Entrepreneurship, knowledge and employment

Solidarity, subsidiarity and the role of the State: Food for thought from the late 19th to early 20th century debate

Figuera Stefano, University of Catania, Department of Law
Pacella Andrea, University of Catania (Italy), Department of Law

Between the second half of the 19th century and the first decades of the 20th, the explosion of the social question and awareness of the crisis of liberalism led to critical reflection about the operation of the capitalist economic system. This occurred in various countries even in contexts that had previously viewed the socialists’ criticisms of the reigning economic order with great suspicion, if not outright aversion. Serious economic inequalities and exploitation thus came to the centre of attention for scholars who seemed conscious, in view of the legitimate demands of the poorer classes, of the urgent need to provide a satisfactory response, alternative to that offered by socialism. This was the context of contributions made by those who placed great emphasis on the value of solidarity, seeing the creation for a supportive economy as a third way that could avoid the excesses of liberalism and of socialism. The State’s role in the economic system was a central issue in this theoretical debate. Some thinkers opposed state intervention, others believed it possible. This crucial topic was debated especially in the first decades of the 20th century, when a vision revolving around the principle of subsidiarity was added to the pro-solidarity view. Various scholars in the tradition of the Austrian school argued the validity of the individualist methodological option and expressed absolute faith in the market’s allocative power, leading essentially to the elimination of state intervention. The establishment of the social market economy model was a very important step from the point of view of reaffirming the central role of the market and drastically downsizing, if not totally repudiating, economic policies based on authentic demands for solidarity. The specific aim of this paper is to reconstruct the economic debate of the period in question using the concepts of solidarity, subsidiarity and the role of the State from the perspective of an institutional revisitation

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Keywords: Solidarity, subsidiarity, the State, 19th to early 20th century debate

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