Classical liberals should take care to avoid some bad habits in usage.
Never use 'public' to denote 'government', or 'private' to denote 'non-government'.
Thus it should always be,
'government school' not 'public school',
'government transport' not 'public transport',
'government funding' not 'public funding',
and
'government policy' and never 'public policy'!
What to do with 'private company' and 'public company'? I think 'personal company' would do for 'private company'. A 'public company' is obviously not describable as a 'government company'. I can't think of anything better than 'open company', but 'universal company' might be better.
'Public' in fact is an unhelpful word, generally, as it is obscure in its reference, and is used to fig-leaf state involvement. Doesn't 'public library' sound better than 'government library'? Would you like to take a dip in the 'government pool'?
'Community' is a useful substitute for public. 'Community opinion' can do for 'public opinion', and 'community transport' for 'public transport' which is not solely a government enterprise. And 'community corporation' would be better than 'public corporation' in referring to a corporate body genuinely independent of the state. Similarly, 'community library' and 'community pool'.One might use 'community good' for 'public good', but 'universal good' is perhaps still better.
Tuesday, 15 January 2013
Monday, 14 January 2013
A single philosophy divided by a common word
To the classical liberal the current American usage of the word ‘liberal’ is a thing of pain. Any initiative to increase government spending is, of course, ‘liberal’; any expansion in government regulation of the economy is by the same usage ‘liberal’. In Capitalism and Freedom Friedman insisted on using ‘liberal’ as a classical liberal would. To no avail: the American usage that originated in the 1930s is stuck fast.
I am not concerned to persuade anyone to use the word ‘liberal’ as I should use it. But I do want to understand usages. My point here is that in the term ‘liberalism’ comprehends three different references.
‘Liberalism’ as an historical episode Historians use the term to describe polities originating in a reformist enlightenment project of post-ancient regime societies of 19th c Europe. This program was, politically, to establish a constitutional, national, parliamentary and impersonal state; economically, to abolish the mercantilist legacy of the early modern state, and any vestiges of medieval constraints on trade; and socially, to remove religion from public life.
Liberalism in this usage is more of an ‘event’, or episode, than a ‘thing’. It is more of an effect, than a cause, even though the effect, like an explosion, has serious effects itself. This 'liberalism' is singular and unique; and once gone, gone forever. The usage is obviously natural for historians, but frustrating to intellectual historians, since no great intellectual coherence can be expected from these episodes, being a matter of political equilibration rather than exercises in thought. ‘Liberal Italy’ ( from say1865 to 1922) was not terribly liberal.
‘Liberalism’ as a social philosophy Liberalism here is something that ‘grows’ or ‘develops’, rather than ‘happens’. Obviously, any social philosophy has a history itself, composed of event-like objects (as ‘logical positivism’ as an event in the history of positivism). And neither is outside political history. Thus, liberalism as a social philosophy may have originated, as Hayek believed, in a reaction to royal absolutism in 17th c Britain. But unlike 'liberalism as a historical episode' liberalism as social philosophy is dealing with questions that are almost outside history. A theory of fire may be dead and buried, but its reference is enduring.
‘Liberalism’ as a species of society This is liberalism as sociological phenomenon; a society of a particular nature. It is the type of society where the individual is the basic unit of society (as Daniel Bell puts it). This society is undeniably located "in history"; it is obviously tied up with the modern Europe. Benjamin Constant was capturing this in contrasting the Modern Liberty (of the individual) with the Ancient Liberty (of the polis). When more precisely, it began is a matter of disagreement; Oakeshott saw its germination in late medieval Italy; Rawls in the Reformation; Bell in the 17th century.
But unlike ‘liberalism as historical episode’ it is more like ‘state of matter’ than an event. So one might contend that England' ancien regime concluded in 1649, or one might mount the case for 1832; but no one sees any profit in dating the year of Britain's commencement as a liberal society. Unlike a ‘liberal age’ or ‘liberal philosophy’, 'liberal society' exists as a matter of degree. Societies are more or less liberal. There will always some degree of accommodation of liberal values; some pocket where they may be strong even in the face of illiberal sway in other parts. Historically, the economy is, of course, where liberal society is strongest.
This matter of degree is best not seen as a matter of content. There is "legacy liberalism", such as Australian Federalism; something bequeathed by an earlier period, but with which current society has no sympathy for. The degree of liberalism, then, is best measured resilience of liberalism in the presence of shocks, and growth in their absence. This growth and resilience is fostered by the support of other social dynamics support it; when liberalism manages to engulf, or at least permeate, the domains of polity and community.
Which brings us back to the United States. It is - for better or ill – a deeply liberal society. Everyone in the United States is a liberal in the classical liberal sense, no more so than those oh-so-conservative Tea Partiers (which, recall, keep away from the one thing that might have diistinguished them from classical liberals - social policy). Socialism is an extinct fauna in the American ecosphere; and even the left that survives has never been tied at the hip to labourism, as it has in the rest of the anglosphere. The state is utterly liberalized; more democratised, federalized, constitutionalised, checked and balanced, sunset-claused, porous, transparent – and less possessed of agency – than any other state. And that, I suspect, has allowed the word ‘liberal’ to seep over to favour a prerogative in state action that in less liberal societies would be rightly deemed an offence to liberalism.
I am not concerned to persuade anyone to use the word ‘liberal’ as I should use it. But I do want to understand usages. My point here is that in the term ‘liberalism’ comprehends three different references.
‘Liberalism’ as an historical episode Historians use the term to describe polities originating in a reformist enlightenment project of post-ancient regime societies of 19th c Europe. This program was, politically, to establish a constitutional, national, parliamentary and impersonal state; economically, to abolish the mercantilist legacy of the early modern state, and any vestiges of medieval constraints on trade; and socially, to remove religion from public life.
Liberalism in this usage is more of an ‘event’, or episode, than a ‘thing’. It is more of an effect, than a cause, even though the effect, like an explosion, has serious effects itself. This 'liberalism' is singular and unique; and once gone, gone forever. The usage is obviously natural for historians, but frustrating to intellectual historians, since no great intellectual coherence can be expected from these episodes, being a matter of political equilibration rather than exercises in thought. ‘Liberal Italy’ ( from say1865 to 1922) was not terribly liberal.
‘Liberalism’ as a social philosophy Liberalism here is something that ‘grows’ or ‘develops’, rather than ‘happens’. Obviously, any social philosophy has a history itself, composed of event-like objects (as ‘logical positivism’ as an event in the history of positivism). And neither is outside political history. Thus, liberalism as a social philosophy may have originated, as Hayek believed, in a reaction to royal absolutism in 17th c Britain. But unlike 'liberalism as a historical episode' liberalism as social philosophy is dealing with questions that are almost outside history. A theory of fire may be dead and buried, but its reference is enduring.
‘Liberalism’ as a species of society This is liberalism as sociological phenomenon; a society of a particular nature. It is the type of society where the individual is the basic unit of society (as Daniel Bell puts it). This society is undeniably located "in history"; it is obviously tied up with the modern Europe. Benjamin Constant was capturing this in contrasting the Modern Liberty (of the individual) with the Ancient Liberty (of the polis). When more precisely, it began is a matter of disagreement; Oakeshott saw its germination in late medieval Italy; Rawls in the Reformation; Bell in the 17th century.
But unlike ‘liberalism as historical episode’ it is more like ‘state of matter’ than an event. So one might contend that England' ancien regime concluded in 1649, or one might mount the case for 1832; but no one sees any profit in dating the year of Britain's commencement as a liberal society. Unlike a ‘liberal age’ or ‘liberal philosophy’, 'liberal society' exists as a matter of degree. Societies are more or less liberal. There will always some degree of accommodation of liberal values; some pocket where they may be strong even in the face of illiberal sway in other parts. Historically, the economy is, of course, where liberal society is strongest.
This matter of degree is best not seen as a matter of content. There is "legacy liberalism", such as Australian Federalism; something bequeathed by an earlier period, but with which current society has no sympathy for. The degree of liberalism, then, is best measured resilience of liberalism in the presence of shocks, and growth in their absence. This growth and resilience is fostered by the support of other social dynamics support it; when liberalism manages to engulf, or at least permeate, the domains of polity and community.
Which brings us back to the United States. It is - for better or ill – a deeply liberal society. Everyone in the United States is a liberal in the classical liberal sense, no more so than those oh-so-conservative Tea Partiers (which, recall, keep away from the one thing that might have diistinguished them from classical liberals - social policy). Socialism is an extinct fauna in the American ecosphere; and even the left that survives has never been tied at the hip to labourism, as it has in the rest of the anglosphere. The state is utterly liberalized; more democratised, federalized, constitutionalised, checked and balanced, sunset-claused, porous, transparent – and less possessed of agency – than any other state. And that, I suspect, has allowed the word ‘liberal’ to seep over to favour a prerogative in state action that in less liberal societies would be rightly deemed an offence to liberalism.
Thursday, 10 January 2013
James M. Buchanan, 1919-2013
James Buchanan,
the 2006 Noble Laureate in economics, was born in rural Tennessee, and lived
most of his life in the American South. His paternal grandfather had been a
Confederate cavalryman who, with Populist support, went on to be a Democratic governor
of Tennessee. Buchanan later recalled his boyhood spent reading ‘in
grandfather’s attic piled high with radical pamphlets of the 1890s ... The robber barons were real to me’. By
that time the Buchanan family was living in ‘genteel poverty’ in ‘a huge house…in
varying states of disrepair’. Young James was expected to re-win the lustre of
the family name. But in the approach of world war he was drafted into US Naval Reserve Officers Training Program,
where he experienced the ‘blatant discrimination against
Southerners, Westerners and Mid-westerners’ that radicalised him against the ‘eastern
establishment’. He graduated 6 out of 600, and learned that ‘even unwashed
rednecks of Appalachia could stand to measure with scions of Newport’. One such ‘scion of Newport’ of the same Program was John F Kennedy. To Buchanan’s mind, Kennedy’s triumph in 1960
was no more than the ‘raw injustice’ of ‘a purchased presidency’.
Buchanan was
allocated to the staff of Admiral Nimitz, and there acquired a loathing of the
grand-standing of General Macarthur. In July of 1945 he received an instruction
to arrange for the USS Minneapolis to
pick up ‘a special cargo’. Puzzled by this unusual order, he made out the
dispatch nonetheless. Earlier, while on his leave in his home state, he had heard rumours of the Oak
Ridge plutonium plant, but only after the Hiroshima bombing, did he realise how
he had been one tiny cog in the mechanism of nuclear destruction.
Upon
demobilisation, he enrolled in economics at University of Chicago. He saw
himself as a ‘liberal socialist, but within was weeks he was a free market
advocate. His world view was completed by his study leave in Italy 1955, that
acquainted him with the pathologies of the Italian state, and pitiless realism
of Italian thinkers towards it. The upshot was an outlook on the relation between government
and the economy that was at odds with that of most mid-20th century economists.
They were trustful of government custody
of economic management, but wary of democratic pressures on that. Buchanan
reversed that position; he distrustful of government and hopeful of democracy. Whereas
the standard view saw government as benevolent and competent, in Buchanan’s
‘Public Choice’ position government is no more benevolent than any business. Worse,
it was typically a sole provider of its services, and so was best analysed as a
monopoly. He argued that this interpretation of government implied that even ‘good policy’ would be for the ill; as ‘good policy’ simply allowed the
goose to be plucked less painfully, and so plucked the more fully.
Whereas in the
standard view democracy was the articulation of a ‘general will’ by
majoritarian institutions, to Buchanan democracy was a system of competitive political markets. Parliament is a
market place - a political market place - where exchange between political constituencies
takes. In his classic co-authored work of 1962, The Calculus of Consent , he
argued that a political system consisting of single chamber making decisions by
50 percent plus one basis could not amount to a process of political exchange.
If a reliable majority was secured that would amount to a political monopoly, and consequently
constraints should be imposed on such majorities. This was not undemocratic since
such constraints would be approved consensually before the political contest
began. Buchanan’s analogy was with a game of cards; before the cards are dealt all
players agree to the rules that will make the game work. These rules are the
constitution, and constitution is essential to healthy democratic politics. Strongly
under the sway of US constitutional tradition, Buchanan was seeking to
retell the wisdom of his country’s founding fathers to their 20th c
descendents.
Buchanan’s confidence
in the US political system faltered in the tumult of 1960s, that included bombing
of the office of his head of department at UCLA. He saw the spread of ‘constitutional
chaos’ underwritten by an unholy alliance of Democrats and Republicans to repeal
the ‘unwritten’ prohibition of budget deficits. The fall of the Berlin Wall 1991
brought him little sense of triumph; socialism is dead, he said, but ‘Leviathan
lives on’. And while the economists who had that supplied the matter for his ‘economic
theory of politics’ were no longer beholden to myth of the benevolent state, they were no
longer beholden to anything: they were ’ideological eunuchs’, engrossed in make-believe
world of pure theory, that he compared to science fantasy. Of the economics of
the last generation, he said ‘I am
reminded’ of J. K. Tolkien, ‘who through sheer power of imagination created a
whole new world of beings, the hobbit world, in his trilogy, The Lord of the
Rings. The analogy is revealing when we recall that Tolkien was writing fairy
tales for children.’
Buchanan had the
greatness that allowed him to fruitfully cultivate his contradictions; the wish
debunk political romance with an attraction to
that of his own; a readiness to deploy scientific method while maintaining a philosophic
texture of mind; to be both alienated from his country and and to love it; to
deny all the gods and to give thanks to them.
James Buchanan's 18th Century Cure for a 21st Century Disease
James Buchanan (1919-2013) called on the
genius of the 18th century to correct the mediocrity of the 21st.
The 2006 Nobel Prize winner spent 60 years arguing that once the economic philosophy
of Adam Smith is applied to politics there will appear a political case for
that limited government which Smith had argued for on solely economic grounds. The
current global agony over government debt perfectly make’s Buchanan’s point.
Buchanan did not deny there might be a purely economic case for government deficits. Do they stimulate total demand? Perhaps. Can they dispense with temporary tax swings by bridging temporary gaps between government spending and revenue? Certainly. But whatever economic arguments favour them, Buchanan believed his ‘economic theory of politics’ showed that government deficits are a bane, and should be made unconstitutional.
His starting point is his conception of the legislature. He did not see it as a debating chamber,: it was a market place, a political market place. In this political market place different political constituencies strike a bargain to fund each other’s most preferred programs. 'I will give you my support for that, in exchange for your support for this'. Such bargains will never strictly mimic the exchange of genuine market, as the taxation to fund any program will always be borne in part by sections of the electorate not benefitting from the program. Someone else, in other words, is always paying for part of your lunch. In consequence, there will be too much government spending. But at least every program will have some sort of ‘tax price’
The political market place goes from doubtful to disastrous once programs can be funded by deficits. For the capacity to deficit fund means that there is a zero ‘tax price’ at the margin for any piece of government spending. The beneficiaries of programs can charge all its costs to future generations, who are completely unrepresented in the political market place. Government spending being free, elementary economics says political constituencies will ‘buy’ as much of it as they can. And that is until bond buyers balk at ever being repaid. Thus Greece. The price of avoiding that chaos is forgoing the benefits of ‘demand management’ and ‘tax smoothing’ by disallowing deficits even when they seem desirable.
The upshot is that Buchanan favoured a constitutional amendment to enforce a balanced budget, and thought it politically attainable. Inflation targeting has proved popular, and it is a constraint no less than the balanced budget rule. In the US local and state governments already commonly disallow deficits. In March 1995 the U.S. Senate failed by only a single vote to approve such an amendment. And Buchanan believed held that until the mid 1960s the balanced budget rule was ‘an integral part of the broader unwritten constitution of the United States’. It was the advent of Keynesian demand management that made possible a coalition between Democrats and Republicans to revoke that unwritten clause. Democrats saw stimulus in tax cuts, and to Buchanan’s mind ‘”Tax reduction was from the outset more important to conservatives than budget balancing’. The new coalition expressed itself in 1964 Kennedy tax cuts, and even more pungently in the ‘Jobs and Growth’ tax cuts of George Bush.
Buchanan was alive to the power of this coalition in favour of deficits, and proposed that any balanced budget amendment only kick in seven years after it was passed. He also proposed that the rule apply to budget plans, rather than outcomes, as outcomes will inevitably been disturbed by unforeseen events. He also favoured exempting genuinely income-producing capital assets. And he stressed that it was not a cap on government spending as such. The American public would be able to choose to spend as it likes: it would merely have to pay for it.
Buchanan's favour of the balanced budget illustrates Buchanan’s deep faith in a constitutional remedies for dysfunctional politics. His philosophy amounted to a “constitutional salvationism’, reflecting both the political heritage of the United States and the benefits of the rule of law. But regrettably, what one amendment can enacts, a later amendment can repeal. And would there not be every political incentive to repeal a Balanced Budget Amendment? Buchanan never saw the 'unwritten' balanced budget rule of the pre-Keynesian era as the product of the rational consensus that he believed was foundation of constitution-making. He saw the 'unwritten rule' as (in his words) a ‘fiscal religion’; to break it would have been (in his words) ‘sin’, a transgression beyond the pale. It wasn’t a matter of constitutionality but morality. Perhaps today’s endemic deficits require a moral cure rather than a constitutional one.
Tuesday, 8 January 2013
Reason, True and False: A Guide For Liberals
The classical liberal has an apparently ambiguous response to 'reason'. In a phrase, they are attracted to 'rationality' and repelled by 'rationalism'. But what does this contrast come down to?
Liberals, I submit, differ from rationalists in that liberals see reason as a value, not as a power. Unlike rationalists, they do not see reason as a kind energy or motive force, to be unlocked and unleashed to perform marvels. In favouring a posture of cognitive humility, the liberal pins no great hopes on human reason. But, for all that, they believe reason exists, and is worth paying for when it is to be had. Why?
The liberal values reason because he believes that freedom cannot perform its economic feats without reason. The invisible hand's merit is not invincible to the merits of the choices that compose it. If you like, we need to know the quickest way to our workplace if the invisible hand is to secure what no planner could ever achieve: a maximising allocation of resources. But this valuation of reason is, it must be allowed, not a valuation of great reason. It is not a scintillating exercise of reason to know the shortest way to work, or home. A horse knows as much. Such mundane performances miss out on so much of the valuation of reason by liberals. Has not the cultivation of mind been a glory of liberal society? Are we to suppose this glory is merely an unbidden fruit of liberal values? Has not no small part of this glory been won by liberal thinkers, and their fellow travelers? Should we assume that their achievement was extraneous to their values?
In truth, it is not immediately clear whether liberal society should value the more refined productions of reason. The invisible hand - let it be stressed - does not require for its success that any one appreciate the invisible hand. It would work just as well if no one believed a word of Smith; or read of word of Smith; or if not a word of Smith had been written.The success of Smith’s Invisible Hand, then, doesn’t require the general public to be philosophers. Or anyone to be a philosopher. Granted: a belief in liberalism requires some 'philosophy': for liberalism is so paradoxical a doctrine that - like the heliocentric model - it is not clear that anyone would believe it without the harvest of sustained intellectual cultivation. But, for all that, liberalism to work doesn't require liberalism to be believed; no more than the circulation of blood requires belief in the circulation of blood.Granted: if the invisible hand was expressly disbelieved by the population then, doubtless, it would not be allowed to operate. Thus reasoning - superior reasoning - can obtain a value in correcting inferior reasoning, and the "Wealth of Nations" gains a value by discrediting "England's Treasure by Forraign Trade". Reason, then, can dispose of sophism.
For all that, in reading Smith we are still left with the thought that it would for the best if we didn't have any philosophers at all. Hayek seems to reinforce this thought by suggesting that social competition is sufficient to select in successful rules of behaviours. There is something odd in Hayek placing such confidence in such 'Darwinian' selection in the midst of the Age of Socialism, but the real defect in Hayek's position is that he istruncating the relation of freedom and reason. Yes, freedom facilitates reason - Hayek's position - but reason also facilitates freedom. Put simply: I can command you, or I can reason with you, (argue with you, discuss with you, etc). I can also seduce, convert you, you subvert you ; all these involve disregard for reason, and, I submit, a disregard for freedom. Reason, then, is the medium by which contrary wills may freely engage. It is the tournament that decides the conflict without resort to force. This conception of reason's value lends itself to a certain understanding of political freedom that has proved popular with liberals; the 'Athenian' conception of democracy, or democracy-as-discussion. But it also obviously has an application to myriad bilateral relations between individuals.
Indeed, the conception of reason as the tiltyard of conflicting wills applies not just to a conflict of wills of different person, but to a clash of wills within the same individual. For one way the person who "does not know what to do" can solve that problem is by submitting to the will to others; to join a cult, or an army, or a totalitarian movement. Another way is to allow the victory of one part of their will over the other.To follow, for example, their "duty" in the face of a conflict of wills is to award dominion of one of their wills over the others. An alternative is for them to debate their motives for one action, or the other. This is surely makes for a freer action.
In championing reason as the medium by which contrary wills may freely engage, there is no assumption of the power of reason. There is no assumption that rational discussion will produce a political consensus, or even a decent majority. But it is through consensus we would like collective action to take place; and they would like such a consensus to be produced by rational deliberation.
The above brings also out that to liberals reason is 'a' value: it is not 'the' value. Liberals will not sacrifice freedom to reason. They will not support a dictatorship of scientists. Reason is valued as a complement to freedom. But at the same time freedom is a complement to reason, as Hayek rightly maintained. These twin stars orbit each other.
The liberal values reason because he believes that freedom cannot perform its economic feats without reason. The invisible hand's merit is not invincible to the merits of the choices that compose it. If you like, we need to know the quickest way to our workplace if the invisible hand is to secure what no planner could ever achieve: a maximising allocation of resources. But this valuation of reason is, it must be allowed, not a valuation of great reason. It is not a scintillating exercise of reason to know the shortest way to work, or home. A horse knows as much. Such mundane performances miss out on so much of the valuation of reason by liberals. Has not the cultivation of mind been a glory of liberal society? Are we to suppose this glory is merely an unbidden fruit of liberal values? Has not no small part of this glory been won by liberal thinkers, and their fellow travelers? Should we assume that their achievement was extraneous to their values?
In truth, it is not immediately clear whether liberal society should value the more refined productions of reason. The invisible hand - let it be stressed - does not require for its success that any one appreciate the invisible hand. It would work just as well if no one believed a word of Smith; or read of word of Smith; or if not a word of Smith had been written.The success of Smith’s Invisible Hand, then, doesn’t require the general public to be philosophers. Or anyone to be a philosopher. Granted: a belief in liberalism requires some 'philosophy': for liberalism is so paradoxical a doctrine that - like the heliocentric model - it is not clear that anyone would believe it without the harvest of sustained intellectual cultivation. But, for all that, liberalism to work doesn't require liberalism to be believed; no more than the circulation of blood requires belief in the circulation of blood.Granted: if the invisible hand was expressly disbelieved by the population then, doubtless, it would not be allowed to operate. Thus reasoning - superior reasoning - can obtain a value in correcting inferior reasoning, and the "Wealth of Nations" gains a value by discrediting "England's Treasure by Forraign Trade". Reason, then, can dispose of sophism.
For all that, in reading Smith we are still left with the thought that it would for the best if we didn't have any philosophers at all. Hayek seems to reinforce this thought by suggesting that social competition is sufficient to select in successful rules of behaviours. There is something odd in Hayek placing such confidence in such 'Darwinian' selection in the midst of the Age of Socialism, but the real defect in Hayek's position is that he istruncating the relation of freedom and reason. Yes, freedom facilitates reason - Hayek's position - but reason also facilitates freedom. Put simply: I can command you, or I can reason with you, (argue with you, discuss with you, etc). I can also seduce, convert you, you subvert you ; all these involve disregard for reason, and, I submit, a disregard for freedom. Reason, then, is the medium by which contrary wills may freely engage. It is the tournament that decides the conflict without resort to force. This conception of reason's value lends itself to a certain understanding of political freedom that has proved popular with liberals; the 'Athenian' conception of democracy, or democracy-as-discussion. But it also obviously has an application to myriad bilateral relations between individuals.
Indeed, the conception of reason as the tiltyard of conflicting wills applies not just to a conflict of wills of different person, but to a clash of wills within the same individual. For one way the person who "does not know what to do" can solve that problem is by submitting to the will to others; to join a cult, or an army, or a totalitarian movement. Another way is to allow the victory of one part of their will over the other.To follow, for example, their "duty" in the face of a conflict of wills is to award dominion of one of their wills over the others. An alternative is for them to debate their motives for one action, or the other. This is surely makes for a freer action.
In championing reason as the medium by which contrary wills may freely engage, there is no assumption of the power of reason. There is no assumption that rational discussion will produce a political consensus, or even a decent majority. But it is through consensus we would like collective action to take place; and they would like such a consensus to be produced by rational deliberation.
The above brings also out that to liberals reason is 'a' value: it is not 'the' value. Liberals will not sacrifice freedom to reason. They will not support a dictatorship of scientists. Reason is valued as a complement to freedom. But at the same time freedom is a complement to reason, as Hayek rightly maintained. These twin stars orbit each other.
Tuesday, 1 January 2013
Keynes' General Theory of Liberalism
It has been said that Keynes came not to bury capitalism, but to save it. But what was his purpose with respect to liberalism?
His plain purpose, surely, was to discredit historical liberalism. To historical liberalism the competitive market was the ultimate expression of the congruence of the liberal values of freedom, wealth and rationality. Keynes's reasoning annihilated the merit of the free play of markets: such play would be unproductive of wealth and punishing of rationality.
But if his negative purpose was to discredit historical liberalism, what was his positive intention? Was it to reinforce the coalition of labourism and Technocracy, that, under the standard of 'socialism', then constituted an existential threat to liberalism? No: Keynes deprecated both labourism and technocracy. Keynes was in today's language 'an elitist'; he would not have the fish conflated with the mud (to use his own phrase); he would never truly sympathise with the egalitarianism of Labourism, and there was nothing in his theories to suggest he should. His objection to the inequality of wealth of his day was purely instrumental and contingent: it produced more saving than the economy could absorb.On the same logic, Keynes would favour an increase in inequality if the economy was not generating enough saving.
And Keynes also repudiated technocracy. Technocratic versions of his own doctrines (eg Lerner's "Economics of Control') repulsed him. To Keynes, Lerner's ideas were a supurious rationalistic antidote to the economic disease that, in Keynes mind, was bottomed in the inadequacy of rationalism.
It was no great wonder that in the last year his life that Keynes was in 'deeply moved' agreement with Hayek on socialism.
So where was Keynes positioned on the ideological matrix?
Broadly speaking, Keynes was, of course, a New Liberal, a category that progressively displaced traditional liberals in the Liberal Party over the course of Keynes' life. (His life-long party political allegiance was to the Liberal
Party). New Liberalism might be ruthlessly analysed as merely a dilution of historical liberalism by some stronger currents of the times: by egalitarianism, by rationalism (in the form of Utilitarianism), and by a little of (what we would call) communitarianism, in the guise of 'organic' conceptions of the nation. If you like, New Liberalism was a conglomerate rather than a crystal.
But Keynes could be interpreted more ambitiously as providing a new doctrinal structure of liberalism; one that would manage to do service to the preeminent of value of freedom in the face of the inadequacies of human reason.
The foundation of Keynes' rejection of the invisible hand , I venture, was epistemological. Humankind was not capable of the performances the invisible hand required of it. This incapability would appear to clear a path for planning; but human reason, unequal to making the invisible hand work, would be even more overwhelmed by planning. Keynes, I suggest, found hope in a different possibility: not more control of human will, but less control. Not in less control by the state, but less control by the internal government of the pysche. Less self-control, in other words.
Since at least J.S. Mill there has been a tradition of finding the kernel of freedom in 'sponteneity': the opposite of self-control. Mill's principle adversary here was the informal sanction of 'convention' by society at large. But 'spontaneity' could clearly also be invoked against that self-regulation, which Mill, as a rationalist, saw rooted in reason. Keynes as an anti-rationalist would find no such exoneration of self-regulation. And in consequence the puritanical or bourgeois virtues would now be impeachable.
It was, of course, the 'bourgeois' virtues; of thrift, discipline and prudence that historical liberalism held were necessary for a society wealthy. But to Keynes, thrift would not add to capital, and prudence would not preserve it, but only waste it in paralysis. Thrift and prudence were abnegations of the will, a kind of stillness, a substitute death, that not only did serve freedom, but which made for poverty. And he had a long treatise on economic theory to argue that contention. By motivating a wish to hold money, all that prudence fostered was a reward for a form of inactivity -saving-that made us all poorer.
Since at least J.S. Mill there has been a tradition of finding the kernel of freedom in 'sponteneity': the opposite of self-control. Mill's principle adversary here was the informal sanction of 'convention' by society at large. But 'spontaneity' could clearly also be invoked against that self-regulation, which Mill, as a rationalist, saw rooted in reason. Keynes as an anti-rationalist would find no such exoneration of self-regulation. And in consequence the puritanical or bourgeois virtues would now be impeachable.
It was, of course, the 'bourgeois' virtues; of thrift, discipline and prudence that historical liberalism held were necessary for a society wealthy. But to Keynes, thrift would not add to capital, and prudence would not preserve it, but only waste it in paralysis. Thrift and prudence were abnegations of the will, a kind of stillness, a substitute death, that not only did serve freedom, but which made for poverty. And he had a long treatise on economic theory to argue that contention. By motivating a wish to hold money, all that prudence fostered was a reward for a form of inactivity -saving-that made us all poorer.
What Keynes was doing, then, was to dethrone the virtues of self-control of historical liberalism, and replacing it with the virtues of impulse; of 'animal spirits' , of enjoying your sin. If we could only be more like artists, and less like clergyman, all would be better. In Keynes, in summary, passion steps in to replace reason, as Hume had proposed so long before. Freedom as licence supplants freedom as truth.
What might be made of Keynes attempt to honour freedom (or, a kind of freedom) in the face of the inadequacy of human reason?
It is arguable whether "freedom as licence" is a better response to the inadequacies of human reason than self-control. Hayek shared Keynes' doubts about reason, but proposed the solution would be found in competition; competition between institutions.And 'institutions' in Hayek means rules, typically enforced by an internal sanction. A population averse to assimilating such internal sanction would leave competition unable to select in succesful behaviours.
But it is even more arguable whether freedom is licence, and if self-control is an infraction of freedom . To choose a constraint is not slavery. To be unable to choose a constraint - to be unable to 'control one self' - surely constitutes a form of dominion almost as bad as literal slavery.
But it is even more arguable whether freedom is licence, and if self-control is an infraction of freedom . To choose a constraint is not slavery. To be unable to choose a constraint - to be unable to 'control one self' - surely constitutes a form of dominion almost as bad as literal slavery.
Monday, 31 December 2012
The Real Freedom Illusion
Critics of classical economics often contend that the freedom classical liberals prize is not 'real freedom'. To illustrate,
Votaries of freedom may be tempted to follow this path of isolating 'real' freedom . After all, a freedom that allows one to drown is not a very attractive freedom.
But I contend that those who prize freedom should be disaffected by such a search for 'real', 'positive' freedom. I contend that this theorising of real freedom will not conclude in distinguishing true freedom from its shams - an achievement that any votary of freedom would esteem- but will instead reduce to identifying the conditions in which freedom is desirable; indeed, irresistible. Such a program of investigation is, undeniably, of interest . But my objection is that it will blunt the appreciation of the devotee of freedom of their object of admiration. Instead of exploring her loveliness, we list her faults.
True love is blind. The most passionate votary of freedom does not see the value of freedom in any way 'conditional'. They will not hold freedom to account on any criterion. The votary of freedom does not, for example, require that freedom brings happiness. He does not care if freedom offends 'equality of opportunity'; he is unconcerned if it accompanies exploitation. The votary of freedom believes one should be free to be unhappy; free to infringe equality of opportunity; and free to exploit (if 'exploit' means paying less for something than it is worth), .
Does the votary of freedom, then, also believe in the freedom to cheat? Not logically. If I am being paid in counterfeit notes we may be confident that I have not chosen to be paid in counterfeit notes.The fraud is subverting my freedom. The 'freedom to enslave' is a similarly incoherent notion. But what of the freedom to harm others? It is on this question that classical liberalism struggled. The Millian dictum that that freedom should be restricted so that its exercise does not harm others is massively illiberal in implication, at least in the absence of a massive limitation of the harm which 'counts'. (If you criticise this post you might be deemed to harm me). Mill left classical liberalism without an adequate account of freedom, and leaving the door open to doctrines positive freedom of New Liberalism.
Hayek's attempt to get a more adequate account of freedom, without resorting to capability, surely indicates the impulse of the votary of freedom. His formulation of freedom as 'the absence of coercion' is an improvement on Mill's inadequate effort, but would rule still out the 'manipulation' that freedom surely permits. Friedman's emphasis on 'choice' as the nub of freedom is better, and Buchanan's stress on choosing our constraints better still. Perhaps freedom is 'choice over the human wills we are subject to'.
But where would a formulation of freedom as 'choice over human wills' leave that person clinging to a log? Free or unfree?Very possibly it leaves them 'free'; for it is possible there are several passers by, all with a rope. The person is dependent on no single human will; and so he is free. And yet, if he is destitute he will drown. His freedom, then, does necessarily save him from drowning. But the moral of the scenario is not that his freedom is not real; but that it isn't useful. And this is just to say that freedom is not a panacea.
The most passionate devotee will object. And they will be wrong in their objection. The discreet and sincere admirer of freedom will acknowledge its limitations. To admire is not to worship. And to acknowledge the limitations will serve the appreciation of freedom, as appreciation rests on truth. The only other way to respect truth without admitting blemishes of the beloved, is to participate in the program of 'real freedom'- seek to identify the settings of freedom's perfection. And that is massively reducing of her domain.
And that is why the adversaries of freedom favour 'real freedom'
- someone who is 'free', but is (say) immobilised by a terror of breaking the taboos that saturate their daily life, is not really free (Gurley)
- someone clinging to a log in a torrent may nominally be free in negotiating with a passer-by to throw a rope, but they are not really free. (Hobson deploys this sort of example).
Votaries of freedom may be tempted to follow this path of isolating 'real' freedom . After all, a freedom that allows one to drown is not a very attractive freedom.
But I contend that those who prize freedom should be disaffected by such a search for 'real', 'positive' freedom. I contend that this theorising of real freedom will not conclude in distinguishing true freedom from its shams - an achievement that any votary of freedom would esteem- but will instead reduce to identifying the conditions in which freedom is desirable; indeed, irresistible. Such a program of investigation is, undeniably, of interest . But my objection is that it will blunt the appreciation of the devotee of freedom of their object of admiration. Instead of exploring her loveliness, we list her faults.
True love is blind. The most passionate votary of freedom does not see the value of freedom in any way 'conditional'. They will not hold freedom to account on any criterion. The votary of freedom does not, for example, require that freedom brings happiness. He does not care if freedom offends 'equality of opportunity'; he is unconcerned if it accompanies exploitation. The votary of freedom believes one should be free to be unhappy; free to infringe equality of opportunity; and free to exploit (if 'exploit' means paying less for something than it is worth), .
Does the votary of freedom, then, also believe in the freedom to cheat? Not logically. If I am being paid in counterfeit notes we may be confident that I have not chosen to be paid in counterfeit notes.The fraud is subverting my freedom. The 'freedom to enslave' is a similarly incoherent notion. But what of the freedom to harm others? It is on this question that classical liberalism struggled. The Millian dictum that that freedom should be restricted so that its exercise does not harm others is massively illiberal in implication, at least in the absence of a massive limitation of the harm which 'counts'. (If you criticise this post you might be deemed to harm me). Mill left classical liberalism without an adequate account of freedom, and leaving the door open to doctrines positive freedom of New Liberalism.
Hayek's attempt to get a more adequate account of freedom, without resorting to capability, surely indicates the impulse of the votary of freedom. His formulation of freedom as 'the absence of coercion' is an improvement on Mill's inadequate effort, but would rule still out the 'manipulation' that freedom surely permits. Friedman's emphasis on 'choice' as the nub of freedom is better, and Buchanan's stress on choosing our constraints better still. Perhaps freedom is 'choice over the human wills we are subject to'.
But where would a formulation of freedom as 'choice over human wills' leave that person clinging to a log? Free or unfree?Very possibly it leaves them 'free'; for it is possible there are several passers by, all with a rope. The person is dependent on no single human will; and so he is free. And yet, if he is destitute he will drown. His freedom, then, does necessarily save him from drowning. But the moral of the scenario is not that his freedom is not real; but that it isn't useful. And this is just to say that freedom is not a panacea.
The most passionate devotee will object. And they will be wrong in their objection. The discreet and sincere admirer of freedom will acknowledge its limitations. To admire is not to worship. And to acknowledge the limitations will serve the appreciation of freedom, as appreciation rests on truth. The only other way to respect truth without admitting blemishes of the beloved, is to participate in the program of 'real freedom'- seek to identify the settings of freedom's perfection. And that is massively reducing of her domain.
And that is why the adversaries of freedom favour 'real freedom'
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