RedStateEclectic

Liberty and Totalitarianism - Michael Polanyi (1/3) The Seminal Impetus of Liberalism

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I am reading The Logic of Liberty by Michael Polanyi, which - quite surprisingly to me - turns out to be the source from which Hayek has received some of his best ideas, most notably the concept of spontaneous order.

I. Liberty and Contingencies

In the present post, however, I wish to dwell on a chapter ("Perils of Inconsistency") in the above book, in which Polanyi casts light on the roots of the totalitarian catastrophes of the 20th century. It holds another surprise to me, as Polanyi traces a striking linkage between the doctrine of liberty and the totalitarian ideologies of communism, fascism and Nazism.

Phrasing can make a big difference. While one could say, as Polanyi does, only with substantial license though, that totalitarianism has its roots in liberalism, it is less misleading to emphasise what he calls "moral inversion", i.e. the process by which certain basic suppositions of the earliest liberals have - thanks to certain peculiarities of European history - become "morally inverted" so as to give rise to the totalitarian mind set.

Contrary to Polanyi, I insist that in no way would one be justified in ascribing to liberalism responsibility for the emergence of totalitarianism; but the Polanyian link between the two does tell us something about the contingencies that liberal thought may help trigger. No one has full control over the way in which freedom and her underlying intellectual visions ultimately play out in history.

Here is Michael Polanyi's fascinating story.

II. The Totalitarian Metamorphosis of the Liberal Impetus

Writes Michael Polanyi:

Liberalism was motivated, to start with, by detestation of religious fanaticism. It appealed to reason for a cessation of religious strife. This desire to curb religious violence was the prime motif of liberalism both in the Anglo-American and in the Continental area.

(Polanyi, M. (1998), The Logic of Liberty, Indianapolis, Liberty Fund Inc,  p.116 - emphasis added)

However, there appeared momentous differences between the two geo-cultural areas. First, let us look at the Anglo-American sphere:

Anglo-American liberalism was first formulated by Milton and Locke. Their argument for freedom of thought was twofold. In its first part (for which we may quote the Areopagitica) freedom from authority is demanded, so that truth may be discovered. The main inspiration of this movement was the struggle of the natural sciences against the authority of Aristotle. Its programme was to let everyone state his beliefs, and to allow people to listen and form their own opinion; the ideas which would prevail in a free and open battle of wits would be as close an approximation to the truth as can be humanly achieved.

We may call this the anti-authoritarian formula of liberty.

Closely related to it is the second half of the argument for liberty, which is based on philosophic doubt. While its origins go back a long way (right to the philosophers of antiquity) this argument was first formulated as a political doctrine by Locke. It says simply that we can never be so sure of the truth in matters of religion as to warrant the imposition of our views on others. These two pleas for freedom of thought were put forward and were accepted by England at a time when religious beliefs were unshaken and indeed dominant throughout the nation.

The new tolerance aimed pre-eminently at the reconciliation of the different denominations in the service of God. Atheists were refused tolerance by Locke, as socially unreliable.

(Ibid. p. 117 - emphasis added)

The Continental context was rather different:

On the Continent , the twofold doctrine of free thought - anti-authoritarianism and philosophic doubt -  gained ascendency somewhat later than in England and moved on straightaway to a more extreme position. This was first effectively formulated in the eighteenth century by the philosophy of Enlightenment, which was primarily an attack on religious authority and particularly on the Catholic Church.

(Ibid. p. 117 - emphasis added)

Michael Polanyi describes his central thesis in this way:

I have said that I consider the collapse of freedom in Central and Eastern Europe as the outcome of an internal contradiction in the doctrine of liberty. Wherein lies this inconsistency? Why did it destroy freedom in large parts of Continental Europe, and has not had similar effects so far in the Western or Anglo-American area of our civilization?

Ibid. p. 120

Find out about the denouement in the second part: Liberty and Totalitarianism - Michael Polanyi (2/3) - The Moral Inversion of Liberalism.

The Universal Grin - A Farewell to Alms?

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I have come round to reading at least the conclusion of Gregory Clark's A Farewell to Alms. A Brief Economic History of the World, much praised, even by Hans-Hermann Hoppe, who seems delighted to be able to draw (what, I presume, many of us would call) racist conclusions from reading it. See The Great Fiction (2/3).

At any rate, I am doing work on immigration at the moment, and found Clark mentioned in a good article on the topic: No Panaceas: Libertarian Challenges to Open Borders. 

So, I decided to browse A Farewell to Alms and read the short concluding chapter "18: Conclusion: Strange New World."

I was surprised and disappointed. The main shortcoming of the chapter is its ill-conceived reliance as the main selling point on certain trite and superficial propositions of happiness research. Quite a let-down for a not so brief "brief economic history of the world".

Unfortunately there is little evidence of gains in happiness from gains in income, life expectancy, or health by society as a whole. (Clark, G. (2007), A Farewell to Alms, Princeton University Press, p. 374)

But why should we expect evidence to the contrary?

After all, there is a finite range of emotional intensity in experiencing inner states that convey happiness or its contrary. The range of emotional intensity is very likely an anthropological constant, which is to say, that Neanderthal man may have felt not much different than you and I upon having his teeth drilled or experiencing delight at the sight of his latest crush. When you come to think of it, we would hardly expect open-ended growth in a person's intensity of experiencing orgasmic bliss as a positive correlate of the steady increase in his income or net worth. 

Incongruously, Clark prefaces the chapter with a quote from Henry Fielding that appears to be more reflective of my findings:

All Nature wears one universal grin.

At any rate, Clark goes on to point out that rich interviewees tend to indicate greater happiness than poor ones, but in a footnote he concedes that

the amount of variation in reported happiness ... is small, typically less than 5 percent. (Ibid. p. 374)

However, Clarke conjectures:

Perhaps, we are not designed to be content, but instead to forever compare our lot with that of our competitors, and to be happy only when we do better. (Ibid. p. 376)

While I am not sure contentment and happiness make a good synonym, I think, Clark is putting his finger on a crucial point. For I have been arguing for quite some time

what makes humans humans and separates them from other animals is their proclivity to adapt to their environment by developing and pursuing new desires. Humans are by definition and biological make-up not content with a situation where this proclivity is frustrated. The propensity to attempt the new (and be unhappy with failure to achieve it) is unlimited in human beings, rather than the ability to feel happy.

Envy is a derivative of this more fundamental human drive; while, of course, comparing oneself to others is not necessarily dishonourable, a resentful act or based on a sense of inferiority. We cannot be what we are and we cannot make the best of us without comparing a lot of things with a lot of things, including men with men.

For more see my post: Happiness and Freedom.

Clark then refers to Robert Frank who argues:

[S]ince the gains in happiness from higher income and consumption come only at the expense of the reduced happiness of those who lose out in such status races, much of the energy devoted to achieving higher incomes in any society is socially wasteful. (Ibid.)

A false metric that is not even significant is eagerly turned into a self-righteous moral demand, stoking the insatiable greed of the anti-capitalist sentiment:

The rich, the winners of the status races, should be heavily taxed to reduce such socially costly activity. (Ibid.)

By that reckoning, mankind will never know a farewell to alms - political propagandists and bad economists endeavouring to make sure indigence and beggarliness are as endogenous to our species as is the human grin.

However, Clark cautions:

But happiness studies so far do not support any such policy conclusion. Greater taxation of the rich might reduce income inequality, but it would not make societies as a whole happier. We lack trustworthy evidence that societies with greater income equality are on average happier. (Ibid. p. 377)

Not surprisingly.

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Why Worry about Inequality? A Reflection on Self-Ownership

Negative Liberty and Positive Liberty (1/2) - Core, Frontier, and Relational Freedom

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Negative liberty

Among the building blocks of the liberal conception of freedom we find the idea of negative liberty. This notion emphasises that liberty demands

• the protection of any one agent (individuals and associations created by individuals) against arbitrary interference by any other agent.

Negative liberty highlights the role of prohibitions in creating liberty as a bulwark against arbitrariness. In that sense negative liberty may be referred to as freedom from restraints and violence from others.

It is based on the expectation that desirable advancement, personal and societal, is best generated within the framework of rights to which its prohibitions refer. Presupposing a fixed set of collectively enforced entitlements - in the form of rights and a license to act in defence of these rights - negative liberty is conservative, defensive, and static in that it recommends by definition

• the perpetuation of the structure of rights on which it is built,

and implies that this structure of rights ensures

• an optimal modus operandi regarding coercion in society which does not require or provoke alteration.

Not all notable liberals subscribe to the idea of negative liberty, among them Kant and Mill, but it is certainly taken to be a fundamental feature of freedom in the eyes of many modern libertarians, including Friedrich Hayek.

Positive liberty

By contrast, positive freedom conceives of liberty as

• entitlement and empowerment, emphasising the possibility and the right to overcome actively hindrances to the aims individuals, associations, or a community may wish to arrive at.

Positive liberty seeks to support the project of human perfectibility by encouraging efforts at remodelling the apparatus of rights in the light of new and better insights concerning human progress, including insights suggesting differential treatment of diverse members of society .

Whereas adepts of negative liberty expect to transcend the status quo from within the given laws, supporters of positive freedom seek progress by transcending the current legal framework.

Whereas negative liberty implies that

• the heeding of generally applicable rules of just conduct ensures the common good and that human potential (ingenuity, entrepreneurship etc.) is most effectively leveraged precisely by faithfulness to these rules,

positive liberty implies that

• human ingenuity, foresight, and other-regarding empathy ought to take the lead in re-engineering the system of laws to expedite new stages of progress.

However, the distinction between positive freedom and negative freedom is fraught with problems.

If they are to make sense, the concepts must be handled with great analytical care. After all, it is possible to express negative liberty in terms of positive liberty, and vice versa.

Negative liberty may express the core of freedom as freedom from arbitrariness. That is to say: enjoying a state of being protected against arbitrariness. However, the same condition can be described in terms of positive freedom, namely as the freedom to actively oppose arbitrary abuse. That is to say: enjoying a state of entitlement and empowerment.Thus, Thomas Hobbes is erroneously referred to as a father of liberalism, simply because he couches his agenda of positive freedom (for the absolutist state) in negative terms, namely "the absence of external impediments."

The difference of meaning between negative liberty and positive liberty is certainly useful in emphasising different sides of freedom, which has definite and important requirements of non-interference but also a need for interference in the status quo, including the framework of established rights.

Practically speaking, we may distinguish between, say, the

• negative liberty of free speech, i.e. the prohibition to prevent a person from expressing his views,

and the

• positive liberty of inhibiting free speech, say, on the grounds (deemed compelling by the proponent) that from false or inciting utterances there may ensue severe damage to certain groups or even society at large.

Parts, Not the Whole

Negative and positive liberty describe important aspects of freedom, but they are not suited to capture the phenomenon of liberty in its entirety. Liberty is not a system, but a system of systems that includes both strands of negative freedom and positive freedom.

Nevertheless, in most debates, the terms tend to be juxtaposed as opposites concerning their adequacy

• to represent the overall nature of freedom, and

• to serve as blueprints for the implementation of freedom in society at large.

On the level of micro-analysis (looking at liberty at work in a specific context) the terms may legitimately coexist, especially to fight out the many difficult and important conflicts at the frontier between good and bad intervention, say, in the economy or the law. But when it comes to macro-analysis of the overall character of freedom in society, both terms become inapplicable, as their partial perspectives cannot but fail to represent

the full nexus of liberty, which consists neither

• of equally applicable prohibitions alone,

nor exclusively

• of unequal impositions that undermine the equality before law (to enhance one parties positive liberty at the expense of another party's liberty),

but

• encloses relational liberty that contains both elements of negative and positive liberty which are mixed and delineated by competition and negotiation, being always subject to designed as well as unwitting development and change.

In other words, negative liberty quite simply does not describe the composite manifestations of liberty in the real world, and it is inadequate as a theoretical model of liberty, owing to its

• negativity (one cannot work with "do nots" alone)

and

• stasis (being, in fact, living creatures, rights are subject to considerable change, and with them the condition of liberty). See also How Law Changes - The Forgotten History of Jaywalking, and The Homestead Act - Politics, Legislation, and Government for Liberty.

The liberty that exists - any liberty that may ever exist - cannot be understood without appreciating the element of positive freedom that constantly stirs her movements. To the extent that negative liberty supplements the composite of liberty, it is present in the mix thanks to acts of positive freedom.

Positive liberty has enormous toxic potential. It deserves to be Argus-eyed, for their champions are liable to

• (a) lend too much trust to the wisdom of experts and agitators and their visionary social engineering, especially if applied on a grand scale, and thereby

• (b) undermine the conservatism of law that promotes the stability and predictability on which effective human initiative depends - see especially Competing for Liberty (4/6) - Two Functions of Law, and Liberty as Method vs. Liberty as Blueprint.

Relational Freedom

When negative freedom lacks the quality of an active force, positive freedom is prone to display far too much of that quality. What, then, is needed is a balance between

• the passive dimension of freedom (= negative freedom)

and

• the energy that animates her (much of which is to be found in positive freedom).

The process of approaching such balance, I shall refer to as relational freedom.

For the reasons just given, I feel that it is an infelicitous move by liberals to place negative liberty at the front-line of their case for freedom. For more, see Negative Liberty and Positive Liberty (2/2) - A Tug-of-War.

See also Why Law (1/2) and Why Law (2/2).

The Age of Liberalism

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I am reading a fascinating little book published in 1904,

"The Evolution of Modern Liberty. An Insightful Study of the Birth of American Freedom and How it Spread Overseas," by George L. Scherger.

The writer makes me jump from one interesting idea to another, either taken directly from the book or inspired by it. I do not know with which idea to begin.

For starters, I shall confine myself to a simple, yet momentous observation, namely that liberalism has changed significantly since the era of its heyday in the 19th century.

In its contemporaneously dominant adoption by global social democracy, many, indeed, too many inhibitions, taboos, and reservations of classical liberalism are being breached, burdening the economy, jeopardising a balanced political system (one ensuring that no single force in society exerts absolute dominance), and undermining personal freedom - all of which being important pillars of the robust conditions of freedom.

Crude ideological stereotypes of socialist origin - above all, the chimaera of inequality - are being used to leverage insufferably invasive and collectivist attacks on our free societies.

In no small measure, I conjecture, however, these social democratic excesses are being invited by an inability, and - perhaps more deeply causative - a long-standing unwillingness of the classical liberal to enter the political fray so as to delineate his position from social democratic conceit, on the one hand, and anarchist utopianism, on the other hand.

The challenge is that many of the social democratic policies are quite compatible with (robust conditions of) liberty, while some of these have tremendous popular appeal (like certain elements of the welfare state), though there may be other and far better approaches to the respective issues. But if there is no politically vital force to represent these better, genuinely liberal approaches, social democracy is destined to become the dominant political force.

It would probably take an entire book to retrace the many roads that have led to a world in which liberals have become either

• social democrats, or

• crypto-anarchists sporting an anti-political attitude that incapacitates them to use the powerful tools of politics and the state to turn liberalism into a living thing, rather than a pious creed for personal edification with no public significance.

As Scherger seems to imply convincingly, the liberalism of the 19th century did include great expectations for and a vision of the state as a liberating force - why this vision has vanished, why modern libertarians have practically reversed the original liberal view of politics and the state remains a puzzle, that I think, we should pay more attention to, so as to regain the ability to see freedom where she exists and not only complain about her being absent or violated:

These declarations of the Rights of Man [most importantly in America, but also in France and later in Germany and other places, so far as they were American-inspired] mark a new ear in the history of mankind.

The humanitarian spirit underlies them-the conception that each individual citizen is entitled to the concern of the State; that this personality is of infinite worth and is a purpose of creation; that he should be recognized as an individual, as a man.

The principles they contain became the creed of Liberalism. The nineteenth century war pre-eminently the century of Liberalism.

(Scherger, G. (1904), The Evolution of Modern Liberty ..., pp. 5 - 6, Skyhorse Publishing-empahisis added)

Note that the great achievements of the age of liberalism rely on

• state enforcement,

• political mobilisation and, hence, increasingly on

• a thoroughly democratic public.

See Demos and Freedom - Robust and Non-Robust Conditions of Liberty, The Invention of the Modern Public, Modern Liberty's Model of the Public.

Writes Scherger:

Perhaps no other century witnessed greater and more numerous reforms and a greater extension of individual liberty.  

This century is marked by the abolition of slavery in all civilized countries, by the extension of the elective franchise, by the emancipation of woman, by the popularization of government, and by countless other reforms. 

(Ibid, emphasis added)

See also Herbert Spencer (1820-1903) - Illiberalism Within Liberalism - The Liberal Virus of Pessimism, Freedom Limits Liberalism, Freedom - A Force of Creative Destruction in the Moral Realm.

 

 

Continued at Birth of American Freedom - Government and Democracy.

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Competing for Liberty (5/6) - Crusoe-Freedom vs. Multi-Person Freedom

Competing for Liberty (1/3)

voteronpaul: Liberty & EqualityTwo central values of...

The Flying Pay Gap

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In Germany, firms of a certain size are required to employ specialised personnel whose task it is to police gender issues, i.e. to enforce a whole range of privileges intended to protect women against the oppression and exploitation they are with certainty assumed to have to face from men in the absence of such guardianship.

The German gender equality officer reminds me of the Blockwart ("snoop") in olden days, whose task it was to ensure amongst other things that on a certain day of the week all Germans were eating a vegetarian dish, so as to save meat for the soldiers at the front. Or make sure that everyone had a portrait of Hitler on the wall and a neat Nazi flag on the birthday of ze Führer.

I never understood why female as well as male business owners should instigate against themselves a deteriorating profit-and-loss-situation by paying men substantially higher wages for a job than women available to do the same assignment equally well. I thought, "dirty capitalists" were supposed to exploit employees rather than themselves. I do understand, though, why mighty special interests would find it useful to present such a preposterous claim as sheer fact.

Reminds me of Armen Alchians dictum, quoted in my Property Rights, Alchian on Politics, and Why the State Persists:

I know of no way to reduce the prospective enhancement from greater political power-seeking, but I do know ways to reduce the rewards to market-oriented capitalist competition.

And so, like the Flying Dutchman, recreated by light and water in the above image, the myth that women earn less money than men for the same type of work seems doomed to follow a course of eternal persistence in the disseminations of the media.

According to all the media headlines about a new White House report, there's still a big pay gap between men and women in America. The report found that women earn 75 cents for every dollar men make. Sounds pretty conclusive, doesn't it? Well, it's not. It's misleading.

According to highly acclaimed career expert and best-selling author, Marty Nemko, "The data is clear that for the same work men and women are paid roughly the same. The media need to look beyond the claims of feminist organizations."

On a radio talk show, Nemko clearly and forcefully debunked that ultimate myth - that women make less than men - by explaining why, when you compare apples to apples, it simply isn't true. Even the White House report: Women in America: Indicators of Social and Economic Well-Being explains why. Simply put, men choose higher-paying jobs.

And "An Analysis of Reasons for the Disparity in Wages Between Men and Women" prepared, under contract, for the U.S. Department of Labor in 1/09, sums it up:

"This study leads to the unambiguous conclusion that the differences in the compensation of men and women are the result of a multitude of factors and that the raw wage gap should not be used as the basis to justify corrective action. Indeed, there may be nothing to correct. The differences in raw wages may be almost entirely the result of the individual choices being made by both male and female workers."

Read more at the source.

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Regulators and the Socialist Calculation Problem

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Rightly, in my opinion, Arnold Kling is unhappy with the mainstream

ultra-Keynesian treatments of the financial crisis and its aftermath,

whose

all-purpose causal variable is a glut of savings and a dearth of government spending.

By contrast, he favours the explanation offered by Jeffrey Friedman and Wladimir Kraus in their book Engineering the Financial Crisis:

The Friedman-Kraus story is one in which regulators suffer from the socialist calculation problem. With risk-based capital regulations, regulators determined the relative prices of various investments for banks. The prices that regulators set for risk told banks to behave as if senior tranches from mortgage-backed securities were much safer than ordinary loans, including low-risk mortgage loans held by the bank. The banks in turn used these regulated prices to guide their decisions.

In 2001, the regulators outsourced the specific risk calculations to three rating agencies–Moody’s, S&P, and Fitch. This set off a wave of securitized mortgage finance based on calculations that proved to be wrong.

Friedman and Kraus challenge the basic mindset not only of DeLong but of 99 percent of all economists. That mindset is that the socialist calculation problem, if it matters at all, only matters for full-on socialists, not for regulators in an otherwise capitalist system. In the conventional view, regulators can fail for ideological reasons, or because they are manipulated by special interests. But Friedman and Kraus offer a different thesis. When information discovery is vital, regulators, like socialist planners, are doomed to fail because they are unable to mimic the market’s groping, evolutionary approach to learning.

The source.

 

A Culture of Freedom - Oakeshott on Liberty (2/3)

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In A Culture of Freedom - Oakeshott on Liberty (1/3), we concluded by quoting Oakeshott's dictum that

freedom is

the absence from our society of overwhelming concentrations of power.

The author goes on to explain:

This is the most general condition , so general that all other conditions may be seen to be comprised within it.

It appears, first, in a diffusion of authority between past, present and future.

Our society is ruled by none of these exclusively. And we should consider a society governed wholly by its past, or its present, or its future to suffer under a despotism of superstition which forbids freedom.

The politics of our society are a conversation in which past, present and future each has a voice; and though one or another of them may on occasion properly prevail, none permanently dominates, and on this account we are free.

Further, with us power is dispersed among all the multitude of interests and organizations of interest which comprise our society. We do not fear or seek to suppress diversity of interest, but we consider our freedom to be imperfect so long as the dispersal of power among them is incomplete, and to be threatened if any one interest or combination of interests, even though it may be the interest of a majority, acquires extraordinary power.

Similarly, the conduct of government in our society involves a sharing of power, not only between the recognized organs of government, but also between the Administration and the Opposition.

In short, we consider ourselves to be free because no one in our society is allowed unlimited power-no leader, faction, party or "class", no majority, no government, church, corporation, trade or professional association or trade union.

The secret of its freedom is that it is composed od a multitude of organizations in the constitution of the best of which is reproduced that diffusion of power which is characteristic of the whole.

From The Political Economy of Freedom, in Rationalism in Politics and Other Essays, pp.388/389

We must be able to grant our political opponents and the indifferent respect and freedom, debate and deal otherwise with them peacefully and in constructive fashion, and we must be on the guard to ensure that the essential dispersal of interests and power is kept in a state of reasonable balancedness. This is the joint task of the citizens as agents and consumers of politics, and the specialists in our societal division of labour that we call politicians.

Just as much as we may demand of our politicians to be responsible and honest, our politicians are entitled to expect of us to be cognizant of the difficult challenges they are grappling with on our behalf.

As I wrote in the below comment on Keystone:

I think, it is important for the responsible citizen to realise that

• there are genuine dilemmas out there, that

• we need our political representatives to handle them as best as is possible, that

• the unresolved disagreements are not the result of the machinations of evil politicians, and that

• we need brave and honest politicians to help maintain trust in a community faced with disruptive and devise issues.

A politician who gives her best to be approachable and transparent – to which there are natural limits – deserves, and indeed requires an active effort on the part of us citizens to understand the dilemmas and prospects of imperfect and less than satisfactory solutions inherent in her job.

We should respect her for doing a job that absolutely needs to be done but that most of us are not prepared to do.

As principals and consumers of politics, we have responsibilities, too, which include fairness and regardfulness vis-à-vis our political representatives.

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Preferring Smith

80% of World's Worst Poverty Eradicated in Less Than 40 Years

Preferring Smith

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James R. Otteson has a readable article entitled Adam Smith vs Ayn Rand on Justifying the Free Society where he explains among other things why Smith could see a valuable place for "publick works," including education, in a free society.

Whereas the Randian would raise a principled objection against any kind of state incursion (including in education) on grounds of violation of individual rights, the Smithian is willing to entertain the possibility, but shifts the burden of proof on to the proposer and maintains a high threshold to initiate action.

This is simultaneously a strength of Smith’s position and indicative of a weakness of Rand’s. Smith’s intellectual humility prevents him from believing that he can excogitate rules for human behavior applicable to all times and all places. Instead, like an Aristotelian empirical scientist, he adopts conclusions tentatively but subject to further empirical review. This gives him a reasonable starting point based in observed reality. Yet it also allows for innovation and flexibility, as the dynamics of human society changes.

Let me now conclude with one final point. Recall this famous passage in Smith: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages” (WN I.ii.2). That sounds rather Randian, does it not? But what Smith saw in market transactions was not selfishness—as many people, both friends and foes of Smith, claim—but respect: it was peers meeting one another and making offers to one another, each of them respecting the other enough to recognize the other’s authority to say “no, thank you” and go elsewhere. What a profound and deep respect it shows others not to impose one’s own will, values, or purposes on them, not to require permission from or beg the mercy of “superiors,” and instead to recognize each person’s moral authority to say “no.”

The political economy Smith endorsed could, therefore, not only be demonstrated empirically to lead to material prosperity and the alleviation of human misery, but it also instantiated and exemplified the morally beautiful equality of individual human freedom. 

The source.

Otteson invokes a graphic distinction between Planners and Searchers among those assuming responsibility or following ambition in hoping to change the quality and nature of society.

Planners try to impose universal orders; Searchers instead try to find specific problems where they can make marginal, ground-level differences. [...] Searchers get good work done, marginally and gradually improving the world one step at a time.

I believe, the efforts of politicians and political engagement in all kinds of other functions (campaign supporter etc.) are necessary and commendable, if they contribute to the work of the Searchers rather than that of the Planners, to use the terminology of the article mentioned above. In fact, we can not come by the advantages of the Searchers' work unless people start getting seriously involved in politics.

See also The Successful Person and Ayan Rand - "I Do Not Fake Reality and Never Have"

Relatedly, Russ Roberts on How Adam Smith Can Change Your Life:

 

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Herbert Spencer (1820 - 1903) - Illiberalism within Liberalism - The Liberal Virus of Pessimism

Laura Ebke - Practical, Proven, Principled

How Adam Smith Can Change Your Life

The Day the Music Died - The Keynesian Propensity

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One of the things that struck me during the year that I spent in Berlin, just after the infamous wall had been torn down, was the intensity of antipathy, even hatred, I dare say, that some of my West German colleagues displayed vis-à-vis their new East German collaborators. At bottom, it was a matter of Futterneid - literally: jealousy about food. Berlin used to be a place spoiled with lavish subsidies - to make sure people would find it attractive to live, work, invest, and produce in the enclave city. Burdened with the heavy costs of integrating a bankrupt socialist economy into a Western-type society, Bonn decided to cut many of the Berlin-subsidies.

One of the cases I had on my desk was a big-name piano manufacturer, who threatened to go belly up - the music was going to die, basically because the Berlin-subsidies had been withdrawn.

Why do I mention this? I suspect, the Berlin-subsidies were a form of widespread Keynesianism, whereby the idea of a subsidy is enmeshed with other concerns, which in themselves may or may not be objectionable. In other words, there is a human propensity to act like a Keynesian, which to some extent, I think, we cannot or even should not discard entirely.

Could West-Berlin have survived without the subsidies? Would Berlin have ended up a capitalist eyesore, without subsidies; or, contrariwise, had it become the eyesore that it looked to me before 1989 thanks to all sorts of pampering leniency, including easy subsidies? What measures would have made Berlin something like a free-market-shining-city-on-the-hill amidst the communist desert? The Bonn Republic, being profligate herself in terms of handing out countless subsidies, would Berlin politicians have stood a chance by arguing in favour of "no subsidies"? Would a good politician have been better advised to play along with the regime of subsidies, and once elected get some genuinely good policies accomplished, rather than quitting the game for reasons of being strictly principled?

No doubt, there are groups, persons, and politicians of the shamelessly self-serving type, there are the fatuous, and the fatuously self-serving kind; but when the public good is an open issue with many different answers to it, I suppose, sound principles and arguments alone are not good enough to bar excesses or preclude less than meticulous compromises and mixed solutions. Ultimately, it would seem that in a large number of cases there is no hindrance to bad politics that is more effective than better politics.

I just wonder, how hard it is for politicians, especially on the municipal and state level not to avail themselves of public resources. Also, to spend or not to spend public resources, is it always a matter of clear-cut discernment?

This is not supposed to be an argument in favour of Keynesianism; but where public resources are substantial, as they are under modern capitalism, public life tends to get interwoven in countless ways with the Keynesian thread, and people grow accustomed to the gifts of the visible hand. Until the day the music dies.

But in all that confusion and in the face of so many doubts, it is wholesome to get the basics right, and who better to turn to for that than Steven Kates.

Steven, whose Free Market Economics, I strongly recommend for perusal both by layman and expert, has a most readable piece on the fortunes of economics, economies and the Keynesian legacy, the post being part of an exchange with a French Keynesian.

Nothing to lift an economy like public investment! Every business like the post office. Every investment another Solyndra. All subsidised with nothing self-sustaining through the revenues it earns. Dig a hole and get fill it [sic?] in again. Don’t worry about earning a greater return than the funds outlayed. Just close your eyes and spend. Don’t worry, it will all work out once that magic multiplier cuts in. [...]

On this much we can agree, that the world’s economies are in a mess. Consumers deep in debt, savings eaten away by low productivity government spending, and private investment going nowhere. [...]

It is not aggregate demand that matters, but value adding aggregate supply. You must do more than build brick walls, you must build where what is built actually contributes to future prosperity. To think more holes dug up and then refilled can generate recovery because it constitutes “fiscal spending” is the essence of economic illiteracy. [...]

In times gone by, before Keynes, economists talked about “effective demand”, that is, what had to happen to turn desire for products into an ability to buy those products. Now it is aggregate demand – the total level of demand – which has leached the original concept of any understanding that for everyone to buy from each other, they first have to produce what each other wish to buy. If that is not obvious, then common sense has gone from the world.

The source.

As for facile references to austerity, Daniel Ben-Ami offers an insightful post on the meme.

See also Government - High-Cost Producer.

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The Conservatism of Things

Image credit.

I am getting more and more fascinated by the role that politics and the state play in the history of freedom. For, I am just not satisfied with the accounts of my fellow-libertarians. I believe, much research needs to be done toward and from a renewed libertarian perspective.

Institutional change is a fascinating subject, but so is institutional continuity.

Matt Ridley has a remarkable piece on the latter issue - why do some things change so little - and in being inert, how do they help freedom survive and grow?

Ridley reviews a book by a certain Runciman on how Defoe, author of Robinson Crusoe, would experience a visit of England 300 years after his death:

It is astonishing that the industrial revolution, and the vast expansion of the population that it allowed, did so little to change the main shape and habits of Britain’s political and cultural institutions. [...]

For three hundred years Britain has almost uniquely avoided slipping into feudal, theocratic, despotic or military rule. It has remained an untidy mixture of constrained monarchy, permeable oligarchy, imperfect markets, and representative democracy. [...]

Defoe lived towards the end of a period of civil war, regicide, restoration, (“glorious”) foreign invasion, Jacobite civil war and the imposition of a new dynasty. Yet in the centuries since, with the exception of Culloden and the Blitz, there have been no battles within the country, let alone civil wars. With hindsight, says Runciman, it was never even likely that Britain would succumb to revolution or dictatorship. The idea of freedom was always too strongly popular: freedom of movement, opinion, assembly, speech, contract, trade and fair trial. [...]

If Labour in 1950 had gone to the country with a programme of full communism, or the Conservatives in 1979 with a programme of ultra-libertarianism, both would have lost by a mile. Gradualism was made inevitable by elections, which force parties to respect the cautious instincts of the people [...]

Runciman (like me) is a devotee of the theory of cultural evolution, the notion that society changes by the gradual and undirected emergence of new ways of doing things that persist by competitive survival, rather than by grand design. In Darwinian terms, some of Britain’s institutions are sociological coelacanths — living fossils that have changed little while the world has changed rapidly around them.

It is hard to think of another nation — only the Vatican or perhaps the Netherlands spring to mind — where the main institutions have changed so little since 1724. [...]

On every measure of science, technology and society, we are as modern as you could wish. Yet we manage to be so within national institutions that are little changed from the time of George I.

The source.

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King George I - From Anthropocentric Liberty to Sociogenic Liberty