Every political-economic system stands on a foundation, the societys culture. Ultimately, culture is a tacit system of values and virtues that guide the everyday activities of the people. When the political-economic system is out of sync with a societys underlying cultural values, the result is instability, which most likely will result in a transformation of the system in the direction of those values. For example, the political economy originally known as liberalismbased on the institutions of individual rights, private property, personal responsibility (individualism), free markets, and the rule of lawrequires cultural attitudes consistent with those institutions. Should there develop widespread resentment against achievement, accumulation of wealth, privacy, and consumption, the foundation of liberal institutions will inevitably erode and eventually collapse. Authoritarianism and even totalitarianism will likely follow.
The process can work in the reverse: changes in political institutions can, over time, effect changes in cultural attitudes. Welfare-state programs sooner or later encourage an entitlement mentality in people. Where they once understood that benefits are to be obtained through work, persuasion, and voluntary exchange, they now expect a bureaucracy to provide them as a matter of right. Mediation by a government agency masks the reality that taxpayers are forced to provide such benefits. Left unchecked, the welfare state (aided by government-run schools) acculturates new generations into this entitlement mentality. A vicious circle results: entitlement programs strengthen the entitlement mentality, which produces demands for new and expanded programs. More and more of peoples income is collectivized, and the scope of individual choice is diminished. The very character of people is transmogrified. Self-responsibility atrophies and dependence grows. This is what Nobel Laureate Friedrich A. Hayek called The Road to Serfdom.
Similarly, just as liberal institutions are supported by and reinforce attitudes favorable to voluntary exchange, cooperation (through the division of labor), and peace, the institutions of warfareprotectionism, interventionism, imperialism, and militarisminstill collectivism, nationalism, and belligerence. This in turn weakens the natural abhorrence of the brutality of war. The murder of innocents is sanitized as collateral damage, and unprovoked invasions are euphemized as regime changes.
The political and economic interact intimately. The governments response to crises erodes not only liberty, but also its cultural underpinnings. Thus government intervention in the economy creates hardships (unemployment, inflation, depression, etc.) that are glibly blamed on others at home and abroad, resulting in domestic regulation, trade restrictions, foreign intervention, and sometimes war. When government exploits crises and expands its power, people become accustomed to looking to the state to solve problems. The irony is that the cultural values proclaimed by both conservatives and so-called modern liberals are systematically subverted by the political and economic measures they support.
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