One of the worst aspects of liberalism is that it is an ideology. Worse still is the fact that the bourgeoisie itself believes in this ideology – that, after all, is the secret of its power. According to this ideology, a free society is one founded on individualism. There are two aspects to the life of an individual: one is the “wealth” that an individual possesses, what is known as “self-interest”; and the other is the “public” facet of an individual’s life which is made up of social relations and beliefs and opinions. The bourgeoisie believes that a society is free if and only if it can keep the private aspect of the lives of its individual citizens entirely separate from their public aspect. And this neat separation can be achieved only upon condition that at least one of these two aspects of individualism can be optimised scientifically. Given that it is impossible, by definition, to have a “science of belief and opinion” (science cannot be, by definition, a matter of opinion), it follows that only the private sphere – the sphere regulating the maximisation of individual wealth – can be determined scientifically.
Indeed, the very “freedom” on which the liberal State prides – freedom of expression, of opinion and belief and life-style - itself is dependent on the “necessity” of the private sphere. Only if the individual pursuit of self-interest can be regulated “scientifically’ will it be possible for individuals to indulge in and enjoy “freedom of expression” in a manner that does not interfere with the functions of the liberal State. And vice versa, only if the private sphere can be regulated “scientifically” can the liberal State maintain its “neutrality” in the public sphere. But this is so if and only if both the powers and the functions of the State are confined to (a) the protection of individual self-interest – which can be done purportedly “scientifically” -, and (b) to the avoidance and prohibition of any interference by the public sphere against the private sphere. In a liberal society, the State can enforce the “liberties” of its citizens only upon condition that their self-interests can be determined through a neutral-scientific social mechanism for their optimisation – the market mechanism -, and that their opinions and beliefs do not interfere with this mechanism. It follows necessarily that the two spheres can be kept separate if and only if the State is “neutral” and, as a corollary, the “neutrality” of the State can be assured if and only if the State limits its powers and functions to ensuring (a) the scientific operation of the market mechanism and (b) the non-ingerence or non-interference of the public sphere with the private sphere. (Given that the private sphere is determined scientifically and technically, it is impossible for it to interfere with the public sphere if it is governed scientifically.)
It is self-evident that the liberalist ideology presumes that it is in the self-interest of each and every individual to ensure that the Economic, the private sphere, is insulated from the Political, the public sphere. This insulation of the two spheres is the foundation of liberalism: political economy on one side and freedom of expression on the other: - necessity here and freedom there. Clearly, then, the constitution of the liberal State must be founded, first, on the necessary conflict of individual self-interests, and, second, on the equally necessary agreement of all its individual subjects on the neutrality of the State and on the necessity of applying scientific principles to the private sphere. This is the basis of the rationalist scientific and secular roots of liberalism. Liberalism is the theory that the social antagonism of individual economic self-interest is compatible with political "freedom" even though quite evidently the "market mechanism" is founded on "the fever of self-interest" (Hegel) and is therefore in blatant contradiction and antithesis to the “agreement” of individuals to (a) the scientific basis of government and (b) to the presumed “neutrality” of the liberal State. It is this inner contradiction that liberalism cannot resolve because the capitalist interests it represents lead to "conflict", to "crisis" (Schumpeter) - however much liberalism may wish to homologate economic equilibrium with political stability and "liberty".
The contradiction, the fatal flaw at the heart of liberalism is that it is impossible to separate Politics from Economics – and therefore the liberal State, far from being “neutral” and “rational” must necessarily be “partisan”. The presumed neutrality of the liberal State – the confinement of its powers to the tutelary function (Nietzsche), that is the protection of private rights from political interference either by the State or by other individuals – turns the public sphere also into a private sphere in the sense that public opinion under liberalism must be thoroughly de-politicised so that the public sphere, the Political, becomes just as much a private sphere as the sphere of economic individual self-interest, the Economic.
And because of this de-politicisation of society under the “night-watchman State” or “State of Law” of liberalism, it is clear that the citizenry, the public sphere, can no longer form or dictate the political will of the State. The liberal State then becomes a mere arbiter that does not and cannot express the political will of its citizens. This is why “democracy”, understood as the privatisation of the public sphere through its self-enforced separation from the private sphere of self-interest, is the modern form of the decline of the State. If by democracy we understand not the active participation of every citizen to the formation of the State (the freedom of the ancients) but rather the passive enjoyment of “personal liberties” or “private rights” (the freedom of the moderns), then the fate of the liberal State – its Ohnmacht or powerlessness – is sealed once and for all!
A society that is founded on capitalist social relations of production quite simply must rely on a liberal State. And that is for the reasons we adduced above: such a society must be founded on (a) individualism, (b) individual rights, (c) the strict separation of property rights from freedom of expression, and finally (d) the limitation of State powers to enforcing both these rights (property and expression) in such a manner that freedom of expression does not interfere with property rights. But what this means is that the “neutrality” of the liberal State with regard to the private sphere of property rights leads to the privatisation and therefore the de-politicisation of freedom of expression – and hence to the de-politicisation of society. If freedom of expression is legally barred from interfering with the economic institutions of capitalism and if the liberal State is charged with the function of preventing such “political” public interference with “private” economic decisions, the inevitable outcome of this State neutrality is that the liberal State is entirely incapable of mediating the inevitable “political” repercussions of “private” economic decisions on the “public” sphere of personal expression and life-style, which equally inevitably must either be given a say on the regulation of private property rights or else – in the absence of such political representation – must lead to the revolutionary or otherwise violent overthrow of the liberal State!
Either the Political is allowed to interfere with the Economic, in which case the liberal State must be abolished; or else both the political and economic institutions of capitalist society will be torn asunder by conflicts and antagonisms that the liberal State is constitutionally unable to mediate and resolve. Either way, the liberal State is doomed to wither or to be overthrown and superseded. This is the self-dissolution (Selbst-aufhebung) of the liberal State.