was published, Javier Milei was elected president of Argentina and has successfully introduced policy reforms to expand economic freedom. (Unfortunately, I cannot claim that my essay was influential in bringing that about.)

Cultural and economic grievances as explanators of political change

In the preceding essay on this blog I discuss the question: “Is cultural backlash a major determinant of political outcomes in the liberal democracies?” My intial focus was on the view which Pippa Norris and Ronald Inglehart presented in their book, Cultural Backlash: Trump, Brexit and Authoritarian Populism (2019),  that the spread of post-materialist values has induced a cultural backlash among cultural conservatives. They suggested on that basis that the combination of authoritarianism and populist rhetoric is a threat to liberal democracy.

In my view, Norris and Inglehart were mistaken in attributing cultural backlash to the spread of post-materialist values. I argued that it would be more correct to attribute cultural backlash to the illiberalism of progressives who have been advocating what Yascha Mounk has described as the identity synthesis (see: The Identity Trap, 2023). The identity synthesis has provoked a backlash because it rejects neutral rules like equal opportunity and free speech in favour of action to promote the interests of particular groups that have suffered from discrimination in the past.

Some recent research by John Burn-Murdoch, published in the Financial Times ‘Why the Maga mindset is different’, March 7, 2025) has suggested that over the last 20 years the values held by people who identify with the right wing of U.S. politics has moved closer to the values of people in Turkey, Russia and China than to people who identify with the right wing of politics in Europe. It remains to be seen what impact, if any, this apparent retreat from classical liberal values will have on the institutions of liberal democracy in the United States. 

Norris and Inglehart acknowledge that economic grievances also play an important role in encouraging people to support policy remedies proposed by populists. In that context, I have referred to some research published in an essay on this blog that has highlighted the adverse impact that slower economic growth can have on life satisfaction, particularly of young people. I suspect that the longer-term slowdown in economic growth in the liberal democracies might be more important in generating support for populist policies than are grievances that can be related directly to the impact of import competition or immigration.

However, we live in a world where the policies that political leaders sell to voters depend on how voters perceive reality. Those perceptions are not always accurate. Some opinion leaders on both the progressive and conservative sides of politics attempt to sell voters a distorted view of reality. As I wrote that I was reminded of a comment I made in my review of Michèle Lamont’s book, Seeing Others, 2023. I suggested:

“On the question of factual accuracy, Lamont’s narrative, which suggests that the workers have reason to be angry with the wealthy one percent, seems to me to be just as questionable as Donald Trump’s narrative which suggests that the workers have reason to be angry about globalization and immigration. Neither of those narratives promotes an accurate understanding of economic reality.”

The concept of political entrepreneurship

Catherine De Vries and Sara Hobolt have suggested that competition between political parties in European countries is like competition in economic markets. In both contexts long-standing dominant players (firms or parties) may be challenged by disruptive new players. The central objective for both challengers and incumbents is the control of government and the delivery of public policies. Political entrepreneurs play a key role because a party that engages in successful political policy innovation can enjoy an effective monopoly on an issue and reap the consequent electoral benefits. (De Vries CE, Hobolt SB. Challenger Parties and Populism. LSE Public Policy Review. 2020; 1(1): 3, pp. 1–8. DOI: https://doi.org/10.31389/lseppr.3)

De Vries and Hobolt were writing about multi-party systems in which several political parties are competing for power. However, a similar form of competition occurs when an innovative political entrepreneur within a major political party challenges established leadership factions by offering a product that is more appealing to supporters of the party.

Valentina Ausserladscheider has contributed to an understanding of political entrepreneurism by providing a framework to consider reasons for the political success of Jörg Haider, the leader of the Austrian Freedom Party, during the 1990s. Haider’s winning formula was based on a policy mix of authoritarian and and neoliberal policies, which was particularly successful during a time of economic turmoil and uncertainty. (See Chapter 9 of Culture, sociality, and morality : new applications of mainline political economy edited by Paul Dragos Aligica, Ginny Seung Choi, and Virgil Henry Storr, 2021).

Ausserladscheider emphasizes that the strategies of political entrepreneurs are not determined solely by voters’ ideological positions. Successful political entrepreneurs don’t offer the same policies as their competitors. They advance their political ambitions by focusing on niches in the marketplace of ideas that established parties do not satisfy, and on winning support by emphasizing the problem-solving capacities of their ideas. For example, the entrepreneurial strategy of far-right parties is their “nationalist and nativist core ideology”, leading to policies such as immigration restrictions that are claimed to solve a range of problems.

As illustrated by the example of Jörg Haider, the strategies that political entrepreneurs follow to attract support can result in political programs that offer a mix of libertarian and authoritarian policies.

The influence of political entrepreneurs

From a cursory inspection of the accompanying graph, people who have rudimentary knowledge of global politics would have no difficulty identifying political entrepreneurs who have historically been major players determining outcomes in many jurisdictions where economic and personal freedom seems substantially at variance with underlying cultural values. There are good reasons for that. Media coverage tends to focus on political leaders, the challenges they face and the policies they adopt.

The role of political entrepreneurship is not always obvious in liberal democracies where the institutions of representative government have been respected for many decades. However, it doesn’t make sense to assume that changes in public opinion will be automatically reflected in public policy even in countries with representative government. In general, the responses of political markets to new information (e.g. poll data about shifts in public opinion on particular issues) depend to a much larger extent on decisions by big players than do responses to new information in financial and commodity markets.

A better understanding of the reasons why political entrepreneurs behave as they do might help us to assess whether current political developments are likely to expand or constrain economic and personal freedom. Those outcomes depend on both the motivations of the individuals concerned and on the social and economic context in which they operate.

Like other humans, political entrepreneurs are motivated by a range of factors. It is usually unrealistic to assume that they are motivated solely by a desire to maximize social welfare (whatever that means), to maximize the number of votes they obtain, to maximize personal wealth, or to obtain the perks of the office. Given the nature of their occupation, however, it seems reasonable to assume that political entrepreneurs obtain more satisfaction than most other people from constructing ideological narratives and selling them, and from exercising the political power required to implement policies.

In some instances, ideological predilections may play a dominant role. For example, while social and economic context helps to explain why revolutions occurred in China and Iran in the 20^th century, the repression of individual liberty following those revolutions stemmed directly from the ideologies of revolutionary leaders - Mao Zedong in China and Ayatollah Khomeini in Iran.

Similarly, while the economic problems confronting the United States and Britain during the 1980s provided contexts in which substantial changes in the direction of economic and social policies could be contemplated, the responses of Ronald Reagan and Margaret Thatcher owe much to their respective commitments to economic freedom. The reforms currently being pursued by Javier Milei in Argentina seem to be similarly motivated.

Looking around the world, a range of different ideological predilections seem to be playing a role in policies advocated by political entrepreneurs. For example, we see ideological considerations playing a role among those seeking opportunities to expand the welfare state, to redistribute wealth, to promote “equity” for community groups which have suffered from discrimination in the past, to save the environment from CO2 emissions, to pursue international humanitarian goals, or to pursue nationalist goals by restricting immigration, raising trade barriers, and withdrawing from international organisations. Some of those policies have potential to impinge adversely on economic and personal freedom.

As we have seen earlier, even if political entrepreneurs are motivated mainly by a desire to exercise political power, the innovative aspect of their role requires them to focus on niches in the marketplace of ideas that established parties (or factions) do not satisfy. They seek to attract support from people who are discontented with current economic and social outcomes by emphasizing the problem-solving capacities of their ideas. Their success in attracting a loyal support base of customers who are willing to help them to sell their narrative depends to a large extent on the strength of competition from politicians selling different narratives, and on the extent of resistance by journalists and members of the public who consider their narratives to be incorrect or that their policy proposals are unworkable, unconstitutional, unethical, or otherwise unhelpful.

In my opinion, the ability of some political entrepreneurs (from both conservative and progressive sides of politics) to persuade large numbers of people to accept false narratives is posing an increasing threat to liberty in the liberal democracies. False narratives pose a threat to liberty because they often provide a basis for false beliefs that problems can be solved by restricting personal and economic freedom. For example, the personal freedom of people who refused vaccinations for Covid was restricted inappropriately in many countries because of false narratives that unvaccinated people were likely to spread infection. And economic freedom is currently being restricted in some countries through imposition of higher import barriers on the basis of false narratives about the impact of free trade.

A few decades ago, people seemed to have been more willing to put their trust in political commentators who took pride in remaining politically independent and well-informed. Those commentators were able to expose false narratives to a greater extent than now occurs, and thus to limit the influence of political entrepreneurs who base their policies on falsehoods.

In recent years, however, mainstream media has become increasingly polarized. The rise of social media seems to have aggravated the problem. Many exchanges of views about political issues on social media consist largely of recitations of false narratives promulgated by political leaders.

Some commentators who are independent and well-informed can still be found in both mainstream and social media, but prevailing cultures may need to give greater respect to the search for truth before those people will have sufficient influence to discourage political entrepreneurs from promoting false narratives.

Conclusions

Authoritarian and libertarian political outcomes don’t just appear out of nowhere. Underlying cultural values that have evolved over long periods of time go some of the way toward explaining levels of economic and personal freedom in different countries. However, political entrepreneurship also plays an important role.

The role of political entrepreneurs is most apparent in those countries where underlying cultural values are less supportive of economic and personal freedom. Political entrepreneurs have played an important role in some of those countries in promoting either more or less freedom than would be expected on the basis of underlying cultural values.

The role of political entrepreneurship has been more constrained in those liberal democracies where the institutions of representative government have been respected for many decades.

However, the ability of some political entrepreneurs (from both conservative and progressive sides of politics) to persuade large numbers of people to accept false narratives is posing an increasing threat to personal and economic freedom in the liberal democracies. Polarization of the media means that such claims are now less subject to independent scrutiny than they were a few decades ago.

Recent political developments are raising the question of whether cultural change in some liberal democracies has emboldened some political entrepreneurs to challenge conventions regarding government respect for judicial rulings on the legality of their activities. Governments that do not perceive themselves to be bound by judicial interpretation of laws and constitutions are unlikely to have much regard for individual liberty. Any government which claims that its actions are beyond legal challenge because they reflect the general will of the people is showing obvious signs of authoritarianism.

Addendum

Chris M Sciabarra has given me permission to publish the following comment, which he has provided by email:

"I just read the essay and enjoyed it; I'll have to give a bit more thought to it. You make some very good, persuasive points, though there are some claims that I need to process a bit more. I think the whole concept of political entrepreneurship has some weight here. I wonder how, for example, it might mesh not only with public choice thinking, but also with Hayek's insights about how the 'worst get on top' when political power becomes the only power worth having. If that's the case, then political entrepreneurship in a populist age morphs into a kind of political con game that attacks the very roots of liberal democracy---something you acknowledge in your conclusions.

One of the issues that concerns me is that while there was a backlash against the "identity synthesis" of illiberal progressives, I don't think that was the key factor that influenced the outcome of the election. Incumbent parties lost all around the world, whether they were perceived as 'right'- or 'left'-leaning. In the US, of course, Trump won over Harris. In the UK, the Conservative Party was defeated. The Liberal Democrats lost in Japan, while in France, a coalition of left-wing and centrist parties gained ground. And so forth. I think that inflation, stagnant wages, housing affordability, etc. led most incumbents to defeat because whoever is in power is the party that takes the blame for the conditions on the ground. 

That said, I also think that the "identity synthesis" on the illiberal left has only been replaced by a different kind of "identity synthesis" on the illiberal right, given the right's embrace of nationalism and, in many cases, a virulent form of nativism, riding on profound anti-immigrant fervor. Not to mention the illiberal right's obsession with scapegoating the smallest of minorities---like transgender-identifying people, who make up about 0.6% of the population. This is as much of an illiberal right-wing play on identity politics as anything we've seen on the left." 

Chris has now posted a more extensive review on Notablog . 

Notablog is also worth visiting for other reasons - including the opportunity to take a break from worrying about authoritarianism to listen to the "Song of the Day". 

An interesting diagram

I think the following diagram captures very well the illiberal cultures on the authoritarian socialist and authoritarian nationalist sides of politics, and the overlap between them.

Stephen Hicks posted the diagram on X and asked if anyone could tell him where it came from so that that he could give credit. I would also like to give credit to the person responsible for constructing this.