The Croly Ghost

Exorcising the specter haunting American politics

Virginia Postrel from the December 1997 issue

(Page 2 of 2)

America is an amazing place: creative, generous, and productive, with so many cultural nooks and crannies that no one can comprehend them all. Ours is a country whose greatness lies in its plenitude, the sheer diversity of niches--business, cultural, artistic, stylistic, intellectual, athletic, philanthropic, technical, you name it--it continuously creates and fills. (I owe the apt term plenitude to anthropologist Grant McCracken's book by that name, available at www.cultureby.com.) Plenitude is exciting, fun, stimulating, cool. It allows more people to be happy more of the time. It defies rigid status categories, whether "traditional" or "multicultural," in favor of the fluidity of choice and contract. It is a source of progress and competition, of the essential variations in the evolution of a dynamic civilization.

Crolyism despises plenitude. As a governing doctrine, it is inherently intolerant, demanding conformity to a central purpose. "In becoming responsible for the subordination of the individual to the demand of a dominant and constructive national purpose," wrote Croly, "the American state will in effect be making itself responsible for a morally and socially desirable distribution of wealth." To the distribution of wealth, we can add a host of other private matters, from the correct relation between employers and employees to the intimate structures of family life to the proper forms of art. In a Crolyist state, the National Organization for Women can imagine no way to peacefully coexist with the Promise Keepers--for one vision or the other must define the "dominant and constructive national purpose."

Classical liberalism, by contrast, was built on the idea of peaceful coexistence. It evolved as an alternative to unceasing religious wars. Its 21st-century version--which emphasizes dispersed knowledge, competition and feedback, and evolutionary learning, as well as personal freedom--is the only political philosophy that makes room for plenitude. "There is a common culture that unites the world of plenitude," McCracken writes coyly. "It is, I think, and this will please no one, the marketplace. This is the great lingua franca of the contemporary world. As long as we can meet somewhere in the exchange of something for the benefit of someone, we have a foundation that can sustain plenitude."

The question, then, is how to sustain in turn the foundations of the marketplace--such free institutions as property rights, contract, the rule of law, and freedom of conscience and expression. This is not an easy question, which is why it is so often finessed with slogans. It actually has several components: how to move toward freer institutions, how to protect them, and how to define them. What exactly is meant by "property rights" or "the rule of law" is not obvious in every context--What about commons? Spillover effects? Intellectual property? Incomplete contracts?--nor is the relation between legal institutions and cultural habits and beliefs.

By dismissing free institutions as annoying impediments to political action, Crolyism has pushed such fundamental issues out of public view. But scholars have continued to think about them. As a serious intellectual movement, classical liberalism is not only as vibrant as ever, it has become downright trendy. The questions it asks are interesting, deep, and practical, a sure recipe for scholarly attention.

In mid-September, a remarkable conference was held at Washington University in St. Louis, the first meeting of the International Society for the New Institutional Economics. NIE builds on the work of two Nobel laureates, Ronald Coase, who has asked such basic questions as, "Why are there firms?," and Douglass North, who asks why some economies have grown faster than others and examines how they developed the institutions that permitted that growth. With no advertising except the society's Web site (sykuta.business.pitt.edu/NIE), the conference organizers expected 40 or 50 attendees; they had to close registration at more than 200, from 20 countries and all the social sciences.

The NIE conference was testimony not only to the power of cyberspace to nurture international communities but also to the vitality of serious alternatives to Crolyism (even at the World Bank, where NIE-inspired researchers are actually pondering such issues as "the sources of secure property and contractual rights"). Conventional political discourse continues to define government as the manipulative determiner of national purpose, but the twin challenges of Third World development and postcommunist transition have revived the fundamental insight of classical liberalism--the idea that government best serves its citizens by limiting itself to enforcing neutral rules. Figuring out how to turn that insight into policy is both an intellectual and a political challenge. But the idea itself is a "governing doctrine" worthy of American greatness.

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