Markets and Civil Society

The European Experience in Comparative Perspective

Victor Pérez-Díaz, Victor Pérez-Díaz

• Publisher: Berghahn Books
• Year: 2009
• ISBN:
  9781845459376
• Edition: 1
• Topic: History
• Subtopic: World History
• Index: History

The nature of the currently emerging European society, which includes the economic and social transformation of Eastern and Central European countries, has been hotly debated. At its center is the relationship between markets and civil society within political and social contexts. The contributors to this volume offer perspectives from various disciplines (the social sciences, conceptual history, law, economics) and from several European countries in order to explore the ways in which markets influence various forms of civil society, such as individual freedom, social cohesion, economic effectiveness and democratic governance, and influence the construction of a civil society in a broader sense.

Part I

MARKETS, CIVIL SOCIETY
AND POLITICS

Chapter 1

MARKETS AS CONVERSATIONS

Markets’ Contributions to Civility, the
Public Sphere and Civil Society at Large

Víctor Pérez-Díaz

The economy is embedded in politics and society, as today’s neo-institutional and Austrian economists as well as economic sociologists point out (Boettke and Storr 2002; Granovetter 1992; North 2005; Swedberg 2005a, 2005b), and historians have known for long (Braudel 1973: 444), but the reverse is equally true.¹ We should understand the different ways of functioning of these spheres and how the boundaries between them are maintained, but also how these spheres complement and reinforce each other and how their boundaries are continually crossed. Markets are influenced by politics and society while market experiences shape each one of them in return. The connection going from the markets to the other spheres is the focus of this chapter. I am also interested in understanding how markets and these other spheres may cohere in an orderly whole.

Coherence, or orderliness, is a matter of gradation. But while the development of society brings with it a growing complexity and institutional differentiation, yet a modicum of internal compatibility between the different institutional spheres of society is necessary for society to hold together and continue to grow; otherwise, it may retrogress and, in time, disintegrate. Of course, one way or another, societies continually change. They change because real, individual agents pursue manifold strategies and make use of the existing repertoire of meanings, rules and resources for achieving certain aims or for upholding certain values, that may be at variance with each other.² In so doing, institutional and cultural tensions develop which, in turn, combine with the effects of pressures originating in the environment to push change even further. Nevertheless, the proposition that, for sustained periods of time, a minimum institutional fit is necessary holds true, as individuals need it for making their own life plans, engaging in their particular strategies and standing up for their values.

In trying to understand this process of change, we should be aware that the neatness of ideal-typical modelling is not to be confused with the untidy facts of real life. Still, some conceptual ordering is required both for theoretical and practical purposes; even though ideal types are not supposed to correspond to actual developments, they may help us to understand and evaluate them. However, not all models have equal value when it comes to making sense of historical experience, and, eventually, many reveal themselves to be inadequate to the task, and are disregarded. Thus, the realities of socialist life may weaken our current interest in Marxism as an analytical and normative model, while this may not be the case as regards some so-called bourgeois ways of thinking; even the ‘messy experiences of bourgeois life’ (Habermas 1989: 329) still allow us to keep an interest in that seemingly most archaic specimen of ‘bourgeois ideology’, namely, the theory of civil society in its old-fashioned, Scottish variety.

A Brief Summary of the Argument

The points I intend to make are, basically, three: (1) that markets should be understood, in an ideal-typical manner, as part of a general social order which I refer to by the ancient expression ‘civil society’; (2) that markets may reinforce that order by shaping and influencing politics and society so that they proceed, or function, in a civil manner; and (3) that we may get a better grasp of the way markets act and achieve this effect by developing an understanding of markets as conversations.

Markets are part of, and shape, civil society understood (in ideal-typical terms) in a broad sense. This broad view of civil society (henceforth, CS)³ has an institutional and a cultural dimension. As a set of practices and institutions, CS brings together, in a systemic whole, the spheres of free markets; of a liberal (and democratic) polity defined by the rule of law, limited and accountable government, and a public sphere-cum-free elections and a representative body; and of a plural society in which voluntary associations and other communities (civil society in a restricted sense: Pérez-Díaz 1995, 1998) play a crucial role. Markets, free polities and plural societies are processes of strategic and communicative interactions which operate within given institutional frameworks, but these institutions cannot be sustained in the long run unless people develop civil (and civic) virtues which provide them with the proper abilities and inclinations to participate in them.

The broad and composite view of CS belongs to a living tradition anchored in the peculiar historical experience of certain seventeenth- and eighteenth-century Euro-Atlantic political communities. That time and place provided the relevant historical context for the Scottish thinkers who put the various pieces of the theory of CS together.

Of course, we must distinguish between an analytical and normative model and the actual workings of any given society. An economy of free and open markets that is subject to the rule of law and proscribes fraud and violence is a model, a regulative idea, that helps us to understand a historical situation and may eventually inspire policy. But it is not a substitute for reality; in fact, there are abundant records showing how the real economies of so-called capitalist democracies of our time incorporate the survival, and even revival, of collectivistic and authoritarian practices.

The historical record shows that markets as well as liberal democratic governments can fail, and do fail. It is not only a matter of under-performance. Economic entrepreneurs may collude with public magistrates to defraud and exploit a gullible and passive public. They can make a mockery of the rule of law by controlling the administration of justice. Oligarchic parties may enter into an unholy alliance with media conglomerates of the left or right, and they may distort a liberal democratic polity and lead the way to corruption, tyranny, Caesarism or authoritarian politics. The public space may be polluted by lies and threats, propaganda and violence. All such developments are deviant and pathological from the viewpoint of a normative theory of CS, but they should be expected to happen under certain conditions.

These practices show ways in which business, government officials, big unions, media conglomerates and the like conspire to reduce the scope of, and distort, a market economy; and, of course, explaining these practices, in their historical context, implies a change in the level of analysis and the use of an array of complementary theories to that of CS as such.

In this chapter, I keep my discussion at a rather general level while I attempt (in the second section) to restate the traditionally broad conception of CS and suggest its relevance for a better understanding of our times, while also reinforcing our links to our historical roots.⁴ Then (in the third section), I develop a view of markets as conversations, that is, as a system of communication (mostly, but not entirely, by non-linguistic means) which works as an educational mechanism shaping people’s habits. In turn, these habits may help them to develop a complex of capacities and dispositions, of civil (and civic) virtues, which we can bracket together under an ample rubric of ‘civility’. Again, a caveat is included here regarding the obvious possibility that real markets depart from this ideal-typical discussion, and due acknowledgment is made to the ‘dark side’ of real markets (which, by the way, is analogous to the dark side of real liberal democratic polities and of real voluntary associations). Finally (in the fourth section), I explore the scope and the limits of the civilizing effects that free markets, thus understood, have in the realm of politics and the public sphere: on the development of civic capacities, on the formation and preservation of fairly well integrated political communities, and on the relations between citizens and public magistrates as well as the political class at large.

A last word of caution. As presented here, the theory of CS is neither a substitute for reality (as indicated) nor a substitute for a theory of a good society as such. It denotes a reasonable set of institutional arrangements that allows for people with different comprehensive views of the good to live together, peacefully, while trying to enact their ultimate moral views in the various spheres of social life.⁵ In a sense, civil society is not so much a good society as it is a superficial order which is ‘good enough’ for the purpose at hand.

Back to Civil Society in Its Broad Sense

The Scottish Philosophers’ View of CS in Context

A broad, composite understanding of the term ‘civil society’, encompassing social and political institutions, has been part of Western tradition for many centuries, dating back as far as classical political philosophy, civil jurisprudence, medieval political theory, the new scholastic and the Renaissance humanists. The Dutch and Anglo-Saxon thinkers of the seventeenth century, and, in particular, the Scottish philosophers of the eighteenth century, were the starting point for a new avatar of the concept of CS in modern times; but in order to understand this modern version better, we must put it into historical and intellectual context.

During Europe’s early modernity, an expansion of overseas markets and profound demographic and agrarian transformations came along with far-reaching cultural and technological changes. As a result, a mosaic of small, circumscribed local or regional worlds (of micro-cosmos in Fernand Braudel’s terms; 1990: 114) became parts of a network of larger political units and of extended, spontaneous orders of economic and social exchanges of all kinds, so that, by the eighteenth century, Europe had become a system of states (Pocock 1999: 2, 20, 310), in which governments engaged in a certain amount of dialogue with significant segments of their subjects-citizens, religious and political dissent was gradually permitted, markets and commercial transactions multiplied, and a cultivation of manners spread among increasing numbers of the educated, wealthy sectors of society. Thus, a society based on markets, limited government, a public sphere and voluntary associations was not a mere theoretical construct, no more than an analytical or normative model with a distinguished intellectual tradition behind it: it had become the historical horizon, the plausible, attainable reality of significant parts of Europe at the time.

Even then, this world had to be thought out and understood by the people concerned. The Scottish philosophers of the eighteenth century had that world-historical experience within their grasp, and they attempted to theorize it. From their own singular half-local, half-cosmopolitan perspective (midway between Glasgow or Edinburgh and London so to speak), they put together the different narratives and conceptual schemas which they had inherited from a civic tradition, the tradition of natural jurisprudence and the discourse on civility and manners of a polite society. In this way, they constructed a new discourse of the genesis and structure of modern ‘civilized’ societies.

At the same time, their choice of arguments was not merely theoretical; it had a normative and evaluative, and lastly an existential dimension to it. In a fairly deliberate way, while trying to understand the historical situation they faced, they engaged in it and, in a sense, they embraced it as well. They made the choice between clinging to the independent nation that Scotland had been in the past, and being part of the United Kingdom. They chose the Act of Union (1707) as a vehicle for a different Scotland in the future, which meant opting to engage in a system of expanding markets, representative government and public debate, and in a new social world in which the so-called mingling classes would play an ever-increasing role. They chose to do all of this along with most of the middle and upper strata of the Lowlands to which they belonged.

Furthermore, the Scottish theorists were brought various theoretical languages through a variety of institutions and recent experiences (exiles returning home after a sojourn in Dutch universities, and a milieu of professors, civil servants and Whig aristocrats, among others), which provided them with the tools to articulate a new current of thought; while, at the same time, the historical situation itself provided the challenge, the motivations, a repertoire of institutional mechanisms already to hand, and the climate of intellectual debate for doing so.

At the heart of the Scottish intellectual project lay the tradition of natural jurisprudence as it was transmitted from Dutch scholars of the seventeenth century. This was primarily built around the principle of justice ruling the social exchanges between autonomous actors, based on respect for their private property and the fulfillment of their contracts and promises, but it was complemented by other principles. Iustitia, for one, might be a key virtue of that civilized, civil society (CS), particularly in the economic sphere, but it was not the only one, since it must combine with some form of benevolence in the social sphere as well as civic virtue in the political one. Together, justice, benevolence and civic virtue constitute a broad moral character of ‘civility’ understood as a combination of those civil virtues which fit into and facilitate the proper workings of a CS in its broad sense.⁶ In fact, the Dutch experience of the seventeenth century bore witness to this combination of iustitia, benevolence and civic virtue. These were assumed to be characteristics of the burghers, who were engaged, on the one hand, in their economic pursuits, family life, neighborhood activities and associational experiences of all kinds (in their churches, philanthropic societies, etc.), and, on the other, in city and political affairs (Schama 1988: 7). The view of society in the tradition of natural jurisprudence, dating as far back as Cicero, is that of a self-governing system of social, spontaneous coordination among rational, autonomous agents, but only up to a point. In fact, the whole cannot work unless there is a balance between the free, private arrangements of the individual actors, the institutional framework, and the attending role of legislators and those s...