RedStateEclectic : Permeable Individualism (3/3) - In the Beginning There Were Markets?

Image credit. Collective effects - why do people do things like these?

In Permeable Individualism (2/3) - In the Beginning There Were Markets? we have seen that in the course of evolution humans have, in a condition of mutual permeability, become inextricably intertwined with the institutions that make for social order.

The individual is surrounded by collective effects, being influenced by them as well as expressing herself through these. Ignorance of such mutual permeability is liable to give rise to imbalance in society and in the theoretical perceptions by which we make sense of (the position of the individual in the) community. As we have argued in Permeable Individualism (1/3) and (2/3), there is a danger of such imbalance clearly contained in

the Lockean individual as the point of origin of all moral, legal and political ratiocination, and in

the rational actor underlying neoclassic economics in which she appears in another guise.

American institutionalism, pioneered by Thorstein Veblen and John R. Commons ("the old institutionalists" below), provides a useful scaffolding from which to tackle the crucial drawback of liberal individualism: its inability to account for

the evolutionary and cultural preconditions of rational human action,

the interdependence, the cyclical causality and mutual feedback between individual and institution as opposed to the individual's primacy over institutions.

Far from being the starting point, the rational individual, the individual involved in sociogenic freedom, emerges from a vast array of preconditions, biotic and social.

Thus, writes Geoffrey Hodgson,

the idea of the given, rational individual is both unsuccessful, and untenable in ongoing, evolutionary terms. The introduction of habit and instinct provides a consistency between the socio-economic and biotic levels of analysis, and establishes an important link between the socioeconomic and the natural world.

Hodgson, p. 189

He goes on to elucidate the basic idea:

For the “old” institutionalists, habit is regarded as crucial to the formation and sustenance of institutions. Habits form part of our cognitive abilities. Cognitive frameworks are learned and emulated within institutional structures. The individual relies on the acquisition of such cognitive
habits, before reason, communication, choice, or action are possible.

Learned skills become partially embedded in habits. When habits become a common part of a group or a social culture they grow into routines or customs (Commons 1934, p. 45). Institutions are formed as durable and integrated complexes of customs and routines. Habits and routines thus preserve knowledge, particularly tacit knowledge in relation to skills, and institutions act through time as their transmission belt.

Institutions are regarded as imposing form and social coherence upon human activity partly through the continuing production and reproduction of habits of thought and action. This involves the creation and promulgation of conceptual schemata and learned signs and meanings. Institutions are seen as a crucial part of the cognitive processes through which sense-data are perceived and made meaningful by agents. Indeed, as discussed below, rationality itself is regarded as reliant upon institutional props.

The availability of common cognitive tools, as well as congenital or learned dispositions for individuals to conform with other members of the same group, work together to mold individuals goals and preferences. Accordingly, individuals are not taken as given. In mainstream economics, widespread lip-service to notions of individuality and choice may have helped to obscure the degree in reality to which conformism or emulation actually occur, even in modern competitive economies.

For an “old” institutionalist, such outcomes are an important part of the institutional self-reinforcing process. [...] The imitation and emulation of behavior leads to the spread of habits, and to the emergence or reinforcement of institutions. In turn, institutions foster and underline particular behaviors and habits, and help transmit them to new members of the group.

The additional emphasis here concerns the role of habit both in sustaining individual behavior, and in providing the individual with cognitive means by which incoming information can be interpreted and understood. Our understanding of the durable and self-reinforcing qualities of institutions is enhanced.

The thrust of the “old” institutionalist approach is to see behavioral habit and institutional structure as mutually entwined and mutually reinforcing: both aspects are relevant to the full picture (Commons 1934, p. 69).

Choosing institutions as units of analysis does not necessarily imply that the role of the individual is surrendered to the dominance of institutions. [...] Both individuals and institutions are mutually constitutive of each other. Institutions mold, and are molded by, human action. Institutions are both “subjective” ideas in the heads of agents and “objective” structures faced by them. The twin concepts of habit and institution may thus help to overcome the philosophical dilemma between realism and subjectivism in social science. Actor and structure, although distinct, are thus connected in a circle of mutual interaction and interdependence.

(Hodgson pp. 180 - 181)

Individualisms and the Consequences for Freedom

Individualism has been criticised by eminent conservatives and classical liberal authors such as Burke, Sumner and de Tocqueville. Their fearful and dismissive view of individualism strikes me as valid regarding its overly pronounced interpretations espoused by anarchism, crypto-anarchism and Rousseauian totalitarianism (egalitarian democracy as the expression of the general will of the collective of free individuals).

However, I do not share their misgivings to the extent that individualism is supposed to be either identical with egoism or bound to degenerate into a general selfishness that brings about social atomism, an individualistic fragmentation fatally rupturing social cohesion, a disempowering isolation of the individual that ultimately leaves him helpless in the face of despotic ambitions.

There is a different perspective on individualism, which I have in mind when I think of freedom.

The robust conditions of freedom which mark modern civil society emphatically signify the wider scope and greater independence of the individual today compared to most of human history: freedom of association and establishment, free choice of occupation, freedom of speech, freedom to participate in politics etc. The extent of freedom available to the individual nowadays is no triviality. This extensive, yet patchy freedom must be guarded, but it also must be recognised in its operative existence.

Modern liberty accords the vast network of free individuals associated in civil society a weight greater than that of government, in the sense that the latter is systematically hindered to organise despotic concentrations of power.

Mutual permeability of institutions and culturally prevalent individualism are stabilising characteristics of a free society, ensuring that neither of the twins attains a status of destructive pre-eminence.

Thus, in order to understand liberty in our time and type of society, we should not try to identify the degree to which we find the individual free by Lockean standards, instead we should ask ourselves whether the institutions of civil society promote and guarantee robust conditions of freedom so that there are effective barriers to protect the individual from absolute power, while leaving enough space for the kind of collective action that enhances the resourcefulness and the comfort of the individual.