The paradox of tolerance is not a paradox in moral terms, but a reinstitution of political difference....
The liberal ideology' has a number of paradoxes. One that threatens liberalism at its core is the paradox of tolerance. It is without doubt that liberalism is an ideology of tolerance. The common argument from the liberal front sounds as follows: "I do not agree with what you say, but I will defend your right to say it!" This type of openness towards the other can be parasitic to the polity in question. For, if the liberals are to tolerate all the views, would they not succumb, in the end, towards views which reject liberalism as such? In other words, the paradox of tolerance states that being tolerant must refute the intolerance of the other towards the tolerant self.
Among the first to recognize this paradox was Karl Popper. Although he is primarily (and with good reason) remembered for his philosophy of science, it is essential to view his political philosophy as well. Popper admitted as much by pointing this out in his lectures through a story of his early years. Enamored by Marxism, as many were in those days, he could not grasp the historicism that accompanied it. During a riot some of his friends were shot by the police. While talking to the Communist party about this event, he was told that his friends lost their lives for a good cause - they were working towards the inevitable revolution of the proletariat. It is this type of historicism - a belief in the progress of science to predict human affairs - that he rejected. This relation between science and political philosophy is at the heart of his endeavor to have sound scientific theories. (A similar argument was made by his colleague Imre Lakatos, though they later drifted apart - and if there is a despicable relation in philosophy it is theirs. In a lecture at London School of Economics, Lakatos equally points out the basis of science for political acts.)
Back to tolerance and Popper. Although Popper was a proponent and defender of tolerance, he did recognize its limits - hence the paradox. He could not find a solution to the paradox as such and instead resorted to what is currently called an approach reinstating the political distinction between friends and enemies. The intolerant other is the enemy who must be destroyed:
"We should therefore claim, in the name of tolerance, the right not to tolerate the intolerant. We should claim that any movement preaching intolerance places itself outside the law, and we should consider incitement to intolerance and persecution as criminal, in the same way as we should consider incitement to murder, or to kidnapping, or to the revival of the slave trade, as criminal" (Popper, The Open Society and its Enemies - a rather long note to chapter 7; pdf to the full text can be found on University of Berlin website, though I am not sure about the copyright).
It would appear strange that a tolerant man as Popper claimed himself to be, would be espousing such a measure towards intolerance. What the paradox of tolerance shows, it seems, is the doctrine emphasized by Carl Schmitt in the 20s and 30s - that the ultimate distinctions in politics are between friends and enemies; and that their relation has a potential of erupting into combat. The paradox of tolerance, in other words, does not have a solution other than Schmitt pointed out: namely, the end of the political (or politics). This is, to be sure, not the end of the world; and Schmitt was clear that an antagonistic form of politics is only the contemporary expression. So he states that in a world without politics, would be one containing:
"many very interesting antitheses and contrasts, competitions and intrigues of every kind, but there would not be a meaningful antithesis whereby men could be required to sacrifice life, authorized to shed blood, and kill other human beings" (Schmitt, The Concept of the Political, p. 35 - unfortunately, not free pdf of this one).
The point I am slowly getting at here is that Popper's problem with intolerance is not a paradox in moral terms; on the contrary, the paradox of tolerance on shows that morality is subjected to politics - something already recognized by Aristotle. If Popper would have read his classics better (there is no greater misunderstanding of Plato than in Popper's work), he would have realized what his statements actually end up doing: a recourse to historicism no longer based on science.
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