Democratic Capitalism and the European Union
Twenty-five years after the end of state socialism, the history of EU enlargement and integration, coupled with the deepest crisis it has so far faced, have posed the challenge to rethink one classical question of social and political theory: How does the democratic state interact with the capitalist market economy? How has the putative institutional equilibrium of the post-Second-World-War "social" market economy been disrupted and how can it (if at all) be restored at the European level of the EU, i.e., an unprecedented type of supranational political entity?
Following the demise of state socialism, the EU underwent a (still unfinished) process of Eastern Enlargement after which no less than thirteen new member states (all of them, except for one-and-a-half small Mediterranean islands, post-Communist) came under the umbrella of the Treaties and the acquis of European law. So far, four of the latter have joined the Euro zone; other post-Communist transformation countries are committed to following suit in the short- to medium-term future. The economic transition they have undergone is an historically novel one, the transition from the "command economy" of state socialism to the market economy of democratic capitalism. Yet the binary conceptual code of "state" vs "market" has helped to obscure the (I would claim) universally valid condition that applies both to the post-Communist transformation and European integration: The market as the mode of operation of a capitalist economy is, on the one hand, the opposite of the state and its practices; on the other, markets are themselves creatures of state policies and continuously recreated by the latter. In Hayek's famous distinction, the "command economy" is based on táxis , the discretionary establishment and coercive implementation of some man-made positive order. Kósmos , in contrast, is conceptualized as a kind of social order, namely the market that emerges from evolutionary forces beyond human design, intention, and even potential understanding.
No doubt, the binary codes of opposing táxis to kósmos , state to market , the " artificial" to the " natural ," discretionary coercion to freedom has become a hegemonic intellectual frame since the dominance of neoliberal doctrines in economic and political thought began, on both sides of the North Atlantic, in the late 1970s. Yet the two cases just mentioned - economic transformation after state socialism and EU integration - can serve as perfect empirical illustrations of the fact that markets are themselves coercively implemented artefacts of political design and decisions , not outcomes of some alleged "natural" evolution or simply "normal" conditions. Markets, as well as other institutions of capitalist societies, are made and allowed to operate by identifiable actors at specific times and locations; at any rate, they are not " given " nor do they just " happen " naturally. If that premise is accepted, what follows is the need to re-arrange the Hayekian conceptual architecture and to complicate the picture by adding a few items. Let me briefly do so in four points.
First , the difference between the two types of political economy must be rephrased so that the state-socialist type of regime (for Hayek the quintessential case of táxis ) operates the economy through the means of collectivized property, plan, command, control, and by reference to some notion of "social justice" embodied in prescriptive rules 1 establishing positive duties. In contrast, capitalist states run their economies through setting the stage for spontaneous self-coordination of rational interest-driven proprietors, i.e., by granting market participants, by merely prohibiting