The collapse of liberal democracy is often misunderstood. Regina Queiroz argues that a libertarian-conservative model has displaced liberal democracy's endorsement of popular sovereignty. Driven by re-regulation, liberalisation, and privatisation, this model prioritises market logic over social cohesion. From Portugal’s housing crisis to national populism, the author explores this ideological shift
Libertarian-conservative thinkers, most notably Friedrich Hayek, have long associated traditional liberal democracy with unlimited popular sovereignty. From this perspective, liberal democracy is a distorted system. Indeed, the rational parliamentary debate is a mere bargaining tool to distribute ‘prebends’ and consolidate official power. In truth, popular sovereignty serves rulers and narrow constituencies rather than the public good; it is merely a mask for private interests.
Furthermore, this model rejects any democratic claim to social justice, aiming to protect citizens from market disappointments. Such protections require wealth redistribution, which these thinkers view as a direct infringement on the freedom to accumulate wealth. Therefore, they equate liberal democracy with totalitarianism. They compare it to Nazism or Stalinism to justify its dismantling.
Beneath a veneer of democratic procedures, libertarian conservatism shifts sovereignty from 'the people' to the unbridled freedom of the entrepreneur, or what it terms 'entrepreneurial sovereignty'. This is coupled with a rejection of rational deliberation and compromise. Any political agreement is thus viewed as a 'corrupted bargain'. Therefore, libertarian conservatism fosters a polarised, threatening form of democracy. This is evident in political communication that targets citizens or entire peoples, such as TINA (There Is No Alternative) or the threat to expel Greece from the Eurozone during the debt crisis.
Libertarian-conservative leaders act as entrepreneurs and feel no obligation to fulfil electoral programmes
Under this model, libertarian-conservative leaders act as entrepreneurs, no longer bound to any public mandate. They feel no obligation to fulfil electoral programmes. US President Donald Trump promised to avoid new military campaigns, yet he launched a major military offensive against Iran in early 2026. Many politicians break promises. As Niccolò Machiavelli argued, a prince may break commitments to serve the public interest. For Machiavelli, this meant the interest of the people as a whole. However, the libertarian-conservative model is different: it equates the public interest with the needs of a wealthy minority. Politicians break promises specifically to cater to a narrow circle of private interests.
Libertarian conservatism even extends this detachment from commitments to the basic principles of logic, enabling the simultaneous assertion of contradictory claims.
The abandonment of popular sovereignty in favour of entrepreneurial democracy requires a fundamental reconceptualisation of the market, the State, and the citizen, as evidenced in the political thought of James Buchanan.
Libertarian conservatives see markets as 'cosmic' entities governed by impersonal, spontaneous laws. These laws prioritise absolute financial freedom over social outcomes. Profit becomes the only metric of rationality, overriding social or national obligations. This often leads owners to highlight affluent global actors over their own community, such as neighbours or fellow citizens.
Libertarian conservatives see markets as 'cosmic' entities governed by spontaneous laws, which prioritise profit over social outcomes
Holding a monopoly on law and force, the State is repurposed through market logic. Governments use the 're-regulation, liberalisation, and privatisation' (RLP) formula. They engineer legal conditions for entrepreneurial enrichment. This differs from ‘deregulation, liberalisation, and privatisation’ (DLP), an anarchic system. DLP represents an extrinsic assessment of libertarian conservatism, often viewed through the lens of liberal democracy or Marxism. Instead, RLP highlights the State's positive regulatory nature, as illustrated by merging Portugal's Foundation for Science and Technology (FCT) into a growth-oriented agency.
This same formula underlying entrepreneurial democracy has reshaped public policies in essential sectors. Portugal’s housing market is a notable example. Tenant protections were stripped away; stable leases were replaced by precarious, temporary contracts; and finally, short-term rentals and the Golden Visa scheme expanded rapidly.
The results are stark. In just a decade, Lisbon has undergone a 180% house price surge. House price surges mean housing is now inaccessible to most Portuguese citizens, yet the state still intervenes to protect the wealthy, forcing them to the city's outskirts. Market price corrections have become virtually impossible, yet the State frequently intervenes, such as through bank bailouts, to protect the interests of the wealthy.
Protection of the wealthy has impoverished the poor and middle classes, fuelling national-populist movements
Both in Portugal and internationally, protection of the wealthy has failed to create general prosperity. Instead, it has impoverished the poor and middle classes, fuelling national-populist movements. These movements typically pit 'corrupt elites' against a 'pure people', and nationals against foreigners. While often blamed for political polarisation, these movements are a symptom of a deeper problem: a democratic, polarised system that refuses to seek consensus among conflicting interests.
Increasingly, nationalist populism has merged with libertarian conservatism. This merger juxtaposes 'national entrepreneurs' against 'welfare-dependent' immigrants. It reinforces the right of the wealthy to expand holdings without majority consent. Elon Musk’s Department of Government Efficiency (DOGE) initiative is a clear example of this administrative dismantling.
We should not blame liberal democracy for its own collapse. Instead, we must show how the libertarian-conservative model has diverged from liberal democracy’s core tenets — specifically by abandoning limited collective rationality. This principle is essential for rectifying laws based on the will of the many rather than a select few. As Michael Freeden’s work suggests, libertarian-conservatism stems from a different ideological family. Correctly naming this transition helps us rebuild a system where local needs balance ‘cosmic’ market signals. Ultimately, a politician's word must be a commitment to citizens, not a path to hubristic self-enrichment.
