Daron Acemoglu is an economist at MIT and a recipient of the 2024 Nobel Prize in Economics. His latest book is What Happened to Liberal Democracy?
In this week’s conversation, Yascha Mounk and Daron Acemoglu discuss why liberal democracy’s post-war formula for shared prosperity broke down, how the rise of a college-educated professional class produced a cultural backlash against “social engineering,” and how to shape the future of artificial intelligence.
We’re delighted to feature this conversation as part of our series on Liberal Virtues and Values.
This series, made possible with the generous support of the John Templeton Foundation, features content making the case that liberalism has its own distinctive set of virtues and values that are capable not only of responding to the dissatisfaction that drives authoritarianism, but also of restoring faith in liberalism as an ideology worth believing in—and defending—on its own terms.
This transcript has been condensed and lightly edited for clarity.
Yascha Mounk: We started talking about many things the last time we were on the podcast, but we started talking a little bit about your thoughts on liberalism, which you had already published an article about. Now you have come out with an incredibly ambitious work on the subject that tries to unify approaches to the question from economics, from political theory, from public policy, from history, and I look forward to touching on many different aspects of this question. I promise you that we can geek out about political theory as much as you wish in this conversation. Part of what you have to do when you try to fix liberalism is to come up with a diagnosis. I think that is probably the aspect of this question that has been most debated over the last ten years, and it is probably most difficult to say something new about. In your diagnosis, why is it that after liberalism’s remarkable triumph for half a century, we now seem to be in this genuine moment of crisis for this set of ideas?
Daron Acemoglu: Well, I think that is the heart of it. In fact, despite the fact that there is a lot said about this, I still think we are far from a holistic understanding, which requires both a recognition of the proximate causes of the crisis, but also the ultimate or the fundamental causes that underpin those proximate causes. That is what I try to do. But first, as just a little preface, I think the success of liberalism is truly remarkable. The kind of freedoms, access to public services, political participation, and broadly shared prosperity, despite the very high inequality that we are experiencing today, that all of these things that we enjoy today, in at least the Western world, but also in many parts of the emerging world, would have been unimaginable to somebody who lived three hundred years ago, however enlightened they were. And that is all coming from the aspirations articulated by liberal ideas and their implementation in the context of liberal democratic institutions. That makes it all the more jarring that liberal democracy plunged itself into crisis.
In a nutshell, I think this has two reasons. One is that the world changed, in particular from an industrial era to a post-industrial age, and liberal democracy did not adjust to it. Second, liberal democracy became, to an extent, a victim of its own success. These two are complementary, they are related, but they are also distinct. Let us start with the first. I think shared prosperity is truly axiomatic to liberal democracy. If you are an absolutist king or a dictator, your regime can survive for a long time without true legitimacy, without the support of the people.
Mounk: You need to have certain insiders who are willing to impose the rules, and they need to be doing relatively well, but as long as you pay the courtiers and the soldiers enough, you probably survive.
Acemoglu: That is right. Every regime seeks legitimacy, and every regime obtains some type of legitimacy, at least for certain periods of time. But for liberal democracy, that is really critical. Unless people really support it, unless people participate, liberal democracy cannot survive. Shared prosperity, meaning economic growth from which every social group benefits, is really important for that. The big success of liberal democracy, starting in the twentieth century—in some parts of the world in a sporadic way also in the nineteenth century, but very, very consistently in the three and a half, four decades following World War II—was really very important for liberal democracy’s success.
The formula for that, simplifying it quite a bit, is to say businesses invested and expanded, and in doing so, under the framework created by democratic governments, trade unions, and other labor market institutions, they had to pay higher wages to workers because they needed workers. They could not coerce them, they could not cheat them. That is where the institutional framework was important. But crucially, in order to expand, to produce more cars, more fridges, more T-shirts, they needed more workers.
Mounk: That meant the scarcity of human labor and the competition for those workers, which actually created the middle class.
Acemoglu: One hundred percent. And that generated wage growth, that generated job creation and employment growth. That is, in my assessment, simplifying it again to some extent, but that is the only formula for creating shared prosperity. I know of no society in history that has been able to create shared prosperity for a sustained period of time that is not based on wage growth and employment.
So that was the formula. That formula started coming apart with the digital age, with the digital technologies that induced a transition from industrial economics to post-industrial economics, whereby, first of all, educated, more skilled workers became more valuable because they were needed for management, services dealing with data, dealing with these other functions, as well as using the technologies that were first skill-biased. But even more importantly, with digital automation—meaning that using digital technologies with advanced tools, software systems, robotics, and now AI—we are substituting machines and algorithms for tasks previously performed by humans. That severs the link between business growth, innovation, and profits and wages, because now we can expand production tremendously without employing many workers. Even worse, you can expand while laying off workers because you are automating your production processes.
Mounk: How would you describe, just in descriptive terms, what stage we are at? I am a little torn on how to interpret the current state of affairs. On the one hand, in the United States today, we are close to full employment. There is not a big structural problem of unemployment. In some regions of the country, people are really struggling to find workers. This is not Marrakesh ten years ago, or West Germany thirty years ago. You do have quite a lot of affluence in society. America is one of the richest countries in the history of the world, certainly if you exclude small oil states and other kinds of aberrations. But what does seem to have happened is something where the returns to having a college degree and being a knowledge worker are outsized. Perhaps the real injury, I guess I am unsure whether the real injury is economic or whether it is cultural.
Acemoglu: Well, it is both. It is both, and I am going to come to the cultural one. Things do not work with the nice linear structure of our models. The irony, in some sense, is that the big period in which pre-AI automation had a big impact really came to an end in the mid-2000s. The period that best illustrates my argument is from the late 1970s or 1980 to 2015 or 2014. It is during that period where wage inequality, the gap between college-educated or postgraduate workers and those without a college degree, skyrocketed. It is the period during which, almost consistently, real wages, inflation-adjusted wages of workers with a high school degree or less than a high school degree, especially men with a high school degree, fell consistently almost every year from 1980 to 2014. It is that period during which the non-employment rate of workers without a college degree increased quite tremendously. People essentially dropped out of the labor force. That is why unemployment statistics are not the ones that I am that interested in. I much prefer to look at discouraged workers as well, which means looking at employment-to-population ratios.
Mounk: Just to explain that for people who are not economists, the unemployment rate is the share of people who are looking for work relative to the workforce. But there may be people who drop out of the workforce altogether, and there is a real concern, for example, about so-called NEETs, which is to say, people, often young people, who are not in some form of employment, education, or training for a job. If a twenty-year-old is living in the basement of a parent’s home, is not actively looking for work, is not being trained in any way, that is obviously a very worrying case, but they may not show up in the unemployment statistics.
Acemoglu: Absolutely, one hundred percent. The unemployment rate, strictly speaking, is the number of unemployed people who do not have a job among those who say they are seeking a job. The Current Population Survey, for example, one of the key survey instruments in the United States, and there are similar ones in other countries, asks people, are you actively seeking work? If the answer to that is no, you are out of the labor force. What happened, for example, when people in the auto industry or in steel or other industries, with automation or with imports from China, lost their jobs, many people just dropped out of the labor force. They stopped looking and they stopped answering that question, yes, I am looking for a job.
The other thing is just household income inequality that has skyrocketed. The remarkable thing is that real wages, inflation-adjusted wages, that used to grow faster than productivity, especially for workers without a college degree, because they were critical for industrial employment in the late ’40s, ’50s, ’60s, early ’70s, those wages did not exactly stagnate, but came close to stagnating from 1980 to around 2014. That was the collapse of shared prosperity. The post-industrial age required a different way of managing the economy, a different way of mobilizing and creating jobs for workers without a college degree, using technology differently, and none of that happened. That is the failure of liberal democratic institutions adjusting to their age.
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But the cultural aspect that you mentioned is also very, very important. This coincided with another social change that happened as a consequence of the post-industrial economy, which is that the number of workers with a college degree increased tremendously. They became much more important to the production process, earned more, and gained more social status. In the process, they concentrated in major urban cities. They surrounded themselves with other people like themselves. They created their own subculture. They severed often their links to communities that consisted of people with different levels of skills and different diverse skills. They became more cosmopolitan and more convinced of their values. Together with that, they became politically more influential, but also disinterested first in the plight of the less educated groups. You can see that in the Democratic Party, for example, or in other center-left parties in Europe, where these parties that were essentially working-class parties, as many of their names suggested, became completely dominated by the college-educated, and they changed their programs away from the kinds of policies that working classes favored, more towards policies and priorities that the college-educated favored. The college-educated at that point, becoming more convinced of their values, started what I call a social engineering agenda, which is trying to improve society by imposing values on the rest of society. That is very, very important to the cultural backlash that you were hinting at, Yascha.
Mounk: Your analysis of the social engineering mechanism is really very interesting and distinctive and novel, I think. To stick with the analysis for a moment, and I want to make sure that we get to that in a later stage of the conversation, part of what is interesting about this current political realignment is that, traditionally, if you were relatively affluent, you had a college degree, you were probably a Republican. There are obviously always exceptions, but statistically speaking. And if you were working class and did not have a college degree, you were probably a Democrat. You could say the same thing about the Social Democrats and the Christian Democrats in Germany, or Labour and the Conservatives in the United Kingdom, and so on. Today, it is starting to reverse.
Acemoglu: It is not just that it has weakened, it is reversed.
Mounk: Right. But these parties still have not fully understood that in their rhetoric and how they are talking. The strange thing, in particular, about the Democratic Party is that it thinks of itself naturally as a party of the working class, and is definitely searching for working-class candidates. I think often it has so little sense of what is working class that it picks candidates who sound like the working class to highly college-educated people.
Acemoglu: One hundred percent. You got it completely right. First of all, any social change of this sort is often perceived somewhat later than it should be. But moreover, that perception was also delayed because the right still remained opposed to trade unions. Trade unions continued to be strong in many countries, the UK, the United States, Germany especially, and they continued, for a while at least, and they still do to some extent, to give their support to the center-left parties. But take the Labour Party in the UK—now that trade unions are less able to garner that support, they are just coming apart. These parties became parties of postgraduates, but were still able to keep some portion of the working class through the trade union movement.
There are some interesting papers on this, for example, by Nicolas Longuet-Marx, Suresh Naidu, and Ilyana Kuziemko, that illustrate how the preferences over economic policy of working classes in the United States, lower-education workers in the United States, have remained very consistent. And those of the Democratic Party started changing and diverging quite significantly from those of the working classes. In particular, the Democratic Party has always remained somewhat committed to redistribution, but they favored redistribution via fiscal policies without unions, without minimum wages, without trade protection, without job programs, without any kind of intervention in the market system. Whereas workers wanted all of these things. They wanted minimum wages. They wanted active job programs. They wanted unions. That is what the Democratic Party turned its back on. Then, of course, came the cultural policies and cultural stances that you mentioned.
Mounk: That is very interesting. Even on the economic policies now, when you think about some of the most popular economic slogans of the Democratic Party, sometimes it is raising the minimum wage, but a lot of it is free college or cancel student debt, which may or may not be good policies, but which clearly are directed towards what, according to polls, is actually the strongest Democratic electorate at the moment, which is people with high levels of education but lower levels of income. The person who is most likely to vote for Democrats is a person with a postgraduate degree who makes quite little money, whereas the person who is most likely to vote Republican is the person with a high school degree who is making quite a lot of money—the plumber, and so on.
Acemoglu: One hundred percent. The complication there is that the person with a postgraduate degree making little money is often somebody who will make more money in the future, and also comes from a family with greater wealth and access. Democrats have done better lately in mobilizing that group. Mamdani, who is an amazing politician, has articulated some very important themes, but is really speaking to that group. Still, I think Democrats are not appealing to the working classes, who have more culturally conservative values and other concerns. That is a very big problem, because I think liberal democracy needs that broad coalition.
The image I have in my mind of an iconic coalition to support liberal democracy is FDR’s coalition, which consisted of progressive educated people, his brain trust; it consisted of manual workers, the trade union movement; and it included the Southern Democrats, business owners, people with more conservative values but difficult economic conditions, but very conservative values as well. FDR’s genius was to keep them together. But it is not just unique to FDR. Look at Scandinavia. Look at Germany, you had the same things there as well. That kind of coalition looks much harder to form today, and that is what I think is the future of liberal democracy. We need to reform that kind of coalition.
Mounk: How do we reform that kind of coalition? It strikes me that you are saying that one root of this crisis is that we transitioned from an industrial to a post-industrial society, and philosophical liberals, as well as, in their market sense, political liberals on the left, do not seem to have dealt with that transition the appropriate way. When you look back through history and think about other moments when liberalism was truly in crisis, the rise of fascism and communism in the first half of the twentieth century was one such period. But the middle of the nineteenth century, when liberals had to think about how to adapt their ideology to the rise of industrial society, to the factories in Manchester and so on, was another. There is this complicated way in which liberalism has certain ideas about the economy. I think it is basically a political philosophy whose main idea is about the nature of governance and the rule of law and separation of powers, but not directly economic, though it obviously intersects with the economy. As you are saying, it is rooted in certain economic facts about society. When those economic facts in society radically change, liberalism needs to adapt to that, and it has trouble doing that. Should we think of this as an echo of the mid-nineteenth century, or of other moments in which there was this economic kind of transition, and how is it that the ideology can respond to those new economic facts by changing and adapting, but without giving up what is actually at its core?
Acemoglu: I think those are excellent questions, and your instinct is one hundred percent right that we have to learn from history. Indeed, there were historical difficulties. But I would say, despite the fact that if you look back, there are many mistakes and conceited arrogance in some liberal thinkers throughout the ages, the adaptation in the middle of the nineteenth century, I think, was better than what we have done today. I think the iconic case for that would be John Stuart Mill. He was very influenced by his father, James Mill, an economist and also a liberal in some way. But John Stuart Mill’s liberalism is much more adapted to the industrial age, much less arrogant than his father’s, which was very elitist. Essentially, it became the iconic left liberalism that I can identify with many aspects of the later social democratic ideas. John Stuart Mill was a staunch defender of individual freedoms, but also understood that you needed to provide opportunities and means for people to realize those freedoms. He was very open to democratization, including of women, lower classes, in social life and in the political process. That was the adaptation to industrial society.
Today, I think the adaptation is not necessarily harder, but we are not doing as well. That adaptation, as you have started articulating it, really has two parts. One is economic and technological: how do we use existing technologies and redirect them if necessary, especially in AI, so that we can recreate the foundations of shared prosperity. The other, at the same time, is how do we create the aspirations of liberalism—that is what I call working-class liberalism. It comes with articulating a new governing philosophy with a broad coalition around it. I would say perhaps the latter has to come first, because if we have the right aspirations, redirecting and using technology the right way will become easier as well. Today, it is a failure of governance and institutions that we have the largest and most powerful corporations in the world that are not regulated at all. But it is also part of our governing philosophy. We do not have a governing philosophy today that can stand up to the power of tech. For such a long time, we have given a complete pass to tech companies to do whatever they wanted, because we just did not have that sort of governing philosophy.
Mounk: One question that I ask myself is, assuming that fifty years from now we look back at this period and we think liberalism was really in trouble in the beginning of the twenty-first century, but thankfully we figured it out, and today liberalism is doing great, what is the story that we are going to be telling about that rescue operation? There are three different ways we might be talking about it at that point, two of which are intellectually in competition with each other but somewhat hopeful, and one of which is a much darker timeline, but perhaps the one that is most realistic.
The first is that the ideas of liberalism, the basic political theory behind it, the basic formulation of what liberalism is, had become complacent, had become stuck in one kind of set of assumptions about the world, and we needed some people, like Daron Acemoglu, or more broadly, all the people we are trying to gather in Persuasion, to rethink the liberal tradition. Thankfully, X and Y and Z people managed to do that during that period, and that really allowed us, or gave us, the intellectual tools we needed for liberals to confront this new kind of period.
A second story is: forget about all of that, that is just a distraction and high-falutin word games. Really, what we needed is a set of clever policies, or charismatic political leaders, or election strategists who figured out how to stand up to populists, just engaging in political battle and change. What we need is a really smart idea about how to hold Google accountable, or the people who really figured out how to take the fight to Donald Trump and the MAGA movement in the 2028 elections, or whatever.
The third kind of timeline that we might be thinking about fifty years from now is, things look bad in 2026, but they got worse. There was a ten-year period like the Emergency in India in the 1970s, of real abrogation of democratic rule, or the horrible war between the United States and Canada, whoever, and people saw what the world looks like without liberalism, and then they remembered the liberal virtues, and that is when liberalism reconstituted itself, which is the story of the middle of the twentieth century, of course. That is the story of how liberalism roared back after the horrors of World War II and the Third Reich and the Soviet Union and the Holocaust and all of those kinds of things.
Which story are we going to tell, and in particular, how important do you think that first piece, the most intellectual piece of this, is going to be relative to the other two?
Acemoglu: Well, look, I think there are very good historians who think the only good ever comes out of crises. I am not one of them. Of course, your third scenario is a scary one, and I cannot rule it out. I hope it is not that one. There are instances in the past where we have gotten our act together against challenges, in the face of challenges, but without everything hitting crisis proportions. The progressive era was a challenging time, but it was not a crisis in which people started killing each other. Of course there was poverty, but it was not much worse than it was in the nineteenth century. It was somewhat getting worse. But we got our act together. We formed a broad coalition, or not we, but people there, and they laid foundations for a much better set of institutions, doing things that are unimaginable today: several amendments to the Constitution, introducing the federal income tax, introducing new laws for antitrust, creating new political movements and parties and ideas, and stopping the corrupt election of senators, going to direct election of senators. There were tremendous changes. So we are capable of doing those things.
I, for one, am a big believer in the importance of ideas—not my own. If I can play a tiny role in this, I will be very happy. But ideas matter a lot. That is why I do emphasize in the book the need for a new governing philosophy. In fact, charismatic leaders, of course, are important, but I cannot think of a charismatic leader who has had beneficial effects unless he or she could piggyback on or articulate an inspiring idea. That is why Mamdani is a fantastically charismatic and skilled politician, but I do not think he has the right governing philosophy. That is why I do not think he is going to be transformative for the United States. He may, as yet, develop it. He is a very, very skilled person. But we really need new, aspiring, inspiring ideas, and those that will bring broad coalitions together and that will really energize liberal democratic institutions.
Mounk: Thank you very much for giving this justification for what I want to do in the next part of the conversation, which is to geek out about the political theory in your book. You defend liberalism, you make a philosophical case for liberalism, but as part of that defense, you also attack some of the big traditions that have historically justified liberalism. In particular, you think that we have overindexed on the social contract tradition, starting with Thomas Hobbes and John Locke and Jean-Jacques Rousseau, but it extends all the way through John Rawls and the influence that he has had on our thinking. Describe briefly what the social contract tradition really consists in, for readers who may be less read up on that, and why is it that you think that has in some ways pushed us in the wrong direction? Why, in order to do that work of renewing liberalism, do we need to critically rethink how we are justifying the philosophy?
Acemoglu: The social contract tradition came out of a very necessary point at a time when most of the world was not just governed by kingdoms and sultans, but philosophically believed and legitimized things like the divine right of kings, where certain people were put on this earth to rule over others. Social contract theories instead started articulating ideas related to we the people somehow giving our consent. It is very clear, for example, in John Locke’s work. But a very important part of that, which we can see, for example, in Immanuel Kant’s majestic work, is this effort to find what is right that we can somehow ex ante specify, either procedurally, as in Locke, or substantively, as in Kant, what is ethical action, what is the right organization of society. The extreme version of that, in my mind, is in Jean-Jacques Rousseau, where there is a general will that is always right, and we have no choice but to obey that general will.
Mounk: Where, of course, the famous phrase comes from, that if the individual does not agree with the general will, then the general will should be imposed on them. This is not unusual—there might be a law, and even if you disagree with the law, we are going to force you to obey it—but with a dangerous addition: that this is not restricting your freedom, it is in fact forcing you to be free.
Acemoglu: Exactly. To be free we need to have the general will imposed on us so that we can be free. What is wrong with that, in my opinion, is that what is most positive for us is to agree from the bottom up on what should be done. So what I call a social compact rather than a social contract. What I mean by that is that there is not any formula for the right behavior that we should impose on others. Of course, we have to impose laws on others and ourselves, but we have to agree to them to the extent possible. Liberalism, again, was the one philosophy that cultivated that.
Today I believe we need that more than ever. We need shared moral values, communication, community, so that we can develop ways of reaching those compromises, and that is where bigger coalitions come in. We should move away from this notion that somehow some of us, or some political process, has the solution to all the problems. I think the social engineering agenda that we talked about briefly, Yascha, is very related to that. It comes out of the belief—by the way, when liberals used that, it was trying to solve real problems: problems of ignorance, intolerance, rejection of others in our society, in our midst. Those were real, serious problems. I do sympathize very strongly with the liberal agenda there. But I think the way to deal with that, saying that we know the answer and we have to impose that on diverse communities, is the wrong way to approach it. The moment you do that, first of all, you are betraying, I think, liberal ideas and all the pluralism that is so essential, and all the self-government aspirations that are so essential to liberalism. But also you are bound to create backlash, as we have done, instead of finding the common moral grounds and trying to make gradual progress on these things, which, again, liberalism has done brilliantly for two and a half centuries. Gradually, but brilliantly.
Mounk: Spell out the connection to me. How do you get from Thomas Hobbes to the modern campus bureaucracy for imposing DEI on, say, a department of political science?
Acemoglu: This is actually a fascinating area. I am very interested in that, which is the genealogy of ideas.
Mounk: When you say that there is a connection between the contractualist tradition and the kind of high-modernist project of social engineering, of which you take the DEI bureaucracy to be a part, what is the connection?
Acemoglu: Right, that is where I am going. Is Thomas Hobbes critical for that? I think he is, to some extent, because he introduced the most modern version of social contract ideas, but together with a very firm belief that you also needed the Leviathan, and the iron fist of the Leviathan, to keep order and to impose the right things. From there it is a very protracted evolution to Rousseau. I do not want to say that people from the right criticize Rousseau too much; there are some brilliant things in Rousseau. But I think he is also the epitomization of this kind of thinking, that once we know what is right in the general will, that should be imposed.
I think the key is that none of these ideas, except for that brief period during the French Revolution, were really applied as liberal ideas. Liberalism was in opposition. It influenced things by changing hearts and minds and convincing conservatives, and later socialists, to come on board with its ideals. It is only in the decades that follow World War II that liberalism becomes the establishment. That is also the period where, throughout Western Europe and the United States, some of the problems that liberalism itself did not have any solutions to—such as how do you deal with the intolerant, how do you deal with ignorance, how do you integrate people into society when they come from very different backgrounds and there is discrimination and rejection—all of these problems came to the fore, because these are very heterogeneous societies, and they were modernizing in some aspects, both economically but also ideologically. That is where you see this urban, educated middle class gaining more and more progressive ideas, very cosmopolitan, very inclusive ideas in some sense. But other parts of it are still culturally very different. So how do you deal with these problems? The solution gradually became more and more, we know the truth, we are going to impose it on others. That is what I think is a problem.
Mounk: So the connection is that in the contractualist tradition, there is a kind of distinction between the right and the good—I am now broadly channeling John Rawls, though there are different formulations of it at different stages of the tradition. Broadly speaking, when it comes to how you want to lead your life, the state is meant to be neutral between different conceptions of the good that people have. I might be very secular and think that the good life is to spend my time chatting to interesting people on my podcast. Other people might be very religious and think that the good life consists in being a nun and spending all of their days in prayer. The state is not going to favor one of those things over the other. But in the realm of the right, in the realm of the basic rules the state is going to enforce, there is a kind of objective truth, and that objective truth has to do with how we can actually live together in a society under diverse circumstances. It means, in particular, that I am not allowed to impose my views on you. I cannot say, I am religious and you should also be religious, and if you are not going to be religious, then I am going to physically attack you, and so on.
Acemoglu: I think that is a little more complicated, in my opinion, because I think that is never fully the case. There are things you have to protect about individual liberties. But also, because I think what you describe, which sometimes goes under the name of pluralism, is accepted, sometimes, at the individual level, but my justification for liberalism and liberal ideas also says we have to accept it at the community level as well. Most of the things that we do are not just at the individual level but at the group level. You need to allow for some amount of community-level experimentation and community-level self-government. That is really difficult, because communities, of course, are cages of norms, as I also called them in my previous work with James Robinson, The Narrow Corridor. They impose their values and they take other people’s freedoms. That is why this is a very grey area. But there is no social contract, there is no formula. We have to work through these edge cases ourselves, as a global community, as a national community, as people who share certain moral values. This is why it is very important that we at the same time enshrine basic individual freedoms—freedom of thought, freedom of religion, association, speech—at the same time as we recognize community-level pluralism. I think that is what social contract theories do not fully do. John Rawls is an exception; it is a complicated case.
Mounk: Let me push you on that a little bit. I find the concept of a cage of norms very generative and helpful, and I draw on it in my book, The Great Experiment. When James Robinson came on the podcast to talk about The Narrow Corridor, which is a fantastic book, we debated that. If you want to go four or five years back in the archive of the podcast, you can find a great conversation about that. It is interesting to me that, on this particular point, I think you echo a post-liberal critique from the right, which I think actually has some real meat to it, some real justification, which is to say: these liberals claim that they are neutral between different conceptions of the good—you can be deeply religious, or you can be secular, you can do this, you can do that—but in practice that is not the case. In theory, the university claims, we are a diverse community and you can have all kinds of political views. But in practice, the deeply conservative religious student is going to feel a lot less comfortable on campus at MIT or at Johns Hopkins than the kind of secular Theater kid. I guess the question is, why is that? It seems to me that you are drawing a line here from the contractual tradition and saying, well, because the contractual tradition has this idea of a right and they want to impose it. I would say it is different, actually. I would say that conception should protect those students. The problem is precisely that we are not acting as philosophical liberals, that we are imposing an idea of the good on people, saying this is how you should live and not this other way. That is precisely a violation of what liberal principles are, whether or not they are cashed out as part of a contractual position or not.
Acemoglu: Let me try to say it this way. First of all, I am definitely not a post-liberal. But you are right, that critique is right. What I would say is that liberalism is the best way of dealing with that critique. That is where we have to recognize these grey areas and say we have to create these basic individual freedoms, but still allow for community-level self-government and pluralism. There is no hard and fast rule. In particular, when a community starts discriminating against a particular group, there often are going to be grey areas. If they take that group’s or that individual’s basic rights very strongly, that is where we have to stop it. But where that line is, I think we have to negotiate as a society, based on moral principles. That is why I do not think there is a social contract—if there was a social contract, we would know where that line is, in some sense. That line becomes much more inspiring to draw if we agree around it.
For example, on gay marriage, there are two very different paths to allowing gay marriage, and we have pursued both of them in the United States. In one of them, the process of debate, information sharing, campaigns, and referendums convinced people from very different walks of life, with very different values, that two people of the same sex wanting to get married was also a good thing. If you could put yourself in their shoes, you would realize why that was so important. Empathy was a very important part of building that tradition. A second path was, we know this is right, your community may be against it, but we are going to impose it on you. I think there is a big difference between these two. I fully support same-sex marriage, but I do not want the second path to be the one, because it is going to backfire, and it is actually not consistent with ultimate liberal values. I want that first path, which actually worked quite well for quite a while, to be the one to achieve that. If you are a social contractarian, I do not think you can reject that second path.
Mounk: Why not? I do not fully understand.
Acemoglu: Because it says that there is a social contract, and that social contract says, regardless of your sexual orientation, you should have the rights that opposite-sex couples have. If that is not the case, we are going to impose that. That is the social contract.
Mounk: I think there are many steps from going from something like Rawls’s original position to, say, whether, in a deeply conservative society, some form of protection for same-sex couples that falls short of marriage is acceptable. Or you could take a libertarian point of view, which I think is perfectly compatible with the social contract tradition in this specific circumstance, which is to say, well, the state should get out of the business of marriage. Marriage is something that has deep religious significance; different traditions are going to interpret it very differently. Why should the state be in the business of drawing the lines about what is an acceptable marriage and what is not?
Acemoglu: But the state needs to be there. I do not agree with the libertarian tradition either. If you did that, then it would also be okay for a community to say, well, we do not believe in the secular education system, so we are going to not send our children to school, we are going to drop them out of school at the age of seven, and I think that is wrong as well.
Mounk: But I think the liberal tradition has many more resources for answering some of those questions. The answer for children is that children cannot make decisions for themselves. Liberals think that you need to be able to make decisions for yourself, as long as you are not harming other people. But that presumes that you are capable of making decisions for yourself. A seven-year-old is not capable of making decisions for himself, so who should make decisions for the seven-year-old? The answer is a cooperative project between the parents and the state.
Acemoglu: Just a little tangent: yes, but it is not just the seven-year-olds. I gave that example, but let me give you another. If you are a libertarian and you are against the state, what do you do if a local, self-governing community forces people who are homosexual to go through conversion therapy because they think homosexuality is wrong? That is where the state needs to step in and say, no, that the local community cannot do that. So we do need the state.
Mounk: Sure. But that goes back to the discussion about community and how distinctive the level of a community is. I am not sure whether we disagree about what should govern those communities within liberalism.
Acemoglu: One thing that might help—and this might be a bit too much of a tangent—John Rawls is actually super interesting, because there are two very distinct ways of reading him, and I think he is not clear on which one should be the right way. One is the veil of ignorance, which I think is just very classic social contractarian: behind a veil of ignorance, we agree on the right thing, and then when we come out, when we are no longer behind the veil, we should still follow it. But there is another way, which is that this is an argumentation method. I can try to say to you, Yascha, put yourself in my shoes. You could have, in an alternative life, been me, and you would have seen things differently. That is a way of convincing you. It is the latter Rawls that is completely consistent with what I am saying, and it is the former Rawls that is very opposed to it, because I do not believe we can reach just and fair rules, rules that are going to form a broad coalition, behind a veil of ignorance, and then impose them.
Mounk : I agree with that. I also find A Theory of Justice not all that fruitful for debates today, but Political Liberalism much more helpful, and that is a similar distinction. But I actually want to get to the substantive question about what role the community should have. Here is roughly the position that, in part by engaging with the idea of the cage of norms and so on, I develop in The Great Experiment: the first misunderstanding about liberalism is that liberals do not value community. I think that is wrong. Historically it is wrong, because the very origin of liberalism was, how can we have Catholics and Protestants in the same state? It is not that we did not think those religious communities were important, but it is precisely because they were so important that they led to 150 years of war. We are trying to figure out how we can honor them without continually having war and civil war. When you think about what the basic liberal freedoms are—the freedom of worship, the freedom of assembly, the freedom of speech, freedom of conscience—they precisely come from an understanding that community and religion are incredibly important to most human beings.
Acemoglu: One hundred percent, and that is very important. You are one of those who has emphasized that. Helena Rosenblatt is another person who has emphasized that. I think that is a very important thing, and many important works of the liberal tradition, like, for example, Adam Smith’s Theory of Moral Sentiments, come out of that—trying to say, how can we create communities in which people care for each other and understand each other?
Mounk: If you are saying that communities do not have enough pride of place in liberal theory at the moment, and perhaps not in our societies, because we impose upon them too much when we feel that they have run afoul of this social engineering project, what role should they have? To me, the liberal stance would be: communities have deep value, we want to have many communities in our society, and we have to respect the fact that they may hold views which I, as a secular liberal, may find offensive, and that is acceptable. But they have value derivatively from the choice of individuals to be part of them. This choice is not an idealized thing where I am imagining that at eighteen, I sit down and think, which community do I want to join. Most members of a community are going to be born into it and continue to be a part of it. But what we do have to leave is the possibility of exit. If you are raised within a community that you do not like, you need to be able to leave it. That is a fundamental feature of a community. The reason why we respect communities is that they have members who are free to leave but have not left. That is why they are worthy of our respect.
Acemoglu: One hundred percent, you got it exactly right. But let me push you on the next one. Should there be a right to entry?
Mounk: Not necessarily. I do not have to invite you for dinner. That is part of freedom of association.
Acemoglu: That is it. But that is exactly where we are now seeing the grey areas. Should a community today in the United States that is conservative say, immigrants are not welcome in our community? We cannot prevent them, but they are not welcome in our community.
Mounk: It depends on what you mean by a community here. If it is a residential area, then the answer is no. But if it is a social club for people who all have to be native-born citizens, that is not something I would like, it is not something I would join, but I think we should absolutely allow that.
Acemoglu: Exactly. When it is a residential area, for them to do so by any coercive means, or by any means that is inconsistent with the market system, is not allowed. But they may say, we, as a community, want to practice our religion, and we do not want your religion, and you can come and live here but we are not going to adapt to you. I think we have to allow that too, again subject to basic liberal principles, which is that they cannot restrict the freedom of association, speech, or mobility of those people. But they can have stances, they can have policies, they can have collective arrangements that are not as welcoming to immigrants, and other communities can have more. Those are the kind of grey areas, and I do not know the answer to where that line should be. I am proud of not knowing where that line should be, because I think that line should be something we decide together, based on shared communication and moral understanding.
Mounk: This also gets to a thought I have about the nature of hard cases. I think sometimes people want to point to the fact that there are hard cases as a way to suggest that therefore the underlying theory must be wrong, and I think that is a mistake.
Acemoglu: Absolutely. I think liberalism always has to be a work in progress.
Mounk: Any moral system is always going to have multiple normative commitments, and there are going to be some cases where those commitments butt up against each other.
Acemoglu: Yeah, absolutely. But any good moral system has to have that. There are many bad systems: theocracy does not have that, the divine right of kings does not have that, Sharia law does not have that. That is why they are bad systems.
Mounk: Right. But then I think the question is, in those hard cases, can you explain in a coherent way what the different considerations are and why this is a hard case? As long as each of those considerations has real normative pull, I do not think it is a problem. I want to get to your analysis of social engineering, because you draw both on history and on economics in order to help us understand it. You compare, for example, the DEI bureaucracy today to the clergy of the medieval church. What on earth do those two have in common?
Acemoglu: Any analogy there is dangerous and provocative, and I do not want to overstate it. But I think whenever you form a system where some people have the means to impose their practices or values on others, it has several elements. One is ideological power. That is very important to human beings, because it gives them power over others, and individuals, to some extent, seek power. It does that in a way that is consistent with their values. It also creates employment. It also further unites you with the people who share your values. Those are the dynamics that we saw with the clergy, and those are the dynamics that we see when you look at—and it is not just the DEI bureaucracy, it is the whole post-industrial system. Look at high schools. There is great diversity, so any generalization is going to be false, but there are certain currents in high school teaching that are very common across places, and they do impose a lot of values in some ways. Now, I sympathize with many of those values, but I still think we should encourage people into critical thinking rather than imposing those values. That is the sense in which this sort of thing starts spreading in concentric circles. That is what is problematic, and it does not leave enough room for consensus to emerge through shared moral understanding and communication, and it creates the possibility of backlash.
Mounk: One of the structural similarities you see across many historical examples is that, originally, people are recruited into the bureaucracy to serve a purpose that the principal—the president of a university, the pope, the king—has, but over time it is actually the bureaucracy that is assembled. Tell us about that mechanism, and how it helps illustrate both those historical cases and the challenge we face today.
Acemoglu: I think you summarize it quite well. I would say it is really remarkable that the dynamics of indoctrination in medieval Europe were very much a local matter. The Inquisition and all of these things are the apex of that, but they were very much local zeal—people who had other positions and other jobs really jumping in, surpassing each other in terms of how zealous they were going to be. If you look at where the head of the spear is in the progressive imposition of values in the recent past, it is again people who are there for other positions—human resource departments, or people who are in teaching positions, not everybody obviously—playing this role of, well, it is our job to impose what we think or what we believe are the correct values on others, if necessary, by not allowing them to speak counter thoughts.
In the rest of this conversation, Yascha and Daron discuss the meaning of working-class liberalism, the potential economic impact of artificial intelligence, and how to shape a better way forward for AI. This part of the conversation is reserved for paying subscribers…
