It was an oppressively hot August day, when I heard on the radio that Czechoslovakia had been invaded by Soviet troops. I was 9 years old, and a sense of fear gripped me, as the grown ups seemed unusually worried, suddenly facing the prospect of war again. Mom and Dad, who had gone through the Second World War, had taught me to fear war.
When I visited Communist Czechoslovakia in the mid and late 70s, I could sense a mood of resignation and cynicism among the people I got to know more closely. By their own perception, which would prove right with hindsight, those in their best years then were a lost generation, robbed of national pride, humiliated by a farcical socialist Leviathan and utterly lacking in the life chances of a modern Westerner.
The illusions that I had entertained about socialism were brutally destroyed by visiting that bleak and grotty planet where people were made to hurry about like puppets so that some intangible anonymous power could have its socialism. The Communist Prague I knew was populated by Kafkas entangled in an absurd play.
It is awkward to think that the West was right not to interfere militarily, and that those who decided it was better not to die defending their budding freedom had made a wise choice.
We who worry about our freedoms, how much resignation and cynicism are we entitled to?
Bad news for the wailing libertarian, bad news for those whose belief in liberty makes them feel menaced and inundated everywhere by arbitrary power and injustice, decline and misery, evil and peril.
Depending on how you look at her, freedom is either a concept, or an aspect of reality, a vast and pervasive one, if we are lucky. As a concept it demands perfection and completeness, as part of reality it must accept a position, however prominent, next to other phenomena many of which may not square with the demands of liberty.
The best that we can hope to achieve for freedom is an open society which gives her plenty of space to unfold. However, an open society will never be congruent with freedom. An open society will always be a mixed society in terms of liberal and illiberal elements. With their countless different views of freedom, liberals are among the first to feed the blend of contrasting components that make up an open society.
"The truly great social catastrophes do not arise from a misapplication of the basic principles of a market economy. They arise from a wholesale disrespect for individual liberty, which is manifested in tolerated lynchings and arbitrary arrest, and from a total contempt for private property, through its outright seizure by government forces intent on stifling its opposition or lining its own pockets. The reason why Great Britain and the USA did not go the way of Germany and the Soviet Union in the turmoil of the 1930s was that the political institutions in both our countries were able to hold firm against these palpable excesses even as they went astray on a host of smaller economic issues."
If there are good things happening in this world, we cannot ascribe them to freedom alone, as if all the hindrances in her way no longer matter. If there are good things happening in this world, then this is because of a tolerable, perhaps even felicitous mix of freedom and unfreedom. Thus, a more complete view of freedom ought to accommodate the manner and means by which freedom and unfreedom coexist to bring about a world that gives us Reasons to Be Cheerful.
It is easy to pick up a newspaper, watch television or look on a blog and assume the end is nigh. Between foreign affairs crises, demographic time bombs, debt icebergs and having only hours left to save the NHS (more on that another time…), it would not be unreasonable for us all to assume the world has got a lot worse – that capitalism has failed, inequality has sky-rocketed, and we are living shorter, sadder and more violent lives.
Happily, this is not so. Thanks to capitalism, free trade and globalisation we live in the most prosperous, healthy, safe, equal and free period in human existence. Across the globe, as liberal economic policy and capitalism have left communism and command economies in the dustbin of history, we are seeing remarkable falls in worldwide poverty, hunger, disease, inequality and (despite current humanitarian disasters) deaths from war and natural disaster.
It is worthwhile (as Free Enterprise Award winner Matt Ridley does) looking at the reasons to be happy with our world today and to be optimistic for the future.
Wilfred Owen wrote Futility in May 1918, just a few months before death on the battlefield on 4 November during the crossing of the Sambre–Oise Canal. Futility documents an event where a group of soldiers discover one of their comrades. He has died and their attempts to revive him by moving him in to the sun fail.
I find David Glasner's blog post at Uneasy Money interesting for his discussion of (1) the role of axiomatic reasoning - much hailed by libertarians especially in the praxeological tradition (von Mises, Rothbard), (2) the aberrations of neoclassical economics, and (3) the concept of precision which is not infrequently used to rule out by denigration methods more appropriate to the social sciences, especially economics, than methods preferred because they yield the spurious appearance of supporting an "exact science".
The way I read Glasner, he is saying that axiomatization in economics has become a fetish, a misguided promise of more profound and more certain knowledge, and that modern economics in its immature ambition to be considered "an exact science" and by overemphasising mathematical formalization has lost the subject-matter of economics out of sight.
[...] that it is important to understand that there is simply no scientific justification for the highly formalistic manner in which much modern economics is now carried out. Of course, other far more authoritative critics than I, like Mark Blaug and Richard Lipsey (also here) have complained about the insistence of modern macroeconomics on microfounded, axiomatized models regardless of whether those models generate better predictions than competing models. Their complaints have regrettably been ignored for the most part.
I like the way in which Glasner looks beyond the foreground and middleground, probing into the remoter roots of fetishistic illusions about precision and exactness in science.
Thus, the author argues
[...] the concept of precision is itself hopelessly imprecise, and to set precision up as an independent goal makes no sense.
He backs up his view with quotes from Karl Popper's
enlightening discussion of the historical development of calculus despite its lack of solid logical axiomatic foundation.
[...] However, the absence of a rigorous and precise definition of the derivative did not prevent mathematicians from solving some enormously important practical problems, thereby helping to change the world and our understanding of it.
Writes Popper, the terms "exact" or "precise"
[...] strongly suggest that there exists what does not exist – absolute exactness or precision – but also because they are emotionally highly charged: under the guise of scientific character and of scientific objectivity, they suggest that precision or exactness is something superior, a kind of ultimate value, and that it is wrong, or unscientific, or muddle-headed, to use inexact terms [...]
[...] the demand for precision is empty, unless it is raised relative to some requirements that arise from our attempts to solve a definite problem. [...]
[...] the attribute of exactness is not absolute, and that it is inexact and highly misleading to use the terms “exact” and “precise” as if they had any exact or precise meaning [...]
[...] a lesson taught by the whole history of science: that absolute exactness does not exist, not even in logic and mathematics (as illustrated by the example of the still unfinished history of the calculus); that we should never try to be more exact than is necessary for the solution of the problem in hand [...]
The two major problems with modern liberalism (European meaning) are a lack of
(1) theoretical fortitude to generally deal with the vast fields of contingency and indeterminacy opened up by greater freedom, and more specifically, a lack of
(2) doctrinal maturity to guide it in political participation.
Both deficiencies have a common source. The model of social order underlying modern liberalism is the market. But the market is only a subset within the broader social order.
Hume or Smith were never in danger of reducing the system of liberty to a mechanism that describes free markets. But when Hayek speaks of spontaneous order, he is already propagating the narrower vision.
I do not know when and why it occurred, at any rate, the tragic turn of liberalism looms when sight is increasingly lost of the spontaneous order of society at large.
Why would liberalism suffer such constriction? Maybe because its roots lie in a precapitalist world, and more importantly in a world where government could not possibly be anything but very small by later standards. Maybe because its heyday coincided with the breakthrough of commercial society. Small government and commerce looked like the essence of liberalism. They appeared to offer liberalism's ultimate formula for success.
Now, let me explain what I mean by "the vast fields of contingency and indeterminacy opened up by greater freedom."
(1) Freedom brought about capitalism. (2) Capitalism brought about wealth. (3) Wealth required and enabled mass political participation, and wealth made possible government endowed with unprecedented resources. (4) Mass political participation brought about unheard of demands on the state. (5) Unheard of demands on the state brought about big government.
Freedom brought about big government.
It is useful to think outside the usual box, for a moment, and admit that there are not only silly and objectionable grounds for a larger state to happen. At least from stage (3) on, the delta of implications deriving from mass political participation and unprecedented publicly available wealth becomes much too broad and complicated, too contingent and indeterminate to simply wipe away any consideration of larger government as an expression of base doctrinal dazzlement.
However, this is exactly the error committed by the liberal movement. By its very structure, the liberal doctrine was conditioned, or at least predisposed to heavily underweight political processes and the dynamics of state institutions and government. Liberalism yields to this propensity at a time when these are becoming the most powerful forces in society, next to free markets and civil society, by which latter I mean the growing independence of humans and organisations from the tutelage of the powers-that-be.
The irony, nay, the tragedy is that liberalism becomes a creed of political abstention, just at the time when liberty is taking off in the biggest possible way. This is the dawn of the era of the paradox of freedom. Liberty proliferates and grows all over the world, but liberals hardly participate in shaping her fate. Those among them ready to accompany liberty in the political realm quickly amalgamate with other political schools uninhibited to regard politics as a welcome tool to bring mankind advances that the smaller governments of yesteryear were utterly incapable of. This is the reason why, for instance, the German liberal party has become yet another branch of social democracy a long time ago. A liberal party, a strong liberal force in politics is simply not conceivable under the core paradigm. A liberal must cheat or desert in order to become politically effective.
I must use the word for the third time: it is a tragedy that the audacious vision of perhaps the greatest liberals ever, and the unparalleled success of their political activism have not become the guiding light of modern liberalism. Instead, liberals live estranged from and often embittered by a time characterised by more freedom than has been experienced in any period before ours.
It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are for ever destined to depend for their political constitutions on accident and force.
(Federalist 1, par. 1)
The answer to this puzzle is not a foregone conclusion - it is an ongoing process of political activity producing partial answers.
Edward Elgar publishers, in association with the Institute of Economic Affairs, are about to launch a revised Second Edition of the must-read-book by my favourite economist Steven Kates: Free Market Economics. An Introduction to the General Reader.
The author gives us a little personal background information on the book's cover:
That is very likely the mill from which the plaque has been modelled. I wished to have a cover that showed a water mill made of clay because the two most important influences on me have been John Stuart Mill and the English economist, Henry Clay. My wife, bless her, found just such a combination on the net as the plaque was being sold just then. I therefore bought it, photographed it and now the clay representation of a mill is on the cover. I also like it because it is both nineteenth century and part of the productive apparatus of an economy. And it fits in with my understanding of Jean-Baptiste Say whose factory producing textiles was driven by a water mill. Finally, I just think it’s beautiful. I could not think of a better cover. My profound thanks to Ant for conjuring the origins up.
Itself a great and wonderfully versatile source of reading, the Hit&Run blog has the below recommendation for your summer beach read:
English majors may fondly recall novelist Nathaniel Hawthorne for enthralling works like The Scarlet Letter and The House of the Seven Gables. But few seem to have read Hawthorne's brilliant 1852 satire The Blithedale Romance, which draws on his frustrating experiences with the short-lived utopian community called Brook Farm. [...]
The Blithedale Romance is by turns laugh-out-loud funny and darkly tragic, and its ending packs a wallop. In a world where so-called intentional businesses, foundations, and communities built around shared moral purposes are all the rage, the novel should be required reading. It reminds us that even the best intentions are rarely strong enough to overrule either the longings of the human heart or the basic laws of economics.
Today marks the 100th anniversary of the outbreak of the "Great War" – World War I. This is how the catastrophe unfolded:
So then, we have the following remarkable sequence of events that led inexorably to the 'Great War' - a name that had been touted even before the coming of the conflict.
Austria-Hungary, unsatisfied with Serbia's response to her ultimatum (which in the event was almost entirely placatory: however her jibbing over a couple of minor clauses gave Austria-Hungary her sought-after cue) declared war on Serbia on 28 July 1914.
Russia, bound by treaty to Serbia, announced mobilisation of its vast army in her defence, a slow process that would take around six weeks to complete.
Germany, allied to Austria-Hungary by treaty, viewed the Russian mobilisation as an act of war against Austria-Hungary, and after scant warning declared war on Russia on 1 August.
France, bound by treaty to Russia, found itself at war against Germany and, by extension, on Austria-Hungary following a German declaration on 3 August. Germany was swift in invading neutral Belgium so as to reach Paris by the shortest possible route.
Britain, allied to France by a more loosely worded treaty which placed a "moral obligation" upon her to defend France, declared war against Germany on 4 August. Her reason for entering the conflict lay in another direction: she was obligated to defend neutral Belgium by the terms of a 75-year old treaty. With Germany's invasion of Belgium on 4 August, and the Belgian King's appeal to Britain for assistance, Britain committed herself to Belgium's defence later that day. Like France, she was by extension also at war with Austria-Hungary.
With Britain's entry into the war, her colonies and dominions abroad variously offered military and financial assistance, and included Australia, Canada, India, New Zealand and the Union of South Africa.
United States President Woodrow Wilson declared a U.S. policy of absolute neutrality, an official stance that would last until 1917 when Germany's policy of unrestricted submarine warfare - which seriously threatened America's commercial shipping (which was in any event almost entirely directed towards the Allies led by Britain and France) - forced the U.S. to finally enter the war on 6 April 1917.
Japan, honouring a military agreement with Britain, declared war on Germany on 23 August 1914. Two days later Austria-Hungary responded by declaring war on Japan.
Italy, although allied to both Germany and Austria-Hungary, was able to avoid entering the fray by citing a clause enabling it to evade its obligations to both. In short, Italy was committed to defend Germany and Austria-Hungary only in the event of a 'defensive' war; arguing that their actions were 'offensive' she declared instead a policy of neutrality. The following year, in May 1915, she finally joined the conflict by siding with the Allies against her two former allies.