Chapter 9

 

 

                                                Karl Popper’s Vienna, Or,

The Straitjacket of Mainstream Social Science

 

 

            Today (in the year 2001) the social democratic party of Austria (SPO, Sozialistische Partei Osterreichs) is more concerned with avoiding moving backward than with moving forward.  It is out of office.  It is more concerned with defending Austria’s social safety net against cuts being made by the governing “blue/black” coalition than with improving the welfare state.  Its core electoral constituency, the industrial working class, has shrunk and is still shrinking.  The SPO is still tainted by the dramatic exposures of corruption that took place during its years in office.  It is still suffering from association with real and alleged inefficiency in government bureaucracies and in state-run enterprises.  It has moved from being a working class party, to being a people’s party, to appearing to be (in the eyes of its critics) an opportunistic party of the political class.  The social democrats have found it hard to convince anyone--least of all the young intellectuals and post-materialists who support the new Green Party--that they can pilot Austria’s economy to serve the ends of prosperity, justice, and sustainability in the uncharted waters of globalization.  Young workers, who are often the losers, the victims of globalization, have been turning to Jörg Haider’s (“blue”) xenophobic right-wing populist “Freedom Party”--a depressing reminder of the masses of impoverished and anti-Semitic working people who flocked to the Nazi banners in the 1930s.[1]  Pessimists say that in any event it hardly matters what the Austrian social democrats do because whatever they do the future of the working people of Austria is out of their hands, out of Austria’s hands, out of the European Union’s hands, out of human hands.  The future, the pessimists say, will be determined by the impersonal forces of the global market.

            In the face of this discouraging situation, we offer an encouraging thesis: that a way forward (or, rather, a series of ways forward) can be usefully named by rehabilitating an old principle from social democracy’s past: “system-changing reforms.”  Instead of proceeding directly to elaborate the concept of “system-changing reform,” we shall first provide context by discussing some features of Austria’s historical experience and some issues concerning the methodology of research in the social sciences.    

            Our aim is not to suggest an electoral strategy for a party, and our thesis concerns civil society and international organizations as much as the state.  Our aim is to advance the ethical construction of social democracy, which we take to include perfecting and supplementing the logic of exchange to make it serve ever better the aims of use, and to include building cultures and societies that are able to employ the profit motive where it is useful, but that are not addicted to it.  Societies should be able to live without unhealthy profit-motive dependency, and without suffering severe withdrawal symptoms when the profit motive falters.  

            We do not aspire to contribute anything to scholarship on Austria, a country about which we have no special expertise.  We are using a few reflections on Austrian history to provide a supporting context for a philosophical discussion of basic concepts. We are continuing the discussion of the same issues raised in connection with Spain and Sweden, about which we have no special expertise either.  In this chapter, however, we place greater emphasis on what works (or would work) as distinct from what does not work. 

 

            Historically, we will focus on the administration of Bruno Kreisky, who was the socialist chancellor of Austria from 1970 to 1986.  Our methodological discussion will focus on some key ideas concerning political philosophy and the role of the social sciences, whose most famous and influential formulation is found in The Open Society and its Enemies by Karl Popper, written in the years 1941-1942 and first published in 1945.

            The Kreisky era (1970-1986) can be considered the high water mark of Austrian socialism.  It was the only period in Austrian history in which the socialists won consistent majorities at the polls.  They held office without a coalition partner from1970 to 1983 (Sully 1982: 201-35; Jelavich 1987: 302, 304-06).  (However, the pressure for consensus inherent in the post-World War II “Austrian Way” was then still so strong that governing without a coalition partner did not imply, as it might have implied in some other countries, that the government used its majority in parliament to rule unilaterally.)  The welfare state was comprehensive and well established, and apparently irreversible.  As is typically the case when nations achieve a high level of social justice, crime rates were low.  Austrians were proud of living in one of the safest countries of the world, characterized by social partnership, not social conflict.[2]  Austria played a conspicuous and constructive role in world politics.  It was firmly established among the ten or twelve richest nations in the world, according to the admittedly crude indicator of Gross Domestic Product per capita, along with other West European social democracies like Norway, Sweden, Denmark, Holland, Switzerland, and the Federal Republic of Germany (Sully 1982: 227).  (Then as now any short list of the world’s richest countries in per capita terms will show that many of them have had social democratic parties in office either alone or in coalition with other parties, most, or at least a good part, of the time since World War II.  Thus the hypothesis that unfettered free market capitalism leads to maximum peace and prosperity is not empirically confirmed.)   

            The high water mark can also be regarded as the beginning of the end.  By the end of the Kreisky era, the cold winds of the worldwide neo-conservative trend had arrived in Austria, with their well-known tendencies to diminish the role of the state and to accentuate the linking of the fates of nations to the vagaries of the global marketplace.  It had become harder to manage the Austrian economy, and harder to deliver prosperity and social justice.[3]  The Kreisky government’s Austro-Keynesian policy team, which attempted nevertheless, in spite of Austria’s decreasing control of its own destiny, to deliver prosperity and social justice both at once through ever-increasing economic growth, could not accommodate at all the vision of a sustainable economy proposed by the new Green Party.

            Young Bruno Kreisky, who a quarter century later would be Chancellor Kreisky, spent most of World War II in exile in Stockholm.  The Nazis then governed Austria, and they were utilizing Austria’s people and its material resources as military assets of their thousand-year Reich.  The Austrian social democrats living in exile during World War II had a lot to think about, and several controversial issues to debate.  The socialists had held power briefly in Austria when the First Republic emerged in 1918 from the ashes of the defeated Austro-Hungarian Empire.[4]  Social democracy was a contender in Austrian politics and master of the municipal government of “Red Vienna” from 1919 until 1934.[5]  In 1934 democracy was crushed, and with it social democracy, by an Austrian fascist regime supported by Benito Mussolini’s fascist Italy.  The anti-socialist majority in interwar Austria had been led by the Christian Social Party (the “blacks”) which later became the Fatherland Front of 1934-1938 supporting Austrian fascism, which itself was crushed in 1938 when Hitler annexed Austria to the Reich.  In a plebiscite held in April 1938, 99.7 percent of the Austrian people approved union with Germany and accepted Hitler as their leader (Bukey 2000: 34-38).  It could be argued, and was argued, that the failure of social democracy to mobilize popular discontent for constructive purposes had led in Austria (and in other countries) to the rise of fascism and Nazism, as it could also be argued that earlier, social democracy’s failure to mobilize the masses of Russia had led to the October Revolution and the rise of Communism.  The Austrian social democrats in exile debated whether they had been too reformist, or too revolutionary, too wedded to peaceful and democratic means, or not peaceful and democratic enough (Sully 1982: 69-93).  It could also be debated whether social democracy had, or had not, in the few times and spaces that history had so far offered it (such as 1919-1934 in “Red Vienna”), demonstrated a feasible economic alternative, which was neither free market capitalism nor a totalitarian command economy, and which worked.

            During his exile years in Sweden, Kreisky was impressed by the leading economists of the Stockholm School, Gunnar and Alva Myrdahl, Dag Hammarskjöld, Erik Lundberg, and others; by Sweden’s beloved wartime Prime Minister Per Albin Hansson; by the finance minister Ernst Wigforss; and by the social minister and architect of the welfare state Gustav Moller.  He was impressed by the “social patriotism” of Swedish workers, who sang songs like “Sverige för Folket” (“Sweden of the People”).  Songs like “Sverige för Folket” associated loyalty to the nation with gratitude for belonging to a nation committed in principle to being a home where all citizens were cared for (Kreisky 1986: 374-78).  Kreisky wrote in his memoirs, published in 1986:

. . . on the basis of my experience in Sweden, certain political ideas came to appear to me to be much more realistic than I had formerly thought.  By this I mean the excellently functioning Swedish democracy, and the successful example of a reformism which had changed the whole structure of Swedish society.  In Sweden I learned the Praxis of the difference between what one would later call system-immanent and system-changing reforms.  I have studied this problem and returned again and again to consider it.  Now on the basis of the Austrian example I have come to the conclusion--a simple and if you like dialectical conclusion--that through the quantity of reforms the quality of a society changes (1986: 373-74, emphasis added).[6] 

            Thus the concept, or at least a concept, of “system-changing reform” was very much a part of the thinking of the man who led Austria from 1970 to 1986.  If our thesis is valid, and if indeed the Kreisky era was “the beginning of the end,” then it follows that the concept of “system-changing reform,” as Kreisky understood it and applied it, needs to be reconsidered.  We shall suggest that Kreisky’s version of system-changing reform tended to overlook, or to consider immutable, a key feature of the system to be changed, namely its dependence on the profit motive.  We shall suggest that some creative ways forward were foreign to the worldview of Kreisky’s pragmatic and modernizing social democrats.   Some such “stones the builders rejected” have been at times characteristic in Austria of the checkered tradition represented today by the conservative People’s Party.   The “black” People’s Party, which today shares the government with the “blue” “Freedom Party” of Jörg Haider, derives from an originally anti-capitalist Catholic social movement of the 1880s, which later as the Christian Social Party became noted for its anti-Semitism, especially under its leader Karl Lueger (mayor of Vienna from1897 to 1910), and then for its anti-socialism and its support of Austrian fascism, and then still later for its collaboration with the social democrats in the period 1945-1966.[7]    

            One need not exaggerate the importance of ideas in history to suspect that in Austria the idea of “system-changing reform” needs to be reconsidered in the light of its illusory success.  It appeared, in Kreisky’s eyes, to have produced a qualitative irreversible change in the character of Austrian society.  Yet history is demonstrating that changes are reversible.

            While young Bruno Kreisky was living in exile in Sweden, while World War II  raged in Europe and Asia, while the Holocaust raged throughout Central Europe, another young Viennese social democrat was living in exile at the opposite end of the earth, in Christchurch, New Zealand, writing The Open Society and its Enemies.   Karl Popper, like Kreisky, and like countless others, had been shattered by the experience of social democracy’s failure in Austria between the two world wars.  He too meditated in exile on the collapse of Austria, along with most of the rest of Europe, into an inferno of violence and hatred.  Popper, unlike Kreisky, would never return to Austria to live.  He returned to Europe to become professor of the logic and methodology of the social sciences at the London School of Economics.  Popper’s ideas returned to his native land through his contributions to international intellectual currents, which swept over Austria during the Kreisky era, implicitly bearing some key Popperian notions and with them some other internationally accepted ideas, which happened to have originated in Vienna.  By 1970 Popper’s audience was worldwide.  His views were taken for granted by many who had never read him.  In neighboring Germany, during the time when Kreisky was chancellor of Austria, the three major political parties, the Social Democrats, the Christian Democrats, and the Liberals, all declared themselves to be adherents of Popper’s political philosophy (Spinner 1987: 44-72).

            Although Popper and his wife Hennie (Josephine Henninger) were members of the Austrian social democratic party, they had not been active members in the years immediately prior to their hasty flight into exile in 1937.  Karl and Hennie met when they were both student socialist activists, studying to be teachers at Vienna’s Pedagogic Institute.  They had been enthusiastic contributors to efforts of the party and of the socialist municipal government to uplift educationally deprived working class youth.  As the situation worsened in Austria, they withdrew from politics, partly, Popper later explained, because it was counterproductive for Jews, even assimilated Jews like himself (he was baptized a Lutheran) to be conspicuous socialists.  To be an active Jewish socialist would play into the hands of the Nazis, who exploited the anti-Semitic feelings of the masses by identifying social democracy with Jewry.  More importantly, Popper believed that Austro-Marxism, which was then the ideology of Austrian socialism, had committed grave theoretical errors.  He believed the theoretical errors were responsible for the tragedy he saw unfolding around him, whose terrible outcomes he, more than others, foresaw (Hacohen 2000: 290-91).  

            In exile in a small town in New Zealand, he divided his time between his teaching duties as an assistant professor teaching logic and philosophy of science at Canterbury University, desperate attempts to secure visas to help others to immigrate (sixteen of his relatives died in the Holocaust), and writing a political philosophy designed to serve a better future (Ibid.: 336-37).  Hennie typed his manuscripts.  The result was a philosophy of “piecemeal social engineering” supporting an “interventionist state” (Ibid.: 46, 486).[8]  The “interventionist state” should take steps to eliminate concrete evils, such as unemployment and poverty, and should refrain from holistic and utopian visions.  It should not seek the overall Good, but remedy the particular and concrete evil.  The principle of “love” should be confined to family and friends, since any attempt to apply it on a larger scale was bound to lead to irrational politics and to tyranny.  Democracy was to be the only principle socialists would fight for, since only democracy could secure security.  All else was to be achieved by persuasion.  Although he gave no details, several times in The Open Society and its Enemies Popper cited Sweden as an (and he cited no other) example of what an interventionist state should do (1950: 329, 369, 376, 683ff).[9] 

            Popper’s philosophy is an important systematic defense of certain approaches to social science that have been influential in the post-World War II world.   We shall take the liberty of assuming that our readers know roughly, if not precisely, what we mean when we call them “mainstream.”   There are so many streams in social science that it is necessarily somewhat arbitrary to call one of them main, and perhaps some streams we will characterize as marginal and as needing to be brought more into the mainstream (the psychology of moral development and cultural anthropology) could quite plausibly be declared to be, in their own way, also mainstream.  We suspect that it was partly because of the influence of the mainstream ideas we associate with Popper that the Austro-Keynesians of the Kreisky era did not make truly system-changing reforms, but only system-immanent reforms.  At the end of the Kreisky era, the system had not changed enough to prevent a second failure of social democracy in Austria, and not enough to prevent a second upsurge of right-wing populism.  As Karl Marx once wrote, history repeats itself, the first time as tragedy, the second time as farce.  In Austria, Hitler was the tragedy.   Haider is the farce.

            The genealogy of Haider’s “blue” Freedom Party (Freiheitliche Partei Osterreichs, FPO) can be traced by lineal descent from the party formed by Austrian ex-Nazis when their political rights were restored, after a period under Allied occupation when they were not allowed to vote.  It took Austria fifty-five years, which can roughly be divided into three periods, to go from Hitler to Haider.

            Following Hitler’s defeat in 1945, the “black/red” period began.  This period marks the twenty-five years (1945 to roughly 1970) when Austria was governed by a “Grand Coalition” of its two major parties, representing nearly all of the electorate, the “black” People’s Party and the “red” SPO.  Together they built the distinctive form of social democracy called the Austrian Model or the Austrian Way.  Some of the Austrian Model’s characteristics were: consensus seeking and power sharing at every level of society, corporatism, a welfare state, a mixed economy with a large public sector, a social partnership of labor and capital, and neutrality in foreign affairs.[10] 

            The second period, the sixteen years from 1970 to 1986, was the “red” Kreisky era.  It was the high water mark of social democracy.  We have somewhat arbitrarily, but for reasons we consider good ones, chosen to call it also “the beginning of the end.”

            The third period, the fourteen years from 1986 to 2000, can be thought of as “faded red, faded black, a touch of green, and a threat of blue.”  It was marked by the fading of each and every one of the characteristic features of the Austrian Model.  Typically, a laconic report in 1994 stated that the Joint Commission on Wages and Prices, a centerpiece of social partnership, had not held any meetings during that year.   Although for the most part a faded black/red coalition continued to hold office, both the People’s Party (Osterreichische Volkspartei, OVP) and the SPO, under the influence of Popperian social science, had opted for Versachlichung, i.e. de-ideologization, or, better put, an anti-ideology ideology.  The embrace of Versachlichung meant that the Austrian government would make decisions strictly in accordance with the dictates of what they considered to be "objective" and "rational" "laws" of social science.  Government officials believed that policy successes were guaranteed once obedience to these "laws" had supplanted actions responding crudely to the fickleness of collective emotion.  With Versachlichung came: more social science, less politics.  More market.  Less collective decision making by the state and the corporatist institutions of the social partnership.  More foreign ownership of Austrian industry and media.  Less security for working people.  In the elections of December 2000, Jörg Haider’s Freedom Party received more votes than the People’s Party.    Although the People’s Party kept the chancellorship, the Freedom Party became the majority partner in a new blue/black governing coalition.

            To say that more market, less security for working people, and the like, came with an anti-ideology ideology is not, of course, to say that they came because of an anti-ideology ideology.  We do want to identify Versachlichung as a contributing cause, and not just a consequence, of social democracy’s decline, but before entering into a methodological discussion that will implicitly suggest some implications concerning the direction of the arrow of causation, we shall review more facts from Austria’s past.

            Today Austria’s social democracy, with its welfare state and its deeply embedded tendencies toward consensus-seeking and power-sharing, still exists, even though it is on the defensive, fading, and perhaps fading away.  It is being undermined and eroded by processes and trends whose precise onset cannot be dated, although we have elected to name the Kreisky era “the beginning of the end.”   Perhaps in some sense the historical forces that are now deconstructing Austrian socialism have “always” existed, being in some periods dominant and in others recessive.   Perhaps they have existed for as long as capitalism (some three or four hundred years), or as long as patriarchy (some 3,000 years on Riane Eisler’s account, or as long as humanity on other accounts), or as long as homo sapiens sapiens (perhaps 200,000 years), or since the beginning of life (perhaps 2.6 billion years), or since logic began to be valid, i.e., since eternity.  Assuming that the centrifugal forces that are now disorganizing Austrian social democracy have existed for a long time, they would have to be described as having been recessive and not dominant for at least two decades after 1945.

            Austrian socialism was not built by the socialists alone.  It was built by a coalition of Catholics and socialists.  In 1945, the People’s Party (the reorganized Christian Social Party) was still regarded as the political expression of the Vatican’s ideology.   The People’s Party was the majority partner in the black/red alliance.  It consistently received more votes than its socialist alliance partner from 1945 until 1970.  The office of Chancellor of the Republic of Austria was occupied by the leader of the People’s Party from soon after the elections of November1945, until Bruno Kreisky became chancellor in 1970. 

            The 1945 election showed that during more than a decade of dictatorship, there had been no major shift in the party preferences of Austrian voters.  The People’s Party won a narrow victory nationwide.   The socialists carried Vienna, and came close to winning nationwide.  The Communists had no significant support.  The Pan-Germans were not on the ballot (Sully 1982: 102, 104).

            Yet the post-election process of forming a government signaled an historic break with the confrontational politics of Austria’s past.  The People’s Party and the SPO formed a bipartisan government, representing nearly all the voters.  (For a short period the Communists were also included.)  Leopold Figl of the People’s Party became Chancellor.  The ministerial portfolios were divided proportionally between Catholics and socialists.  And not just ministerial portfolios.  Posts in the civil service, jobs in state run enterprises, academic appointments, judicial appointments, and offices in the many Bunds and Vereins, which tie together the warp and woof of the fabric of Austrian society, were carefully divided and balanced.  Thus was born the principle of Proporz, the sharing of power in Austrian society from top to bottom between the adherents of its two main ideological subcultures (Ibid.; Kreisky 1986: 434-38). 

            Votes in parliament were often unanimous.  The government’s programs and policies emphasized humanitarian objectives, concerning which the religious teachings of the Vatican and the secular ideals of social democracy coincided.  The two wings of the alliance managed to compromise on divorce, abortion, and parochial schools. 

            Parallel to and coordinated with the government, there was an elaborate political organization of the private sector.  Virtually everyone in business was in some Chamber or other, as virtually everybody who worked was in a union or professional association, which themselves formed Chambers.  The business Chambers were generally black, the labor Chambers red, and although there were many complications and exceptions, the net result was always to respect the principle of Proporz.  Not just wages and labor disputes  but also prices were collectively negotiated.  Compared to, for example, the United Kingdom or the United States of America, the number of strikes was insignificant.  

            Not surprisingly, party membership soared.  Already in the 1920s, political and religious affiliations had become a way of life for many Austrians.  Vienna, for example, was dotted with coffee houses sponsored by the political parties.  Viennese apartment dwellings were notoriously small and crowded, and it was an easy and inexpensive form of social life to go out after a hard day’s work and spend the evening in a coffee house sponsored by the Socialist Party, the Christian Social Party, or a Pan-German party (one favoring the union of Austria with Germany), sipping coffee, talking politics, reading the party newspaper and other party literature.   After World War II, with most social institutions politicized, the numbers of dues paying party members soared.   The People’s Party had more dues-paying members than the Christian Democrats of much larger Germany.  The SPO had more than the German SPD.

            The social democracy created by the black/red coalition after World War II bore a striking similarity to the corporatist state that the Catholics of the Fatherland Front had tried to create by means of the dictatorship of 1934-38, protected and inspired by Mussolini’s Italy.  The Austrian political scientist Anton Pelinka of the University of Innsbruck recently wrote of it:

Almost all the People’s Party representatives involved in constructing social partnership after 1945 had already had experience in pre-1938 corporatism.  Social partnership was and is intended to moderate the main conflict of modern society: the conflict between business and labor, between employers and employees.  All three models the pope had in mind--liberalism, socialism, and corporatism--were based on that conflict.  All three models agree that this conflict is the primary one and had to be adapted or transformed into a stable political system.  The liberal approach tended to declare some basic rights and rules and then abstain from interference.  The socialist approach was based on a zero-sum game hypothesis: Nothing but the ultimate victory of socialism would end the contradiction between the classes.  The corporatist approach was and is compromise oriented and interventionist.  It was not this philosophy that distinguished post-1945 from pre-1938 corporatism.  It was the inclusion of the Social Democrats that made all the difference.  Pre-1938 corporatism was based on the breakup of the republican constitution and on the defeat of the Social Democratic Party and social democratic labor unions. . . .  Post-1945 corporatism had to be based on the Second Republic’s consensus, on the historic compromise between the Christian-conservative and the socialist camps (1998: 140).

                                   

            According to a point of view that we shall ascribe to “the pessimist,” the decline of the post-1945 Austrian Model between 1970 and 2001 was inevitable.  Although we shall not name any names, we do not regard “the pessimist” as a rare or imaginary creature, but quite to the contrary, as a spokesperson for views that are commonplace and practically orthodox.   According to the pessimist, social partnership was possible just after World War II because in those years labor was comparatively strong, while business was comparatively weak.  Business participated in the social partnership because it had to.  As its power waxed it ceased to participate.  Later when business had more power and labor less, social partnership ended, and with it the Austrian Way.  Power.  Voila tout.  Like a Kantian category of the understanding, “power” functions as an explanatory principle that the mind brings to social reality, a condition of the possibility of political science.

            One might, to be sure, welcome many of the changes wrought between 1970 and 2001.  One might opine that the postwar Austrians who huddled in their parishes and political clubs, gathered in innumerable Bunds and Vereins for every conceivable purpose from gymnastics to sausage manufacture to chamber music, suffered from groupthink,  from which they are now mercifully being liberated by capitalism.  But the pessimist’s story should not be understood as if it were a story about a voluntary democratic process of amending the Austrian Model to achieve a nicer synthesis of interpersonal bonding and personal individuation.  It is a story about historical forces that overwhelm the mind and pre-empt choice.

            Against the pessimist, we want to argue the optimistic thesis that the Kreisky administration could have fostered system-changing reforms that would have altered history.  It is not too late.  History can still be altered now.  So far we are in complete agreement with Karl Popper.  Popper inveighed against “historicism,” the view that history is governed by what Karl Marx called, in a passage Popper frequently cited, “the economic laws of motion of modern society.”  Popper insisted that humans make social institutions.  We and we alone are responsible for their evolution.  Rational decision-making, social science, is the way to accept our burden, enduring what Popper called ‘the strain of civilization,” by painstakingly reconstructing society piece by piece, solving its problems one by one.  Historicism, the view that history is moving inevitably in a pre-ordained direction is dangerous nonsense.  Social science is sober realism.

            The pessimist will reply to Popper and to us that in spite of the sober realism of a Bruno Kreisky, who announced that he would govern “not with a wineglass but with a slide rule,” in spite of the “modernizing” and “reform” of the “new thinking,” in spite of the de-ideologization of the professional social scientists who staffed the Kreisky administration, in spite of the increasing role played by the non-political Council of Economic and Social Advisers, the outcome was nevertheless pre-ordained.  Business would have more power.  Labor would have less power.  Social partnership would end.  Apparently, the crux of the matter is power.

            Our belief is that in reality the crux of the matter is not so much power as rules.   If one thinks in terms of “power,” and defines it as “control of resources,” then one is likely to overestimate the importance of a shift in control of resources from one group to another.  The system is made of rules.  It makes little difference who controls resources as long as whoever controls them plays the same game by the same rules, making the same decisions according to the same criteria.  We are suggesting that if we think less about power and more about rules, then it will be easier to rehabilitate the idea of system-changing reforms, easier to distinguish reforms that change the system from reforms that do not.

            However, for the sake of the argument let us continue for a while to frame the issues as the pessimist frames them, in terms of “power.”  If one asks why the balance of power shifted in favor of business and against labor, the pessimist will tell a story about the natural evolution of the capitalist system.  Profits accumulate.   At the end of World War II there was no capital available for rebuilding Austrian industries prostrated by war, and business had to rely on government backing, even on government ownership, and on the United States’ Marshall Plan, but as time goes on business becomes more and more able to capitalize itself and to attract foreign investment.   Also, as people participate in market behavior year after year, the conventional norms become more and more the norms of market culture.  Homo Economicus.   Buy cheap and sell dear.  Material success.   As Karl Marx wrote (deliberately oversimplifying, as he himself noted), “The capitalist is but capital personified.  His soul is the soul of capital”  (1990: 112).  The moral life of the non-capitalists also is more and more that of buyer and sellers; buying and selling is their norm, their practice, and their discourse too, even though they buy less and have less to sell.  The never-ending quest for higher profits and cheaper bargains implies the expansion of the scale of commerce.  The market is no longer local; it is Austria; then it is Europe, then it is the Globe; some day it will be inter-planetary, and then inter-galactic.  The ability of government to throw its weight into the scales on the side of labor is weakened, because no national government can govern transactions in an international market.   Instead, the government’s constant preoccupation must be to do what it can to keep profits accumulating, because if profits do not accumulate, the economic process stops, and everybody suffers.  Thus the government inevitably becomes an accomplice to the undermining of its own power, and labor’s.

            The pessimist’s account of the inevitable shift in the balance of power in favor of business and against government and labor is a story about the normal evolution of a capitalist system.  Yet if the system-changing reforms of the social democrats had really happened, and had really functioned as expected, then Austria would not have had a normally evolving capitalist system.  It would have had a different system.

            We want to say--and we believe Karl Popper would want to say--that the pessimist’s story might be substantially accurate insofar as it is an account of what actually did happen in, or to, Austria.  It is an error, however, to say that what did happen had to happen.  The Kreisky administration might have carried out its intention to make system-changing reforms more effectively.  It could have emphasized a different kind of system-changing reform--a kind that would have altered the rules, the principles, the criteria of action--and Austrian history might have evolved in a different direction between 1970 and 2000. 

            We must specify, before continuing, that the question is not really whether system-changing alteration of the basic constitutive rules that govern and drive capitalism is possible.  The question (to which we give an affirmative answer) is whether alternative rules can be peacefully and democratically instituted that are desirable.  Mussolini and Hitler, to name just two, have already demonstrated that running a modern industrial society at full employment according to different rules is possible.  Austrian history from 1938 to 1945 (a period most Austrians would prefer to forget) taught that lesson.  The Viennese-born economist Peter Drucker, in his book The End of Economic Man, published in 1939, described some basic rules of the system imposed on Austria during the Nazi period as follows:

. . . in a closed economy like the fascist state, which forbids capital exports and enforces compulsory investment, profits are reduced to the status of a book-keeping entry.   Instead of abolishing profits in the first place, the government lets them circulate once more through the economic system, only to regain them in the form of taxes and compulsory loans.  In addition, profits are so completely subordinated in Germany and Italy to the requirements of a militarily conceived national interest and of full employment that the maintenance of the profit principle is purely theoretical.  Profits have lost their autonomy as an independent, not to say the supreme, goal of economic activity.  In most cases they have become a substitute for a management fee--with the one qualification, however, that under fascism the owner-manager bears the full risk.  There is a definite trend in Italy and Germany to eliminate profit participation and ownership rights of nonmanaging partners and shareholders.  The manager of a business, regardless of whether he is the owner or only a paid executive, has been freed from all responsibility toward the outside shareholders, even toward a nonmanaging majority owner.  If he does not want to pay dividends though the profits allow it, and prefers to invest in government loans, the government permits him to vote himself a substantial bonus.  At the time of writing, a proposal is being discussed in Germany to force the banks to forego their dividend claims “voluntarily” in favor of the government.  Since the banks are the largest nonmanaging shareholders in practically all German corporations and are majority owners in more than half, the proposal would effectively abolish the greater part of private corporation profit without touching the abstract principle of private profits at all. . . .  Whatever this system is, it is certainly not capitalist (1939: 149-50).

 

Thus the question is not really whether social democracy can propose an alternative to a neoliberal juggernaut driven by the logic of profit-seeking and capital accumulation.   The question is whether it can propose a remedy that is not worse than the disease it seeks to cure.

            If we are correct in believing that the ethical construction of a just, democratic, sustainable, and efficient society requires the modification of the economic mainspring of production and circulation, namely profit accumulation, and the modification of capitalist society’s conventional norms, namely those associated with the calculated “rational” behavior assigned to homo economicus, then the election of Bruno Kreisky as Chancellor must be regarded as a step backward, a victory of caution over feasibility.  Kreisky became the leader of the SPO after the socialists did poorly in the 1966 elections.  (They did so poorly that the majority People’s Party ended the coalition and governed without the socialists for a few years.)  Kreisky ran for party leader in 1967 and for Chancellor in 1970 on a platform that promised a government more pragmatic and less ideological than those which had been led by the black/red Grand Coalition.  The Grand Coalition, which governed most of the time from 1945 to 1970, possessed two ideologies, Catholicism and Marxism, each of which, in its own way, provided a philosophical context for a radical critique of capitalism’s constitutive rules.  The papal encyclicals Rerum Novarum and Quadragesimo Anno made it crystal clear that the Free Market was not God, Private Property was not God, and Profit Accumulation was not God.  Love was God.  The Marxist and Lassallean ideals of nineteenth-century social democracy, which  20^th-century Austro-Marxism remembered, called for a society that would produce for itself.  They called for the priority of use values over the logic of exchange.  Kreisky’s candidacy, on the other hand, represented the hope, a tenuous and probably forlorn hope, that system-changing reforms that would make the welfare state irreversible could be enacted within the limitations imposed by the requirements of the logic of exchange.  

                This is not to say that the way forward for contemporary Austria is to revive Catholicism and Marxism.  Austria today may be too secular to take Catholicism seriously.  It may be too skeptical to take Marxism seriously.  Today it may be the Green Party that can provide a philosophical context for a radical critique of capitalism’s constitutive rules.  When people are convinced that global warming is not an inevitable process, but a consequence of human behavior and human institutions, they may also be convinced that the globalization of the economy and the erosion of the welfare state are not inevitable processes either.  Telling the stories of cultures invented by homo sapiens sapiens as part of the larger story of life in the biosphere may help people to see that even the most fundamental norms and assumptions of economics can be changed.[11] 

            Kreisky’s decision to staff his government with more professional social scientists and fewer politicians was not obviously a step forward, and was perhaps a step backward.  On the surface, the rise of social science and the increased role of the Council of Economic and Social Advisers represented the definitive triumph of social partnership.   The revolution was won.  Henceforth, as Marx had prophesied, the governing of people would be replaced by the administering of things.  Versachlichung  (de-ideologization) meant being sachlich (“objective”), which meant dealing with Sachen (“things”).  On the surface.  However, if it is true, as we suspect but do not know, that the professional social scientists of the Kreisky administration tended to be influenced by currents of mainstream social science that carried an implicit anti-fascist and anti-irrationalist political agenda, then Kreisky’s sober pragmatism had to represent some diminution of the spiritual force of the Austrian Model of social partnership.  The Austrian version of social democracy was one that reconstructed fascist corporatism (i.e., the Standestaat, corporate state, of 1934-38).  It relied on irrationalist (i.e., Catholic) allies.  Hence it may well be the case that in some ways socialism in Austria was weakened, not strengthened, when the socialists won an absolute majority and were able to govern alone without their Catholic partners--although, to be sure, by the time the socialists won an absolute majority its erstwhile partner, the People’s Party, was already drifting away from its confessional base, and toward neo-liberalism.  (And Catholic social teachings are, of course, only “irrational” when measured against a standard typical of mainstream social science, such as Karl Popper’s critical rationalism.  When measured against a traditional essentialist rationalism such as, for example, that of Saint Thomas Aquinas, or even against the standards of the 20th century theologian Karl Rahner, who was influential in Austria, they are perfectly rational.)  

            If, as we have been implying, Versachlichung or anti-ideology ideology, is part of the problem, not part of the solution, then our views can only be defended if we successfully criticize the case made in its favor by Karl Popper in The Open Society and its Enemies and its companion volume, written at about the same time, The Poverty of Historicism. 

            The Open Society and its Enemies was, as it declared itself to be, an anti-fascist polemic.  If there was anything good about fascism, Popper was not going to say so in 1942.  In exile in New Zealand, Popper volunteered to join the New Zealand Armed Forces as the Japanese were advancing southward.  He was turned down, and he went back to his books to fight the fascists with philosophical arguments.  He generalized.    Fascism was a contemporary manifestation of a perennial human emotional weakness.   Ever since the beginnings in Ancient Greece of science, rationality, and democracy (the three go together), people have been susceptible to being emotionally seduced by political and philosophical doctrines that appeal to their nostalgic yearning for Tribal Unity, for mystical togetherness and for unquestionable certitude.  The enemies of the Open Society are the collectivist philosophers--Popper dwells on Plato, Hegel, and Marx, and mentions in passing a host of others--who prey on the anxiety that is the inevitable accompaniment of being a responsible individual in a civilized society.  They purvey the spurious spiritual satisfaction of self-surrender to a collective ideal.  The enemies of the Open Society short-circuit the critical rational process of learning by trial and error, through which, and through which alone, science and the gradual realization of humanitarian ideals (the two go together) advance. 

            In Karl Popper’s Vienna the Austro-Marxists, the anti-Semitic Christian Social Party, and the Pan-German personality cults which defined the loony Viennese underworld from which Adolf Hitler emerged, all contributed to dulling the faculties of critical reason.  All substituted tribal myths of one kind or another for scientific rationality.  For the resulting series of social disasters, the Austro-Marxists were more to blame than the others because they were more intelligent and should have known better.    In his writings Popper did not attack any Viennese intellectuals or politicians directly, nor did he directly attack the theories espoused by Mussolini or Hitler.  Instead he attacked what he took to be their fundamental premises, as they were advanced by great thinkers of the past.  He attacked their premises in forms more sophisticated and plausible than the forms they themselves had thought of, or were capable of thinking of.   Popper made it a general practice in his writings to compose arguments for his opponents that were stronger than the arguments his opponents had thought of for themselves. 

                Our first criticism of The Open Society and its Enemies is that in its general scope and conception and emphasis it is a serious misreading of history.  Our view is that the primary reason why fascists come to power is that social democrats and progressive liberals fail to solve social problems.[12]  Mussolini and Hitler are two cases in point.  It is significant, for example, that Hitler won the German election of 1932 on a platform that emphasized massive public works to solve the problem of unemployment--a problem that the then-governing Weimar social democrats had failed to solve.  Consequently, contrary to what one might be led to believe by a reading of The Open Society and its Enemies, the most effective way to fight fascism is to solve social problems.  Instead of eschewing appeals to Tribal Unity, hoping to discourage fascism by disagreeing with its philosophical premises, social democrats should utilize such appeals openly and candidly when they contribute to the peaceful and democratic solution of social problems.  (Popper was, of course, in favor of solving social problems.  Our complaint is that he underestimated, and denigrated, the contributions that collective emotion can make to solving them--no doubt because his experience, and his reading of history, led him to profoundly distrust collective emotion and to regard it as supremely dangerous.  Conversely, he overestimated the potential for preventing fascism by adhering to a rigorously non-fascist philosophy.)  One can ask, for example, whether a more aggressive, and more emotional, defense of the jobs and wages of Austrian workers left out in the cold by the chill winds of globalization might have prevented their defection from the SPO or the People’s Party to the ranks of Jörg Haider’s neo-fascist Freedom Party in the elections of December 2000.  

            We are suggesting that solutions to social problems (such as unemployment and low wages) sometimes require appeals to ideas and emotions that are not characteristic of the modern (capitalist) age.  The Austrian Model provides empirical encouragement for this suggestion.  It was an unusually successful social democracy, which relied in the process of its construction on ideals and emotions not characteristic of the modern age.   If the plausibility of our suggestion is granted, it then becomes an important question how social science can best transcend its historical origins as an ideology (or anti-ideology) of modernity, in order to play a more useful role in solving social problems.  We shall suggest that two parts of the answer to that question are for politics and economics to draw more on both the psychology of moral development and on the findings and methods of anthropology.  Any such answers, however, will encounter opposition because of the influence of ideas like those found in the philosophy of science of Karl Popper. 

                Popper’s identification of traditional Tribal Unity with the horrors of National Socialism led him to advocate ways of identifying good social science methodology with his own account of good natural science methodology, and both with modernity and democracy and whatever else is good.  His methodological stances are political stances.   They marginalize, or remove from the conceptual map altogether, solutions to social problems that rely on findings from psychology or on traditional ideals and emotions.  As Popper’s biographer Malachi Hacohen wrote, “’[E]motional social needs’ remained foreign to him, implicated with fascism.  When criticism conflicted with traditional life and belief, his stance was clear: Openness and tolerance required that custom and authority give way.  He never negotiated between the closed and the Open Society, or showed their possible convergence in the future” (2000: 426). 

            A case in point is Popper’s endorsement of what are today called “rational choice models.”  Popper was so convinced that the advancement of science and the advancement of humanitarian ideals were one and the same that he never doubted that if he could construe social reality in a way that would make society easy to study, he would thereby contribute to improving society.  Thus Popper wrote:

But in fact there are good reasons, not only for the belief that social science is less complicated than physics, but also for the belief that concrete social situations are in general less complicated than concrete physical situations.  For in most social situations, if not all, there is an element of rationality.  Admittedly, human beings hardly ever act quite rationally (i.e. as they would if they could make the optimal use of all available information for the attainment of whatever end they may have), but they act, none the less, more or less rationally; and this makes it possible to construct comparatively simple models of their actions and inter-actions, and to use these models as approximations 1964: 140-41).[13]  

 

            Popper thus sees the rational actor as an ideal type, to be used as a model to facilitate research, in a light different from the light of ethical construction.   For ethical construction any influential model of human action is a product of culture-creating historical processes in which we are still participating today as we engage in the constant reconstruction of social reality.  Any model of human action is both descriptive and normative.  As descriptive, what it describes is, in Ludwig Wittgenstein’s phrase, “language games,” i.e., customs, forms of human life.  As normative, it influences expectations.  Any model of human action publicizes, even if it does not explicitly endorse, a pattern of human behavior to be regarded as normal.  Thus social science feeds the imagination of the self-interpreting, socially-defined, self-questioning non-entity, which Martin Heidegger (a philosopher Popper despised and did not try to understand) avoided naming by using the deliberately empty term Dasein (“there-being”).  The social scientist is inevitably a participant in the social construction of reality. 

            Popper does not bring into focus the question as to whether it is morally responsible to propose without critical comment a generalized version of homo economicus as an ideal type to orient research in the social sciences.  His focus is on whether social science can be a scientific success.  He believed that physics was already a success, and that experts in physics such as himself (Popper corresponded with Albert Einstein concerning quantum physics and debated the uncertainty principle with Werner Heisenberg) could contribute to the success of the less advanced sciences by showing them the way.  We call the passage from the premise that a model makes human behavior easy to study to the conclusion that it is a good model the “ease of study fallacy.” 

            We dwell on “ease of study” and label it a “fallacy” because we believe that something like the opposite is true.  It is not necessarily true that when people are easy to study with methods like those of physics they are better.  Yet it is necessarily true that when people are easy to study with methods like those of physics they are worse.   If it turns out that human behavior ticks along like clockwork so that predictions made by social scientists are exactly correct, when they use rational choice models (or any model with the virtue Popper ascribes to rational choice, i.e. making human behavior predictable in the way that some natural phenomena are predictable); we should not say, “Whoopee!  Social science is a success!  It can write equations that predict the future!”  Instead we should worry.  We should worry that people are not engaging in conscientious moral deliberation.  If, for example, it can be predicted that between two goods of the same quality, consumers invariably will buy the one that sells for the lower price, then we should worry that consumers do not care whether the goods were made by sweatshop labor, whether the packaging can be recycled, or whether the goods were produced using  pesticides that will eventually poison the soil so that future generations will suffer because of today’s preference for cheap food. 

                The reason why we write that it is necessarily true that when people are easy to study with models like those of physics they are worse, is that the methods of physics do not describe human moral deliberation, from which it follows that people who can be easily studied with them do not engage in human moral deliberation. 

            We are not saying that humans ought to be unpredictable.  On the contrary, humans ought to be reliable and trustworthy.  We make ourselves reliable by forming the habit of acting according to good norms, such as the norm that promises should be kept.  We are saying that the way to understand desirable forms of human predictability is to focus on ethics, not on physics. 

                Since capitalism is not as much about control of resources as it is about what those who control resources do with them, the construction of social democracy is more about moral development than about transfer of ownership.  A rehabilitated concept of system-changing reform requires, to be sure, shifting the control of resources to the nonprofit sector, to the cooperative sector, to municipalities, to voluntary organizations, to autonomous public corporations, to the public sector, and to the parts of the private sector committed to collective bargaining and socially and environmentally responsible management.  But it is less important what sector an enterprise belongs to than what criteria are employed to make decisions.  If a public enterprise follows the logic of profit maximization, then the system is not changed.  If a private enterprise follows principles of stewardship, trusteeship, or servant leadership, then the system is changed. 

            The true system-changing reforms are the ones that falsify the premises of the neo-liberal historicists and the Marxist historicists who argue that there is no alternative to mindless profit accumulation driven by the iron law of the accumulation of capital.  This implies that the government and the public must be sympathetic to the complaints of capitalists who say that they cannot be expected to obey two logics at once, i.e., to maximize their profits and to maximize being socially responsible.  It is the competition of capitals that, historicists of all stripes argue, seals the fate of the entrepreneur who does not maximize profits.  It follows that to build social democracy the competition of capitals must be relaxed.  The classic reaction to corruption in business and monopoly profiteering--to assert that greed can only be curbed by the discipline of competition in a free market--must be restrained.  Society cannot expect business to be socially responsible and at the same time put it in a position where in order to survive it must be socially irresponsible. 

            All of this implies that psychology and the study of cultural change must play a bigger role.  It implies a convergence of the public sector and the private sectors, such that participants in decision-making at all levels in all sectors make conscientious decisions.  At this point psychology and the study of culture intersect, since research in psychology shows that children develop in such a way that they internalize conventional norms, which vary from culture to culture.  A “conscientious” decision, for a normal adult, is one that complies with the conventions (otherwise called norms, rules, values, customs, ideals) of the culture.  Cultural action, as a form of revolutionary praxis, can be thought of as a method for the transformation of the conventions that govern normal social behavior, such as what people do with their freedom, and what they do with their property.  It may appear innocuous, but it changes everything.  It dismantles the mechanism that drives the putative “economic laws of motion of modern society.” 

            The crucial test for social democracy is the capital flight test.  It is the make or break issue, which decides whether democracy or money will prevail.[14]  We are using the phrase “capital flight” to refer broadly to what is sometimes called the systemic power of capital, the power to brake and reverse a movement toward distributive justice by moving capital out of a country, or by refusing to make productive use of capital that stays in the country.[15]  (“Capital flight” names the phenomenon from the point of view of the country the capital flees from.  From the point of view of the country the capital flees to, the phenomenon is called “the race to the bottom.”   The phrase “the race to the bottom” refers to competition among countries to offer lower wages and lower taxes in order to attract capital.)  The question the crucial test for social democracy asks is whether there is a culture of solidarity, in the context of which it will be feasible for the government to take effective measures to curb capital flight.  This question tests the conventions that govern normal social behavior.  It is a test for civil society more than it is a test for government.  Pessimists say there is no possible way to pass it. 

                We do not believe there is a single example of a social democracy that has passed the capital flight test with flying colors, although some, at some times, have done better than others.  In the absence of what we are calling a culture of solidarity, the constitutional structure of a modern democratic state makes it virtually impossible to check capital flight without assuming absolute dictatorial powers, which is neither possible nor desirable, and even with dictatorial powers it is hard to stop capital flight. 

            A rehabilitated concept of system-changing reform contributes to building the culture of solidarity needed to transcend the systemic power of capital.  The rehabilitated concept is derived from the insight that the “power” of capital comes from rules, and rules can be changed.  Norms and values can be changed.  Restructuring civil society to reduce reliance on the profit motive is the direct route to treating and curing capitalism’s addiction to profit, which results in crippling withdrawal systems whenever social reforms limit profits or amend property rights.  Such system changing reforms innoculate a society against capital flight because they remove its basis (control of resources) and weaken its motive (profit).  Although such reforms may not produce a system completely resistant to capital flight, they may help to limit the damage to a tolerable level.  They should at least make the damage less than it otherwise would be. 

            The gradual reconstruction of the norms of civil society can be called “piecemeal moral improvement.”   It corrects, or complements, Popper’s “piecemeal social engineering.”  It calls for a greater role for psychology and for anthropology in politics than Popper’s philosophy of science admits.  Popper advocates the use in social science research of a stylized ideal type of rational actor whose actions are determined by what Popper calls “the logic of the situation.”  Thus Popper obviates the need to study in detail how people really do reason, and how they really do decide what to do.  Open Societies, which practice democracy and support social science research of the kind Popper advocates, are supposed to solve their problems one by one by piecemeal social engineering.  There is not supposed to be any need to analyze the basic constitutive rules of modern liberal democracies, or to compare them with the basic constitutive rules of other societies studied by anthropologists.  To be sure, thought that deviates from the norm of the rational actor does exist.  In Hitler’s Germany it was normative.  But, in Popper’s worldview, whatever psychologists may learn about it has little bearing on the politics or economics of an Open Society. 

            Popper’s motivation for defending logic, and models of human behavior based on logical choices, against what he called “psychologism,” and his motivation for criticizing at great length John Stuart Mill’s argument that psychology must be the fundamental discipline for all social sciences; and Popper’s adherence to a rational and universal cosmopolitan ethics, his intransigent opposition to multiculturalism; can be traced to his reflections on his early experiences in Vienna, as Hacohen shows in his biography (2000: 46-53).  Although we sympathize with Popper’s motivations, we cannot agree with the methodology for social science that he derives from his arguments.  The psychologists and the anthropologists have the empirical evidence on their side.  They are the ones who study what “reason” actually is, in terms of how people really do think, and in terms of the norms that actually govern the many cultures that actually do exist.  It is Popper who has reduced “reason” to the logic of a rational actor who is an ideal type which, as he himself admits, corresponds precisely to no empirically existing reality. 

            The arguments that Popper makes for “reason” and against “irrationality” often suggest that any concession to what he calls “irrationality” will open the floodgates to fascism.  In The Open Society and its Enemies, Popper posits only two choices: the Open Society, characterized by democracy and critical reason; and the enemies of the Open Society, collectivists who yearn for the mystical certitude of tribal unity.  Here are three of the many parades of possible horrors that Popper dwells on in this work: 

It is my firm conviction that this irrational emphasis upon emotion and passion leads ultimately to what I can only describe as crime.  One reason for this opinion is that this attitude, which at best is one of resignation towards the irrational nature of human beings, at worst one of scorn for human reason, must lead to an appeal to violence and brutal force as the ultimate arbiter in any dispute.  For if a dispute arises, then this means that those more constructive human emotions and passions which might in principle help to get over it, reverence, love, devotion to a common cause etc. have shown themselves incapable of solving the problem.  But if that is so, then what is left to the irrationalist except the appeal to other and less constructive human emotions and passions, to fear, hatred, envy, and ultimately, to violence?

            . . . .  But of all political ideals, that of making the people happy is perhaps the most dangerous one.  It leads invariably to the attempt to impose our scale of “higher” values upon others, in order to make them realize what seems to us of greatest importance for their happiness; in order, as it were, to save their souls.   It leads to Utopianism and Romanticism.  We all feel certain that everybody would be happy in the beautiful, the perfect community of our dreams.  And no doubt, there would be heaven on earth if we could all love one another.  But, as I have said before (in chapter 9), the attempt to make heaven on earth invariably produces hell.

                . . . .  This kind of “Christianity” which recommends the creation of myth as a substitute for Christian responsibility is a tribal Christianity.  It is a Christianity that refuses to carry the cross of being human.  Beware of these false prophets!  What they are after, without being aware of it, is the lost unity of tribalism.  And the return to the closed society which they advocate is the return to the cage, and to the beasts (1950: 419, 422, 427).

 

            These three quotations illustrate characteristic Popperian positions.  Together with historicism and irrationalism, he includes holism and confidence in utopian social engineering in the general category of beliefs espoused by the enemies of the Open Society.  We are suggesting a both/and rather than either/or approach to these beliefs that Popper rejects.  We agree with Popper that historicism is mistaken, but it is not entirely mistaken, because the laws of the market (what Marxists call the laws governing the accumulation of surplus value) have such a pronounced tendency to produce what Popper calls “unintended consequences” that the unfolding of their consequences sometimes seems like historical inevitability independent of human will.

            However, rather than simply take at face value the requirement (which is both observed and theoretically deduced) that one regime of accumulation or another is necessary to keep capitalism going, we endorse the idea of system-changing reforms. 

            Although we also, with Popper, prefer rationality to irrationality, we happily concede to irrationalism that the social emotional needs of the human species, which have evolved over many hundreds of thousands of years, are here to stay. 

             We do not agree with Popper’s scientific criticisms of holism.  We believe that the ways everything is related to everything else make the whole a unity that is something much more than the sum of independent parts; in particular, we believe that the biosphere is one, and that the global market is one.  Although we would concede to Popper that holistic thought provides a metaphorical foothold for totalitarian politics, we do not think the danger is more than metaphorical without a social catastrophe like the Great Depression to provide more concrete motivations for fascist solutions.  We also believe that the radical critiques of the liberal capitalist world order made by holistic versions of religion, Marxism, and ecology are invaluable.  We do not believe that radical philosophies, which see the root causes clearly, necessarily lead to violence and tyranny.  They can be coupled with equally radical commitments to nonviolence and to democracy.   A commitment to peaceful persuasion as a means is not a commitment to the status quo as an end; conversely, a commitment to radical transformation as an end is not a commitment to violence as a means.   The history of Austria since The Open Society and its Enemies was first published in 1945 shows that Popper’s opinion that totalizing theories invariably lead to totalitarian politics was mistaken.  It was an opinion that appeared to be correct in the light of Austrian history up to 1945.  After 1945, however, the Austrian case has been one that demonstrates that people with incompatible holistic philosophies can share commitments to democracy, freedom, consensus-seeking, and power-sharing.  The post-1945 Austrian Model is in retreat and on the defensive today,  not so much because the irrational passion for collectivist tribal unity, which Popper rightly feared, has returned, as because a more humanistic social science, which Popper wrongly feared, has not yet arrived. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes