Philosophy

Classical Liberalism, Cosmopolitanism and Nationalism

Edwin van de Haar Current Events, Liberty, Philosophy, Politics , , , , , , , , , ,

In another thought-provoking post on Facebook (does the guy ever write mediocre stuff, I wonder?) Barry raised the question of the relation between classical liberalism, nationalism and cosmopolitanism. He wrote the following:

“On the capture of classical liberal/libertarianism by anti-cosmopolitans. This is very influential at the heart of the ‘leave’ ‘elite’ in the UK, and can only be destructive of classical liberalism/libertarianism. The immediate political consequence of Leave is the elevation of Theresa May to Tory leadership/Prime Minister’s office on a much more ‘Red Tory’, communitarian, corporatist foundation than existed under Cameron. ’To the extent to which the current wave of populism maps into a conflict over national versus transnational identity (Dan Drezner is unconvinced), the problem is not an excess of cosmopolitanism but rather its absence, especially on the conservative, free-market right.”

He seems to take a positive relation between classical liberalism and cosmopolitanism as the default position. Of course Barry did not provide definitions in a FB post, but here I take cosmopolitanism to mean “the idea that all human beings, regardless of their political affiliations, belong to a common moral community. Cosmopolitans often believe that all individuals have the same basic moral status, and tend to downplay the importance or desirability of national political institutions. [They are] opposed to nationalism” (source: Matt Zwolinski (editor), Arguing About Political Philosophy, Routledge, 2009).

I argue that Barry overlooks that classical liberalism combines a cosmopolitan side, with a strong defense of national political institutions (e.g. the state). The cosmopolitan side is perhaps easiest to see, if one takes the idea of free trade as the guiding principle. Free trade is by nature morally neutral for the individuals involved, and has numerous positive economic effects; it fosters cultural exchange as well as innovation and knowledge sharing. In that sense classical liberalism is indeed related to cosmopolitanism.

Yet this stops where the national state comes into play. Classical liberals never predicted any positive political effects of trade (see my earlier notes on this topic) and, just as importantly, they actually favor a strong state, with a limited number of tasks. At the same time, from Hume and Smith onwards to Mises and Hayek, they strongly dislike the idea of transnational political institutions, because these lack any substantial emotional basis which nations do posses. Also, these large political institutions easily become a threat to individual liberty, even more so than national states with too many tasks. So, there is no really no relations between political cosmopolitanism and classical liberalism at all.

There is also no relation between nationalism and classical liberalism. A preference for the national state does not lead to nationalism, which is the vicious and poisonous belief in the superiority of one’s country, often accompanied with a dislike of allegedly inferior neighboring countries or peoples or groups. This is collectivism turned even worse, which is a double ‘no’ from a classical liberal perspective. This said, if patriotism is defined as national pride, then classical liberalism and patriotism can and will go together. There is a fine line between the two sometimes, but patriotism is not violent and dividing, but a binding force between individuals sharing a national state.

The last point is on the European Union. Hayek and Mises have been on record with strong support for a European Federation, primarily as a remedy to war-torn and nationalism-infected Europe. In these circumstances the default position of an international order as a society of states no longer functioned, so there was a need to seek an alternative. Needless to say their federation had little resemblance with the current super state we know as the European Union, which has become a classical liberal nightmare in terms of liberty and property rights violations it commits on a daily basis.

The current EU has some classical liberal traits (the imperfect common market is the single most important one), which is of tremendous use to all European individuals. It is, however, way too cosmopolitan in the bad political way. A likely consequence of Brexit is that this will become even worse, now that the French and their allies will get more room for their collectivist fallacies.

Group Privileges No, Detriments Yes

Fred Foldvary Liberty, Philosophy , , , , ,

The concept of “privilege” has become common in political discourse, while the term “detriment” is seldom used. One incurs a detriment, and is detrimented, when one is harmed, offended, displeased, or disadvantaged, unrelated to merit. One obtains a privilege, and is privileged, when a person or group is advantaged, benefitted, pleased, or favored relative to other groups, when the gain is unrelated to merit.

Some socialists emphasize “white privilege.” Suppose a white man is able to walk down a street without being harassed, while a black man will be stopped and questioned by the police. The socialist will say that the white man is privileged in being free of harassment. But actually, the ability of an innocent person to walk without being stopped and frisked is a natural right, not a special favor. The black man has suffered a violation of his natural rights, a detriment not suffered by the white man.

The socialist will also claim that there is “male privilege.” Suppose a man can walk down the street in peace, while a woman walking down the same street will be whistled at, aggressively approached, and may even be physically attacked. Does the man have a privilege? No, one has a natural right to be free of aggression. The woman suffers a violation of her rights, a detriment.

Women suffer many detriments because of social custom and culture, rather than governmental law. Wives tend to do more household work, even when they are working for wages as many hours as the husband. In some fields of work, men have more prestige and authority, unrelated to merit. The culture is not so much giving males privileges as it imposes on women various detriments.

Some detriments are mandated by law. In most places in the US, men are free to remove their shirts, while a bare-breasted woman would get arrested. The men do not have a privilege; the women have a legal detriment.

Female detriments can become tragic in cultures where male children are preferred. A boy is not privileged by not being aborted or killed. Rather, the girls suffer a lethal detriment. In my judgment, more progress can be made to stop this anti-female bias by calling it a detriment rather than saying the boys are privileged. Boys as well as girls have a right to not be murdered.

Female detriments have been lethal in India, where rape and violence has made headlines. But there is substantial rape in the US and throughout the world, which clearly makes being female a detriment in much of the world.

The trouble with saying there is a male privilege is that men do not feel privileged by not being attacked or disfavored. It should be normal to be left in peace, and to be respected. By identifying the problem as a detriment, we can then raise more awareness and support for remedies. We can also then better deal with the real privileges, favors to those who get subsidies from government because of political clout.

The language of privilege versus detriments influences policy. “Privilege” implies special favors that should be removed. “Detriment” implies harms and disadvantages that should be stopped. For the problem of infanticide, for example, it is not that privileged boys should be killed in an equal ratio, but that girls should not be murdered for being female.

Let’s speak less of racial and gender privilege, and more of detriments!

Where did Homo Economicus come from?

Zachary Woodman Economics, Liberty, Philosophy , , , , , , , , , , , , , , , , , , , ,

Over on my Facebook page, I posted a short criticism of both neoclassical and behavioral economic scholarship on rational choice (drawing from a paper I’m working on exploring that topic). Stated a bit polemically,  though homo economicus has largely been dead in neoclassical theory, his spirit still haunts the work of most modern neoclassical scholars. Likewise, though behavioral economists are trying to dig the grave and put the final nails in the coffin of homo economicus, their nightmares are still plagued with the anxieties of his memory.

This led a former colleague from Hillsdale to ask me where I thought homo economicus came from historically. I wrote the following in response (lightly edited for this post):

It could be argued, in a sense, that the protestant Christian aim to complete moral purity and the Enlightenment aim to make man perfect in knowledge in morality (as embodied in Franklin’s virtue ethics) helped give rise to a culture that would be primed for such a model. Within economics, historically it comes from Bentham’s utilitarianism and Jevon’s mathematical extrapolations from Bentham’s psychology. However, I’d say this comes from a deeper “Cartesian anxiety” in Bernstein’s use of the term to make economic a big-T True, capital-C Certain, capital-S Science just like physics (which Jevon’s himself stated was an aim of his work,[1] and has preoccupied economists since the days of JS Mill). If economic science cannot be said to be completely positive and “scientific” like the natural sciences with absolutely falsifiable propositions and an algorithmic means of theory-choice, it is feared, it must be written off as a pseudo-scientific waste of time or else ideology to justify capitalism. If economics cannot make certain claims to knowledge, it must be solipsist and relativist and, again, be another form of pseudo-science or ideology. If economic models cannot reach definitive mathematical results, then they must be relativistic and a waste of time. This is just another example of the extreme Cartesian/Katian/Platonic (in Rorty’s use of the term) either/or: objectivity OR relativism, science OR nonscience, determinate mathematical solutions OR ideological emotional bickering. Homo economicus was erected as a means to be an epistemic foundation to solve all these anxieties and either/ors.

Of course, as any good Deweyan, I think all these either/ors are nonsense. Their understanding of science, as revealed through the so-called “growth of knowledge” literature in postempiricist philosophy of science (ie., the work of Thomas Kuhn, Lakotos, Karl Popper, Paul Feyerabend, Michael Polanyi, Richard Bernstein, Richard Rorty, etc.) has shown that this positivist conception of science, that is science consists of algorithmic theory choice selected based off correspondence with theory-free, brute “facts” of the “external world,” is woefully inaccurate. Dialogical Aristotelian practical reasoning in the community of scientists plays just as much of a role in formulating a scientific consensus as empirical verification. This does not undermine science’s claims to objectivity or rationality, in fact it puts such claims in more epistemically tenable terms.

Further, the desire to make the social sciences just another extension of the natural science, as Hayek shows in the Counterrevolution of Science, and as even positivists like Milton Freidman argue, is a completely misleading urge that has led to some of the worst follies in modern social theory. Obviously, I cheer the fact that “homo economicus is dead, and we have killed him,” but now that we’ve “out-rationalized the rationalizer of all rationalizers,” we must try to re-evaluate our economic theories and methods to, as Bernstein or Dewey would put it, “reconstruct” our economic science.

In short, immenatizing the eschaton in epistemology and philosophy of science created homo economicus.

For the record, you don’t have to be a radical scientific anti-realist like Feyerabend or Rorty to agree with my analysis here.[2] I myself wax more towards Quine than Rorty in scientific matters. However, the main point of philosophy of science since positivism is the exact type of foundationalist epistemology undergirding modern positivist methodology in the mainstream of the economics profession, and the concept of rationality that is used to buttress it, is a naive view of science, natural or social.

Notably, this critique is largely unrelated to much of the Austrian school. Mises’ own conception of rationality is mostly unrelated to homo economicus as he understands rationality to be purposive action, emphasizing that economists first understand the subjective meaning from the point of view of the economic actor him/herself before declaring any action “irrational.”[3] [4]

What are your thoughts on this? Are neoclassical and behavioral economics both still way too influenced by the spirit of homo economicus, or am I off the mark? Is my analysis of the historical conditions that led to the rise of homo economicus right? Please, discuss in the comments.

[1] Consider this quote from Jevon’s magnum opus Theory of Political Economy “Economics, if it is to be a science at all, must be a mathematical science.”

[2] In fact, I doubt anybody mentioned is really a scientific anti-realist, I agree with Bernstein that Feyerabend is best read as a satirist of the Cartesian anxiety and extreme either/or of relativism and objectivism in philosophy of science and think Rorty’s views are more complex than simple scientific anti-realism, but that’s an unrelated point.

[3] Of course, any critique of epistemic foundationalism would apply to Mises, especially his apriorism; after all, Mises did write a book called “Ultimate Foundations of the Social Sciences” and the Cartesian anxiety is strong with him, especially in his later works. Notably, none of this applies to most of Mises’ students, especially Schutz, Machlup, and Hayek.

[4] For a more detailed discussion of Mises and the Austrians on rationality, see my blog post here or this paper by Mario Rizzo. For a more general discussion of the insights of the type of philosophy of science I’m discussing, see Chapter 2 of Richard Bernstein’s excellent 1983 book Beyond Objectivism and Relativism: Science, Hermeneutics, and Praxis.

Libertarians and Pragmatists on Democracy Part 4: Why Market Anarchism is more Democratic than Democracy

Zachary Woodman Economics, Law, Liberty, Philosophy , , , , , , , , , , , , , ,

Note: This is the final part of a series on democracy. It is assumed the reader is familiar with part one, defining democracy, part two, summarizing classical liberal perspectives on democracy, and part three, which analyzes how pragmatists conceive of democracy as a broader philosophy. Here, I will argue that a synthesis of libertarian and pragmatist perspectives on democracy will yield an argument in favor of market anarchy.

The insights of classical liberalism, and particularly modern libertarianism, have shown that democracy is likely to lead to a tyranny of an irrational and ignorant majority and public choice theory has shown how it results in awful policies thanks to a number of collective action issues. However, as pragmatists have argued, democracy’s philosophical aspirations to scientific public deliberation, seeking the consent of the governed, valuing the dignity of every individual, and decentralizing political authority to take advantage of dispersed intelligence are still admirable. However admirable these philosophical aspirations are, real-world democracies completely fail to fulfill them.

The natural question is, if not democracy, what political arrangements can live up to the philosophical goals of Dewey and Hook? I think the answer lies in market anarchism. In what follows, I will show how market anarchism could succeed in realizing the aspirations of philosophical democracy where political democracy has failed.

Before we get started, let’s take into account a few minor housekeeping notes. It is assumed that the reader has at least a cursory knowledge of how market anarchism and polycentric law works. If you are not familiar with these concepts I highly recommend watching this video by David Friedman before continuing. Also, I am in no way arguing that any of the thinkers discussed in this series are “really” anarchists unless they’re obviously so such as Huemer. I will not even claim that any of them “should have been” anarchists (with the exception of Hayek). I am simply arguing that if we take into account the insights of their various perspectives, one could plausibly defend market anarchism.

Market Anarchism, Unlike Democracy, Does Rest on the Voluntary Consent of the Governed

As Michael Huemer convincingly has shown, democracy does not actually “rest upon the freely given consent of the governed” as Sidney Hook claims. The bar tab example illustrates that we would not consider majority rule “consent” in any everyday interaction and there is little reason to think it should be any different in the context of political institutions. By contrast, market anarchism is almost by definition based off of consent. This is the primary reason why many deontological market anarchists, such as Murray Rothbard, are market anarchists in the first place and why they oppose the coercive, non-consensual nature of the state. While democracy’s claim to legitimacy is that the governed vote but they are still forced to follow the (unjustified) authority of a state that has the monopoly on force whether they agree or not to, market anarchism is based off of voluntarily consented to contracts between individuals and defense agencies and contracts between those defense agencies and private, voluntary court systems and arbitrators. Further, the content of the laws is agreed to and law becomes a product one buys in voluntarily agreeing to sign up with a defense company, just as one buys a car, a piece of furniture, or any other good.

It is curious that many pragmatist defenses of democracy sound very similar to what many market anarchists and libertarians write. Not just in Sidney Hook’s definition of a democracy as a government that “rests upon the freely given consent of the governed,” but perhaps most strikingly in John Dewey’s 1939 essay “I Believe.” In this essay, Dewey walked back some of his early Hegelian collectivist lines of his early years:

My contribution to the first series of essays in Living Philosophies put forward the idea of faith in the possibilities of experience at the heart of my own philosophy. In the course of that contribution, I said, “Individuals will always be the center and the consummation of experience, but what the individual actually is in his life-experience depends upon the nature and movement of associated life.” I have not changed my faith in experience nor my belief that individuality is its center and consummation. But there has been a change in emphasis. I should now wish to emphasize more than I formerly did that individuals are the final decisive factors of the nature and movement of associated life.

Indeed, throughout the whole essay he emphasizes “the idea that only the voluntary initiative and voluntary cooperation of individuals can produce social institutions that will protect the liberties necessary for achieving development of genuine individuality.” Throughout the essay, he decries (like many left-anarchists do) “state socialism” just as much as he does “state capitalism.” Dewey’s opposition to capitalism is well-known, but what is less known is his opposition to so-called “public collectivism.” His criticisms here could just as easily have been written by someone like Hayek:

Recent events have shown that state socialism or public collectivism leads to suppression of everything that individuality stands for. It is not too late for us in this country to learn the lesson taught by these two great historic movements [ie., the rise of state capitalism and state socialism]. The way is open for a movement which will provide the fullest opportunity for cooperative voluntary endeavor. In this movement, political activity will have a part, but a subordinate one. It will be confined to providing the conditions, both negative and positive, that favor the voluntary activity of individuals.

It is interesting that, like anarchists who favor direct action, he emphasizes that political activity is subordinate to the political movement he sees as necessary.

Of course, there are still notable differences between Dewey and libertarians, he still defends what he calls “functional socialism” in the socialization of medicine and still berates more than many libertarians would be comfortable with (except, of course, for left-anarchists) inequality caused by state capitalism. His vision of a truly individualist society, even in his later years, was one with localized, experimental democratic institutions and economics controlled by those localized governments in a “functional socialist” fashion (as I mentioned earlier, that economic vision is at odds with Dewey’s epistemological commitments).

However, I would argue that it is more than a mere superficial coincidence that Dewey’s criticisms of state capitalism are almost identical to those of market anarchists who decry “crony capitalism,” that his criticisms of state socialism are very similar to some individualist libertarian criticisms, and his overall rhetoric defending democracy on the grounds of “voluntary cooperation of individuals” sounds remarkably similar to many libertarians. This is because, largely, the philosophical ends Dewey seeks in politics are the same as those sought by libertarians, market anarchists, and classical liberals. However, the institutional means he advocates are very different and fail to meet those ends.

There is, conversely, one potential criticism that Sidney Hook would raise at this point: that market anarchism does not really rest upon the freely-given consent of the governed due to its allowance for economic inequality. Hook argued that income inequality undermines consent in democracy and, as a result, economic organization should be controlled by a democratically elected government. There are two points to be made. First of all, when economic organization is controlled by government in democracies it exacerbates the problem of income inequality. Rent-seeking culture arises in which concentrated interests use, through lobbying power, government force to accumulate and protect their wealth. Indeed, as I mentioned earlier,  there have been empirical studies showing how over-regulation lobbied for by those concentrated benefits have regressive effects. Even fairly anti-free market economists such as Joseph Stiglitz have argued that income inequality is not an inevitable result of market institutions, but a result of bad government policies such as corporate welfare.

Second, it is questionable to what degree income inequality would exist in pure market anarchy. Of course, much of the bad inequality experienced under state capitalism is the result of bad policies, but some if it is also just a result of market’s tendencies to disrupt economic distributions (which, as Mises argued in Liberalism: The Classical Tradition is not a bad thing because it allows for luxury markets which can serve as an experimental market for expensive, new goods that one day become popular consumer goods). Some market anarchists, such as Anna Morgenstern, have argued that the type of mass accumulation of capital under capitalism would be impossible under market anarchism. I am unsure to what extent I agree, and a systemic analysis of the economic roots of inequality is outside of the scope of this post. However, suffice it to say that it is an open, empirical question whether purely free markets would result in problematic levels of inequality, as Hook seems to think, and we have some good reasons to think it would not. At the very least, it is clear that the democratic institutions favored by Hook are not a serious solution to the problem.

Market Anarchism, Unlike Democracy, Relies on a Decentralized Process of Political Decision Making

Dewey argued in “Democracy and Educational Administration” that “it is the democratic faith that [the distribution of knowledge and intelligence] is sufficiently general so that each individual has something to contribute and value of each contribution can be assessed only as it enters into the final pooled intelligence constituted by the contributions of all.” He seems to echo Hayek’s knowledge problem critique of socialism when he argues that the democratic faith is based on the wisdom that “no man or limited set of men is [sic] wise enough or good enough to rule others without their consent[.]” As we have seen, democracies tend towards heavily centralized governments that undermine this faith and fail to take advantage of the dispersed knowledge (in Hayekian terms) among individuals in society.

Market anarchy, on the other hand, by definition takes advantage of this feature of dispersed intelligence. Rather than having law be designed by a centralized legislature, law arises out of voluntary market exchanges between individuals and, like common law, the precedent of judges in private courts. Of course, both Dewey and Hayek embraced democratic institutions (in Hayek’s case, as well as free market economic coordination) to take advantage of decentralized knowledge. However, both Dewey and Hayek, particularly the ladder (Dewey never wrote about market anarchism as it did not exist as a unique perspective until almost a decade after his death), failed to appreciate the extent to which a polycentric legal system does this much better. Peter Stringham and Todd Zywicki have noted this tension in Hayek’s thought in particular, as they put it in an abstract for their excellent paper on the issue:

Should law be provided centrally by the state or by some other means? Even relatively staunch advocates of competition such as Friedrich Hayek believe that the state must provide law centrally. This article asks whether Hayek’s theories about competition and the use of knowledge in society should lead one to support centrally provided law enforcement or competition in law. In writing about economics, Hayek famously described the competitive process of the market as a “discovery process.” In writing about law, Hayek coincidentally referred to the role of the judge under the common law as “discovering” the law in the expectations and conventions of people in a given society. We argue that this consistent usage was more than a mere semantic coincidence — that the two concepts of discovery are remarkably similar in Hayek’s thought and that his idea of economic discovery influenced his later ideas about legal discovery. Moreover, once this conceptual similarity is recognized, certain conclusions logically follow: namely, that just as economic discovery requires the competitive process of the market to provide information and feedback to correct errors, competition in the provision of legal services is essential to the judicial discovery in law. In fact, the English common law, from which Hayek drew his model of legal discovery, was itself a model of polycentric and competing sources of law throughout much of its history. We conclude that for the same reasons that made Hayek a champion of market competition over central planning of the economy, he should have also supported competition in legal services over monopolistic provision by the state — in short, Hayek should have been an anarchist.

There is one possibly fatal objection to this line of reasoning, that is also the most substantial objection to market anarchism as a whole: the possibility that market anarchy, like democracy, will eventually lead to a centralized state that undermines its attempt to take advantage of dispersed knowledge. This argument was initially hinted at by Robert Nozick in Anarchy, State, and Utopia in his argument about the “immaculate conception of the state” but was expanded on most convincingly by Tyler Cowen. Ultimately it is an empirical question whether market anarchy would eventually lead to more centralization, and it is outside the scope of this post to analyze that fascinating question in any satisfactory amount of detail. I will say, however, that Bryan Caplan has given more or less convincing reasons why this may not be the case.

Market Anarchism, Unlike Democracy, Values the Dignity of the Individual

One of the features central to the pragmatist “democratic faith” is the belief that “belief that every individual should be regarded as possessing intrinsic worth or dignity[.]” As I argued, the conflation of democratic governments with the “collective will” of the people undermines this faith as political dissenters and individual thinkers become viewed as opponents to “the people.” Indeed, it seems that the type of “public” and “private” collectivisms that Dewey ridiculed in “I Believe” are a result of democratic institutions run amuck.

Market anarchism, meanwhile, suffers from no such issues. Instead, the intrinsic worth of the individual is respected as their free choices and associations is the main driving mechanism for political organization. There is no violation of free speech and free thought by a deliberative government as such a government does not exist in the first place under anarchy, and thus the intrinsic worth and dignity are not found in the “will of the people” as in democracies, but in the sovereign individual’s choice of which defense provider to contract with.

Market Anarchism, Unlike Anarchy, is Scientific and Deliberative

Contrary to Dewey and Hook’s characterization of democracy as a deliberative, intelligent application of the scientific method to social issues, democracy is instead characterized by polarizing populist pandering and rationally ignorant and irrational voters casting meaningless ballots based cultural associations rather than reasoned consideration of policy issues. Market anarchism, meanwhile, does have the deliberative, scientific nature the pragmatists vainly hope democratic institutions could aspire to. While under democracy the cost of casting an informed vote is very high and the benefits very low resulting in massive amounts of rational ignorance, under market anarchism individuals have every incentive to ensure they are informed about the legal rules they are purchasing, so to speak, by contracting with rights defense agencies. Unlike in democracy where the benefits of casting an informed vote are extremely low because your vote has an infinitely small probability of making a difference, under market anarchy the rights defense agency you chose to contract with has immediate and certain impacts upon your life, thus creating a much larger incentive to cast an informed (metaphorical) vote by choosing to purchase the services of a preferred rights defense agency.

Deliberation about legal policy is far more likely to be more reasoned in market anarchy than in democracy. First, because market anarchism is more radically experimental than political democracy. Freedom of speech and of thought in democracy is often likened to a metaphorical “marketplace of ideas,” but in market anarchy it is a literal marketplace in which the ideas are not chosen just by speculation and public deliberation, but actually experimented with and acted upon in practice. Democracy is only “experimental” in a priori public deliberation about policies, but market anarchy is “experimental” in actually applying those policies and assessing their results a posteriori. Under democracy, once a policy is chosen it becomes difficult to assess counterfactually if another potential policy could have yielded better results, thus it is difficult to ascertain which was the superior policy. It is as if scientists in a lab simply talked about the hypothetical results of various hypothetical experiments and chose theories based on their discussions rather than actually testing the theories by actually running the experiments. Because of the polycentric nature of law under market anarchy, multiple policies are taken on at the same time, making it easier to tell which is more desirable in practice rather than simple theoretical deliberation.

Another reason why political deliberation is more likely to be reasoned in market anarchy than democracy is because of the institutional mechanisms for choosing policy. The main way law is “made” in democracy is through legislation voted on by representatives, who are ultimately accountable to the public through general elections. Often, debate on the floor of legislative bodies is anything but reasoned and deliberative, and clearly discussion about elections quickly devolves into mindless partisan bickering, sensationalist “scandals,” and populist rhetorical flair rather than reasoned discussion about policies. In market anarchy, however, law is “discovered” by private arbitrators and judges who are ultimately accountable to the defense firm’s consumers in the marketplace. It is pretty clear that real-world courtrooms tend to have a more elevated level of dialogue than legislative bodies, to say less of public elections, and I fail to see why this would not be the case under market anarchism.

Further, there wouldn’t be a need for partisan bickering and debates that bring down the level of public discourse in market anarchy, for similar reasons why there isn’t nearly as nasty debates about preferences for consumer goods as there are about politics. To use an analogy, in democracy, if we’re voting on what soda to consume, whoever wins the vote gets a monopoly on their preferred soda; so my preference for Coke could possibly eliminate your ability to enjoy Pepsi; but in a market, if I prefer Coke you still can drink Pepsi, meaning we don’t need to bicker about our consumer preferences. It is similar (though clearly not identical because when we’re talking about law it’s quite a bit more consequential) with legal policies: in democracy, if I prefer one set of legal rules to another which you prefer, we must fight over how to vote because the two are mutually exclusive; but in market anarchy, because law is polycentric and not monolithic, they are not mutually exclusive so we don’t need to fight nearly as hard for it. There’s a good reason why debates among consumers for products they prefer (Coke v. Pepsi, Apple v. Windows, Android v. iPhone) rarely get as nasty as debates in democratic politics, because there is room for disagreement at the end of the day in a market that there is not in politics.

Conclusion

Clearly, democracy is far from the ideal method of political organization. As classical liberals throughout history have shown, despite the fact that it may be possible to other political forms such as oligarchy and monarchy, it has a tendency towards the tyranny of the majority and massive collective action problems. However, the philosophical aspirations of the most ardent defenders of democracy are still extremely valuable, even if their preferred institutions fail to deliver. Market anarchism is a reasonable synthesis of these two insights; it has the potential to live up to the aspirations of pragmatist democrats without the major, systemic problems of real working democracies that undermine those aspirations.

John Dewey once said “democratic institutions are no guarantee for the existence no guarantee for the existence of democratic individuals,” what is needed is a better set of institutions that have a higher probability to cultivate Dewey’s idea of “democratic individuals.” Market anarchism appears to be a viable candidate for such a set of institutions.

Libertarians and Pragmatists on Democracy Part 3: Pragmatists on Democracy as a Way of Life

Zachary Woodman Economics, History, Liberty, Philosophy , , , , , , , , , , , , ,

eNote: This is part of a series on democracy. It is assumed the reader is familiar with part one, defining democracy, and part two, summarizing classical liberal perspectives on democracy. In this section, we’ll analyze how pragmatists conceive of democracy as a broader philosophy. The final post will argue that a dialectical synthesis of libertarianism and pragmatism on democracy will yield an argument in favor of market anarchy.

As classical liberals have pointed out throughout history, particularly in since the mid-nineteenth century, democracy as a system of political decision-making can be extremely dangerous to individual liberty and social prosperity. It could lead to tyranny of the majority, it may be characterized in practice as the rule of the ignorant and irrational and yield awful policy, and it leads to a reification of the state as the just “voice of the people” which can cause further tyranny. For these reasons, there is a very strong argument from moving away from constitutions which rely primarily on democratic means for decision making for the protection of individual liberty. The natural question is: what is our current democratic regime to be replaced with?

To answer this question, perhaps it is worth examining what is admirable in democracy. Thus far, I have mostly been referring to democracy in the second sense mentioned in the introductory section (henceforth referred to, for want of a better term, political democracy), as a means of political decision making. However, there is also the fourth sense which, although related, is distinct from political democracy which may be called philosophical democracy. To further explore this meaning of democracy, and perhaps give an answer to the aforementioned question, it is worth engaging with the thought of some of the most strident defenders of democracy: the American pragmatists.

Pragmatists on Philosophical Democracy

The writings of John Dewey and Sidney Hook are exemplars of philosophical democracy (though certainly others in this tradition are as well). Dewey, in his 1888 essay “The Ethics of Democracy,” specifically argues against Henry Maine’s view that “democracy is only a form of government.” Dewey explicitly defines democracy as a much broader “way of life,” as he says in his 1937 work “Democracy and Education:”

Democracy is much broader than a special political form, a method of conducting government, of making laws, and carrying on government administration by means of popular suffrage and elected officials. It is that, of course. But it is something broader and deeper than that. The political and governmental phase of democracy is a means, the best means so far found, for realizing ends that lie in the wide domain of human relationships and the development of human personality. It is, as we often say, though perhaps without appreciating all that is involved in the saying, a way of life, social and individual. The keynote of democracy as a way of life may be expressed, it seems to me, as the necessity for the participation of every mature human being in the formation of the values that regulate the living of men together: which is necessary from the standpoint of both the general social welfare and the development of human beings as individuals.

Indeed, Dewey’s emphasis on how democracy allows for participation in the formation of social values is a common thread throughout his entire political philosophy. In his earlier days, he was deeply influenced by the Hegelian notion of society as a “social organism” (although, in his later work he became a bit more cautious about the collectivist and possible authoritarian implications of this doctrine; see his 1939 essay “I Believe”). In 1888, he argued that democracy, by allowing participation of all, “approaches most nearly the ideal of all social organization; that in which the individual and society are organic to each other.” He explains:

In every other form of government there are individuals who are not organs of the common will, who are outside of the political society in which they live and are, in effect, aliens to that which should be their own commonwealth. Not participating in the expression of the common will, they do not embody themselves. Having no share in society, society has none in them.

…The government is not made up of those who hold office, or who sit in the legislature. It consists of every member of political society. And this is true of democracy, not less, but more, than of other forms. The democratic formula that government derives its powers from the consent of the governed…means that in democracy, at all events, the governors and the governed are not two classes, but two aspects of the same fact—the fact of the possession of a unified and articulate will.

Thus, Dewey argues that “Democracy, in a word, is a social, that is to say, an ethical conception, and upon its ethical significance is based its significance as governmental.”

Dewey expands upon the sense in which Democracy is an “ethical conception” in his much later work “Creative Democracy: The Task Before Us,” in which he characterizes democracy as a “personal way of individual life” (his emphasis). In this sense, democracy is not only to be found in institutions but in “free gatherings of neighbors on the street corner to discuss back and forth what is read in uncensored news of the day, and in gathering of friends in living rooms of houses and apartments to converse freely with one another.”

The sense in which democracy is a personal way of life is characterized by what Dewey calls the “democratic faith.” There are two elements to this democratic faith, one is faith in “the possibilities of human nature.” That is, faith that “every human being, independent of the quality or range of his personal endowment, has the right to equal opportunity with every other person for the development of whatever gift he has.” Second, is a “faith in the capacity for human beings for intelligent judgment and action if proper conditions are fostered.” These two faiths combine to make democracy an overarching philosophy that characterized by “belief in the ability of human experience to generate the aims and methods by which further experience will grow in ordered richness.” It can be seen, then, how these faiths may be found in not so much the political institution of democracy but in every day deliberative discussion and face-to-face encounters like neighbors and friends discussing news.

Sidney Hook in his 1938 essay “The Democratic Way of Life” further expands on the ethical character of democracy as a personal way of life. He argues that there are “three related values which are central to democracy as a way of life.” Those are the “belief that every individual should be regarded as possessing intrinsic worth or dignity,” the “belief in the value of difference, variety and uniqueness,” and, to mediate between such values, a belief in “the method of intelligence, of critical scientific inquiry.”

In regards to that last value, it could be said that for Dewey and Hook participatory democracy is not only a “way of life” or an “ethic,” but also a social epistemology. He argues in “Democracy and Education” that, although intelligence is unevenly distributed among individuals, “it is the democratic faith that it is sufficiently general so that each individual has something to contribute and value of each contribution can be assessed only as it enters into the final pooled intelligence constituted by the contributions of all.” He says in Liberalism and Social Action that rapid changes in society “have to be directed” and “controlled that it will move in some end in accordance with the principles of life, since life itself is development.” For Dewey, taking advantage of the dispersed intelligence through the democratic process is essentially the application of the scientific method to political problems. Indeed, the idea of democratic experimentalism comes to the forefront in this philosophical conception of democracy precisely because of Dewey’s epistemological commitments to the scientific method.

Thus, democracy in this pragmatist sense is a personal philosophy and social epistemology that accepts scientific deliberation, humanism, and pluralism as necessary conditions for growth of individuals and society as a whole.

Dewey on Political Democracy

Of course, the pragmatists not only conceived of democracy as a way of life but defended democratic institutions. What is striking about this is how Dewey characterizes political democracy as a means to the aspirations of philosophical democracy rather than an end itself. Indeed, he writes in “Democracy and Administration” that the institutions of political democracy “are not a final end and a final value. They are to be judged on the basis of their contribution to end.” The end here, of course, is the extent to which it allows individuals to participate in the formation of social values and the defense of liberty necessary for such participation.

Recall that in The Constitution of Liberty Hayek also conceived of political democracy as an end, and there is a striking similarity between Dewey and Hayek on this point. One may be tempted to say that the ends they are seeking are entirely different as Hayek is seeking individual liberty. However, this is not necessarily the case, as Dewey argued in Liberalism and Social Action that the end of liberalism is “a social organization that will make possible the effective liberty and opportunity for personal growth in mind and spirit of all individuals.”

To be sure, Dewey’s and Hayek’s conceptions of what constitutes liberty are very different: Hayek specifically cites Dewey as conceptually confusing “power” with “liberty” for accepting a positive rather than negative conception of liberty. For Hayek, liberty simply means “the absence of coercion.” For Dewey, liberty means “the liberation of individuals so that realization of their capacities may be the law of their life.” However, what at first seems to be two contradictory beliefs in liberty are not necessarily contradictory. One may say, with Dewey, that positive liberties are necessary so that individuals may grow in mind and spirit and participate in the formation of social values, but agree with Hayek that a necessary prerequisite for such liberties is absence of coercion. Indeed, this defense of negative liberty for the sake of positive liberty is precisely the stance many modern neoclassical liberals take, most notably Jason Brennan and David Schmidt. Thus, Dewey’s and Hayek’s views on democracy as a means to the end of liberty are quite possibly complementary. (This is not to be confused with claiming they really said the same thing, which they clearly did not.)

Dewey defends democracy as the most effective means to this end on the basis that “no man or limited set of men is [sic] wise enough or good enough to rule others without their consent[.]” Political democracy is understood by the pragmatists, as Sidney Hook says, to be a society “where the government rests upon the freely given consent of the governed.” This consent (which Hook acknowledges is not in complete existence in reality) is given through voting.


Criticisms of the Pragmatist Incorporation of Political Democracy

The pragmatist conception of philosophical democracy is certainly admirable from a classical liberal standpoint. Its emphasis on dispersed knowledge, its call for liberal tolerance of diversity, its humanistic respect for the dignity of every individual, and its use of a broadly scientific (though not scientistic) approach to social issues are all well in line with classical liberalism’s goals. However, clearly the incorporation of political democracy as the political ideal by the pragmatists would irk many classical liberals and especially modern libertarians. In fact, I would argue that political democracy in practice is somewhat antithetical to the philosophical aspirations of the pragmatists.

There are four ways in which political democracy undermines the aspirations of philosophical democracy. First, in no meaningful sense could it be said that political democracy has the consent of the governed. Second, political democracy in practice is in no meaningful sense actually an application of intelligence and the scientific method to political issues in practice. Third, the centralization of political authority and planning in democracies undermines Dewey’s point that intelligence is distributed throughout society (particularly in his extremely interventionist views on economics). Finally, the democratic process undermines the mutual respect of individual human dignity philosophical democracy exalts.

Both Dewey and Hook argue that political democracy’s legitimacy and its epistemic superiority rest on its ability to take the freely given consent of the governed through the electoral process. Dewey is, at best, vague on what this means, but Hook is a bit more explicit in “The Democratic Way of Life:”

In saying that government rests upon the “consent” of the governed, it is meant that at certain fixed periods its policies are submitted to the governed for approval or disapproval. By “freely given” consent of the governed is meant that no coercion, direct or indirect, is brought to bear upon the governed to elicit their approval or disapproval. A government that “rests upon” the freely given consent of the governed is one that in fact abides by the expression of this approval or disapproval.

Hook gives three conditions of how this consent must be reached. First, the method of giving consent must not be obstructed (in this case, free elections without coerced voting). Second, there can be no economic threats to political dissenters, so the economic policy must be controlled through political means. Third, there can be no monopoly in education or the press. I argue, though the third may be reached in political democracy, the first two are nearly impossible to be achieved in political democracies.

On the first point, it is highly dubious that voting is truly a method of consent in the first place. Michael Huemer in The Problem of Political Authority identifies three arguments that are typically given to claim democracy has the consent of the governed. First, “naïve majoritarianism,” which believes that if all vote or have the opportunity to vote in an election the majority has just authority to govern as they please. Second, deliberative democracy, which holds that if participants can publicly reason about their proposals, have an equal voice, and a consensus can be aimed at, the resulting consensus or majority vote is just. Third, equality from authority which holds that treating others as equals means we must respect democratic decisions. Though neither Hook nor Dewey explicitly explain why they think a vote constitutes consent, it is safe to say that their beliefs fall somewhere between naïve majoritarianism and deliberative democracy, thus it is worth rehashing Huemer’s arguments against those views. (The equality argument is mostly irrelevant for present purposes.)

Against naïve majoritarianism, Huemer asks us what if such a principle were applied to everyday situations through a thought experiment of a number of friends trying to decide who pays for the tab in bar. Imagine that, against your wishes, everyone among your friends says they should take a vote on who should pay for the bar tab, and they happen to choose you. Are you morally obligated to pay the tab? Do your friends have the right to forcibly take your money away from you and pay the tab? Our intuition says no and that this isn’t really consensual, so why, Huemer asks us, is it any different with political institutions?

The more interesting argument Huemer takes up is Joshua Cohen’s conception of deliberative democracy, which certainly bears some similarity to the pragmatists. Huemer characterizes Cohen’s notion of deliberative democracy as bearing the following features:

  1. Participants take their deliberation to be capable of determining action and to be unconstrained by any prior norms
  2. Participants offer reasons for their proposals, with the (correct) expectation that those reasons alone will determine the fate of the proposals.
  3. Each participant has an equal voice.
  4. The deliberation aims at consensus, however if consensus is not achieved, it is decided by voting.

First of all, as Huemer notes, there is little reason why deliberation in democratic institutions should legitimize the claim that participants have consented to the results. If we return to the bar tab example, imagine if we just added the stipulation that before the vote was taken everyone gives you reasons and arguments about why you should pay the tab, fail to convince you, and still vote that you pay for it. Nothing changes in terms of your consent to their taking your money. Indeed, the fact that government coercion involves deliberation is irrelevant to whether that coercion was consented to.

However, there is a second reason why the argument for political authority from deliberative democracy fails, and this brings me to my second argument against the application of political democracy for the ends of pragmatist philosophical democracy. Dewey and Hook, as well as Cohen, act as if democratic discourse is actually deliberative as if reasons are actually given, as if everyone participates in the process. Dewey likens this process to the scientific method, holding that it is the “intelligence” that can control and direct changes in society.

This is decidedly not the case in any actual modern democracy. As public choice theorists note, the incentives facing voters is not to apply their intelligence and knowledge to voting, they instead vote as rationally ignorant. Further, contrary to Dewey’s democratic faith in the ability of people to make good decisions voting, they are systemically biased and irrational, as Bryan Caplan argued in The Myth of the Rational Voter. The result is not the controlled, experimental, scientific deliberation and discourse the pragmatists describe, but rule of an ignorant, irrational majority. How one can look at the cacophonic caterwauling in political discourse, the superficial pomp and circumstance of the electoral process, the irrational partisanship that low-information ideological voters possess, and the sensationalism of media coverage and call it “deliberative” or “intelligent” in any sense is quite beyond me. It seems that democracy is more like cheap pornography than science and deliberation, deliberative democracy and intelligence in the scientific method of actual democratic institutions is a myth.

Further, the idea that everyone has an equal say in any existing democracy is, at best, absurd. A fraction of the population votes and their votes are controlled by an even smaller fraction of the population in the press, policy research, and who controls campaign ads. The actual policies are not controlled by elections, but by backroom deals and bureaucracies in modern democracies. As public choice theory teaches us, this makes policy in democracy the whim of special interests who contribute to the politician’s campaigns, who engage in rent-seeking and regulatory capture, not the majority and this certainly undermines the idea that anyone has an equal say in political democracies.

Hook has another condition of consent for political democracies, that there is no indirect economic coercion. He elaborates on this point:

There are less obvious but no less effective ways of coercively influencing the expression of consent. A threat, for example, to deprived the governed of their jobs or means of livelihood, by a group which has the power to do so, would undermine a democracy even if its name were retained. In fact, every overt form of economic pressure, since it is experienced directly by the individual and since so many other phases of his life are dependent upon economic security, is an overt challenge to democracy…Where it cannot influence the expression of consent, it may subvert or prevent its execution. This is particularly true in modern social instruments of production, necessary for the livelihood of many, are privately own by the few…Genuine political democracy, therefore, entails the right of the governed, through their representatives, to control economic policy.

My strong disagreement with Hook here brings me to my third point, that political democracy’s tendencies towards centralization are antithetical to Hook and Dewey’s arguments that philosophical democracy acknowledges and takes advantage of the dispersed intelligence among individuals. Anyone schooled in public choice theory immediately sees the problem with Hook’s analysis that government policy controlling economics is necessary to reduce indirect economic coercion. As the concept of “concentrated benefits, dispersed cost” shows, the reality is that when policy is controlled by the government in democracies a select few special interests have the incentive to use government policy to their ends at the expense of the public good. In other words, what Hook calls “economic democracy” is undemocratic in every way due to the public choice problems embedded in the democratic process for selecting economic policy. Further, Hook’s point about unequal distribution of wealth needing to be subverted by state intervention is far off the mark; that exact state intervention is what causes such centralization of wealth in the first place.

But this brings me to my broader point about how political democracy is inconsistent with Dewey’s assertion that “it is the democratic faith that it is sufficiently general so that each individual has something to contribute and value of each contribution can be assessed only as it enters into the final pooled intelligence constituted by the contributions of all[.]” Political democracy has resulted in the centralization of decision making into ever larger governments by an increasingly elite group of bureaucrats, politicians, and special interests. This is not taking advantage of the intelligent contributions of each individual.

Further, Dewey’s general views on economic policy and favoring for big government that were bordering on socialism at times and were definitely in favor of progressive state intervention, are at odds with his broader epistemic commitments which are closely linked to philosophical democracy. This may be seen by directly comparing Dewey on these points with Hayek.

In a great paper entitled “Hayek’s Challenge to Dewey,” Alan Reynolds points out that both Hayek and Dewey have very similar epistemic views and both derive their political views from their respective epistemologies. However, Hayek’s and Dewey’s respective visions of liberalism are very different. Hayek counts himself in the old classical liberal tradition which seeks limited government to maximize individual negative liberty, while Dewey, despite acknowledging this older liberalism’s success at progress in the past, sees classical liberalism as an obstacle in Liberalism and Social Action and says it should be replaced with a “renascent liberalism” that embraces large government policies to guarantee positive liberties.

Yet, as Reynolds notes, both Hayek and Dewey have similar epistemologies, and his analysis is worth quoting at length on this point:

Dewey constantly argues that the philosophical tradition, starting with Plato but achieving its sharpest articulation with Descartes, portrayed humans as fundamentally rational beings, whose rationality has a single universal structure and is capable of detaching itself from experience to grasp universal truths.  Dewey instead puts forward a radically different view, in which knowledge is fallible, limited, social, embodied, and contextual.  He argues against the “old notion that intelligence is a ready-made possession of individuals.”   This view is a “purely individualistic notion of intelligence” that fails to recognize the social character of intelligence.   Knowledge, for Dewey, is not primarily acquired and developed in detachment from social interactions, but is embodied in them.  We live “in an environment in which the cumulative intelligence of a multitude of cooperating individuals is embodied.”   This means that knowledge is much broader than the articulation of it found in the philosophical tradition.  Dewey’s conception of knowledge, according to Posner, “includes tacit (‘how to’) knowledge as well as the articulate knowledge acquired by formal reasoning and systematic empirical methods, for both are useful.”   Knowledge is not confined to the articulate and explicit, but includes the knowledge weaved into the emotions, common sense, know-how, and intuition.   This broader sense of knowledge is not reducible to the articulate and explicit.

…Hayek’s vision of epistemology similarly deflates the pretensions of human rationality and broadens out our notion of knowledge to include those practical aspects of our know-how that remains unthematized (and possibly unthematizable).  Hayek offers a distinction between two opposing conceptions of “the place which reason plays in human affairs.”   There is the Enlightenment (and specifically Cartesian) view that “assumes that Reason, with a capital R, is always fully and equally available to all humans and that everything which man achieves is the direct result of, and therefore subject to, the control of individual reason.”   In contrast to this rationalist epistemology, he offers what he refers to as his evolutionist, “antirationalist approach,” which “regards man not as a highly rational and intelligent but as a very irrational and fallible being, whose individual errors are corrected only the course of a social process, and which aims at making the best of a very imperfect material.”   Human reason is able to provide the on-the-ground knowledge that helps to navigate particular contexts and situations – and this knowledge will be overwhelmingly what we might call “practical knowledge,” or know-how, which is not easy to formalize into know-that type information.  It is false (and potentially dangerous) to view humans as beings that are specially equipped to access universal truth via universal reason; contrarily, we are creatures that can navigate certain kinds of situations via practical problem-solving.  A great deal of this knowledge is “tacit, inarticulable, and therefore uncommunicable.”   In this view, “man has achieved what he has in spite of the fact that he is only partly guided by reason, and that his individual reason is very limited and imperfect.”   This rejection of Cartesian-inspired rationalism, and defense of an anti-rationalistic, fallibilist epistemology, is central to Hayek’s picture of the individual and the limits of knowledge.

Unlike Dewey, Hayek continually applies this critique of a hyper-inflated view of reason to government policy where Dewey stops short. Hayek’s point that our knowledge is inarticulate, incomplete, and fallible means that no man or group of men possess the knowledge to design an economy. Instead, we must rely on the decentralized decision making of the price system, on the spontaneous order of markets to allocate resources. Any attempts to design, plan, or control an economy are destined to fail due to this fundamental knowledge problem so closely linked to Hayek’s critique of Enlightenment rationalism that Dewey shares. Reynolds comments:

This assumption that socialist planning is possible and desirable relies, I argue, on the following moves on Dewey’s part: (1) Dewey throws out bad Enlightenment “Reason” and puts in its place the notion of “intelligence;” and (2) although “intelligence” does not harbor the pretenses of coming into contact with absolute truth like “Reason” does, it is still powerful enough to be capable of successfully planning and guiding the economy.  While Hayek joins Dewey in step (1) (deflating the pretensions of Reason), Hayek would rightly be concerned with step (2).  For Hayek, the shift from Enlightenment “Reason” to fallible “intelligence” should make us far more skeptical about the possibility and desirability of economic planning.  If Deweyans took Hayek seriously, they might find themselves in agreement with Richard Rorty when he asks the Left to “stop talking about the ‘anticapitalist struggle,’” and content itself with “sticking to small experimental ways of alleviating misery and overcoming injustice.”

It is a little strange, however, that Dewey failed to anticipate this Hayekian challenge. He does acknowledge in Liberalism and Social Action does acknowledge the very Hayekian point that “society in general is served by the unplanned coincidence of the consequences of a vast multitude of efforts put forth by individuals without reference to any social end” as a “new formulation” in classical liberalism. Further, his criticisms of aristocracy and the progressive tendency to over-rely on technocratic experts for government administration come close to Hayekian knowledge problem critiques of socialism at times. However, Dewey’s excessive focus on the historical abuses of early industrial state capitalism blinded him to the potential for markets to be a spectacular coordinating mechanism.

Getting off the topic of economics and back to democracy, it is clear that political democracy’s tendency to centralize everything and apply a one-size-fits-all approach to social problems based off of majority rule are at odds with the social epistemology of Deweyan philosophical democracy.

The final reason why political democracy fails to meet the end of philosophical democracy is it undermines the democratic faith in the dignity of humans, and deliberative discussion and hermeneutical openness to opposing opinions necessary for such a faith. Turn on cable news while covering a political issue or read the comments of the majority of internet political forums and you’ll be hard-pressed to find any examples of people respecting the dignity of “the other side.” Indeed, Jonathan Haidt notes in The Righteous Mind that political discussion tends to go ugly do to the way our minds process morality. Michael Huemer notes just how irrational political discourse in modern democracies can so often get. This bodes ill for any political project that seeks to use outright public debate (as opposed to dialogue) to be “deliberative,” especially pragmatist democracy.

Yet there’s another sense in which modern political democracy completely undermines the dignity of the human person. Modern democracies lead to a false identification of the state with “the will of the people,” a false identification Dewey himself bought in his earlier writings though repudiated after the rise of totalitarianism. Any individual who goes against the state, then, is going against “the people,” all of humanity. Often times, these people are written off with such labels as “unpatriotic,” “irrational,” “anti-democratic” (in the first sense as a meaningless insult) and the sort. That seems completely contrary to respecting the dignity of each individual, and to openness in dialogue and deliberation with other opinions that Dewey wants to embrace.

As we have seen, on almost every aspect political democracy fails to deliver the promises of philosophical democracy extolled by the pragmatists. Dewey himself did acknowledge in a later essay entitled “I Believe” that “democratic institutions are no guarantee for the existence no guarantee for the existence of democratic individuals.” Further, he insists that democratic institutions are a means to the philosophical ends and “are to be judged on the basis of their contribution to end[.]” It seems that it is not inconsistent, in light of recent evidence from public choice theory and experience, to oppose political democracy from a pragmatist perspective yet still embrace Dewey’s broadly “democratic” philosophical commitments.

Of course, Dewey would reject completely separating the means of democracy from the intended ends. As he wrote in an essay called “Democracy is Radical,” “The fundamental principle of democracy is that the ends of freedom and individuality for all can be attained only by the means that accord with those ends.” Further, he was immensely critical of Trotsky and revolutionary radicals for their attitude that the means justify the ends.

What is needed, then, is an alternative set of political institutions to democracy that can approximate the pragmatist philosophical aspirations of humanism, pluralism, open dialogue and serious scientific inquiry that are also consistent with individuality and liberty. In the next post, I will argue that this set of institutions can likely be found in market anarchism with a polycentric legal system.

Libertarians and Pragmatists on Democracy Part 2: Classical Liberal and Libertarian Criticisms of Democratic Institutions

Zachary Woodman Economics, History, Liberty, Philosophy , , , , , , , , , , , , , , , , ,

Note: This is part of a series on democracy. It is assumed the reader is familiar with part one prior to reading, in which the basic direction of this series is introduced and democracy is more concretely defined. This post is meant to do be a non-comprehensive, though fairly inclusive, look at a variety of views of democracy in classical liberal thought. The next post will survey progressive and pragmatist views of democracy, and the final post will argue that the truth in classical liberalism and pragmatism perspectives on democracy lead to a defense of market anarchy.

As alluded to in the introduction to this series, democracy has occupied a tricky place in the history of classical liberal thought. Despite the fact that the prevalence of democratic institutions in the West is at least partially a result of the influence of classical liberalism (in fact, I’d argue classical liberalisms’ role has been extremely significant in this regard), classical liberals have always been at best ambivalent to democracy. In recent years, libertarians have been critical and outright hostile towards democracy. For this reason, I’d argue that classical liberalism is, on net, critical of democracy, and there is a lot to learn from these criticisms. As a matter of housekeeping, it is important to note that I am using the term “democracy” in the second sense—as a system of political decision making—through most of this section unless otherwise noted.

Early Liberalism’s Cautious Enthusiasm for Democracy

At classical liberalism’s conception, democracy was in many ways the end-goal. No doubt, most classical liberals of the Enlightenment preferred democracy to the absolutist monarchism that had dominated Europe in their times. John Locke’s entire political project can be read as a criticism of absolutism, and he tended to more democratic views. In his Second Treatise on Government “democracy” is only mentioned twice by name in Chapter 10, mostly to define it in contrast to oligarchy and monarchy. However, throughout Locke there is a tendency to emphasize what we today would call “popular sovereignty”—a concept which strikes at the heart of the appeal of democracy. As Peter Laslett writes in his introduction to the Cambridge edition of Locke’s Two Treatises:

In his analysis of politics in terms of force as well as in rightful authority Locke is closer to the thought of our own day on the subject of sovereignty than the assumptions of his own time. Behind the superior power of the legislative in his system there is always to be seen the finally supreme, all-important power of the people themselves, again conceived of as a force, though justified once more by the concept of trust. It was a power which would only rarely display itself, and, as we have tried to show, there is considerable obscurity about the actual circumstances in which it could come to action and more about what it might achieve. Nevertheless, this residual power must be called Locke’s idea of what we now think of as popular sovereignty.

Drawing off of Locke, the American founders; inherited a skepticism towards absolutism and a little bit of faith in popular sovereignty. Of course, there is a slight difference in the founders’ conception of popular sovereignty and Locke’s in that it is far more individualist; in fact, it might be more accurate to say the founders did not so much believe in popular sovereignty as individual self-governance, but there is still an affinity between Locke and most of the founders’ on this point. Contra most west coast Straussians (ahem, Tom West and Harry Jaffa), it is important to note that the founders’ were influenced by much more than the classical liberal philosophy of John Locke. They, particularly John Madison, John Dickinson, and most of the early federalists, were just as influenced (if not more-so) by classical Greek and Roman political philosophy and the style of old whig conservatism of Burke and his contemporaries as classical liberalism. This can be illustrated in their perspective on democracy.

Though certainly wary of democracy’s dangers, most of the founders overall could still be described as democratic in some sense of the term. Of course, this point must be nuanced with the founders’ healthy criticisms of democracy influenced by classical liberal thought, whiggish conservatism, and Aristotelianism. Maddison is probably the most frequently cited example of an American founder who waxed pessimistic about democracy, given his writings on the “problem of factions” in Federalist No. 10. To be sure, most of the founders, as Ben Franklin famously said at the end of the constitutional convention, would have probably preferred the term “republic” to “democracy.”

Because of Madison’s Federalist No. 10 and a variety of quotes that were harshly critical democracy from the founders (many of which are false), a number of right-wingers today, particularly populist and nationalistic constitutional conservatives, argue that the founders were not democratic at all and are adverse to anything that refers to America as a “democracy.” To be sure, America is not a pure democracy, however there is little doubt that the founders still had at least some affinity for democracy, particularly in contrast to absolutist monarchy, with the possible exception of Hamilton sometimes (I would also argue that Hamilton was the least classically liberal of the founders and is largely my least favorite founder, but that’s another issue).

Further,  it is obvious the constitution incorporated democratic decision-making far more than any other of that time; in fact, the preamble beginning with “We the People” screams of the democratic, Lockean notion of popular sovereignty. Further, there is little doubt that even the America of the founders can be described as “democratic” at least in the third sense of the term (as a general term for modern Western governments).

Finally, some of the founders were pretty avidly pro-democratic, particularly Thomas Jefferson. As Jefferson wrote to John Taylor:

It must be acknowledged that the term “republic” is of very vague application in every language… Were I to assign to this term a precise and definite idea, I would say purely and simply it means a government by its citizens in mass, acting directly and personally according to rules established by the majority; and that every other government is more or less republican in proportion as it has in its composition more or less of this ingredient of direct action of the citizens.

Note how Jefferson’s definition of a “republic” is virtually indistinguishable from the way democracy is typically defined (in the second sense). Of course, Jefferson, especially in his later years in his later years was skeptical about the workability of this democratic/republican vision, writing “[s]uch a government is evidently restrained to very narrow limits of space and population. I doubt if it would be practicable beyond the extent of a New England township.” Nonetheless, it’s hard to consider Jefferson anti-democratic, especially in his younger years, when the notion of Jeffersonian democracy has been so influential in the history of American politics or if one considers Jefferson’s excuberance for the much more populist French Revolution prior to the Reign of Terror.

The Decline of Democracy in Classical Liberal Thought

After the founder’s era, however, experience with real-world democratic institutions began to contrast sharply with the theoretical hopes Enlightenment-era liberals had for democracy. The Jacobin reign of terror and aftermath of the French Revolution were sobering reminders of the dangers of the tyranny of the majority. As Edmund Burke wrote in Further Reflections of the French Revolution “such a Democracy is a thing which cannot subsist by itself” and the specter of Robespierre led Burke to continually warn of mob-rule and the excesses of democracy. In America, the extremely low level of decorum in early elections (particularly in 1800 between Jefferson and Adams) must have made the more aristocratic and conservative of the founders (the likes of Washington, Hamilton, and John Dickinson) fearful of the direction in which their experiment was going.

By the Jacksonian era, it is safe to say that most classical liberal observers were waxing a bit more pessimistic on the prospects of democracy than their intellectual ancestors. The rise of a populist president in Andrew Jackson who had committed so many acts of tyranny against the Native Americans, the democratization of religious faith by the likes of Lorenzo Dow in the Second Great Awakening, and the growing of democracy into almost a political religion were signals of a disturbing trend to many of the surviving founders and European liberals like Mill and de Tocqueville. In fact, Jefferson even said of Jackson, in an interview with Daniel Webster:

I feel much alarmed at the prospect of seeing General Jackson President.  He is one of the most unfit men I know of for such a place.  He has had very little respect for laws and constitutions, and is, in fact, an able military chief.  His passions are terrible.  When I was President of the Senate, he was Senator; and he could never speak on account of the rashness of his feelings.  I have seen him attempt it repeatedly, and as often choke with rage.  His passions are, no doubt, cooler now; he has been much tried since I knew him, but he is a dangerous man.

No doubt, Jefferson’s critique of Jackson’s inability to control his passions mirror Plato’s critique of the “democratic soul” in the Republic.

However, it wasn’t until Alexis de Tocqueville’s famous Democracy in America that the classical liberal view of democracy truly turned critical. De Tocqueville saw democracy’s influence in America as resulting in the decline of an aristocratic class that “furnished the best leaders of the American revolution.” Socioeconomic egalitarianism was far from the worst of democracy’s problems in de Tocqueville’s eyes. He saw the concept of popular sovereignty as leading to “unlimited power of the majority” that was corroding the checks and balances of the American constitution in every branch of government. Indeed, there has perhaps never been as eloquent a critic of “tyranny of the majority” as de Tocqueville.

In England, JS Mill also was beginning to see the dangers of excessive democracy. Much of On Liberty can be read as building on and responding to de Tocqueville. For example, his warnings against the tyranny of majority opinion in the first chapter of On Liberty echo de Tocqueville’s concerns and are worth quoting at length (also, note how much of this anticipates much of the later insights of the Virginia School of Political Economy):

The notion, that the people have no need to limit their power over themselves, might seem axiomatic, when popular government was a thing only dreamed about, or read of as having existed at some distant period of the past. Neither was that notion necessarily disturbed by such temporary aberrations as those of the French Revolution….In time, however, a democratic republic came to occupy a large portion of the earth’s surface, and made itself felt as one of the most powerful members of the community of nations; and elective and responsible government became the subject of the observations and criticisms which wait upon a great existing fact. It was now perceived that such phrases as “self-government” and “the power of the people over themselves” do not express the true state of the case. The “people” who exercise the power are not always the same people with those over whom it is exercised; and the “self-government” spoken of is not the government of each by himself, but of each by all the rest. The will of the people, moreover, practically means, the will of the most numerous or the most active part of the people; the majority, or those who succeed in making themselves accepted as the majority: the people, consequently, may desire to oppress a part of their number; and precautions are as much needed against this as against any other abuse of power. The limitation, therefore, of the power of government over individuals, loses none of its importance when the holders of power are regularly accountable to the community, that is, to the strongest party therein.

…Like other tyrannies, the tyranny of the majority was at first, and is still vulgarly, held in dread, chiefly as operating through the acts of public authorities. But reflecting persons perceived that when society is itself the tyranny—society, collectively, over the separate individuals who compose it—its means of tyrannizing are not restricted to the acts which it may do by the hands of its political functionaries….Protection, therefore, against the tyranny of the magistrate is not enough: there needs to be protection also against the tyranny of the prevailing opinion and feeling[.]

By the generation of liberals after Mill, the insight that democracy itself can turn into tyranny became influential on the continent as well. French liberals such as Bastiat and Germans such as Mises became critical of democratic institutions. Both Bastiat and Mises noted how democracies are ultimately controlled by public opinion which can, often times, be irrational. Bastiat took note of this in regards to protectionist economics writing, “Protectionism is too popular for its adherents to be regarded as insincere. If the majority had faith in free trade, we should have free trade.” Mises elaborated on Bastiat’s insights more writing in Human Action:

Democracy guarantees a system of government in accordance with the wishes and plans of the majority. But it cannot prevent majorities from falling victim to erroneous ideas and from adopting inappropriate policies which not only fail to realize the ends aimed at but result in disaster.

(Note: Bryan Caplan has a great, more detailed analysis of Bastiat and Mises’ criticisms of democracy, it is highly recommended.)

Most of these problems of the tyranny of the majority highlighted by de Tocqueville and Mill, as well as the issue of a completely misinformed public, seemed confirmed in World War II after the rise of fascism via the democratic process in Germany and Italy.

Public Choice Theory and Democracy’s Continued Decline

In the middle of the twentieth century, classical liberals became influenced by a field of study that seemed to confirm and deepen their worst fears of democracy. I’m referring, of course, to the public choice theory of the Virginia School of Political Economy associated with the likes of James Buchanan, Richard Wagner, and Gordon Tulloch. It is important to note at this point, of course, that public choice theory itself is not a part of classical liberalism as it is a positive scientific research program that simply applies economic analysis to the political process that has been contributed to by libertarians, conservatives, and liberals like rather than any sort of political ideology; however, many of the founders of Public Choice Theory were themselves classical liberals and there is little doubt that this style of economic thinking has had more influence on libertarianism than any other political philosophy.

The new public choice theory found that democracy could result not only in the potential tyranny of the majority, but also in horrible policies thanks to the accumulation of special interests (akin to Madison’s analysis of the problem of factions). The idea that voters are rationally ignorant, the insight that elected representatives do not act in the public interest but out of their own rational self-interest and those of their lobbyist friends, and a number of concepts from the short-sightedness effect to the Arrow’s impossibility theorem seemed to cast poor prospects on democracy’s ability to protect individual liberty. The fact that so many democracies were adopting horrible Keynesian economic policies, and the explanation that this is due to the self-interest of politicians, caused further doubt on the compatibility of free markets and democratic institutions. Later insights from public choice theory revealed that voters were not only ignorant but also systemically biased and irrational, as Bryan Caplan’s Myth of the Rational Voter argued, only added to this anxiety.

This is not to say, of course, that classical liberals since the mid-nineteenth century have been wholly opposed to democracy. Indeed, Mill, Bastiat, Mises, and most of the public choice economists continued to prefer representative democracy strongly limited by a well-designed (well, at least for Buchanan) constitution to alternative systems of political organization. Even Mises in Liberalism: In the Classical Tradition defended democracy on the following grounds:

In the long run, no government can maintain itself in power if it does not have public opinion behind it, i.e., if those governed are not convinced that government is good….There is, therefore, in every form of polity a means for making the government at least ultimately dependent on the will of the governed, viz., civil war, revolution, insurrection. But it is just this expedient that liberalism wants to avoid. There can be no lasting economic improvement if the peaceful course of affairs is continually interrupted by internal struggles…Here is where the social function of democracy finds its point of application. Democracy is that form of political constitution which makes possible the adaptation of the government to the wishes of the governed without violent struggles.

The attitude of FA Hayek in The Constitution of Liberty towards democracy is perhaps the most typical attitude of most classical liberals and libertarians since the days of de Tocqueville, and the majority of libertarians in mainstream political discourse today. Hayek defends a heavily limited concept of democracy as a means to the end of individual liberty; as the most efficient of current possible political constitutions to ensure the freedom of the individual. He echoes Mises in the fifth chapter entitled “Majority Rule” where he writes:

If democracy is a means rather than an end, its limits must be determined in the light of the purpose we want it to serve. There are three chief arguments by which democracy can be justified, each of which may be regarded as conclusive. The first is that, whenever it is necessary that one of several conflicting opinions should prevail and when one would have to be made to prevail by force if need be, it is less wasteful to determine which has the stronger support by counting numbers than by fighting. Democracy is the only method of peaceful change that man has yet discovered.

Modern Libertarianism’s Hostile Opposition to Democracy

Since Hayek penned those words in 1960, before many of the most depressing insights of public choice had risen to prominence, classical liberals and libertarians—particularly more radical anarchists—have grown even more skeptical of democracy and are, at times, outright hostile to it. Hayek himself in his next major work on political theory, Law, Legislation, and Liberty, waxed a bit more pessimistic on constitutional representative democracy than he did in The Constitution of Liberty. Just thirteen years after he spent over five-hundred pages defending and articulating liberal constitutionalism, he opens the introduction to the first volume of his next major work by declaring “The first attempt to secure individual liberty by constitutions has evidently failed.” Though he still proclaims the destruction of liberty that was running rampant in the immediate aftermath of World War II was “not a necessary consequence of democracy,” he laments the role democracy had played in recent politics:

If I am right, it would indeed seem that the particular form of representative government which now prevails in the Western world, and which many feel they must defend because they mistakenly regard it as the only possible form of democracy, has an inherent tendency to lead away from the ideals it was intended serve. It can hardly be denied that, since this type of democracy has come to be accepted, we have been moving away from that ideal of individual liberty of which it had been regarded as the surest safeguard, and are now drifting towards a system which nobody wanted.

In other corners of classical liberal thought, the prospects for democracy were even grimmer. This hostile attitude is perhaps best exemplified by Hans Herman Hoppe’s book Democracy: The God that Failed. Hoppe argues that democracy suffers from a problem akin to the tragedy of the commons; whereas medieval monarchies, aristocracies, and feuds had some sense of ownership over the state, democracies have no clear sense of ownership and so democratic representatives have little incentive to make good policies that protect liberty and economic prosperity.

Though Hoppe spends far too much of the book on anti-intellectual, abrasive, and, at times, bigoted (in the literal meaning of the term) polemics, there is some truth to his central insight and it certainly has a resonance with the public choice research on the short-sightedness effect. I doubt that Hoppe’s insights have the radical implications he draws of by necessity (mainly that monarchy is preferable to democracy); there might be a case to be made that pre-democratic institutions had lower taxes and better protection of property rights, on virtually every non-tax matters it is fairly obvious that such governments were far more tyrannical. Freedom of movement, which was so important to Mises in Liberalism and is among our most important of liberties, was non-existent in feudal Europe; indeed, serfs in many European manors were little more than slaves, pieces of property tied to their land, rather than sovereign, free individuals. Further, social freedom and freedom of religion were virtually non-existent in such polities; homosexuals were executed, Muslims and Jews were persecuted, and there were a number of other violations of human rights I doubt even Hoppe (in his implicit and occasionally explicit homophobia) would defend. (Of course, Hoppe would throw a fit because his argument is purely deductive and a priori whereas mine actually uses empirical evidence, but his simpleton, idiosyncratic, and laughably unintelligent economic methodology and epistemology is another topic.) I highly doubt even the most dogmatic Rothbardian Hoppe-lover would rather live in a medieval Europe feudal manor or monarchy than a modern democracy, despite their flashy polemics.

More recently, Michael Huemer has had criticisms of democracy’s morality in his book (which I highly recommend) The Problem of Political Authority. Heumer’s argument throughout the book is that all attempts to justify the legitimacy of government authority or to argue that there is any real consent between real-world governments and citizens fail, and a better form of government may be found in market anarchism. He notes how democracy has created a false identification of voting with actual consent that can morally legitimize government, and argues against all attempts to claim that citizens of democracies—real world or hypothetical—are under legitimate authority by virtue of the fact that they are living in a democracy. In another chapter, Huemer analyzes the problematic psychology of authority and how democracy contributes to the idolization of government.

Even more recently, Jason Brennan has a forthcoming book out that is perhaps more critical of democracy than any other classical liberal—save perhaps Hoppe—aptly titled Against Democracy. Brennan argues, like Huemer, that our relationship to democracy is non-consensual. In line with most public choice theory, he argues that democracy is truly the “rule of the irrational and the ignorant” and that democratic deliberation, voting, and electoral participation actually makes people worse, more biased, more irrational citizens. Brennan, instead, defends what he dubs “epistocracy”—a sort of aristocratic rule of the knowledgeable. (I have yet to read through Brennan’s book as it hasn’t been released yet and I’m basing this entirely off of reviews and Brennan’s other writings, particularly BHL blog posts, so I may be butchering some of the details of his argument in this description.)

Clearly, the classical liberals—from de Tocqueville to Jason Brennan—have very good reason to be skeptical of democracy, and perhaps even to feverishly oppose democracy. I still do not take the conclusions to the extremes of Hoppe and (at least from my limited knowledge of his writing on this topic) Brennan. I would agree with Hayek and Mises that constitutional representative democracy is the nth best alternative to other systems such as feudalism, absolutist monarchy, and any form of authoritarianism. (Although my general opposition to nation-states for both anarchist and communitarian reasons makes me more critical of democracy than most moderate classical liberals.)

However, it is clear that democracy is far from the best of all possible governmental arrangements. At the very least, the truth that Aristotle emphasized in his Politics that it matters not so much the make-up of the government (rule of the many, few, or one) but the quality of government, whether it is tyrannical or not. There is very good reason to believe, due to most of the arguments by the great thinkers discussed above, that democracy is, unfortunately, more likely than not to lead to tyranny—even if it is less likely to do so than the existing alternatives.

Having said that, perhaps not all is lost for the spirit of democracy. In the next post, I will analyze the pragmatist conception of democracy perhaps most popular among American twentieth-century liberals and progressives. This conception of democracy is far more than a form of political decision making discussed by the classical liberals, but a broader social epistemology and philosophy as mentioned in the introduction. I hope it will be clear by the end of the next post in this series that it is possible to affirm some of the philosophical commitments of democracy extolled by thinkers such as John Dewey, Sidney Hook, and Richard Rorty without necessarily embracing democracy as a political decision-making progress or, as Hayek would argue, democracy as it presently exists.

Friedrich Hayek’s recollection of Ludwig Wittgenstein

Chhay Lin Lim Economics, Liberty, Philosophy , , ,

Today is F.A. Hayek’s birthday, and if he would have been alive he would have been 117 years old now. Hayek is one of the most seminal economists and social philosophers of the 20th century. His works have left a deep impression on me when I first encountered them at the age of 20. The first three works of Hayek that I read were: 1. The Constitution of Liberty; 2. The Road to Serfdom; and 3. an essay entitled The Use Of Knowledge In Society. They have greatly influenced my views on political philosophy and the social sciences.

However, it was not so long ago that another illustrious philosopher, Ludwig Wittgenstein who was a second cousin and 10 years senior to Hayek, was born 127 years ago. In the same year that I became acquainted with Hayek, I also read Wittgenstein’s Tractatus Logico-Philosophicus or to put it more precisely: I attempted to read it. The work is incredibly dense and until today I still don’t feel confident that I have a sensible understanding of the book. Nonetheless, as a small tribute to both of them, I thought it would be nice to post a memoir that Hayek wrote of Wittgenstein.

Wittgenstein
Wittgenstein

F.A. Hayek – Remembering My Cousin, Ludwig Wittgenstein

BETWEEN THE RAILS and the building of the railway station of Bad Ischl there used to be ample space where, sixty years ago, in the season, a regular promenade used to develop before the departure of the night train to Vienna.

I believe it was on the last day of August 1918 that here, among a boisterous crowd of young officers returning to the front after visiting their families on furlough in the Salzkammergut district, two artillery ensigns became vaguely aware that they ought to know one another. I am not sure whether it was a resemblance to other members of our families or because we had actually met before that led us to ask the other, “Aren’t you a Wittgenstein?” (or, perhaps, “Aren’t you a Hayek?”). At any rate it led to our travelling together through the night to Vienna, and even though most of the time we naturally tried to sleep we did manage to converse a little.

Some parts of this conversation made a strong impression on me. He was not only much irritated by the high spirits of the noisy and probably half-drunk party of fellow-officers with which we shared the carriage without in the least concealing his contempt for mankind in general, but he also took it for granted that any relation of his no matter how distantly connected must have the same standards as himself. He was not so very wrong! I was then very young and inexperienced, barely nineteen and the product of what would now be called a puritanical education: the kind in which the ice-cold bath my father took every morning was the much admired (though rarely imitated) standard of discipline for body and mind. And Ludwig Wittgenstein was just ten years my senior.

What struck me most in this conversation was a radical passion for truthfulness in everything (which I came to know as a characteristic vogue among the young Viennese intellectuals of the generation immediately preceding mine only in the following university years). This truthfulness became almost a fashion in that border group between the purely Jewish and the purely Gentile parts of the intelligentsia in which I came so much to move. It meant much more than truth in speech. One had to “live” truth and not tolerate any pretence in oneself or others. It sometimes produced outright rudeness and, certainly, unpleasantness. Every convention was dissected and every conventional form exposed as fraud. Wittgenstein merely carried this further in applying it to himself. I sometimes felt that he took a perverse pleasure in discovering falsehood in his own feelings and that he was constantly trying to purge himself of all fraud.

THAT HE WAS VERY highly strung even at that time cannot be doubted. Among the remoter relatives he was thought of (though hardly known by them) as the maddest member of a rather extraordinary family, all of whom were exceptionally gifted and both ready and in a position to live for what they most cared for. Before 1914 I had heard much of (though being too young to attend) their famous musical soirees at the “Palais Wittgenstein”, which ceased to be a social centre after 1914. For many years the name meant to me chiefly the kind old lady who, when I was six years old, had taken me for my first car-ride—in an open electromobile round the Ringstrasse.

Apart from an even earlier memory of being taken to the luxurious apartment of an extremely old lady and being made to understand that she was the sister of my maternal great-grandfather— and, as I now know, Ludwig Wittgenstein’s maternal grandmother—I have no direct knowledge of the Wittgenstein family at the height of their social position at Vienna. The tragedy of the three elder sons apparently all ending their lives by suicide had attenuated it even more than the death of the great industrialist at its head would otherwise have done. I am afraid that my earliest recollection of the name of Wittgenstein is connected with the shocked account of one of my Styrian maiden great-aunts, surely inspired by envy rather than malice, that their grandfather “sold his daughter to a rich Jewish banker. . . .” This was the kind old lady I still remember—just.

I DID NOT MEET Ludwig Wittgenstein again for ten years; but I heard from him from time to time through his eldest sister who was a second cousin, an exact contemporary and a close friend of my mother. The regular visiting had made “Aunt Minning” a familiar figure to me (actually, she spelt her name, which is an abbreviation of Hermine, with a single “n”, but this would sound odd to English ears), and she remained a frequent visitor. Her youngest brother’s problems evidently occupied her much, and though she deprecated all talk about the “Sonderling”, the crank, and strongly defended him when occasional and undoubtedly often much-distorted accounts of his doings circulated, we did soon learn of them. The public eye did not take notice of him while his brother Paul Wittgenstein, a one-armed pianist, became a well-known figure.

But I did, through these connections, become probably one of the first readers of Tractatus when it appeared in 1922. Since, like most philosophically interested people of our generation I was, like Wittgenstein, much influenced by Ernst Mach, it made a great impression on me.

The next time I met Ludwig Wittgenstein was in the spring of 1928 when the economist Dennis Robertson, who was taking me for a walk through the Fellows’ Gardens of Trinity College, Cambridge, suddenly decided to change course because on the top of a little rise he perceived the form of the philosopher draped over a deckchair. He evidently stood rather in awe of him, and he did not wish to disturb him. Naturally, I walked up to him, was greeted with surprising friendliness, and we engaged in a pleasant but uninteresting conversation (in German) about home and family to which Robertson soon left us. Before long Wittgenstein’s interest flagged, and evident signs of his not knowing what to do with me made me leave him after a while.

IT MUST HAVE BEEN almost twelve years later that the first of the only real series of meetings I had with him took place. When I went to Cambridge in 1939 with the London School of Economics I soon learned that he was away working at some war hospital. But a year or two later I encountered him most unexpectedly. John Maynard Keynes had arranged for me to have rooms in the Gibbs building of King’s College, and after a while I was asked by Richard Braithwaite to take part in the meetings of the Moral Science Club (I think that was the name) which took place in his rooms just below those I occupied.

It was at the end of one of these meetings that Wittgenstein quite suddenly and rather dramatically emerged. It concerned a paper which had not particularly interested me and of the subject of which I have no recollection. Suddenly Wittgenstein leapt to his feet, poker in hand, indignant in the highest degree, and he proceeded to demonstrate with the implement how simple and obvious Matter really was. Seeing this rampant man in the middle of the room swinging a poker was certainly rather alarming, and one felt inclined to escape into a safe corner. Frankly, my impression at that time was that he had gone mad!

It was some time later, probably a year or two, that I took courage to go and see him, after having learnt that he was again in Cambridge. He then lived (as always, I think) in rooms several flights up in a building outside the College. The bare room with the iron stove, to which he had to bring a chair for me from his bedroom, has often been described. We talked pleasantly on a variety of topics outside philosophy and politics (we knew that we disagreed politically), and he seemed to like the very fact that I strictly avoided “talking shop”, not unlike one or two other curious figures I have met in Cambridge. But, though these visits were quite pleasant and he seemed to encourage their repetition, they were also rather uninteresting and I went along only two or three times more.

After the end of the War, when I had already returned to London, a new kind of contact by letter began when the possibility arose, first to send food parcels, and later to visit our relatives in Vienna. This involved all kinds of complicated contacts with bureaucratic organisations about which, he rightly assumed, I had found out details before he did. In this he showed a curious combination of impracticability and meticulous attention to detail which must have made all contacts with the ordinary business of life highly unsettling for him. However, he did manage to get to Vienna fairly soon after me (I had succeeded for the first time in 1946), and I believe he went there once or twice again.

I THINK IT WAS in the course of his return from his last visit to Vienna that we met for the last time. He had gone to see his dying sister Minning once more, and he was (though I did not know it) himself already mortally ill. I had interrupted the usual railway journey from Vienna via Switzerland and France at Basel and had boarded there the sleeping-car at midnight the next day. Since my fellow occupant of the compartment seemed to be already asleep I undressed in semi-darkness. As I prepared to mount to the upper berth a tousled head shot out from the lower one and almost shouted at me, “You are Professor Hayek!” Before I had recovered sufficiently to realise that it was Wittgenstein and to register my assent, he had turned to the wall again.

When I woke up next morning he had disappeared, presumably to the restaurant car. When I returned I found him deeply engrossed in a detective story and apparently unwilling to talk. This lasted only until he had finished his paperback. He then engaged me in the most lively conversation, beginning with his impressions of the Russians at Vienna, an experience which evidently had shaken him to his depth and destroyed certain long-cherished illusions. Gradually we were led to more general questions of moral philosophy, but just as it was getting really exciting we arrived at the port (in Boulogne, I believe). Wittgenstein seemed very anxious to continue our discussion, and indeed he said that we must do so on board ship.

But I simply could not find him. Whether he regretted having become so deeply engaged, or had discovered that, after all, I was just another Philistine, I do not know. At any rate, I never saw him again.

Libertarians and Pragmatists on Democracy Part 1: What is Democracy?

Zachary Woodman Liberty, Philosophy , , ,

Note:  This is part of a series of posts critiquing democracy. I plan on writing this series in four parts. First, in this post, I plan on introducing the various nuances to the term “Democracy.” Second, I will give a brief summary of classical liberalism’s skeptical attitude towards democracy. Third, I’ll summarize the insights into the benefits of democracy from the perspective of the American pragmatists. Finally, I’ll argue that the dialectical synthesis of these perspectives on democracy leads to a plausible defense of market anarchism.

Democracy has tended to occupy a bizarre position in the history of classical liberal and libertarian thought. Particularly in recent decades, here’s a sense of ambivalence amongst libertarians towards democracy the last couple decades even though the prevalence of democratic institutions in the west is almost a direct result of our intellectual ancestors. There are also a diversity of perspectives on democracy amongst libertarians, from fanatically opposed, such as Hoppe, to ambivalently supportive, such as Hayek, to fairly supportive, such as the younger Jefferson. Fellow note writers here at NOL have recently been showing a far more negative view on democracy typical of more modern libertarians.

My personal attitude is further complicated by other intellectual influences. Whereas there’s a tendency in my thought to be very skeptical of democracy, for many of the reasons anti-democratic libertarians are apt to emphasize, the other main intellectual tradition that influences my thinking—that of American pragmatism—is extremely pro-democratic. Democracy is arguably the very center of the philosophy of John Dewey, who has had a profound influence on my philosophical and political views (despite my extreme disagreements with his statist policy agenda). As a result, if someone were to ask me “What do you think of democracy?” I’d probably give a very wishy-washy response. In this series, I’ll attempt to reach a sort of dialectical synthesis between the variety of classical liberal opinions of democracy and the radically pro-democratic ideas of the Deweyan pragmatists.

Before critiquing it, perhaps understanding what the term “democracy” even means is in order. There are four main ways I see the term used in modern discourse. The first, trivially, is thrown around as an empty term of political praise; in popular political discourse, the term “democratic” is uttered as an almost meaningless praise when a politician does something the speaker likes that happens to agree with the majority consensus and the term “anti-democratic” is thrown around as an insult if a politician does something that the speaker disagrees with and happens to be against the majority consensus. The fact that democracy is now a term of empty praise is especially ironic as it is a pretty recent development; prior to the nineteenth century, democracy was a term with strongly negative connotations since Aristotle used it to describe tyrannical rule of the majority in his Politics and Plato critiqued the “democratic soul” in the Republic. This use of the term in America has been particularly abused since the age of Andrew Jackson, who committed a jihad (see what I did there?) on the concept of America as a republic by turning the idea of democracy into a national religion. Clearly, this use of the term is mostly (although not altogether) unrelated to the issues I’ll be addressing in this series.

The second way the term “democracy  is used, most obviously, is as a simple description of a mode of political decision making or constitutional design. In this most literal sense, democracy is defined as the election of political leaders or policies by majority vote. Third, democracy is used as kind of a generic term for the system of government that has dominated the west since World War II—even though terms such as “parliamentarian” or “republican” are probably more accurate.

Finally, and perhaps most interestingly, democracy is used in some circles (particularly by the pragmatists) to describe a social epistemology, an overarching philosophical orientation, or—to quote Sidney Hook and John Dewey—a “way of life.” As Dewey writes in the Democracy and Educational Administration “Democracy is much broader than a special political form, a method of conducting government…it is something broader and deeper than that.” Dewey describes this deeper meaning of democracy “as the necessity for the participation of every mature human being in the formation of the values that regulate the living of men together[.]”  This notion of democracy is characterized by a thoroughgoing experimentalism and Dewey himself essentially sees democracy as the application of the spirit of the scientific method to social relations. I will have much more to say about this conception of democracy later, but for now note that it is possible to affirm many of the epistemic and philosophical commitments to the democracy of the pragmatists without necessarily affirming democracy as a political constitution.

In the next post, I’ll analyze what political democracy means in the tradition of classical liberalism; in particular, I’ll focus on some of the unease about democracy’s potential for tyranny occupied by earlier classical liberals such as Mill and De Tocqueville, and some of the criticism of democracy in more recent libertarian thought inspired by the insights of public choice theory. By the end of the series, I argue the criticisms that classical liberals and libertarians have had may be devastating to the argument that a predominately democratically (in the second sense) oriented government is the best possible political system; however, those criticisms do not necessarily apply to the fourth understanding of democracy extolled by the pragmatists. In fact, if we take into account the flaws of democracy pointed out by libertarians, some form of market anarchy may perhaps be the best way to fulfill the democratic goals of the pragmatists.

AEM Europe and PCPE in Prague, April 21-24 2016

Chhay Lin Lim Economics, Liberty, Philosophy, Politics , , , , , ,

I have recently returned home from 4 days of Prague, Czech Republic, where I attended two conferences: Austrian Economics Meeting Europe and the Prague Conference on Political Economy. After having been secluded from Austrian economists and Libertarians for almost 2 years, it felt like a homecoming to be surrounded again by people who share similar thoughts. This was after all the only place in the last two years where I was able to fully express my (´controversial´) ideas about society. Being surrounded by tremendously smart people – you have to be rather smart and geeky to give up part of your free time or professional work in order to visit conferences and discuss philosophy, politics and economics – within the beautiful city of Prague made it a wonderful experience.

The AEME came about after the summer of 2014 when those from Europe who visited Mises University that year decided to come together again to discuss classical liberal ideas in the spirit of Carl Menger, Ludwig von Mises, Friedrich von Hayek and Murray Rothbard. The first AEME event took place in 2015 in Vienna, Austria, the city where the Austrian School of economic thought emerged from the works of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others. The Austrian School is famous for its methodological struggle against the Prussian Historical School and their idea that economics is culture- and time-specific and therefore does not contain universal validity. The Austrian School is also famous for such theoretical contributions as the subjective theory of value (as opposed to Marx’ labour theory of value), theory of marginal utility, opportunity cost doctrine, Austrian business cycle theory, the time structure of production and consumption, methodological individualism and the economic calculation problem that was first formulated by Ludwig von Mises in 1920 and later expanded upon by Friedrich von Hayek to show that pricing systems in socialist economies were necessarily deficient. From a socio-political perspective, the School argues for limited government and some even for libertarian anarchism.

AEME pub
AEME participants sharing their last evening in Prague in a local pub

What was great about the second AEME is that it took place right before the PCPE conference at the CEVRO Institute. Most of us who attended AEME have stayed two extra days to attend the PCPE conference as well. The CEVRO Institute is a private university founded in 2005 that is located in the very centre of the city of Prague. The university prides itself in its emphasis on freedom, markets, and its innovative character that is for example manifested in its PPE (Philosophy, Politics, Economics) programme taught by such international illustrious professors as Michael Munger who is also director of Duke University’s PPE programme, Peter Boettke who is the director of the F.A. Hayek Program at George Mason University, David Schmidt who is director of the Center for the Philosophy of Freedom at the University of Arizona, Boudewijn Bouckaert who was the former dean of the Faculty of Law at the University of Ghent, and Josef Sima who is the president of the CEVRO Institute. The institute has invited several prominent speakers for its conference. Prof. Mark Pennington (London School of Economics) was for example invited to present “Why most things should probably be for sale”. Prof. Benjamin Powell who is the director of the Free Market Institute at Texas Tech University, the University to which I almost applied to to pursue my PhD in the academic year of 2015 but eventually decided to work as a software engineer, was there as well to speak about “Migration, Economic Calculation, and the European Situation.” Prof. Mario Rizzo (New York University) had the honour to be the keynote speaker and spoke about “The four pillars of new paternalism” which was followed by commentaries from Prof. Pascal Salin, former president of the Mont Pelerin Society.

PCPE 2016
Mario Rizzo’s welcome speech to PCPE

The second day of the PCPE conference, there were 27 speakers spread over 9 sessions on such topics as economic theory, anarcho-capitalism, the Austrian School, entrepreneurship, cryptocurrencies, the role of family and more. I was one of the speakers and spoke on the “Philosophical investigation of seasteading as the means to discover better forms of social organization”. The thesis of my talk was that one core focus of political philosophy is to deal with the realities of value pluralism and political disagreements. I contended that the most common form of social organization, representative democracy, does not satisfactorily deal with these realities. Therefore, we should look for political possibilities beyond representative democracies and that in order to discover these possibilities, we should experiment with new forms of social organizations. By approaching the issue from a meta-system level perspective and realizing that governments are resistant to structural societal changes we should then introduce competition into the industry of governments. Seasteading, the creation of habitable dwellings on the oceans, could serve as a means to introduce more competition in the industry and lessen political tensions between citizens who hold different comprehensive doctrines.

Chhay Lin - PCPE
Me speaking at PCPE about Seasteading as the means to deal with such political realities as value pluralism and political disagreements

If I could mention one thing that has made the most remarkable impression on me, it would be the warning issued by Prof. Stephen Baskerville (Patrick Henry College, USA) that the most immediate threat to our liberties is feminism and the social justice movement. He maintained in his talk that there is an ensuing crisis of the family which is perpetuated by the state. According to Prof. Baskerville, family courts can enter homes uninvited, take away people’s children, confiscate their property, and incarcerate them without trial, charge or counsel. With over 50% of all first marriages ending in divorce and more than half of all these divorces involving children, the greatest threat to our liberties is the colluding social work state bureaucracies with radical feminism. These groups have colluded to suppress information on such injustices. Listening to Baskerville’s talk, I felt the great urgency to engage in an intellectual battle against feminism and the social justice movement.

Other than the many intellectually invigorating moments, the city itself provided many magnificent sites. To mention several sights: we visited a beer garden, experienced a classical music concert at the Mirror Chapel, walked over the Charles Bridge, and visited the Prague Castle.

Prague Charles Bridge
The beautiful Charles Bridge crossing the river Vltava

All in all, the city of Prague, AEME and PCPE were an unforgettable experience! It has already been decided that next year’s AEME conference will take place in Krakow, Poland. The conference will be open for anyone who is interested in Austrian economics and libertarianism. For more information on AEME and the papers that were presented in the previous editions, you can find our website here. In case you are interested in studying at the CEVRO Institute and its MA PPE programme with specializations in “Austrian Economics”, “Studies of Transition”, and “International Politics”, you can visit their website here.

Objective Moral Rules

Fred Foldvary Liberty, Philosophy , , ,

“Moral realism” is the proposition that objective moral rules exist. A moral rule assigns a moral value (good, evil, or neutral) to an act done by a person. A moral rule, such as “theft is evil,” is intended as a fact.

Moral realism is non-nihilist and non-relativist. Nihilists and relativists believe that no act is inherently good or evil, that there is no morality beyond personal and cultural beliefs. Moral realism is based on an ontology, a way to show that an objective morality exists.

The existence of an objective and universal ethic cannot be based on intuition. Intuition consists of ideas believed without conscious thinking. What people think of as intuition is heavily influenced by the prevailing culture. One person’s intuition may tell him that gambling is bad, while other may think that gambling is harmless fun.

Many ontologies of morality have been proposed. The one I think is warranted in reason is the natural moral law proposed by John Locke, although he did not present a derivation. In my judgment, the ontology consistent with Locke is as follows.

1. There are criteria that are necessary for the existence of a universal ethic. The ethic has to be universal to all persons, comprehensive to all acts, non-arbitrary in its premises, and logically consistent. If one presents an ethic which fits these criteria, then the universal ethic exists.

2. The premises of natural moral law are the biological independence of individual thinking and feeling, the moral equality of persons, and the existence of a personal ethic in each person’s mind. The first two were proposed by John Locke in his Second Treatise of Government. The equality premise is based on the common observation that there is in human nature no inherent basis for one group of persons to be superior masters over a second, inferior, group.

3. The derivation of natural moral law, as expressed by the universal ethic, provides rules for the three moral values (good, evil, and neutral). Good acts are welcomed benefits. Evil acts coercively harm others, as invasions, in contrast to merely offensive acts that depend only on the beliefs and values of those affected. All other acts are morally neutral.

Those who reject moral realism ask about the fact-value problem, the proposition that one cannot derive a moral value from any observed fact. The answer is that the universal ethic does not create any values. The values are held by individuals, in accordance with the third premise, the existence of personal ethics. The universal ethic is a production function which inputs individual moral values (good, evil, and neutral) and transforms them into universal ethic moral values. For example, if a theft takes place, the individual moral value is that it is evil, and since the theft is an invasion, a coercive harm, this individual value becomes a universal ethic value.

If, in contrast, a person observes someone who is walking naked on his property, and judges that to be evil, the universal ethic inputs that value and makes it neutral for the universal ethic, since that is an offense rather than an invasion into another’s property.

Therefore, the natural moral law does not generate values from facts, but rather, produces natural moral law values by inputting personal values and then applying its rules to output universal-ethic values.

Some skeptics reject natural-law moral realism because its premise of personal equality cannot be proven true the way that, say, the law of gravity is shown to be true. The proposition that there is in human nature no inherent master/slave relationships can be observed and inferred, but the conclusion is not apodictic, i.e. absolutely certain. However, the alternative is either supremacism, the alleged superiority of some religion or creed, or else nihilism, the absence of any transcendent morality, and either one leads to war.

The purpose of the universal ethic is the moral basis of proper governance, and since to my knowledge, nobody has come up with a superior moral idea, the ontology is good enough for the practical purpose of providing social peace and harmony with nature.

Unanimous direct democracy

Bill Rein Books, Philosophy , , , , ,

I was recently introduced to a few positive arguments for this in R. P. Wolff’s In Defense of Anarchism. Lacking the book to cite, he was absorbed with the problems of democracy, namely, the triumphant majoritarian democracy, in the manner that the minority suffers exclusion from representative processes and alienation in their laws. Philosophically he thinks contemporary liberalism leads to an illegitimate government, and anarchism is the only legitimate form of governance.

He proposed a possible method in which unanimity might be lost (as is the case in any large enough governed society), but directness and egalitarianism sustained and an authentic “rule by the people” enacted: socially-funded television sets, installed at large community centers or subsidized for private homes, with featured debates at every election season. Specialists, e.g., in fields like economics, American history and foreign policy, could feature, from various recesses of the political spectrum, to explain the more complicated issues in a collaborative, unpedantic effort. Middle Eastern history, for example, could be briefly clarified before candidates discuss their stances. (Of course, biases would find an entry point through specialists. Further discussion is necessary for this.) At the end of the week of debates, once issues are clarified and nominees understood, the remote control could be used to cast a vote for each member of the household according to the census. This system would greatly increase voter participation, and make domestic politics worthwhile for the average citizen, returning policy-making to everyone affected.

This is an idea of working within the current society on a system for better voter say: it should be judged on these merits as such.

Is it feasible? Is it at all admirable? Discuss.

Is there an Implied Consent to be Governed?

Fred Foldvary Liberty, Philosophy , , , , , ,

Implied consent means that what one may or may not do is understood without having to ask or say explicitly. In personal relationships, having established some interactions, it is implied that one may continue doing these. If a store is open for business, it is implied that customers may enter, and also that the customers will pay for what they take.

Implied consent has also been applied to the relationship between a resident and the government. The idea is that a person may not agree with some policies, but benefits from others, so it all evens out, and therefore there is an implied consent by all regarding government policies. Some say that if one does not move out, one implicitly agrees with the laws.

Being under the jurisdiction of a government is a major “state” of affairs. We might consider what Lysander Spooner, a 19th-century American philosopher, had to say in his book No Treason: The Constitution of No Authority.

“Neither law nor reason requires or expects a man to agree to an instrument, until it is written; for until it is written, he cannot know its precise legal meaning. And when it is written, and he has had the opportunity to satisfy himself of its precise legal meaning, he is then expected to decide, and not before, whether he will agree to it or not. And if he do not then sign it, his reason is supposed to be, that he does not choose to enter into such a contract.”

In the laws of the United States and many other countries, important relationships are required to be in writing and signed. When one buys real estate, the new buyer must sign a contract. When one gets married, there is a signed agreement. Being under the jurisdiction of a government is just as important.

When one buys a unit of a condominium or homeowners association, one is presented with the community documents, the master deed and bylaws, and the buyer signs an agreement. But this is not done when one moves into a governmental jurisdiction. Why not? Spooner says:

“The most they can say, in answer to this question, is, that some half, two-thirds, or three-fourths of the … adults of the country have a tacit understanding that they will maintain a government under the Constitution; that they will select, by ballot, the persons to administer it; and that those persons who may receive a majority, or a plurality, of their ballots, shall act as their representatives, and administer the Constitution in their name, and by their authority.”

But, says Spooner:

“No body of men can be said to authorize a man to act as their agent, to the injury of a third person, unless they do it in so open and authentic a manner as to make themselves personally responsible for his acts. None of the voters in this country appoint their political agents in any open, authentic manner, or in any manner to make themselves responsible for their acts. Therefore these pretended agents cannot legitimately claim to be really agents. Somebody must be responsible for the acts of these pretended agents; and if they cannot show any open and authentic credentials from their principals, they cannot, in law or reason, be said to have any principals. The maxim applies here, that what does not appear, does not exist. If they can show no principals, they have none.”

Although Spooner thought that his arguments against a governmental implied consent supported anarchism or voluntary governance under explicit contracts, there is another possibility. Coercion is the opposite of consent, and no consent is needed to defend against invasions. Therefore if there is a government whose sole function is to protect people from coercive harm, and that government does not itself commit coercive harm both in its laws and its public finances, then no consent is needed.

The function of natural moral law is the proper governance of humanity, to prohibit coercive harm. Therefore, as I wrote in Soul of Liberty, “There is no moral authority for government other than to enforce the Universal Ethic.” If government only enforces natural moral law, as expressed by the Universal Ethic, then no consent is needed, regardless of how the governors are selected, even if the governor is a dictator, as there is only protection from coercive harm.

However, in human reality, there is no perfect governance, and people disagree on the details of law, and so, as a practical matter, if we take human equality to its logical conclusion, no person should be above any other. That implies a voluntary governance among peaceful persons, enacted with the explicit consent of signed contracts. As to those who choose to not be peaceful, since they do not honor consent, they implicitly agree to be punished. That is the real implied consent in governance – those who coercively harm others imply that they may be resisted, put on trial, and punished.

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This article also appears in progress.org under “Implied Consent.”

Liberalism and Sovereignty

Edwin van de Haar Liberty, Philosophy , , , , , , , ,

More than a year ago I promised Jacques a post on sovereignty and while I am not always able to follow up very quickly, I tend to do what I promise. So here it is! Jacques’ main cri de coeur was why (classical) liberals should care about sovereignty at all.

When it comes to the theoretical discussion about sovereignty (the literature is huge), I think there is no better start than the work of international relations theorist Robert Jackson. Or better and broader: any thinking about international relations benefits from this Canadian, former Boston University professor, especially his magnum opus The Global Covenant: Human Conduct in a World of States (Oxford University Press, 2000). But this is a side step.

In his 2008 book Sovereignty: Evolution of an Idea (Polity Press) he argues that:

sovereignty is an idea of authority embodied in those bordered territorial organizations we refer to as states, and is expressed in their various relations and activities, both domestic and foreign. It originates from the controversies and wars, religious and political of sixteenth and seventeenth century Europe. It has become the fundamental idea of authority of the modern era, arguably the most fundamental.

Also in regions where other kinds of arrangements existed before Western imperialism.

It is at the same time both an idea of supreme authority in the state, and an idea of political and legal independence of geographically separate states. Hence, sovereignty is a constitutional idea of the rights and duties of the governments and citizens or subjects of particular states. It is also an international idea of multiple states in relation to each other, each one occupying its own territories and having foreign relations and dealing with others, including peaceful and cooperative relations as well as discordant relations and periodical wars.

Of course a lot of popular and academic discussion follows from this, for example about the particular form of sovereignty (popular, or not), the relation between power and sovereignty, sovereignty and globalization, or if and when sovereignty may be breached to protect others through intervention. Yet here I solely  focus on the relation between sovereignty and liberal political theory.

Concerning the domestic supremacy side of sovereignty a lot has been written by liberals. Most liberals (classical, social, and even libertarian minarchists, such as Ayn Rand or Robert Nozick; see my Degrees of Freedom for the precise definitions) realize some form of state is needed to protect individual rights. A state embodied with sovereignty. At the same time most liberals (social liberals less so, because they favor a relatively large state) recognize the state is also the largest danger to individual freedom. How to balance the two is the perpetual question of liberal political thought, one also without a definitive answer or solution, so far.

Less attention has been given to the international side of sovereignty. There are a number of libertarians, such as the anarcho-capitalist Murray Rothbard, or his intellectual successor Hans-Hermann Hoppe, who think there should not be states, hence no issues of sovereignty exist once their stateless world has materialized (they remain largely silent about how to reach that situation). Yet it seems to me the thinking should not stop there. These same thinkers romanticize the idea of secession, yet seem to overlook that those seceded groups or communities also need to deal with other seceded groups and communities. They are a bit lazy when stating everybody should look after themselves, and only defend themselves in case of attack by others. If everything would be nice and neat among people this might be ok. Yet of course history shows (also in those areas where sovereignty never played a big role before Western imperialism) that people interfere all the time in each others affairs, some rulers may have malign intentions, others belief some parts of the seceded lands belong to their community, let alone issues about religion, et cetera. In short, chances on a peaceful world with the occasional conflict that can be solved by self defense are zero.

Funnily enough, social liberals share the idea of the possibility of a world peace and cosmopolitan harmony. They also favor the abolition of sovereign states, not through secession but through the pooling of sovereignty at the transnational level, with the European Union as an example and a world federation as the ultimate end goal. This seems just as unrealistic, as even the EU is still mainly governed from the member states, as the current refugee crisis and the possible dissolution of the Schengen agreement illustrates. More generally, the pooling of sovereignty proves rather difficult, also in other parts of the world. ASEAN in South East Asia is an example.

More realistic are classical liberals, such as Hume, Smith, and Hayek, who acknowledged an emotional tie between the individual and his country, as well as the constant need to defend individual property rights against invasion by others, through standing armies, diplomacy, some international treaties, the balance of power, et cetera.  Human nature does not allow for starry eyed fantasies about international harmony, let alone international peace. Hence, it is rather normal to care about external sovereignty, as it is foremost a means of protection.  Not the sole means, but an important and fundamental institution of international relations.

Of Uber, cab drivers and compensation

Vincent Geloso Economics, Liberty, Philosophy , , , , ,

What a title for a blog post right? Where am I going with this? A few days ago, I debated a few of my academic colleagues who tend towards libertarianism in the predominantly left-leaning province of Quebec. The topic? How the rise of Uber is killing the taxi cartel? I authored a paper on ride-sharing a year ago and I cannot be more enthusiastic towards such technologies that are allowing consumers much more choices at lower prices than with the taxi cartel. Thus, we were all in agreement. The point of contention appeared when the topic of compensation was raised. I favor partial compensation of the owners of taxi licences. Instantly, I was cast in the minority position and branded as a statist. A debate ensued and I made the case that it was not acceptable to right a wrong by committing another wrong (how Christian of me).

First, let me lay out some facts first and some assumptions

  1. A taxi licence restricting competition is a subsidy. But it is a strange type of subsidy that occurs through a redistribution of property rights (limiting the right to use one’s own car to carry individuals in exchange for payment to those who buy the transferable right to do so). Unlike cash subsidies, quotas, trade barriers and tax credits, it is the only form of income transfer that exists that is a property. You can abolish any cash subsidy, tariff, quota, tax, tax credits or legal monopoly without having to compensate since no one has property of such things. That is the source of the odd nature of the taxi licence – a subsidy with a property deed.
  2. The two benefits from these licences occur through limiting competition and thus allowing higher prices/quality ratios and through higher asset value (the permit’s value). The extent of those benefits depends on the extent of the curtailment of the liberties of other to compete. The more restrictive the policy, the greater the redistribution from consumers to producers in the long-run.
  3. However, new drivers have to pay a high price and they must have some time to recoup the acquisition of the asset. Their recovery will take some time as they also hike prices and lower quality.

So, if you want to abolish a taxi licensing scheme, is it acceptable not to compensate? According to my colleagues, yes it is. Since the benefits of higher prices were so considerable to those drivers (at the expense of consumers), compensation is not necessary.

Yet, the drivers do own property don’t they? The licence is worth many thousands of dollars, basically the value of a small house. Many drivers rely on this asset for their retirement. Now, let me make another presumption which is crucial to this discussion: the change is caused by legal changes, not technological changes.

I believe that, in the presence of the technological change, there is no case for compensation. Nobody would compensate telecoms companies for the rise of Skype since it is a process of entrepreneurship. However, the case is different if a government decides to abolish the licences. So here, my entire reasoning for compensation is contingent to a case where the state abolishes the licences, not a situation where technologies render the licences worthless like the car killed the street horses.

Clearly, it was unjust for consumers to deal with a cartel that gouged them and which was legally sanctioned to do so. But can you right an injustice by committing another injustice (the de facto dispossession of an asset)? Normatively speaking, I simply believe that using the monopoly of violence of the state to right the abuses caused by past uses of the monopoly of violence of the state is not that productive. Why? Because I have this assumption lodged firmly in my head as a result of my training in public choice theory: rent-seeking matters.

Rent-seekers will always exist. They are the social-science equivalent of gravity in physics. You just have to deal with their existence. Rent-seekers are basically political entrepreneurs who have very concentrated benefits from applying policies whose costs are not that obvious or that important for a large population. These political entrepreneurs are very alert to opportunities and they will seize them. Sometimes, they discover that their preferred course of action leads to resistance. They will automatically shift gear and find another way to obtain an unearned reward thanks to the complicity of those they bargain with (politicians and bureaucrats). Their rhetoric will change, their narratives will change, their arguments will evolve, but at the core, they will continue to rent-seek. True, you can conceive constitutional rules that limit rent-seeking (I am a big fan of that). However, one way or another, it will remain and some will find ways to connive with politicians and bureaucrats to obtain undue rewards. And even if there was such a utopia free of rent-seekers (I just won’t buy that for a dollar) where a constitution would ban their activities or even a stateless utopia (again, I am not buying it), is it acceptable to justify all means possible to reach such a destination?

What if associations of cab drivers lobby for special tax discounts on gasoline since they provide a public service? What if they lobby for stricter security checks on drivers (needless security checks) which end up having the same effects? What if they convinced regulators that only certain types of vehicles (less than 5 years old for example) should be allowed to operate? What if they mandated association with a dispatcher to better avoid traffic jams? How could a politician oppose special tax treatment for drivers, better security for consumers or all these other bogus motives? In the end, they will find a way to rent-seek. However, by dispossessing them of an asset worth many hundred of thousands of dollars, you are basically creating the certainty that they will aggressively rent-seek to recuperate their losses. Thus, you don’t end up breaking a vicious policy cycle, you end up encouraging its continuation in stranger, hidden and subtle manners whose perniciousness continues equally.

Hence my case that you can’t right a wrong by committing a wrong. Respect the rule of law, liberalize the market and compensate and attempt to rewrite constitutions to prevent arbitrary redistribution of property rights.

Giving Up On The Masses

Chhay Lin Lim Liberty, Philosophy, Politics , , , , , , , , , , , ,

In 2012, during Ron Paul’s second presidential candidacy as a Republican, I felt deflated with the masses again. Again, the masses were not going to vote a libertarian into office. It was the same year in which I read Murray Rothbard’s Ethics of Liberty and Hans-Hermann Hoppe’s Democracy: The God That Failed. What struck me at that time was the realization that democracy is actually an extremely poor political system to make society become more libertarian. Democracy is not even a guarantee whatsoever for political and economic freedoms. Its success is dependent on the uprightness of the masses, but where are the masses to stand up against war, bank bailouts, taxation, police aggression etc? If the government is truly a gang of thieves and murderers, as I believe it is, then the voting masses are advocates of theft, harassment, assault, and murder.

I do not believe that the masses are ready for freedom, because freedom means taking responsibility for one’s life and actions – a frightening prospect for the masses who lack the strength to face insecurities in life. Ingrained with fear of their own and their neighbours’ incapability to live a ‘responsible’ life, they are attracted to masters who can arrange their lives for them. The masses have also never thirsted for truth. Whoever can supply them with illusions is easily their master, and whoever attempts to destroy their illusions is always their victim. They want to be comfortable and cuddled to death. Thinking is too much hassle for the mass-man. The masses have moreover a love for egalitarianism and a disdain for those who are different, who are more successful and more beautiful. They hate freedom, because in freedom man naturally maintains his distance from his fellow human beings.

Being discontent with the masses and deflated in my philosophical views on politics and economics, I took Peter Thiel’s following dictum to heart: “The masses have given up on unregulated capitalism, so those who still support unregulated capitalism should give up on the masses.” Instead, I have put my hope on such technological advances of decentralization as cryptocurrencies, seasteading, 3D-printing, and localized energy conservation and production.