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Public administration and Nations Building papers serie

No philosophy, please, we are managers

Public Management and the common good: Euro-Atlantic convergences

Claude Rochet Professeur des universits

Institut de la Gestion Publique et du Dveloppement Economique, Paris Institut de Management Public et de Gouvernance Territoriale, Aix-en-Provence CERGAM, Universit Paul Czanne, Aix-Marseille III

Claude.rochet@finances.gouv.fr Claude.rochet@univ-cezanne.fr

July Sept 2009 Working paper Presented at IIASA conference in Helsinki, and EGPA conference in Malta Translated from French

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Claude Rochet

Rsum : Le management public, en tant que discipline acadmique, a jusqu ce jour, t principalement inspir par une approche exclusivement managriale et axiologiquement neutre qui ont laiss de ct les grandes questions sur la finalit de la politique publique, celles du bien commun, de la bonne socit qui tait la base de la philosophie politique classique. Gouverner sest rduit gouvernancer , en se fondant sur le prsuppos que les bons moyens la bonne gouvernance ne pouvaient que mener aux bonnes fins. Cette approche est la traduction de la domination de lindividualisme libral domin par le droit et les mcanismes du march. On assiste, de part et dautre de lAtlantique une convergence des critiques contre ce modle et un retour du rpublicanisme qui met le bien commun comme finalit de laction publique. Ce dbat a t fondateur des dmocraties modernes, de lAngleterre du XVII sicle, la fondation des Etats-Unis et la tradition rpublicaine issue de la Rvolution franaise. Larticle envisage comment le management public peut se rgnrer aux sources de cette tradition pour tisser le lien rompu entre gestion et politique, en envisageant les consquences sur la formation des managers publics. Mots clefs : Philosophie politique, programme de recherche, management public, bien commun, histoire angleterre, histoire Etats-Unis, crise financire

Abstract : Public management, as an academic discipline, has been, up to now, inspired by a managerialist approach axiologically neutral that cast aside the great questions regarding the ends of public life, those of the common good and of the good life that were at the very basis of the classical political philosophy. Governing has been reduced to governancing , relying on the presupposition that good means automatically lead to good ends. Based on critiques of this drift, we witness on both sides of the Atlantic the renewal of the old republicanism that makes the common good the aim of public administration. This debate has been at the very foundation of the modern democracies since the XVII century in England, to the foundation of the United States and the republican tradition stemming from the French Revolution. This paper envisages how public management could rejuvenate itself to mend the broken link between the managerial and the political, putting emphasis on what would be the consequences on the training of public managers. Key words: Political philosophy, Research programme, public management, common good, history of England, Histoty of the United States, financial crisis

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Figure 1: The good government , Fresco of Ambrogio Lorenzetti, Sienne Town hall

The fresco should be read from left to right and from top to bottom. This symbolic group starts with the figure of Wisdom who is holding a biblical book bearing the same name. From here, a rope links it to Justice. The two parts of the scale represent, on the one hand, the distribution function of Justice giving each part its own talents. On the other hand, these pans also possess a commutation function: they attribute each one according to their merits (the just person is crowned & the condemned is decapitated). Then the rope passes into the hands of Concorde with a plane on his knees to smooth out arguments & controversies. Then the same rope reaches the hands of twenty-four citizens dressed & with their hair done according to the fashion at that time. The latter symbolise the past Siennese government which was called the Twenty-four Government.. Finally, the rope ends in the hands of an imposing old man, dressed in black & white, which represent the colours of the town. He represents the Commune, & the Common Good. The authority and legitimisation of his regency are expressed by the advisors. They are by his side to guide him. They are Vertus Thologales (from the left: Faith, Charity & Hope) who are placed above him & the Vertus Cardinales de Saint Ambroise (Strength, Prudence (phronesis), Temperance, and Justice) who are next to him with Magnanimity & Peace. On the bottom right, armed men manage the security of the citizens & a group of prisoners tied together shows clearly the fate destined for rebels & outlaws. Two nobles with long hair, kneeling, are offering their castles to the Commune, renouncing freely their sovereignty in favour of the Siennese state (Skinner, 2003).

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Management is not a neutral technique but an activity inexorably linked to politics, public poliicies, the law and the stakes of civil society. It is always present in values and /or ideologies
Christopher Pollitt et Geert Bouckaert Public Management Reform : a Comparative Analysis , 2004

It would seem as if the rulers of our time sought only to use men in order to make things great; I wish that they would try a little more to make great men; that they would set less value on the work, and more upon the workman; that they would never forget that a nation cannot long remain strong when every man belonging to it is individually weak, and that no form or combination of social polity has yet been devised, to make an energetic people out of a community of pusillanimous and enfeebled citizens. A. de Tocqueville. De la Dmocratie en Amrique.

Public management has been dominated by the idea that the notions of the State and government can be reduced to good governance : efficiency and transparency of public action, clarification of the decision-making and responsibility circuits, etc. Should we, from now on, cease to govern and replace it with to governance , that is reducing politics to management? Opposed to these ideas from neo-classical economics, which emphasised the importance of organizational performance, are ideas from institutional economics and the evolutionary school, which insist on the role of institutions in both the developing countries and in the evolution of developed counties and have been able to identify the comparative institutional advantages in the explanation of differences in growth between nations. Good management does not necessarily mean good government. Managing well does not mean governing well: our accounts may be accurate but our political choices can be unjust or mistaken. When governments are compared using the indicators of good governance as defined by public management research, used by the OECD, and which tries to establish a One best way model, Matt Andrews (2008) shows 1) that the criteria are inconsistent, 2) that there is no correlation between performance development and the observation of these criteria, and above all 3) that it is not appropriate for developing countries to try to use these criteria. Formal indicators, without a solid theoretical base about long-term development, about the role of the State in development and which would permit an understanding of how development strategy is determined in each country, are necessary in order to define what an effective and efficient State would really be. This work started to be undertaken by heterodox economists (Reinert, 2007, Chang 2003, Sapir 2007, Rodrik 2008 amongst others) in an effort to link institutional and developmental economics by emphasising the political characteristic of such criteria. The aim of this article is to contribute to this thought-process and to move away from the strictly managerial approach to public decision-making, by showing that advances in institutional economics are forcing us to re-emphasis the classical criteria of political

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philosophy that of the common good at the centre of public decision-making and to see their effect on pubic sector administrators. This article is composed of five parts: The first part will look at the limitations of purely managerial approaches arising from the New Public Management (NPM) and will integrate the most recent knowledge from evolutionary theories in order to escape the false alternative posed by current thought: either a bureaucratic State, or no State at all, in the name of faith in the auto-regulating capacity of the market. It is now possible to reconsider the role of the polity in this dynamic by underlining the fact that the role of the State lies in the evolution of the system of beliefs particularly in periods of technological change and transitional crisis which implies returning to consider the fundamental questions of political philosophy: those of the common good and the role of civic virtue. The third part looks at the fortunes and misfortunes of civic virtue in the building of modern nations, comparing, the evolution of the debate, since the 17th century, in England, France and in the making of the United States. The fourth part concerns the Euro-Atlantic debate centred on the role of republicanism which updates the role of the common good as the basis of the evolutionist institutional dynamic and consequently of public organisations. In the conclusion, the implications for the education and the training of the elite public administrators will be considered in the perspective of updating Webers model, in both its fundamental and practical aspects as regards skills development.

The limitations of a purely managerial approach

The New Public Management vogue (hereafter referred to as NPM) developed theories concerning the difference between management and politics through the canonical principle let managers manage on the grounds that administrative complexities had become much too big for the powers-that-be to deal with without being overloaded by minor technical questions at the expense of the essentials. NPM, in its first wave of reforms in New Zealand, based its theories on the neoliberal corpus: neoclassical economics from the Chicago school, the theory of public choice and transaction costs. The State becomes primarily a provider of services, its intervention in the economy and its regulatory function being limited to market failures, which are by definition less frequent and less serious than State failures. NPMs approach was to separate the domain of doing things right - management from that of doing the right things - politics. NPMs plan was to build low but solid, adopting an institutional configuration whereby civic values are ruled out and are replaced by the simple efficiency of management (Laegreid et Christensen, 2002: 119). In the academic litterature the term new paradigm is used to describe the revolution supposedly incarnated by NPM. There is no denying that the latter has made important contributions to the management field mainly in terms of the development of management control and accrual accounting - and public management research can today assess more than two decades of reform (Kettl, 2005, Bartoli, 2004, Pollitt et Bouckaert, 2000, 2004). Today the star has faded and has given way to pragmatism which can handle several types of strategy and tactics that vary according to the context (Schick, 1999, Pollitt, 2003). Pollitt et Bouckaert (2004) show that, in empirical practice, it is a neo-weberian twodimensional State which is emerging:

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Claude Rochet

- The State remains the main piloting and regulatory force in the evolution of society, the objective is not the minimal State advocated by certain AngloAmerican politicians. The State is not considered principally as a burden on the economy and society, nor as a necessary evil. It acts more as the guarantor and partner of both a strong economy and the cohesion of a civilised society (Pollitt, 2008). Of course this role changes according to the different strategies that need to be considered in the new socio-economic paradigm, (Innovation, a State Affair, Rochet, 2007). - The State machine is becoming modernised using new technologies and management methods, which have enabled it to be more efficient. But there is no assumption that aping the private sector or actually using the private sector is the only way to achieve efficiency and professionalism (Pollitt, 2008). Christopher Pollitt insists on the fact that the Neo-Weberian State (NWS) concept never claimed to be a new paradigm, in spite of the labels attributed to it by many researchers2. The attitude whereby the slightest model becomes a paradigm unfortunately is generally found in the social sciences, resulting in the notion losing its meaning. I adhere to the definition given by Thomas Kuhn, that is particular and coherent traditions in scientific research , a set of primary principles which permit the development of new analyses and new concepts which represent the principal activity of normal science . The work is done once and for all () and is destined to be adjusted and specified in new or more limited conditions (Kuhn, 1983). The stake is not simply academic: it is political. If public management can claim to be a paradigm in itself, a scientific revolution that annuls all previous concepts, it permits a tabula rasa of the past and a rupture of links with politics and changes in the socioeconomic paradigm, thus becoming an auto referential concept. Laurence Lynn (2001) shows that if there ever was a public management paradigm, it amounts to traditional principles of the separation of power and citizen control over administrative power, and that wanting to replace the Weberian bureaucratic paradigm with the supposedly new paradigm of NPM turns out to be a far greater threat to democracy by separating administration from politics. Leaving aside the false alternatives If in the Anglo-Saxon world we are witnessing a rebirth of the importance of public service ethos, of the political State and its role, the mainstream views remain coined with beliefs founded under the influence of NPM: the private sector manages better than the public sector , the size of the State must be reduced , good management gives good results . The French concept of State reform is emblematic in this matter: it is in fact only a question of public management and not of the State as an institution. The confusion is accentuated in the translation from English to French notably in OECD work whereby government is translated by Etat whereas it is really the administration that is being referred to (OCDE, 2005). France has long had Minister of State reform who was in fact only a minister for administrative modernisation3. The last act of this

See Synthesis comments on propositions Christopher Pollitt, Tallinn, 31 January 2008, the conclusion of trans-european dialogue organised by the IIASA, http://www.cuni.cz/ISS-50-version1-080227_TED1_Pollitt_Synthesis.pdf 3 It has not always been so: after the first attempt to create a Ministry for administrative reform under the IVth Republic which only lasted ten days (Paul Giacobbi en 1950), a real Ministry for administrative reform was entrusted to Louis Joxe with the position of Secretary of State, from 1962 to 1967. This Ministry disappeared between 1974 & 1988. It was given the name of Ministry of State Reforms in 1995. In other words, when the State played a real role & had a political strategy, we could clearly

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confusion was achieved in the transfer, in 2006, of the services of the Ministry of State reform to the Ministry of Finance as part of the management of the State modernisation to be controlled by Bercy. In the process of a general revision of public policies the State missions are only considered from an efficiency perspective : a management, financial and accounting approach has replaced the political dimension of the State (RGPP, 2008). In this way, the reform debate tends to centre on a false alternative : either we accept reform and its underlying neo-liberalism, or it is refused on the grounds of defending the States role and the status quo must be accepted. The debate concerning the role of the State can be organised according to a demarcation line which broadly separates the neo-classics on one side, the Keynesians on the other, according to Joseph Stiglitzs formula, between those who are convinced, on the one hand, that the State generally does not work and that market forces work , and vice-versa for the other side. Either we support State intervention and we must accept the cost and the inconvenience of such actions bureaucracy and its costs or the latter must be counteracted using performance logic which forcibly leads to the disintegration of the State as an institution. If this alternative is adopted it can only lead to a process of bureaucratic euthanasia of the State : the incapacity to solve the bureaucratic problem at the public organisation level has become a pretext for suppressing the public sector, even to questioning the principle of the State itself as an institution. This type of reasoning cannot claim to find its source in liberal humanist thinking which, from Smith to Hayek, has never denied either the role and the necessity of having a strong State, or that of its intervention in social and economic life. For classical liberal thinkers, the issue was liberating the State from its sinecures and associated costs in order to guarantee its liberty of action in accordance with a law sheltered from contingencies, and not to remove economics from the domain of the moral sciences to make it into a science in itself as the political economists of the XIX century will claim (Polanyi 1944, Alvey 2000). It is therefore a question of intellectual method. Through critical analysis of the weaknesses of current research programmes, the objective must be to reconcile questions of how and what , the dynamic of institutions and organisations. The theory of knowledge as a demarcation line Friedrich Von Hayek founded his research on the theory of the State and its action on a theory of knowledge, by rejecting all forms of determinism. If his conclusions are very composite, they nonetheless represent a radical rupture with the dominant positivist thought by refusing the scientism of the laws of nature (Dostaler, 1998, 2001). Hayeks method lies in a radical rejection of the logical positivism of the Vienna circle4 and in the idea that reason is the central force in transforming social order. His work on the theory of knowledge is of primary importance in understanding the question of the State :
distinguish State administration, and, conversely it is when the State loses its influence that it is reduced to an administration, which is confused with the political State institution. 4 The Vienna Circle was a group of intellectuals grouped around Moritz Schlick, & which included Rudolf Carnap, Otto Neurath, Viktor Kraft, Hans Hahn, & Herbert Feigl, which attracted a large number of well-known scientists like Kurt Gdel. They aimed to unify sciences & eliminate metaphysics as they considered that metaphysical propositions had no meaning. They were inspired by the conceptions of Russell & Wittgenstein & wanted to formalise scientific knowledge. Popper was opposed to the Vienna Circles philosophy, called logical positivism, logical empiricism or even neo-positivism. This philosophy was criticised by Popper in his first book, Logik der Forschung (1934), the logic of scientific discovery (1973).

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Claude Rochet

On the discipline level, he considerably widens the field, refusing the reductio ad economicam of neo-classical economics, extending it to include the domain of moral philosophy. On the epistemological level, he bases his rejection of the logical positivism on the liberalist humanist source the origins of which are found in Adam Smiths Theory of moral sentiments. His liberalism confronts the axiological neutrality of the neo-classical approach and its mathematical formalism, which claim to discover deterministic laws in economics which guide the adaptation of institutions. Hayeks preoccupation centres on two questions : Does the State build the social side? and what is the interaction between the institutional framework that it defines and the actors role ? He distinguishes the State as an institution from the State as an organisation and sees in the confusion of the players interests and the law-making interest a danger for political liberty. The State cannot be an end in itself and must be subjected to a higher authority. Hayek makes explicit reference to Thomism : official authorities are not in themselves a source of legitimacy, they need to refer to a higher-level authority, sheltered from the contingencies of the democratic States politicians, in the same way as the institutions born after the English revolution in 1688 did. Hayeks project is to replace a government by men with a government by laws. The electoral system for Hayek is no guarantee against tyranny, it is only a means. Democracy conceals a danger : the coercion of the majority over the minority. He questions the social contract as conceived by Rousseau : The National Assembly is neither the sovereign nor an expression of a pre-existing social contract reflecting the nations will. From that point on, the highest State authority must have no coercive power, and only serve to remind people of and to safeguard the law. He suggests that it be composed of mature, experienced citizens, over the age of 45, who are supposedly wise. In his opposition to positivism, Hayek only conceives of society as a building without an architect , which is a spontaneous result of non- intentional actions. He thus denies the existence of laws and the sense of development of history which would be exogenous to human activity. Hayek goes as far as rejecting the concept of society as a fruit of positivist rationalism and as a desire for the coercion of individuals over other individuals against which the Hayekian State has to fight. The construction of society obeys an endogenous principle for spontaneous order, positive law being the codification of perceived regularities. This spontaneous order is the product of experience which develops habits and institutions which have succeeded in their own sphere and which have become, in their turn, the foundation of the civilisation we have built 5. The motor of this progress is the bounded rationality 6 of individuals which leads them to look for coordination mechanisms which, while conserving the liberty of the decentralised actors, gives them information about the state of equilibrium of the system as a whole. Such is the role of the price mechanism that Hayek considered only as a method of managing information between the whole and the actor. The market is not, for Hayek, a law of nature , but an efficient mechanism for sharing information which contributes to reducing the bounded rationality of the actors. His views
5 6

F.A HAYEK The use of Knowledge in Society , reproduced in Pierre Manent the liberals , Tel, Gallimard Hayek does not use this formula which first appeared in the work of Herbert Simon, but the concept is already expressed knowledge of the circumnstances that we should use never exists in a concentrated or integrated form, but only as dispersed fragments of incomplete& contradictory knowledgethat all separate individuals possess . Id, p. 765

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counter the tendency of economic theory that attempts to quantify the way the world operates. He was unable to obtain a position in the Economics Department of the University of Chicago because of his growing opposition to the more and more abstract mathematical model-building tendency of economic science. He became a Professor of moral science, like Adam Smith. But Hayek came across an aporia7. His aim was to conceive of a society based on liberty, defined by an absence of coercion, even though it is impossible to abolish it completely. From here comes the necessity of the State, which is a central institution in the Hayekian system : it must have a coercion monopoly, in the sense of the monopoly of legitimate violence outlined by Max Weber, whom Hayek admired in spite of the fact that he belonged to the German historic school. This coercion monopoly has to be law in order to avoid the coercion of men over other men. But as the State cannot be an end in itself it must be subjected to the law that controls it. In order to ensure his closed- system, Hayek needs a vault key which is neither the market process, nor positive law. He invents general laws which are in the same position as the natural law of classical political philosophy, from a moral standpoint, sheltered from human positivist rationality and having a coercive nature. From this point on, this moral law calls on either metaphysics, in the sense of a hidden God guiding mens actions towards good 8, or a wise legislator guided only by morality decreeing general rules in public law, which act as a complement for a spontaneous order in private law which the judge has to make people respect: an order that has not been put together by somebody and which is not based on commandments indicating what individuals should do () The judge must establish rules which have never been formulated, nor practiced before (Hayek 1980 : 114-121). Law is, for Hayek, the product of a process of natural selection. It is not created, contrary to what juridical positivism states: We should first liberate ourselves totally from the false idea that a society may first exist and that afterwards it is capable of forming its laws (Hayek, 1980: 114). Law and the judge thus appear as a deus ex machina which guarantee harmony in the whole of the spontaneous order. The vault key of the Hayekian system is therefore composed of a non-positive right, resulting from a process of evolution. But nothing is said about the selection criterion which is at work in the process, which is either of a metaphysical nature for the general laws of public law, or returns towards the utilitarian principles which it counters and which supposes that an agreement exists between utility and morality 9 in private law. Hayek fails to approach the problem of political philosophy, that of wisdom and good society . Raymond Aron brings up this aporia in the conclusion of his laudatory commentary, of The Road to Serfdom:

7 8

In philosophythe apories are difficulties which are irreducible in a philosophical question or in a doctrine. For Jean-Claude Perrot Une histoire intellectuelle de lconomie politique aux XVIII et XIX sicles , Paris, ditions de lEHESS, 1992, the invisible hand is the expression of hidden God, a jansenist thesis found in a lot of liberal economists. 9 The law was certainly not created to serve any great aim, on the contrary it developed because it made the people who conformed to it more efficinet in the pursuit of their own objectives (1980 : 135)

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I have always had difficulty, personally, in believing that morality and utility, through some pre-established harmony, fully coincide () I do not refute my admiration for Hayeks theory, but I reserve my faith in it. The Liberals sometimes have a tendency, like the Marxists, to believe that world order could reconciliate our aspirations with reality 10. Hayek uses the intellectual method and the theory of knowledge, and not the question of the State versus the market- the demarcation line which is no longer between liberal economists and the partisans of the state but between positivists and non-positivists. Hayek leaves us with two questions for research: 1) To which order does the interaction of decentralised actors relate, and are the intentional action of institutions possible within a rationality logic limited to actors, and 2) To which non-positive law can the State be subjected to, in order to play its role of protecting the liberty of actors and of researching a process of information sharing? Determinism revisited : the ergodic hypothesis Abandoning determinism exposes us to a danger : that of integral cognitive relativism, the negation of reason. We have to navigate between two pitfalls : passive or active obedience to a supposed sense of history and the total negation of historic institutional and organisational regularities, which lead us to believe that all is possible . The Future is open declared Karl Popper (1988), but that does not mean that we can do anything and everything. Only the method of formulating and refuting hypotheses will permit us to fix the demarcation line between the scientific and pseudo-scientific approaches. Here we are talking about technological social sciences that Karl Popper refers to in The Misery of historicism: prediction may forecast at regular intervals hurricanes coming from a specific direction, technological and social engineering will allow us to take the necessary decisions to reinforce our structures and prepare people. But does this in itself deny the possibility of taking intentional actions at an institutional level ? At this point we need to extend Hayeks theory of knowledge, as done by Jacques Sapir (2005) ET Douglass North (2005) by applying the ergodic hypothesis 11.

Risk, incertitude, ergodicity

In a system which evolves in a stable environment, the art of prevision and risk management can be practised using statistical support. According to an old definition by Hirsh, the risk factor is the one which can be calculated statistically and against which we can insure ourselves. A system which evolves in an open environment is controlled by uncertainty: a multitude of random factors make its behaviour stochastic. To pilot such a system, we have to have access to the underlying principles, which govern it. Institutions can, in this case,
10 11

R. Aron the Liberal definition of liberty , a commentaryof The Road to Servdom, in Pierre Manent, op. cit, p. 833. The observation,in time or space, of the properties of a part of a system permit the formulation of hypotheses about the proerties of the whole system..Ergodic systems only include states of equilibrium the transition from one state to another is statistically foreseeable. On the contrary, to understand the behaviour of a non-ergodic system, it is necessary to look at its inherent organisational principles or be able to situate it in a larger whole of systems whose behaviour caould be ergodic. The ergodic theory came from the chemist Bolzmans work & its mathematical foundations were developed by Von Neumann in order to understand the behaviour of dynamic systems. It was introduced into economic analysis by Haavelmo & Samuelson.

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reduce the incertitude by identifying the configurations that the system may take, by understanding the gap that exists between the actors skills and the difficulty level of the problem to be resolved (North,1991). In both cases, the system is ergodic because we can hypothesize its overall and future behaviour through understanding its behaviour at a certain moment. In ergodic systems, determinist methods can function. The institutions in an ergodic system play a role in reducing the incertitude by expressing preferable choices towards which the internal stochastic behaviours of the system should direct themselves. The evolution of institutional systems follows a continually changing trajectory (Rochet, 2007), either through a succession of foreseeable states separated by changes which represent the transitions from one technological cycle to another : the Kondratiev cycles, the business cycles of Schumpeter or even the techno-economic paradigms (Perez, 2002). A public system is ergodic when it evolves in the same techno-economic paradigm within which we can understand the main working principles.

When institutions no longer function

From this point on the paradigm has changed and we have entered a new technological cycle due to the fact that the practices used could no longer solve the problems of a turbulent and uncertain environment. The behavioural system has become non-ergodic: The institutions which permitted a reduction of incertitude no longer work: they must be reinvented (North, 2005). It is therefore necessary to access more profound underlying rules than those codified by existing institutions, which will allow us to understand the transition principles from one techno-economic paradigm to another. This distinction is essential in order to understand the role of institutions : If the socio-economic systems had no ergodicity, our understanding of change would be reduced to hearing a a tale told by an idiot, full of fury, Signifying nothing. (Shakespeare, Hamlet) therefore denying any positive institutional role. If, on the contrary, ergodicity is total, as in the positivist hypothesis, observation would allow us to reach a scientific understanding of the world : this is the positive State of Auguste Comte where observation dominates imagination () and dethrones it 12. In both cases, institutions are useless or, rather more, of secondary importance. The observation of regularities between institutions and performance in the long term leads us to admit, using Samuelsons vocabulary, partial and temporary ergodicities which are separated by periods of crisis (Sapir, 2005, Rochet, 2007). From this point on it becomes clear that the application of methods specific to the ergodical world to pilot in a non-ergodic world constitute a major source of failure for public policies. This is the main hypothesis in the most recent work of Douglas North (2005): in a nonergodic world the key competence becomes our learning capacity which allows us to reinvent theories underlying the conception of institutions.

The essential question is therefore that of knowledge..

This is a function of our representations, more precisely of our representation systems based on our perception capacity, which may be perfect or imperfect. Either we manage to reach a state of complete and intelligible knowledge of the real (the world of the theory of general equilibrium and the historical laws of Marxism) or we adopt a completely ergodic hypothesis.

Positive political systems, or the treaty of Sociology instituting a religion on humanity , p. 113, Paris 1854.

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Either our knowledge is imperfect and we achieve, according to the particular case, a statement of determinism which is partially unintelligible, and which can only be verified ex-post, a non-intentional result of intentional individual or group actions. This may lead us, either to the methodological individualism adopted by Hayek that results in spontaneous order, or to situation where the State and the institutions play a role in structuring the convergence of the intentional actions of individuals and organisations. In this case, we can identify local and temporary determinism, which can become useable through learning and progress in knowledge. By introducing the ergodic hypothesis, we can surpass the positivist approach which assimilates an understanding of the evolution of the future behaviour of socio-political systems to that of their past behaviour and poses the question Can the State be the initiator of political design or is it subjected to historic laws which it is proud to have given birth to? .

The role of the polity: what is good government ?

In the OECD report Modernising the State (2005), it is only a question of adapting to the evolution of society. Societies are constantly evolving and the State has to follow. In dominant political thought, the role of the State is reduced to management and political economics can be summarised as making the policy of economics. The OECDs report does not in fact deal with the State but with governance, presented as formal and informal set of rules that the OECD countries are supposed to have in common. Good government is the one that respects the rights of ownership, peoplesrights and the rule of law, with those linked to peoplescitizenship. The State questioning the belief system In a non-ergodic world with an imperfect perception, the role of the polity is to stimulate learning and the evolution of mental models which are at the heart of the systems of beliefs. Erik Reinert, in his fascinating article, The Role of the State in Economic Growth (1999), shows that throughout history, the winning countries had institutional strategies which represented a growth of knowledge based on the perception of ruptures in the long term. When an institutional system based on an ergodic conception of the world is confronted by the non-ergodicity of reality and, by the awareness of its imperfect perception capacity, a crisis is inevitable. Xavier Raufer studies this rupture in the urban violence context. On the one side he emphasises that the diagnosis of the essential has been done . But reports from the DST13, the security branch of the police force and the customs warn the government about the degradation of the difficult areas by traffickers of all kinds and the disappearance of all feelings of citizenship in such areas. But there is, as Xavier Raufer emphasises, a refusal to face reality on the part of the elites attached to their system of beliefs. The responsible, since the ENA, relies in social engineering fanaticism, it relativises and looks at things from a superior point of view often with irony. Two decrees and a white paper well fix it . In this way things have not only become insipid by the time they get to the top, but very often are in a terminal phase (in Lagadec, 2000 :204).


DST / Dfense de la scurit du territoire

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In short, this refusal to face reality is the expression of resistance to changing the system of beliefs in place and the flight towards more of the same thing . The characteristics of the statesman have not changed since Machiavelli (Rochet, 2008) : he is the person who re-establishes politics in its dimension of permanent refoundation of the city through the evolution of the beliefs on which the institutions are founded. The necessary return of the polity Hayeks aporia comes from having looked for general laws supposedly those associated with wisdom. But where does this wisdom come from ? Either it is metaphysical and of divine origin (which is implicit in Adam Smiths work), or it is the result of wise men for Hayek. But in his works there is no principle of political philosophy which could be used to found his general laws . Hayek has made a valuable contribution by showing the impossibility of the liberal solution on which Hobbes, and especially Locke, built their conclusions, and by showing the necessity of the State as a condition for individual liberty facing the all powerful society . He fails on the question of legitimacy. This latter question has two solutions either it comes from above or below (Gauchet, 2005 :21). Either it comes from a link, which transcends individuals, or it comes from the agreement between citizens bearing their rights: the process of adjustment between these two sources of legitimacy is in no way automatic (Gauchet, 2005: 26). The return to political philosophy is the point to look for whereby the political life comes to be considered as the essence of human society, to use the distinction made by Marcel Gauchet between the polity and politics, the latter being simply the practical organisation of debate on the stakes of public policy in a democratic society. The repercussion of the failure of Marxism and the success of liberal democracy was not the defeat of determinism and historicism, but the victory of its stereophonic opposite, democracy of the individuals rights which changed from being the rights of fundamental liberties to the rights to - debts rights - in which the State has a regulating function in a society based on individualism alone. It creates the illusion of allpowerful individuals who are enthroned masters of themselves, realising that they have no control over their destiny (Gauchet 2005 :28). It is to this mode of thought that the NPM developed its conception of the State as a services provider in the face of customer citizens . Having lost all the symbolic dimension of representing a political intention, it is just a practical example of administration, reduced to the role of a seismograph recording societys movements. It becomes an essential functioning power which gives individuals the right to no longer think that they are in society, but encloses them in a tightly and comprehensive network through a managing grip over the society (Gauchet, 2005 :431) Could the loop be looped, will positivist liberalism lead us to the Leviathan of Hobbes that it was trying to avoid ? The only way to think about changing institutional and organisational structures when faced with the ruptures of the IIIrd technological revolution is therefore to revise the system of dominant beliefs, which is only possible through political philosophy. With Leo Strauss, I support the idea that political philosophy must return to the status that it had before modernity : questioning the nature of a good society and the common good. The question has to be asked Does the Enlightenment extinguish what it sheds light on? and we must consider the depth of the crisis in the Western world and find the means to rectify what, in modern rationalism, is considered is destructive

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structive (Pelluchon, 2005: 14). For Strauss, the incorporating tension which is present in human societies is that which links and opposes Athens and Jerusalem, that is the unity and the opposition of government by laws and government by morals. This founding tension must stay open and is by nature irresolvable: it provides public management with a thinking base for the definition of the legitimacy of public decisions and on the relationship between public decision and the common good.

The Fortunes and misfortunes of virtue in the birth of nations

In the series of frescoes by Ambrogio Lorenzetti (1328) which decorate the Town Hall in Sienna good government (figure 1) rests on the cardinal virtues of saint Ambroise (Temperance, Justice, Strength and Prudence) with Magnanimity and Peace next to him, and the theological virtues of saint Paul (Faith, Hope and Charity). But the key is Justice, notably social justice, which is supported by Concorde and the equality which must reign between the citizens represented in rank, all holding a rope (a symbol of mutual understanding ). The fresco emanates a feeling of equilibrium and harmony which is not the result of a natural order but of a political order built by man. The allegory of good government is dominated by an imposing figure which is the incarnation of the type of ruler the city needs in order for the precepts of justice to be followed and to protect the common good (Skinner, 2003 :138). The ideal magistrate possesses the eight virtues plus the virtue that Snque considers to be essential to occupy the position of a supreme magistrate, magnanimity, or the capacity to look disdainfully at all the minor preoccupations that the commoner chooses to the detriment of the more serious 14. Each of the virtues is represented by nine wise men governing the town. But the eminent presence of the magistrate shows that no-one can claim to possess them all, that his role is to remind them and invite them to act, under the control of the people who elected him, for the pursuit of the common good. From the Roman political philosophers (Cicero, Salluste, Snque, Tacite) to the prehumanists (Latini, Jean de Viterbe), to the philosophers of the Renaissance, from Thomas dAquin to Machiavelli, followed by the English partisans of the commonwealth (Milton, Harrington, Nedham), Rousseau and the founding fathers of the United States, there is, with perspectives that vary the weight given and the role attributed to civic virtues15, a political management of the public thing (respublica, common weal, ben comune) which can fall within the scope of moral sciences and which deals with the dynamic equilibrium between economic development and civic virtue, permanently being questioned by the appearance of new sources of enrichment, the lever of both prosperity and corruption. The corrupting role of finance : the English case England became Great Britain with the integration of Ireland in 1690 and with the Union Act with Scotland in 1707. To support these wars - Nine Years War (1689 -1698) then the War of Spanish Succession (1701 1714) the proceeds of the British Treasury, based on customs tariffs and indirect taxes, no longer sufficed and it had to borrow money. The Bank of England created public debt in 1694. The question of civic virtue is posed under another light by Charles Davenant who, while recognising the necessity of these wars, underlined the corrupting role of a permanent army and the appearance of finance as an autonomous sphere of activity. The humanists, following the line of Ma14 15

Snque, cited by Skinner (2003 : 49) See Pocock, 2003 et Skinner, 2003.

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chiavellian thought, condemned resorting to professional armies as a source of corruption and only recognised the armies of armed citizens as virtuous. This was the case of the Navy whose role was totally complementary to that of the merchant navy, which was not a permanent army, the sailors moving from one corps to another in what was a model of good public management and performance both operational and institutional (Findlay et ORourke, 2008). For Davenant, commerce is a necessary activity for England because it brings into the country resources which were necessary to maintain its power. But it represents a material and not a moral contribution. The trader must show, through his frugality, that he can support the war without being corrupted, by keeping the common good in perspective. Pocock (2003: 446) sees in this debate in England at the beginning of the XVIII century the true source of the protestant ethic that Max Weber16 theorised about much later. The question that the philosophers and the political polemists debated (Swift, Defoe, Bolingbroke, Trenchard) is that of the opposition between real wealth and virtual wealth which depends on the development of credit availability which becomes an economic activity in itself because of the appearance of public debt. For Daniel Defoe and, in Whig literature, credit is described in an analogous way to that in Machiavellis fortuna, as an archetype of the instability of human societies subjected to greed and passion (Pocock, 2003: 453). But Defoe tries to show that credit can be useful for economic development: thus he presents it in 1710 as being a major force in the transformation of the world and of innovation assimilable to Machiavelian virt. He shows that there is a credit ethic and that it can only be useful if it is respected. This ethic is not contained in credit itself as later theories on the rationality of financial markets will claim but in the moral health of society. The virtue is that of the real world and consists of eliminating the fantasy and irrational elements which subvert minds. Jonathan Swift, the principal contradictor of Defoe, underlines on the contrary that the financial economy is based on opinion which replaces judgement and neglects real data on which credit is based. For Swift, there is from now on a dissociation between the material and moral composites of society, because, with the arrival of finance, the classical dynamic of Machiavellis virt fortuna corruptio which provided a theory of the dynamic development of the unstable system that is capitalism (Rochet 2008, Collin 2008), no longer functions. Defoe replies (Pocock 2003 : 459) that the world of passion and opinion can be disciplined by experience. The financial crisis of 1720 considerably brang mist to the old whigs mill, who considered finance as a source of irrationality whereby the public became interested in wind at the expense of landed interests. The South Sea Company was created in 1711 to manage the financing of the English public debt through the collection of private savings where an attractive renumeration, based

Recent research shows that this preoccupation started well-before.Giacomo Todeschini (Richesse franciscaine : de la pauvret volontaire la socit de march, Verdier 2008) discusses the doctrines developed by the Franciscans in the XIVth century to consider the contradiction between individual wealth & the common good See also Laurence Fontaine Lconomie morale : Pauvret, crdit et confiance dans lEurope prindustrielle, Gallimard, 2009, Paris

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on income earned in the South Sea colonies, was guaranteed. These guarantees gave birth to speculative rumours in order to attract investors, which far exceeded the real economic capacity of the colonies. The bubble burst and many investors, including Jonathan Swift and Isaac Newton were ruined, and this for Harringtons disciples is an illustration of the neccessity of creating a link between civic virtue and landed interests. The machiavelian opposition between virt and fortuna becomes that of landed interests, (which at the time were based on land ownership) and monied interests (virtual wealth based on money ). The offensive was led in England by John Trenchard in his Catos letters (1720 -1724) and simultaneously in France affected at the same time by the Mississipi financial bubble burst and the bankruptcy of John Laws system - led by Montesquieu in Les Lettres Persannes. But the public debate was much more animated in England where it lasted for a quarter of a century. Both Montesquieu and Trenchard assimilated financial economy to the wind koopers, which spread throughout Europe and are illustrated in important works devoted to the 1720 bubble including the amazing Tafeerel ( the big mirror of folly ) published in Holland which represents the Wind Koopers (Figure 2) as the incarnation of the madness of the time, and because of the power it exercised over the Crown, was the source of ruin for subjects and trade 17. These wind koopers had invented a mechanism that Hyman Minsky (1992) will describe as Ponzi schemes and which consists of selling shares that one do not really possess and is unable to repay debt on its assets and must continually issue new bonds to pay interest based on future and imaginary profits. For Harringtons descendants, the greatest danger was no longer the risk of the royal prerogative and absolutism, but that of corruption introduced through finance- mad financing results in a loss of the common good and pushes members of society towards madness and frenzy (Pocock 2003 :480) the role is similiar to Machiavellis factions which were a source of ruin for the republic. For Bolingbroke, this is now the essential demarcation line of the political debate and the distinction between the whigs and the Tories becomes obsolete : the line passes between the Crowns part, or that of corruption induced from finance, and that of the Country, that of virtue and the real economy. The exhaustive recension carried out by Arthur Cole (1949) as well as the South Sea Company story written by John Sterling (1962)18, showed that, on the one hand, financial madness discredited share holding companies and was the cause of the late development of capitalism in England, France and Holland, and that, on the other hand, the contradiction between financial capitalism and civic virtue had become the central problem in the birth of nations.


Holland remained outside the speculative madness of 1720, mainly because it recalled the tulip crisis of (1636 -1637). But the Dutch had a lot of commercial contacts with London & Paris & had participated in the English debt & had bought shares in the Mississipi Company..They therefore felt the indirect consequence of this financial crisis. 18 The South Sea Company bubble was the subject of a bibliographical research programme at the University of Harvard http://www.library.hbs.edu/hc/ssb/index.html

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Figure 2: The Wind Koopers. Taken from Tafeerel (The great Mirror of madness ), published in Holland after the 1720 bubble burst (Cole, 1949).

The difficulty is therefore that of clearly defining civic virtue and economic development, knowing that the latter has an ambivalent relationship with finance, as Hyman Minsky (1992) formulated in his two theorems of financial instability. There are two types of financing which generate two types of development : healthy financing based on a hedge financing capacity which results in stable growth, and unhealthy financing of the Ponzi type (Ponzi schemes), which the analysts of the 1720 economic crisis identified as the Wind Koopers. In the long term, this antagonism between economic development and financial speculation is confirmed in Carlota Prezs (2002) work. For Montesquieu, commercial interest averts the political interest that Machiavelli tried to moderate with good institutions. But it is also a source of corruption19 : we must therefore

We can say that commercial laws improve manners,in the same way that these laws lose manners. Commerce corrupts manners: that was the subject of Platos complaints id. XX, I

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find a source of virtue which is distinct from commercial interest and the development of the financial economy: political virtue which is not an individual moral virtue but more of a public virtue, consisting of loving ones country a concept that Montesquieu assimilates to love of equality in the sense of isonomia, or all of societys actors observing the same political laws. The end of the XVIIIth century appears as a new Machiavellian moment when the prosperity of society increases due to commerce but at the cost of the destruction of political citizenship. But at the point where Machiavelli would have considered that a strong government was necessary to manage the conflict between the prosperity of the few and the impoverishment of the many, the Scottish Enlightenment, while admitting the negative effects of commercial and industrial expansion on the impoverishment of the personality, imagined the future as a coexistence between progress and corruption. Rousseau was a determined opponent of this concept and he acts as the Machiavelli of the XVIIIth century by envisaging in the birth of the society the recourse to managing the inequality produced by the development and the pursuit of the ideal of equality amongst citizens (Pocock, 2003: 504, Manent 1987: 178). The history of financial speculation, from 1720 to 2008, reveals three constants : 1- Reason is powerless when faced with the madness of speculation and, contrary to Daniel Defoes hypothesis, experience plays no role since the same scenarios keep repeating themselves. Charles Kindleberger, in his history of financial crises (2000), shows that markets have learned nothing from the successive crises that have occurred since the XVIII th century, but, contrarily, governments have. 2- In order to come out of a crisis, there is a demand for State intervention in the name of the common good, which appears to be the result of rational reasoning when speculation drunkenness gives way to a hangover. 3- The role of morality and the relationship between the public and private good previously confined to academic circles becomes central in public speech making. The terms of the modern and contemporary debate therefore began in the XVIIIth century : Industrial and commercial activity is a powerful force in the transformation of society and in engendering progress, but its incapacity to eliminate financial madness is autodestructrive. Political virtue is the necessary product of rational action which must fight the irrationality of the Wind Koopers and reinstall the common good at the heart of the politico-institutional system. The founding of the United States : the end of classical politics Corruption in England was the main cause of the independence movement in the United States. The political and social climate of the American colonies in the 1760 decade revealed a conglomeration of individuals made up of quarrellers and proceedurists who cultivated dissension . Discord was general both between individuals and between the colonies themselves who did not hesitate to go to war. If the idea of independence advanced, it was because the colonists attributed the cause of this chaos to England who represented, in their eyes, a model of decay. The English had destroyed the very liberty they had gained during the Revolution through their obsessive greed for wealth. For one of the principal figures of the American Revolution, John Dickinson, the cult of private interest plunged the English into a domestication and a low-

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ering of the spirit 20. Dickinson tried to avoid separation with Great Britain, having understood the synergy between industrial development and commerce, which the union between the two continents represented. But the corruption picture present in Great Britain this nation which admits to the face of the world that corruption is an integral part of its system of government according to terms used by Patrick Henri who was the most virulent opponent of any attempt at conciliation was such that all attempts failed. Rejection of the British parliamentary monarchy implied, for the American revolutionaries, adherence to Harringtons theory on the emergence, through civic activities, of a natural aristocracy of self evident leaders . Eric Lane et Michael Oreskes (2007)21, enthusiastic apologists of the American Constitution, present the victory of liberalism (the inverted commas are necessary because this term was invented later and was not employed in debates at that time) as the logical result of the utopianism of Tom Paines doctrine, the charter of American independence, whose work Common Sense played a considerable role. For Paine, it was only a question of waiting for the emergence of natural leaders after the declaration of independence in 1776 : his theory failed because disorder was growing in the young America. But, as Christopher Lasch (2006 :210) pointed out, Paine cannot be qualified as a republican. He dreamed of a society composed of small, self-managed landowners who would prosper thanks to commerce. In Paines work there was no political theory of representation or government that could make him a republican. Paines utopianism cannot be cited to justify the rejection of the principle of republican virtue in the 1788 Constitution. Gordon Wood (1979) sees in the very principles of political theory at that time the source of the failure of the republic. The people are considered as undifferentiated, while civic life that underlies the republican virtue supposes that differentiated functions allow people to become involved in city life. This was the main reason for Patrick Henris opposition to the new constitution, essentially these three words We, the people because he saw in those words an undifferentiated mass, cut off from their land, which could only delegate their power to representatives at the expense of direct democracy and the states. Apart from Noah Webster whose political role is little-known compared to his role as a lexicolographer - very few Americans had read Rousseau for whom there is no virtue in the designation of representatives : a people which is reduced to this situation is therefore not free (Pocock 2003 : 519). For Rousseau there is an irreducible difference between the person who acts for me and the person who acts with me: that is the civic virtue. However, if man is not placed, by the Machiavellian institutional dynamic, into a situation where he can be virtuous, he falls back on his private interest which is the fruit of all his own interests whereas, for the Harringtonians, the meaning of the common good is the fruit of his reason. For Wood, the constitutional choices made by the United States are the end of classical politics which is translated by an evolution from republicanism to liberalism (Wood 1979: 562), that is from the classical theory of the individual seen as a civic

John Dickinson Letters from a farmer in Pennsylvania , 1787. Dickinson was not a simple farmer but the richest landowner in Pennsylvania who had an elaborare vision of the synergies between Great Britain & its colonies This is the grand importance of the colonies for Great Britain. Its prosperity depends on its commerce ; manufacturing commerce ; manufactures, available markets. However, the most constant & advantageous markets are the colonies ; in the rest of Europe, there are all sorts of interfering factors & all sorts of incidents that risk to endanger these exchanges 21 Ex-editor of the International Herald Tribune, & Eric Lane who is a professor of Law. Their support of the American Constitution as a solution to the conflict between non-virtuous private interests & collective systems of regulation weighing the for & against, is particularly clear & well constructed & was widely acclaimed in the USA, & supposedly gave birth to the greatest success in the history of humanity , would merit further discussion outside the scope of this article.

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and active being, who participates directly in the Res Publica according to his means, towards a theory where he appears to be principally conscious of his own interests and takes part in government only in view of carrying them out, bringing only an indirect contribution to this mediation activity through which the government ensures conflict resolution, which is the only common good in this case (Pocock 2003 : 523). The Machiavellian distinction that we find in Rousseaus work in Discourse on inequality, between plebs (the uneducated mass) and people (the citizens educated by the good institutions and the virt of the Prince), disappears. Alexander Hamilton will close in the United States the political debate that began in the 1690s in England with the birth of commercial society22. For Hamilton, the future of the United States lies in power because the passage from virtue to commerce, contrarily to Harringtons compromise atempt and Montesquieus theories, will not be pacifist. The interests of commercial nations are not complementary, there can only be wars how comes the necessity of having a strong central government sitting on stable fiscal revenues. Hamiltons proposition comes from this - he looks much more towards the East, industrial Europe, than towards the West to conquer - in his Report on manufactures (1791), to reproduce the recipes of the all-powerful England: Creating a public debt, a national Bank, customs duties and political and mercantile protectionism in order to develop national industry. The republicans, with Jefferson at the top, but also the federalists like Madison from whom he will break away, can see the same scenario of corruption in British institutions reappearing, but, while they share the same preoccupations concerning support for economic development, they have no alternative to offer. Hamiltons plan was adopted, even by his oldest adversaries (Irwin, 2003), but however pertinent it was in ensuring economic development, it introduced the problem of corruption at the heart of the functioning of American institutions, and of course, the cycle of crises the first of which occurred in 1839 (Wallis, 2004). Thus the situation that Jean-Claude Micha calls The empire of the least bad (2007) is confirmed and replaces the stormy and demanding republican liberty concept: a type of society which, in the manner of the Hegelian slave who at a decisive moment trembles for his life and prefers life to heroic death , will make self-preservation the first and unique aim of the individual. We no longer need to appeal to peoples virtue nor to their capacity of discerning between good and bad since market laws and the reign of rights supposedly regulate the pacified existence of commercial life. In the language of English liberalism, every demand concerning the individual becomes, according to the founding concepts of Isaah Berlin, positive liberty , associated to Hobbes Leviathan and to all types of suspect interventionism, inspired by authors ranging from Rousseau to Lenin, to which negative liberty is opposed that is a liberal concept of absence of constraint on the part of the State: it is the quantity of authority which predominates, like the coercion on individual liberty, and this regardless of the type of political regime.

The Political Philosophy of the Republic : a renewal of the EuroAatlantic debate

New literature on the role of the State (Rochet, 2007 and 2008, Reinert, 2007) underlines the extent to which commercial and industrial development never ceased to be a political process and that the key to the evolution of nations is the role of the State.


First secretary of State for the Treasury, who believed in a strong state & an English style mercantile system, he was an enemy of Thomas Jefferson.

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Managing change in the State is not therefore a technical problem of good governance but necessitates a far more global approach, that of the moral sciences, which are, according to Durkheims definition, the sciences of the human spirit 23. The rebirth of a contemporary Euro-Atlantic republicanism (Skinner, Pettit, Spitz, Viroli) allows us to go beyond the opposition between Berlins positive and negative liberty: The republican conception of liberty permits the combination of protection against the arbitrary behaviour of the State, by renewing the tradition of civic humanism for which liberty and law, State and economic performance, individualism and the feeling of common good are no longer opposed but represent two poles of the same dynamic. The debate on the construction of society around the common good is not therefore exclusively inherited from the French Revolution : In the last third of the XIX th century, in an England at the height of its fame but nevertheless engaged in a phase of declining returns in the third technological cycle, the debate on the role of public power occupies the totality of political philosophy as seen in the works of Bosanquet or Hobhouse24, who are as concerned about general interest as their French colleagues are (Spitz 2005 :42). Abandoning the positivist position for an evolutionist position implies abandoning a vision of the State either as the founder of the laws of history and where the liberty of the actor is denied (the maximal State), or as the manager of market failures (the minimal State), for a State capable of intentional action. The purpose and the legitimacy of the action of the State becomes the key question : at the heart of classical political philosophy, the central question is therefore that of the common good. What is the common good ? What institutions have in common is an autonomy which is at the heart of their evolution and which is clearly founded by Machiavelli (Discours sur la premire dcade de TiteLive): The politicians mission is to provide impetus for a dynamic of virtuous action- the princes virt which modifies a peoples destiny. The politician has his own dynamic guided by the ultimate ethical criterion which can permit him to free himself from common moral principles The politicians objective is the common good - the ultimate depositary being the people, who are the only defender of peace in the Marsilus of Padua sense, faced with the altercations of the powers-that-be which, if left to their own means, would not be subjected to any law. The question of the legitimacy of power is central and is related to the common good, as well as to the interaction between citizens and the State as a means of validating the objectives and building a legal framework in agreement with the legitimate ends. For Machiavelli, this dynamic cannot be maintained in a republic (Rochet, 2008). During the German occupation, a Jesuit father, Gaston Fessard, published in 1941 in the first underground publication of Tmoinage Chrtien, an editorial France, prends garde de perdre ton me (France, be careful do not lose your soul) in which he expressed his opposition to the doctrine of the Catholic hierarchy swearing allegiance to

Moral sciences are those which are especially concerned with the human mind. The method of these sciences needs to be examined. Four types of moral science can be distinguished : philosophical, social philological, & historic sciences Durkheim, philosophy lesson at Lyce de Sens, notes taken by Andr Lalande 24 Bernard Bosanquet, The Philosophical Theory of the State, Londres 1869, et Leonard Hobhouse, The Metaphysical Theory of the State, a criticism, Londres 1926, red. Routledge, 1996. Hobhouse, as opposed to Stuart Mill, does not consider that liberty is an aim in itself but that its objective is to allow man to develop.

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Ptains government. Fessard developed the theory of the slave prince who differs from the Machiavellian prince in that he is unable to lead the spiritual battle for the good of his people. If Ptains government was legal25, it was illegitimate because it no longer pursued the common good. It was solely an administration able to ensure the first level of the common good, material goods, and not the superior common good that of morals and values26. Fessard was a Germanist who had studied the Hitlerian mystic and had understood that it was a question of a spiritual battle that aimed to destroy the heart of the humanist tradition - Frances very identity. French administration experienced the same dilemma, but, save many exceptions, faced the problem with less determination. In his study of French administration under Vichy, Marc Olivier Baruch (1997) concluded that Weberian rationality played its role: Marchal Ptains historical charisma conferred an unquestionable a priori legality to the regime and the routine of administrative procedures did the rest, civil servants could take refuge behind these innocent institutional mechanisms 27 and thus avoid a conscientious revolt. Upon Liberation, Gaston Fessard (1944) summarized his thoughts in a work on authority and the common good which defines the dynamic of the common good in a way that is particularly operational for public management : 1. Sharing of the good: either it is a question of natural collective goods, or the question concerns a voluntary decision whereby people can benefit from large scale projects or positive externalities (e.g. transport infrastructure). This is the founding principle of public services 2. The community of the good : is the good for the whole community ? Understanding this question is essential for public services which are submitted to Greshams law : the public targeted is replaced by the better educated public, on the margins of the target, who can better handle administrative opportunities. Many public services offer the juridical capacity to do things , but are not based on the effective capacity in a practical and cognitive way - of the population. 3. The goodness of the common good, which is the systemic effect of the common good. Is the sharing of the good superior to the sum of the goods shared ? This criterion is essential in order to distinguish the particular common good from common goods . The dynamic of the common good : extends from knowledge to the public decision. The common good is not only entrusted to the discernment capacity of individuals. It emerges from the practice of civic virtues employed by the rulers Machiavellis vivere politico which encourages citizens to behave well. The common good emerges from the interaction between people and rulers, which is illustrated in the comment below Lorenzettis main fresco: Wherever the sacred virtue of Justice reigns


France is the only example of an occupied country where a collaboration government was put in place legally, the Republic was abolished & complete power was given to Marchal Ptain by the Chamber of the popular Front, with 71% of the socialist party voting in favor.This was not the case in onther collaboration government regimes like that of Quisling in Norway which was in no way legitimate. 26 Acting according to the Common good, would mean therefore for the true citizen forcing the supremacy of the superior common good over the elementary common , G. Fessard Au temps du Prince esclave , in Harvill-Burton, 2006. 27 Pierre Legendre, in Jouir du pouvoir , 1976

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It calls for the unification of many souls And having united them It permits the signor to create a common good for all 28 The common good is therefore the source of the legitimacy of decisions. Leo Strauss distinguishes very clearly between legality and legitimacy. We have no guarantee that our laws are just they can very well be the work of idiots or rogues ( Droit Naturel et Histoire Natural Right and History - hereafter referred to as DNH- :99). Legality is only legitimate if it serves the common good. But the common good cannot be conventional, whereas laws are naturally. They can only be seen as an interpretation of what is just hic et nunc. What is just varies in each case, in each city and cant be a result of scientific knowledge, and not even of sensitive knowledge. So determining what is just in each case, that is the role of art and political skilfulness, which can be compared to a doctors skill which involves prescribing in each case what is good for the health of the human body (DNH: 100). The common good is an emerging reality which results from the confrontation of options thought public debate at the heart of a controversial space which is historically the Nation- State (Rochet, 2001). But is it possible for the common good to be anything ? . For Strauss, the polity is guided by his consciousness of the whole : prior to any perception of particular things, the human soul must have a vision of the ideas, a vision of the articulated whole (DNH :119). But this whole is by definition inaccessible and our perception of this whole is only a simple opinion because we only have partial visions which are inadequate articulations of the fundamental awareness of the whole. This tension about everything is a translation of the tension between Athens and Jerusalem, between a society ruled by laws and a society ruled by perfect morality, which is the motor of political life. It is a vector in the evolution of beliefs, since political philosophy does not know and does not direct, but in Socrates manner, it does ask the fundamental questions about the meaning of public action and good society. Political philosophy is more modestly an attempt to pass from opinion to knowledge (Tanguay, 2004 :193) : Civil life requires a funamental compromise between wisdom and folly , and this means a fundamental compromise between the natural right that is discerned by reason or understanding and the right that is founded on opinion alone. Civil life requires the dilution of natural right by simply conventional right. Natural right would be like a time bomb in civil life (DNH :141). The political good is therefore that which suppresses many evils without upsetting too many preconceived ideas . The question of the common good must remain an open question in order to manage the compromise between the wisdom of the philosopher who does not act and the folly of the positivism of reason enfired by the all powerful technical and scientific progress. The role of civic virtue If institutions are, as North (1991) defines them, constraints imposed on human interaction, the more society is capable of auto regulation, the less the formal institutions have to intervene. However, formal institutions have a cost, which is translated by a limitation of liberty since they are by definition coercion, in transaction costs and in public mone28

Translation proposed by Quentin Skinner (2003 :139)

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tary costs by the organisations that these institutions generate. This problem is already present in Machiavellis work (Rochet, 2008): the republican State can only subsist if the whole of the people is virtuous, if it is not, it loses its taste for liberty and the regime becomes corrupt. For Machiavelli, a people is naturally good, it is not virtuous, it does not necessarily use its power to obtain the common good and civic virtue can only come from formal institutions (Rochet, 2008, Collin, 2008). The question of civic virtues was rediscovered at the end of the XXth century by the republicanist current born out of insatisfaction with the liberal political philosophys ability to inspire an attachment free from the common good (Lasch, 2006). This current posed two questions to the researcher : that of the exact nature of liberalism and what separates it from republicanism, and that of the exact role and the exact functional value of civic virtue in the functioning of a political system. On this first point, we must discard a superficial criticism of liberalism which would oppose individual interests and the common good. Liberalism, contrary to Macphersons interpretation (2004), did not ignore civic virtues, at least in its original version in Adam Smiths. As for republicanism, it is a meritocracy that cannot be resumed as an invocation of altruism and devotion to the public good: Nothing is more founded on competition than the republican ethicCharging man to evaluate his actions using the most limiting criteria of its realisation, turns them against each other (Lasch, 2006: 207). The second question is that of the functional role of civic virtues once we have passed the incantation stage. In his impressive work The birth of the modern world (2006), C.A Bayly emphasises that the civic republican trend or the virtuous republic was apparent throughout the XVII th and the XIXth centuries, even in the United States after the triumph of liberal individualism in the second half of the XIXth century. Bayly shows that this phenomenon of the virtuous republic occurred all over the world with a revision of modern values over civic virtues and traditional ethics. Aristotle, whom the Italian quattrocento reintroduced at the heart of political philosophy, is interpreted in vernacular language by the Ottoman renaissance in the XVIIth century and then by the Chinese in the XIXth. Civic virtues were the groundwork through which the values of liberal modernity were integrated, thus making it possible to criticize modernity and update traditional values.

The education of elites

For most of us, we have the right to say that we were good workers.Have we always been quite good citizens ? Marc Bloch, The Strange Defeat, 1940 It was Machiavelli who put the role of great men at the heart of political philosophy, either as founding fathers of the city, or as providential men who have come to straighten out a corrupt republic, because the masses cannot by themselves transform their aspiration to virt into concrete terms. But he also specifies that the States setting an example cannot hope to last if it is in the hands of one person , from which comes the necessity for a republican regime which would permit elites to regenerate themselves in popular legitimacy. The dynamic of the common good is therefore a source of renewal for elites. However, like any system, it has to conform to the homeostatic principle which makes it resistant to change for its own benefit and not for the common good. Despite the power of the
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self-justification mechanisms they are composed of, they are nonetheless subjected to the principle of Schumpeterian creative destruction: either they are animated by Machiavellian virt that is the desire not to take into consideration personal interests and security, the desire to only leave space for the defence of the countrys glory and liberty (Skinner, 2000: 117) and they act as a model for the people, or they remain attached to their position and interrupt the political regeneration process. At this point we enter into a process of clerk betrayal denounced by Julien Benda in his famous essay in 1927. Christopher Lasch also denounced even more vigorously the elites abandoning of their historical task to stimulate the evolution of institutions in The revolt of the elites and the betrayal of democracy (1996). The spirit of finesse and geometry The education of the elites has been under fire since the founding works of Michel Crozier, whether they belong to the public or private sector. Criticism of the French style of elite education goes back in fact to Tocqueville who, in the third part of The Old Regime and the Revolution, underlined the influence of arts scholars on the formation of the public spirit in the XVIIIth century with the drift towards abstraction and contempt for the real outcomes that it had induced 29. This shortcoming is far from being limited to the French administrative style. In Voltaires Bastards (1993), the Canadian John Saul denounced the damage caused by positivist rationalism in western elites. Leo Strausss radical criticism of modern political science is starting to be considered : new political science looks at political things from the outside, from the neutral point of view of the foreign observer it considers human beings in the way an engineer would consider materials destined to be used for the construction of a bridge (1990 :298). The fundamental vice of modern political science is, for Leo Strauss, its value relativism which means that it cannot admit that something like the common good exists. The result is a political confiscation on the part of the experts of the system of beliefs in place, which ineluctably leads to the death of the social body that is disinterested in virt, and consequently corruption of the political body . In order to distinguish ourselves from the dominant tendency in education, which tends to be reduced to the acquisition of skills, we can distinguish education from instruction. Instruction is what Leo Strauss called liberal education , that which consists of learning to listen to small voices and consequently becoming deaf to loud-speakers () In the present state of things, we can hope for a more immediate rescue from the humanities than from the sciences, more from the part of a spirit of finesse than from a spirit of geometry (Strauss, 1990 : 44-45). This spirit imposes a distancing from the deductive spirit in which Michel Crozier sees the power of the technocracy. Confronted with that we need to use knowledge at the base of any strategy for change so that the scientific and technological communities are vigorous and open, so that relationships are faster and more lively between fundamental knowledge, applied knowledge and its final utilisation. (Crozier, 1979 : 171). Ethical education and a capacity to render the State as a space for controversy are the two axes in the education of elites which can make them capable of animating the process of institutional evolution and of countering their tendency towards clerk betrayal .

In both he finds the same love for--general theories, sweeping legislative systems, and symmetrical laws, the same confidence in theory, the same desire for new and original institutions; the same wish to reconstruct the whole Constitution according the rules of logic and in conformity with a set plan instead of attempting partial amendments. A terrible sight! For what is a merit in an author is often a defect in a statesman, and characteristics which improve a book may be fatal to a revolution Tocqueville, livre III de lAncien rgime et la Rvolution

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Recent research brings back to the fore the notion of Greek phronesis that Ambrogio Lorenzetti mentioned as the heart of the virtues of good government (Figure 1). The phronesis is this practical and immediate intuition that Aristotle opposed, in the Ethics at Nicomaque, to the universal intuition (Gueorguieva, 2004) and to theoretical knowledge detached from action, sophia. For Hannah Arendt, phronesis is the essence of polity since it is the exercise of judgement by both politicians and citizens, independently of reference to a transcendent knowledge of an epistemic nature. If phronesis cannot be taught and cannot be acquired except by experience, the interaction of institutions with organisations, and that of great principles with concrete problems can permit it to be developed. Phronesis is action, it is a practical art without which politics is just vain agitation. Hannah Arendt was one of the founders of the rehabilitation of the practical philosophy of phronesis : modernity substituted the doing (activism) to action (depending on the aim), that is a process which becomes an end in itself, where the discourse becomes powerless and divorced from acts : What first undermines and then kills political communities is loss of power and final impotence; and power cannot be stored up and kept in reserve for emergencies, like the instruments of violence, but exists only in its actualization. Where power is not actualized, it passes away, and history is full of examples that the greatest material riches cannot compensate for this loss. Power is actualized only where word and deed have not parted company, where words are not empty and deeds not brutal, where words are not used to veil intentions but to disclose realities, and deeds are not used to violate and destroy but to establish relations and create new realities. (Arendt, 1983 :260) The management of organisations cut off from any discourse on institutions is therefore no longer action in the way Hannah Arendt used it, but a taciturn process with no meaning. Debate on the nature of institutions which only considers their formal, and even more, their juridical dimension, fails to consider the essential: what constitutes the foundation and the vitality of political society and its capacity to face change by keeping hold of its values: civic virtues. Virtuous elites, in the Machiavellian sense of the term, have to combine firmness and pragmatism in action in order to pursue the common good. Democracy, in this republican perspective, is not only a formalist procedure characterised by the vote, but a contention space where fundamental questions are debated and considered according to the stakes of what makes up good society . This exercise is by definition endless, and undoubtedly more demanding than submission to any law , of nature, history or economy. Public management as a practical art Padioleau (2003) considers the public managers skills in the practical arts of public action as the most important: management in times of uncertainty, the taking of risks, problem resolution, collective learning, strategic piloting, public debate Developing practical arts in public management necessitates permanent revision of the knowledge base. If this is not done, they become stuck with universal good practices in the purest positivist tradition, even in ideology, producing what Padioleau calls perverse conservative reformism which disregards the link between the way of operating and the process of resolving the problems which it created. If privatisation can be a solution for a specific problem at a specific time to counteract a bureaucracy that has become unproductive, that does not necessarily mean that it is a
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good public management practice . Thus the privatisation of Railtrack was a significant failure, which cost the British Treasury more than the public company British Railways which was re-nationalised implicitly through recapitalisation by emitting bonds guaranteed by the State 30. Forgetting that a practical art is only a practical art, a phronesis, and not a truth in itself leads to radical mistakes because perverse conservative reformism often puts in the same basket excesses in the reproduction of standard practices and immoderateness of artificial rationalism (Padioleau, 2003: 166). This ignores the link between what and how or what has been called the difference between doing things well and doing good things . Public management, confronted by the uncertain world of the present technological rupture, forces us to carry out a strange loop 31 which leads us to a return to fundamental questions of meaning, non-fulfilment, and undicidable: those of the moral sciences. Public decision-making can therefore progress going backwards and forwards between political vision and practical arts, according to a process defined by Herbert Simon: The idea of final objectives is not coherent with our limited capacity to predict or determine the future. The real result of our actions is to establish the initial conditions for the next stages of action. What we call final objectives, are really the choice of criteria selected for the initial conditions that we will leave to our successors (Simon, 2004: 290) The final objective can only be an idea, a vision which becomes clearer as we progress, through different steps, in a process of problem solving. In this optic, public policy is no longer the art of conceiving ideal cities but rather that of finding a way to progress through learning in the realisation of the idea. It is no longer concerned with the precise definition of final objectives, but with the choice of criteria used in the public decision,making in an uncertain and risky environment. The choice of criteria is fundamentally political, in order to appreciate the good and the bad and to make a good decision. These practical arts have two sources: accumulated practical wisdom, phronesis, and conjectural knowledge which face up to new situations, the mtis of the Greeks, studied by Dtienne and Vernant (1974). In a non-ergodic situation, it is of course the metis which will be selected first to confront ambiguous and disconcerting situations (Baumard, 1996). Practical arts combine intuition, sagacity, prediction, flexibility of mind, dissimulation, smartness, vigilance, and sense of opportunity but the accent is always on practical efficiency and the search for success in action (Padioleau, 2003: 171). The mtis is the opposite of the spirit of geometry, Dtienne and Vernant define it as slanted and wobbly knowledge which allows us to find our way through hazards while keeping the aim to be reached clearly in mind. If Plato condemned this form of intelligence of action and preferred contemplative wisdom, sophia, Aristotle made it the key to political success which owes much more to a quick glance than to imperturbable knowledge. But Aristotle takes care to distinguish mtis which allows us to reach a goal, from phronesis which allows us to deliberate each good, the former without the latter possibly leading to panurgism (Dtienne et Vernant, 1974 : 305).


The Economist Railtrack's bankruptcy, Blood on the tracks Oct 11th 2001 The strange loop phenenomon is produced each time when, following ascension or descension in a hierarchical system,,we return to our great surprise,to the point of departure (Douglas HOFSTADTER Gdel, Escher, Bach p. 12).

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We can therefore link the what and the how through a continuum of the process of creation and by up-dating knowledge and action, structured through the pursuit of a political goal : the common good. We can conclude with two points : 1) Setting up a diagram illustrating the relationships between the type of knowledge required for a public decision and a typology of situations (Figure 3). 2) Defining a coherent framework for the education of elites by mixing this approach with the characteristics of the neo-Weberian State identified by Pollitt et Boukaert (Table 1)
This diagram should be interpreted in the following way : Faced with a new situation, the abstract generalisations of epistem are powerless, the practical wisdom of phronesis, which is the art of judgement, needs to enrich itself with new experiences which will be forged through the exercise of mtis, which is the art of taking into account the context. In this case, the technologies of public management are not very useful What the person in charge needs is much more instruction in terms of general culture than technical training on how to use the tools of public management which do not by themselves make sense. The practical art of action is the expression of mtis - phronesis which is largely linked to character, and virt, of the public decision-maker. In the training of superior officers, the Collge Interarmes de Dfense (the War School ) always places general culture Figure 3 : From how to what , linking practi- and strength of character as one of the top qualities of cal action and distant finality an executive.

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Instruction : Values inherited from Education : new skills the Weberian model Values that need to be updated: Skills related to an open and uncertain world : The State as an architect of Strategic scenarios in a non-determinist environpolitical solutions for the servment ice of the common good Integrating the citizen : Public laws written and speo in public decision-making cifically seen as a conseo in the conception of services quence of the unequal rela A measurable and assessable logic for the creationship between the State tion of values and the citizen Information systems considered as the control The statutes of the Public secmechanism for administrative reform tor considered as a recognition of the specific values of public service Values that should be abandoned : New values to be promoted : Hierarchies Redefinition of the roles, responsibilities and Exclusive employment types of relationship between the centre and the The division of labour based periphery on the primacy of procedures Development of a horizontal approach to public policies Favours mobility between the private public and the public private sectors Modular, evolutionary and resilient organisation of public management tools.

Like all institutional arrangements, the skills employed will take different forms according to nations, obeying the principle of path dependency. But several invariants appear: moral strength, personal legitimacy founded on the sense of common good and practical intelligence which are therefore intimately linked and cannot be summarized as the combination of deductive intelligence and the statutory legitimacy of elites which have fallen under the empire of the spirit of geometry and have become Voltaires bastards .

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The dates used are those of the edition used

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Lynn, Laurence, 2001, The Myth of the Bureaucratic Paradigm: What Traditional Public Administration Really Stood For, Public Administration Review, 2001, vol 61, n2 Macpherson, C.B, 2004, La thorie politique de lindividualisme possessif, de Hobbes Locke , Folio essais, Gallimard, Paris, Manent, Pierre, 2001, Les libraux, Tel, Gallimard Minsky, Hyman P. The Financial Instability Hypothesis (May 1992). The Jerome Levy Economics Institute Working Paper No. 74. Available at SSRN: http://ssrn.com/abstract=161024 or DOI: 10.2139/ssrn.161024 Mokyr, Joel The Gifts of Athena, historical origins of the knowledge economy , Princeton University Press, 2002 North, Douglass, 2005, Understanding the Process of Economic Change , Princeton University Press OCDE, 2005, Moderniser lEtat, Paris Padioleau, Jean-Gustave, 2003 Arts pratiques de laction publique ultra-moderne, LHarmattan, Paris Pelluchon, Corinne, 2005 Leo Strauss, une autre raison, dautres Lumires, Librairie philosophique, Vrin, Paris. Perez, Carlota, 2002, Technological Revolutions and Financial Capital The Dynamics of Bubbles and Golden Age. Cheltenham: Edward Elgar. Peters, B. Guy, 1996 La capacit des pouvoirs publics dlaborer des politiques , Centre canadien de gestion, rapport de recherche n 18 Pettit, Philip, 2004 Rpublicanisme, une thorie de la libert et du gouvernement, NRF Gallimard, Pollitt, C.,and Bouckaert, G. (2000, new edition 2004). Public management reform: An international comparison. Oxford, UK, Oxford University Press. Politt, C, 2003 Rforme de la gestion publique : connaissance du contexte et exprience internationale, in Revue de lOCDE sur la gestion budgtaire volume 3 n 3 Popper, Karl 1998, Misre de l'historicisme , Editions Press Pocket, Paris Pocock, J.G.A, 1975 (second edition 2003), The Machiavellian Moment, Florentine Political Though and the Atlantic Republican Tradition , Princeton University Press, NJ Reinert, Erik S., 1999, The Role of the State in Economic Growth , Journal of Economic Studies, vol 26, 1999, How Rich Countries Got Rich, and Why Poor Countries Stay Poor?, 2007, Constable, London Rochet, Claude 2001, Gouverner par le bien commun Ed. F.X de Guibert, Paris- 2007 Linnovation, une affaire dEtat ? Gagnants et perdants de la III rvolution industrielle, LHarmattan, Paris - 2008 Le bien commun comme main invisible : le legs de Machiavel au management public Revue Internationale des Sciences Administratives Rochet Claude, Kramidas Olivier, Bout Lugdivine The risk of efficiency indicators in the management of public policies , EGPA 2005 Saul, John, 1993, La btards de Voltaire , Ed Payot, Paris Sapir, Jacques, 2005, Quelle conomie pour le XXI sicle , Odile Jacob, Paris Skinner, Quentin, 2001, les fondamentaux de la pense politique moderne , traduction, coll. Lvolution de lhumanit, Armand Colin, Paris, 2000, La libert avant le libralisme, Le Seuil, Paris, 2001, Machiavel, Seuil, Paris, 2003, Lartiste en philosophie politique : Ambroggio Lorenzetti et le bon gouvernement , Raisons dagir, Paris Spitz, Jean-Fabien, 2005, Le moment rpublicain en France, NRF essais, Gallimard, Paris Strauss, Leo, Droit naturel et Histoire , Champs Flammarion, 1986- Le libralisme antique et moderne , PUF, 1990 Tanguay, Daniel, 2003 Leo Strauss, une biographie intellectuelle , Grasset, Paris

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