No Country for Creative Destruction

Imagine a country whose inhabitants reject every unpleasant byproduct of innovation and competition.

This country would be Frédéric Bastiat’s worst nightmare: in order to avoid the slightest maladies expected to emerge from creative destruction, all their advantages would remain unseen forever.

Nevertheless, that impossibility to acknowledge the unintended favourable consequences of competition is not conditioned by any type of censure, but by a sort of self-imposed moral blindness: the metaphysical belief that “being” is good and “becoming” is bad. A whole people inspired by W. B. Yeats, they want to be gathered into the artifice of eternity.

In this imaginary country, which would deserve a place in “The Universal History of Infamy” by J.L. Borges, people cultivate a curious strain of meritocracy, an Orwellian one: they praise stagnation for its stability and derogate growth because of the stubborn and incorruptible conviction that life in society is a zero-sum game.

Since growth is an unintended consequence of creative destruction, they reason additionally, then there must be no moral merit to be recognised in such dumb luck. On the other hand, stagnation is the unequivocal signal of the good deeds to the unlucky, who otherwise could suffer the obvious lost coming from every innovation.

In this fantastic country, Friedrich Nietzsche and his successors are well read: everybody knows that, in the Eternal Return, the whole chance is played at each throw of the dice. So, they conclude, “if John Rawls asked us to choose between growth or stagnation, we would shout at him: Stagnation!!!”

But the majority of the inhabitants of “Stagnantland” are not the only to blame for their devotion to quietness. The few and exceptional proponents of creative destruction who live in Stagnantland are mostly keen on the second term of the concept. That is why some love to say, from time to time, “we all are stagnationist” – the few contrarians are just Kalki’s devotees.

These imaginary people love to spend their vacations abroad, particularly in a legendary island named “Revolution”. Paradoxically, in Revolution Island the Revolutionary government found a way to avoid any kind of counter-revolutionary innovation. It is not necessary to mention that Revolution Island is, by far, Stagnantlanders’ favourite holiday destination.

They show their photos from their last vacation in Revolution Island and proudly stress: “Look: they left the buildings as they were back in 1950!!! Awesome!!!” If you dare to point out that the picture resembles a city in war, that the 1950 buildings lack of any maintenance or refurbishment, they will not get irritated. They will simply smile at you and reply smugly: “but they are happy!”

Actually, for Stagnantlanders, as for many others, ignorance is bliss, but their governments do not need to resort to such rudimentary devices as censure and spying to prevent people from being informed about the innovations and discoveries occurring in other countries, as Revolutionary Island rulers sadly do. Stagnantlanders simply reject any innovation as an article of faith!

Notwithstanding, they allow to themselves some guilty pleasures: they love to use smartphones brought by ant-smuggling and to watch contemporary foreign films which, despite being realistic, show a dystopian future to them.

As everything is deteriorated, progress is always a going back to an ancient and glorious time. In Stagnantland, things are not created, but restored. As with Parmenides, they do not believe in movement, but if there has to be an arrow of time, you had better point it to the past.

Moreover, Stagnantland is an imaginary country because it does not only lack of duration, but of territory as well. As the matter of fact, no man inhabits Stagnantland, but it is indeed stagnation that inhabits the hearts of Stagnantlanders. That is how, from dusk to dawn, any territory could be fully conquered by the said sympathy for the stagnation.

Nevertheless, if we scrutinise the question with due diligence, we will discover that the stagnation is not an ineluctable future, but our common past. Human beings appeared very much earlier than civilisation. So, all those generations must have been doing something before agriculture, commerce, and institutions.

Before the concept of creative destruction had been formulated by Joseph Schumpeter, it was needed a former conception about how people are conditioned by institutions: Bernard Mandeville pointed out how private vices might turn into public benefits, if politicians arranged the correct set of incentives. The main issue, thus, should be the process of discovery of such institutions.

That is why the said aversion to competition and innovation is hardly a problem of a misguided sense of justice, but mostly a matter of what we could coin as “bounded imagination”: the difficultly of reason to deal with complex phenomena. Don’t you think so, Horatio?

What is ‘Good’? What was Arendt pursuing?

Arendt is not the most consistent or coherent philosopher. Her writings display shades of sentimental as well as stoic rationality. Some might scoff at the progression of her thoughts. But the depth of her emotion is what grants her literature the luminescence that we need in times of moral darkness. The world was left waiting for what could have been a monumental work on political judgement when Arendt passed on before getting a chance to complete the final segment of The Life of Mind. The piece entitled ‘Judgement’ was left with an epigraph:

Victrix causa deis placuit, sed victa Catoni.

Taken from Lucan’s Pharsalia, it translates to ‘the victorious cause pleased the gods, but the defeated one pleases Cato.’ It refers to the Roman philosopher and thinker Cato’s life and beliefs. He chose to commit suicide rather than give in to the faction he thought was ‘wrong’. Thus, what is ‘good’ would remain good even if it is defeated a hundred times. His stoicism and moral stubbornness is perhaps what Arendt wanted us to inculcate as a way of moral disciplining of the mind. But also of relevance is the presumption that there is, in fact, something good that is universal and not subject to fluctuations of regions, religion, class or caste. It is like music? Only humans have the capacity to perceive beats, melody, pitch and a number of other variables that combine to make music as we know it. Irrespective of how isolated or engaged our culture might have been with a globalized world, we carry within us the ability to differentiate good music from bad. What differs is our perception of what is happy from sad. A Balinese music for cremation might sound quite happy and serene to the uninitiated. Similarly, perhaps we possess the capacity to ascertain the ‘good’ pursuits from the bad. While culture, upbringing and circumstances of nature might affect the way we perceive the degree to which we are obligated to act upon the thus discovered moral, no (non-sociopathic) human can deny the existence of the goodness of the moral once confronted with it.

I remember asking my professor once about what he thought was that one universal value in constitutions around the world that need protection from majoritarian attempts at amendment. He answered, without blinking, equality. I knew there was something within the wide array of norms that we associate with equality that I know is a good that commands universality. However, there was enough in the substantive affirmations of equality that had room for reasonable disagreement such that as an unbiased spectator I would not be able to dismiss one side over the other. Perhaps the universal principle requires a Humean recognition or a Kantian deliberation. Either way, that it exists and is worth pursuing is an unquestionable precursor to an Arendtian enquiry into the state of things.

There are some hints as to what she might have thought definitely existed within the set (and let us treat it as a set of values/ideals/principles for nothing if not humility about the extent of our understanding and knowledge) of what is ‘good’. Political freedom features quite prominently into her thought. The freedom to participate in public affairs as equals seems to have a place of prominence for Arendt. Not so much the concept of equality extended to realms outside the political. We are not born equal and cannot and should not try to find a natural occurrence of equality for that would require an unjust comparison of the distinctions and characteristics that distinguish individuals. The last blog post talked about Arendt’s insistence on separating the political from social and personal realms. While identity politics is often engaged to make a case for equality, and Arendt had nothing against the ideal of equality, she believed that it is in the political realm that we needed to affirm the ideal of equality most vehemently and zealously. This is because it affects directly our participation in the political which in turn affects everything about our existence in the world.

A better way to read Arendt is to go meta-psychological on her. Perhaps one of the ‘good’  values within the set is a form of communicative rationality, the desire and pursuance of a method of thinking representatively. And perhaps, just as liberation is a necessary precursor to freedom, so is the engagement of Arendtian judgment to finding that which is ‘good’.

The Shelf Life of the Self: Arendt on Identity Politics

Demands for separating one’s public and private identities are neither new nor simple. As the argument goes, many a political philosopher have claimed that to engage in worthwhile and productive politics, we must shed our private identities to better see, so to speak, the concerns that need a more universal outlook. Thus, to better communicate and deliberate upon political questions within a polity, say a nation, the citizens need to view themselves as citizens alone sans any group affiliation based on gender, religion, race and caste. This is not to snub the importance of social identities in general but only in so far as they affect our political judgement. On the other hand, the response to such a proposal has predictably highlighted the benefits, both political and moral, that one’s private identity has on their political participation. After all, the walls between the identities are not quite as impervious to each other as the philosophers are making it to be. Our individual selves are more than just a simple addition of our social, cultural and personal experiences. How we think about political dilemmas is often and quite rightly influenced by what we anticipate from a rival social group. A female advocating the freedom to make reproductive choices is not just assessing the positions of the stakeholders involved, as Arendt’s call for ‘enlarged mentality’ would require of her. The said female also has to keep in mind the gender hierarchies at play around her.

Arendt was famously non-feminist. She believed that the transposition of the private and the social identities into our political identities can destroy the very fabric of political communication and thus, political judgement. To resolve political dilemmas facing our society, Arendt believed we needed the exact opposite of what identity politics has to offer. Our private and social selves come with a shelf life. They end where the political begins. According to Arendt, the politicization of personal and social identities brings to the fore a self-defined and accepted discrimination that takes us away from the equality that politics demands of us. To think representatively, we need to not only be treated as but also feel like political equals.

While identity politics does well to highlight a history of suppression, it also contributes to a further strengthening of political cleavages that prevent us from ever going back to the ideal state that was disturbed by the suppression. Identity politics causes harm to inter-sectionalities because it forces us to choose between conflicting identities. But more importantly, it conflates the many dimensions of our self with the identity that we have thus chosen to speak through, politically. This conflation results in a demonization of everything that does not conform to our sense of identity, resulting in a fear of the unknown (of which Martha Nussbaum has talked about in the Monarchy of Fear). In the creation of this battleground, we forget that the other side is human. Just like us. And it is easy to not think about our moral obligations to each other when the enemy has been dehumanized and reduced to a label.

Arendt on identity politics deserves much greater scrutiny. Especially because of the overwhelming reliance of social cleavages but current political leaders. The era of identity politics has given us a society with walls that mask themselves as political ideologies but are nothing more than a refusal to recognize that the other side is human too. An essential step in Arendtian judgement is to accept the inherent and equal worth of each individual, irrespective of their social identity. We would do well to find common grounds in our humanity, first.

The Negative Capability of a Good Legislator

In a former post, we had explored the idea of considering the law as an abstract machine which provides its users with information about the correct expectancies about human conduct that, if fulfilled, would contribute to the social system inner stability (here). The specific characteristic of the law working as an abstract machine resides in its capability of dealing with an amount of information more complex than human minds. This thesis had been previously stated by Friedrich Hayek in his late work titled “Law, Legislation and Liberty”, aimed to provide the foundations to a proposal of an constitutional reform that would assure the separation of the law from politics -not in the sense of depriving politics from the rule of law, but to protect law from the interference of politics.

Paradoxically, the said opus had many unintended outcomes that surpassed the author’s foresight. One of them was the coinage of the notion of “Spontaneous Order”, which Hayek himself regretted about, because of the misleading sense of the word “spontaneous”. At the foreword of the third volume of the cited “Law, Legislation and Liberty”, he explained why he would prefer to use of the term of “Abstract Order”. Notwithstanding its creator’s allegations, the label of “Spontaneous Order” gained autonomy from him in the realm of the ideas (for example, here).

Why better “abstract order” than “spontaneous”? Because while no “concrete order” might be spontaneous, we could nevertheless find normative systems created by human decision, besides the spontaneous ones (see “Law, Legislation and Liberty”, Chapter V). Moreover, we do not see spontaneous orders whose rules fail to provide stability to the system, because of “evolutionary matters”: such orders could not endure the test of time. Nevertheless, for the same reason, we could imagine a spontaneous order whose rules of conduct became obsolete due to a change in the environment and, thus, fails to enable the social system with the needed stability.

Spontaneity is, thus, not the central characteristic of the law as a complex order. What delimits law from a “concrete order” is the level of abstraction. An alternative name given by Hayek to designate the concrete orders was the Greek term “taxis”, a disposition of soldiers for battle commanded by the single voice of the general. Concrete orders could be fully understood by the human mind and that is why they are regarded as “simple phenomena”: the whole outcome of their rules could be predicted by a system of equations simpler than the human mind.

Notwithstanding a single legislator could sanction a complete set of rules to be followed by the members of a given society, the inner system of decision making of those individuals are more abstract that the said set of rules and, thus, the human interactions will always result in some subset of unintended consequences.

These unintended consequences should not necessarily be regarded as deviations from the social order, but indeed as factors of stabilisation -and, thus, all abstract orders are, in some sense, still spontaneous. These characteristics of the law as a complex order concern on the information about the final configuration of a society given a certain institutional frame: we can establish the whole set of institutions but never fully predict its final outcome. At this stage, we reach what Hayek called in The Sensory Order “an absolute limit to knowledge”.

We now see that the legislator could sanction a complete system of rules -a system that provides solutions for every possible concrete controversy between at least two contenders-, but he is unable to be aware of the full set of consequences of that set of rules. We might ascertain, then, that being enabled with a “negative capability” to anticipate the outcome of the law as a complex phenomenon is a quality to be demanded to a good legislator.

By this “negative capability” we want to designate some understanding of the human nature that allows to anticipate the impact of a given norm among the human interactions. For example, simple statements about human nature such as “people respond to incentives”, or “all powers tend to be abusive”. These notions that are not theoretical but incompletely explained assumptions about human nature are well known in the arts and literature and constitute the undertow of the main narratives that remain mostly inarticulate.

Precisely, as Hayek stated, every abstract order rests upon a series of inarticulate rules, some of which might be discovered and  later articulated by the judges, while other rules would remain inarticulate despite being elements of the normative system.

However, we praise Negative Capability as a virtue to be cultivated by the legislator, not by the judge. The function of the judge is to decide about the actual content of the law when applied to a particular case. It is the legislator the one who should foresee the influence to be exerted by the law upon a general pattern of human behaviour.

Notwithstanding Negative Capability could be dismissed in order of not being a scientific concept, this negative attribute is one of its main virtues: it means lack of ideology, in the sense given to that term by Kenneth Minogue. While an ideological political discourse reassures itself in a notion of scientific truth, at least a legislator inspired by common and humble ideas about human nature would be free from that “pretence of knowledge”.

The Factual Basis of Political Opinions

“Ideology is a menace.” Paul Collier says in his forthcoming book The Future of Capitalism and I couldn’t agree more: ideology (and by extension morality) “binds and blinds”, as psychology professor Jonathan Haidt describes it, and ideology, especially utopian dreams by dedicated rulers, is what allows – indeed accounts for – the darkest episodes of humanity. There is a strange dissonance among people for whom political positions, ideology and politics are supremely important:

  • They portray their position as if supported by facts and empirical claims about the world (or at least spit out such claims as if they did believe that)
  • At the same time, believing that their “core values” and “ideological convictions” are immune to factual objections (“these are my values; this is my opinion”)

My purpose here is to illustrate that all political positions, at least in part, have their basis in empirically verifiable claims about the world. What political pundits fail to understand is not only that facts rule the world, but that facts also limits the range of positions one can plausible take. You may read the following as an extension of “everyone is entitled to his or her own opinions, but not to his or her own facts”. Let me show you:

  • “I like ice-cream” is an innocent and unobjectionable opinion to have. Innocent because hey, who doesn’t like ice-cream, and unobjectionable because there is no way we can verify whether you actually like ice-cream. We can’t effortlessly observe the reactions in your brain from eating ice-cream or even criticize such a position.
  • “Ice-cream is the best thing in the world”, again unobjectionable, but perhaps not so innocent. Intelligent people may very well disagree over value scales, and it’s possible that for this particular person, ice-cream ranks higher than other potential candidates (pleasure, food, world peace, social harmony, resurrection of dinosaurs etc).
  • “I like ice-cream because it cures cancer”. This statement, however, is neither unobjectionable nor innocent. First, you’re making a causal claim about curing cancer, for which we have facts and a fair amount of evidence weighing on the matter. Secondly, you’re making a value judgment on the kinds of things you like (namely those that cure cancer). Consequently, that would imply that you like other things that cure cancer.

Without being skilled in medicine, I’m pretty sure the evidence is overwhelmingly against this wonderful cancer-treating property of ice-cream, meaning that your causal claim is simply wrong. That also means one that you have to update your position through a) finding a new reason to like ice-cream, thus either invoking some other empirical or causal statement we can verify or revert back to the subjective statements of preferences above, b) renege on your ice-cream position. There are no other alternatives.

Now, replace “ice-cream” above with *minimum wages* and “cancer” with “poverty” or any other politically contested issue of your choice, and the fundamental point here should be obvious: your “opinions” are not simply innocent statements of your unverifiable subjective preferences, but contain some factual basis in them. If political opinions, then, consists of subjective value preferences and statements about the world and/or causal connections between things, you are no longer “entitled to your own opinions”. You may form your preferences any way you like – subject to them being internally consistent – but you cannot hold opinions that are based on incorrect observations or causal derivations about the world.

Let me invoke my national heritage, illustrating the point more clearly from a recent discussion on Swedish television.  The “inflammatory” Jordan Peterson, as part of his world tour, visited Norway and Sweden over the past weekend. On Friday he was a guest at Skavlan, one of the most viewed shows in either country (boasting occasionally of more viewers than the large sport events) and– naturally– discussed feminism and gender differences. After explaining the scientific evidence for biological gender differences*, and the observed tendency for maximally (gender) egalitarian societies to have the largest rather than smallest gender-related outcomes, Peterson concludes:

“there are only two reasons men and women differ. One is cultural, and the other is biological. And if you minimize the cultural differences, you maximize the biological differences… I know – everyone’s shocked when they hear this – this isn’t shocking news, people have known this in the scientific community for at least 25 years.”

After giving the example of diverging gender rates among engineers and nurses he elaborates on equality of opportunity, to which one of the other talk show guests, Annie Lööf (MP and leader of the fourth largest party with 9% of the parliamentary seats) responds with feelings and personal anecdotes. Here’s the relevant segment transcribed (for context and clarity, I slightly amended their statements):

Peterson: “One of the answers is that you maximize people’s free choice. […] If you maximize free choice, then you also maximize differences in choice between people – and so you can’t have both of those [maximal equality of opportunity and minimal differences along gender lines]”

Lööf: “because we are human beings [there will always be differences in choice]; I can’t see why it differs between me and Skavlan for instance; of course it differs in biological things, but not in choices. I think more about how we raise them [children], how we live and that education, culture and attitudes form a human being whether or not they are a girl or a boy.”

Peterson: “Yes, yes. That is what people who think that the differences between people are primarily culturally constructed believe, but it is not what the evidence suggests.”

Lööf: “Ok, we don’t agree on that”.

So here’s the point: this is not a dispute over preferences. Whether or not biology influences (even constitute, to follow Pinker) the choices we make is not an “I like ice-cream” kind of dispute, where you can unobjectionably pick whatever flavor you like and the rest of us simply have to agree or disagree. This is a dispute of facts. Lööf’s positon on gender differences and her desire to politically alter outcomes of people’s choices is explicitly based on her belief that the behaviour of human beings is culturally predicated and thus malleable. If that causal and empirical proposition is incorrect (which Peterson suggests it is), she can no longer readily hold that position. Instead, what does she do? She says: “Ok, we don’t agree”, as if the dispute was over ice-cream!

Political strategizing or virtue signalling aside, this perfectly illustrates the problem of political “opinions”: they espouse ideological positions as the outcome of enlightened or informed fact-based positions, but when those empirical statements are disproved, they revert to being expressions of subjective preference without a consequent diminution of their worth! Conservatives still gladly hum along to Trump’s protectionism, despite overwhelmingly being contradicted in the factual part of their opinion; progressives heedlessly champion rent control, believing that it helps the poor when it overwhelmingly hurts the poor. And both camps act as if the rest of us should pay attention or go out of our way to support them over what, at best, amounts to “I like ice-cream” proposals.

Ideology is a menace, and political “opinions” are the forefront of that ideological menace.


*(For a comprehensive overview of the scientific knowledge of psychological differences between men and women, see Steven Pinker’s The Blank Slate – or Pinker’s well-viewed TED-talk outline.)

Small thought on the fundamental revolution of Blockchain

Mankind made a huge leap forward regarding human organization when it implemented the Constitution. Man was no longer to be ruled by kings and despots, but by a document that stipulated the rule of law. Still, we had the issue of who was going to interpret these laws and who was allowed to add new rules.

Now, we have made another revolutionary leap forward in human organization. We don’t need a third party – kings, governments, courts – to interpret the laws anymore if we have self-executing smart contracts that eliminate the need to trust these third parties. Trust is established through mass collaboration and clever code. On top of that, everyone is free to opt-in, to submit new rules, and to participate in a set of rules. No one is forced to participate. You can always secede. We have had many secessions in the blockchain space. Bitcoin Cash seceded from Bitcoin Core, Ethereum seceded from Ethereum Classic etc. It is therefore a peaceful means to organize human beings.

This is, in my opinion, the fundamental revolution of blockchain: a peaceful trust machine for social agreements and human organization.

Blockchain trust

From the Comments: How can we not consent to government if we obey it voluntarily?

Irfan Khawaja has a good argument on Yoram Hazony’s new book on nationalism, which is being thoroughly and thoughtfully dissected by Arnold Kling:

Does anyone understand the point that Kling and/or Hazony are making about the relation between legitimacy based on voluntary acceptance, and consent? On the one hand, the claim is that in a legitimate government, we obey the law “voluntarily”; on the other hand, the claim is that we do not consent to government. How can we not consent to government if we obey it voluntarily? Coming the other way around: how can we obey it voluntarily if we don’t consent to it? Even if Hazony wants to broaden consent beyond the Lockean account, that’s still a broadening of the conditions of consent, not a nullification of the role of consent. The combination of claims that Kling attributes to Hazony does not seem coherent.


As a reminder, this is not a philosophical argument. Well, it is but it isn’t. I suspect this is about Israel and Palestine as much as it is about logical rigor. Stay tuned, and don’t be shy about having your say!