People frequently assume social and economic liberalization goes hand in hand, but the links aren't as tight as we often assume.
In The Politics of Virtue: Post-Liberalism and the Human Future, John Milbank and Adrian Pabst conflate implications of the division of labor with the implications of market capitalism. The conflation matters to their argument. Their argument for a humane, non-bureaucratic, and non-technocratic variant of Christian socialism doesn’t work if the social pathologies they diagnose are caused by the division of labor rather than by the market. While socialism may get rid of the market, it cannot and does not propose to jettison the highly refined partitioning of work in the modern world. As a result, their proposed remedies cannot reestablish the economic and social personalism they seek.
They lament the anonymity and impersonalism of modern economic life, and the consequences of that impersonalism. They argue the “liberal invention of capitalism” created “a legal framework for the undermining of older corporate and guild privilege, together with the institution of untrammeled formal contract that in general absolves impersonal transaction from personal involvement and commitment.”
The impersonalism and or anonymity of modern market economies is a common feature of criticisms of modern market capitalism. Karl Polanyi, whom Milbank and Pabst rely on, laments it in The Great Transformation. It also features prominently in academic works on the American market revolution (which Charles Sellers almost single-handedly initiated with his important book The Market Revolution: Jacksonian America, 1815-1846).
The intellectual problem with studying and characterizing this transformation, whether the transformation itself is the focus of study, as it is for Polanyi and Sellers, or merely the backdrop for further analysis, as for Milbank and Pabst, is the time period saw two intertwined but conceptually distinct economic changes. To be sure, the nature of the market itself changed dramatically, in both its intensity (changing previously traditional modes of household and local production) and its extensiveness (including far more people in regional, national, and national markets). But the Industrial Revolution itself radically altered the nature of production independent of any transformation in the market. While the market revolution certainly stimulated and incentivized the Industrial Revolution, and at the same time promoted the division of labor, the latter can exist independent of the former.
This is not difficult to see.
Setting aside the important issue of the practicality of a centrally-directed socialist economy, one can at least imagine a modern economy in which the means of production are socially owned. One cannot, however, imagine a modern economy without an extensive specialization and division of labor.
The spatial component of modern economies that create depersonalism and anonymity result from the accouterments of modern production, not as a result of the market. The extensive division of labor, along with associated scale economies (which, again, is not a market phenomenon even if incentivized by it) carry with it the spatial perquisites that result necessarily in a greater separation of consumer and producer than existed in economic interactions between producer and consumer in more-traditional societies. (Indeed, market interaction in traditional societies was so personal that each interaction generated a unique price as the result of personalized bargaining.)
Whether in a non-market socialist economy or a market economy, the requirements of modern production generate the anonymization between consumer and producers that Polyani, Sellers, Milbank, and Pabst all lament.
There’s a reason Milbank and Pabst must ignore the fact that the anonymization they lament results from the requirements of modern production rather than from the market: Modern levels of the division and specialization of labor cannot be “solved” without inconceivably huge economic and social dislocations. In essence, the cause of the social pathology they diagnose cannot be removed. This does not mean that the alienation they diagnose cannot be meliorated. But it does mean that melioration must derive from something other than a little more market regulation and economic redistribution (Polyani) or some form of localist-Christian socialism (Milbank and Pabst).