In his acute analysis of the character and institutions of the United States, "Democracy in America," Alexis de Tocqueville, a 19th-century French liberal, stressed the importance of what we call "civil society." American democracy, Tocqueville understood, wasn't just a matter of the state, here, and the individual, there. "Between" the state (or government) and the people there were the many free, voluntary associations that formed the sinews and musculature of America. Those free associations also performed many essential social functions: they educated the young, served the poor and cared for the sick.
Writing a century and a half after Tocqueville, Pope John Paul II also highlighted the importance of voluntary associations for the free and virtuous society. Those associations, the pope argued, shape the human personality of a political community--what John Paul called, in his philosopher's vocabulary, the "subjectivity of society." Thus, in a democracy--a way of self-government that depends on the character of a people--the institutions of civil society are schools of freedom: the elementary schools of democracy.
Think about it this way: Every 2-year-old is a natural-born tyrant, a beautiful bundle of willfulness and self-absorption who demands (sometimes winsomely and often loudly) that he or she get what he or she wants--now. Who, or what, turns all those 2-year-old tyrants into democrats: mature men and women capable of being democratic citizens? Where do we learn what Tocqueville called the habits of mind and heart, and what moral philosophers from Aristotle to John Paul II have called the virtues, that are necessary for the machinery of democracy to work well?
We learn them first in the family, which is the fundamental, irreplaceable institution of civil society. We also learn those habits of heart and mind in friendships and in school, in clubs and sports and in religious communities. Men and women who, later in life, take responsibility for making government work first learned how to do so, not from the state, but from the civil society institutions in which they grew up. Adults who take the responsibilities of citizenship seriously did not learn their sense of civic obligation from a governmental agency: they learned to be responsible and civil and tolerant, flexible but principled, in more humane schools: the free, voluntary associations that Tocqueville and John Paul II celebrated.
Democracy means, among many other things, that the government is not everything; thus Mussolini's definition of totalitarianism ("Everything within the state, nothing outside the state, nothing against the state") is the absolute antithesis of democracy--indeed, the very antithesis of freedom. Throughout history, just states (whether democratic or not) have understood that there are limits to their powers: there are certain things that just states simply cannot do.