Is Liberalism Dead?

Andreas Freytag

Friedrich-Schiller-University Jena

Dr. Andreas Freytag is Professor of Economics at the Friedrich-Schiller-University Jena, Honorary Professor at the University of Stellenbosch, and Visiting Professor at the Institute of International Trade, University of Adelaide. He is also Director of G20 Trade and Investment Research Network. He is a DAAD/AGI Research Fellow in October and November 2023.

Dr. Freytag obtained his diploma from the University of Kiel and his doctorate as well as his Habilitation from the University of Cologne. He has published a number of books and articles in first-class peer-reviewed journals on economic policy, international trade policy, development economics, and international policy coordination. He contributes to blogs and for over ten years had a weekly column on wiwo-online, a German magazine.

During his time at the AGI, Andreas Freytag will focus on the substance and path of tightened transatlantic relations against the background of the systemic competition between the West and autocratic states. The latter comprise some emerging economies, including Russia and China. This escalation has geo-political and geo-economic consequences and makes it necessary to strengthen the ties between transatlantic partners as well as to reach out jointly to attract third countries to the Western values.

To maintain Western leadership in standard-setting as well as helping developing countries to enforce universal human rights and environmental standards, there needs to be a coordinated and broad-based strategy to (1) react to Chinese et al. attempts to define and set standards, which become binding for third countries’ companies. Similarly, (2) due diligence legislation may also be more effective if coordinated across the Atlantic. Although not in the center of analysis, another (3) aspect deals with the transatlantic trade relations as such, which are also in need of a revitalization.

This project focuses on the geo-economic aspects of systems competition although it is difficult to disentangle economic and political relations. It analyzes ways to intensify the transatlantic relations with the objective to maintain economic welfare as well as to position the Western partners better to counter autocracies’ attempts to gain influence in the world economy.

Originally appearing in Wirtschafts Woche on October 4, 2013, this essay is reprinted here with the author’s approval. In addition to a Professorship in the Chair for Economic Policy at Friedrich-Schiller-Universität Jena and a column in Wirschafts Woche, Dr. Andreas Freytag contributes at AGI both in print and at events.

Read in German

After the Free Democratic Party (FDP) failed to enter the Bundestag, many are concluding Liberalism has come to an end. Some supporters of the Green Party and, presumably, most followers of the Left Party are already rejoicing. The joy at these parties’ campaign events after the election stemmed almost exclusively from the FDP’s even stronger failure. Are they right? Is Liberalism dead?

It is true that freedom has become something abstract and insignificant for most people―something you do not need to fight for. Political discussions focus on other topics now, such as distributive justice, quota allocation, the minimum wage, and taxes on the rich.

The impression arose that people are no longer responsible for their own lives. Instead, others, such as politicians and bureaucrats concerned with social policy or the members of the European Commission, have taken over this task. The motto is: you live, while we take care for the details.

The ones devoting themselves to these politicians’ offers really are giving up their freedom, and this is where the danger arises. In aspiring to eliminate the apparent and actual inequalities of life, politicians continue to limit individual freedoms and believe that doing so is both good and minimizing risks for the people. Thereby, the elites are taking the people’s power of responsibility.

But not everyone is accepting more interventions in individual rights and freedoms. What some view as increased security―which is often not the case; even the job security of former East Germany proved to be deceiving―others view as terrible paternalism. They cannot experience their freedom, and thus, they are unable to take responsibility for their own lives because those who want to be free need to act responsibly. For some, this is a promise; for others, a threat. Many people forget: in order to act responsibly, one in turn has to be free.

Furthermore, freedom is not limitless, and it does not refer to the survival of the fittest. Even in liberalism there are restrictions to freedom, which are enforced when interacting with the rights of others. Liberalism also knows social policy to a certain extent. However, one thing liberals do not need is a Veggie Day!

A Great Opportunity for Liberalism

After these fundamental and in no way new thoughts, one questions remains: Is the survival of German liberalism dependent on the FDP entering the Bundestag? The answer is no, as in past election terms the FDP has only poorly protected freedom. It did little to enforce European laws that protected the people from free-spending governments or to reform the fragile European currency. The FDP was unable to oblige the finance minister to enforce a transparent and efficient tax system. Furthermore, it allowed public television to effortlessly take money from the people, without justifying the quality of their programs or necessity of their spending. Public television has not proven to be a freedom fighter at all.

The FDP did not protect civil liberty very well either and during the campaign completely forgot to highlight the policies it has proven to excel in, such as health care or its progressive development efforts. It seemed as though the party had been hollowed out, and, however disenchanting, one can conclude that a yellow tie does not make a liberal.

Thus, its absence from parliament is justified, but at the same time, it offers a great opportunity for liberalism in Germany. The party now has to reinvent itself in a process that will be long and painful. This process will highlight civil liberty, economic freedom, open markets, stable monetary policy, and self-responsibility―which could very well fail―;all with the foundation of social security. The FDP will regain its position as the strongest liberal party if this reinvention is successful.

This would also increase its success in upcoming elections, as current coalition talks show that advocates of freedom are very rare in the German Bundestag. A reinvented and strong liberal party should be able to pressure the government without being in parliament.

Liberalism is not dead; it just needs better political representation.

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American-German Institute.