F.A. Hayek

Rule of Law: the case of open texture of language and complexity

Federico Sosa Valle Law , , , , , , , , , , ,

This article by Matt McManus (@MattPolProff) recently published at Quillette made me remember H.L.A. Hart’s theory of law and the problems derived from the open texture of language, a concept borrowed by him from Friedrich Waismann, an Austrian Mathematician and philosopher of the Vienna Circle. Many authors would rather distinguish “open texture” from vagueness: being the latter a proper linguistic matter, the former is related to the dynamic of the experience. As Kyle Wallace summarized the problem: “certain expressions are open textured simply because there is always the possibility that in some new experience we may be uncertain whether or not the new expression is applicable.”

However, Brian Bix, in his “H.L.A. Hart and the ‘open texture’ of language,” argues that, despite the concept of “open texture” being a loan from Waismann’s philosophy, the use gave to the term by Hart is not derogatory at all. With respect to Hart’s point of view, the “open texture” of the law is rather an advantage, since it endows the judges with a discretionary power to adjust the text of the law to the changing experience.

Concerning individual liberty, the laudatory qualification of the open texture of the law made by Hart and Bix might be shared by the jurists of the Common Law tradition, but it hardly would be accepted by anyone from the Civil Law System. According to the former, every discretionary power enabled to the judges helps to prevent the political power from menacing individual liberties, while, following the latter, the written word of the law, passed by a legislative assembly according to constitutional proceedings, is the main guarantee of individual rights.

But the subject of the open texture of the language of the law acquires a new dimension when it is related to the coordination problem derived from the limits to knowledge in society. As it was distinguished by F. A. Hayek in the last chapter of Sensory Order, we could talk about two types of limits to knowledge: the relative and the absolute. The relative limit to knowledge depends upon the sharpness of our instruments used to gather information, whereas the absolute limit to knowledge is sealed by the increasing degrees of abstraction that constitute every classification system. Since every new experience demands the rearrangement of the current system of classification we use to order our perception of reality, the description of this feedback process requires a supplementary system of classification of a higher level of complexity. The progress of the subject of knowledge into higher levels of abstraction reaches an unconquerable limit when he is tasked with the full study of himself.

Thus, we could ascertain that the judiciary function would be enough to fulfill the problems that could arise from the open texture of law, since the judge pronounces the content of the law not in general terms, but in concrete definitions in order to solve a case. In this labour, the judge not only applies the positive law, but he might “discover” abstract principles that become relevant in order to the given new experiences that begot the controversy over the content of the law he is due to solve. This function of “immanent critique” of the positive law by the judiciary system is well discussed by F. A. Hayek in the fifth chapter of his Law, Legislation and Liberty. Since the judiciary function solves in every concrete case the coordination problem derived from the fragmentation of knowledge in society, the open texture of the law does not make it opaque to the citizens.

That notwithstanding, the open texture of the law remains as a systemic limit to the legislative assemblies to define the whole content of the law. Thus, since the whole content of the law can only be achieved in a given concrete case by a judge solving a particular controversy, every central planner would have to accomplish his model of society not through decisions based on principles, but on expediency. Central planning and rule of law will be always set to collide. In this sense, the concept of open texture of the law might work as a powerful argument for the impossibility of every central planning to be performed, sooner or later, under the rule of law.

Why Hayek was Wrong about American and European Conservatism III

Barry Stocker History, Liberty, Politics , , , , , , ,

I am continuing from here, where I mainly discussed definitions of liberalism and conservatism. This sequence of posts was inspired by F.A. Hayek’s essay ‘Why I am Not a Conservative’. I am happy to share Hayek’s sentiment that market liberalism is not the same thing as conservatism, but I find some of the argument rather unsatisfactory. What I have concentrated on so far is what I see as the inadequacy of Hayek’s view of conservatism as just a position of slowing down change. What I am getting on to is firstly his view of European liberalism and then of American conservatism.

Hayek’s essay seems to me to contain rather odd claims about the difference between British and continental European liberalism. He suggests:

the majority of Continental liberals stood for ideas to which these men were strongly opposed, and that they were led more by a desire to impose upon the world a preconceived rational pattern than to provide opportunity for free growth. The same is largely true of what has called itself Liberalism in England at least since the time of Lloyd George.

I certainly sympathise with his suggestion that British (unfortunately Hayek makes the common place but still highly incorrect error of substituting England for Britain, particularly absurd here because David Lloyd George was Welsh) liberalism went to much in the direction of top down rationalism (i.e. statism) from about the time of Lloyd George in the early 20th century. It is of interest here that LG (as he was frequently know) split the Liberal Party and was Prime Minster with Conservative support, wishing his faction of the Liberal Party to merge with the Conservative Party, while advocating statism at home and foreign policy adventurism abroad (in Ottoman Anatolia, shortly before it became Turkey), topped by a rather Caesarist personal style.

Returning to the main issue, the sweeping views Hayek indicates of continental liberalism are rather reductive. He equates continental liberalism (or at least a very large part of it) with what comes out of the French Revolution. He can only be thinking of neo-Jacobin currents in France (known as ‘radicals’) and related national-republican currents elsewhere. There is certainly also a history of more individualistic market liberalism on the continent along with what could be called a kind of liberal moderate constitutional royalism.

It would be better, I suggest, to think of continental liberalism as tending to split between the poles of national-republicanism and constitutional royalism. Hayek concedes in this essay that conservatism can be aligned with nationalism, but claims he cannot follow this up because he is not sympathetic enough to nationalism to be able to talk about it. This does not stop him from a more unrestrained attack on the nationalist tendencies of neo-Jacobins, though frequently such people had a desire for a union of European nations. The Italian national-republican and admirer of British liberalism, Giuseppe Mazzini, is a good example.

It seems clear enough that Hayek leans in the conservative direction of the two pole distinction I mention above. We can see this in his list of liberal heroes in the essay: Edmund Burke, Thomas Babington (Lord) Macaulay, Alexis de Tocqueville, David (Lord) Acton, and William Ewart Gladstone. Burke is a hero of conservatism and my last post explains why I think he stands for conservatism rather than liberalism, calling Benjamin Constant as my prime witness.

Macaulay was a Whig Liberal, deeply attached to the landowning classes and the empire, the sort of people who abandoned Gladstone when he started to emphasise the rights of the Irish. Macaulay ought to be read by liberty advocates. He was a great historian and had some admirable pro-liberty sentiments, but we cannot doubt that he leaned towards the conservative imperial state end of liberalism.

Tocqueville is someone popular with conservatives, but then there are also many left leaning Tocqueville admirers. It is part of the character of his writing that there is something for almost anyone. There was certainly an aristocratic and imperial side of his thinking, with strong criticisms of the Jacobins during the French Revolution and after. However, it should also be noted that he was at least happy to work with moderate republicans in French politics, that is those following a toned down Jacobinism and preferred them to the strong royalists. He saw the world as taking a democratic turn, which he thought had some dangerous aspects, but which he said should be followed in a way foreign to Burke and Macaulay.

Acton’s view of liberty leaned strongly in the direction that any restraint on central power was a good thing, to an extent that meant disregarding universal rights. The most famous example of this is his support for the slave states during the American Civil War and his correspondence with Robert E. Lee, which expressed gushing admiration for this prominent Confederate general and slave holder. Acton had some very pertinent things to say about the dangers of democracy, but failed to see that the danger is unrestrained majoritarianism rather than democracy as such, or at least failed to see that democracy constrained by constitutionalism was a better corrective for democratic vices than his attempts to cling onto non-democratic forms of government, or at least very attenuated forms of democracy (as in indirect elections). We can safely place him on the extreme right of the liberty movement.

Gladstone was a friend of Acton and was strongly influenced by him for many years. However, Gladstone, who started off as a High Tory (traditionalist conservative), ended up as a radical promoting home rule for Ireland and Scotland (to the horror of the Whig, that is conservative, Liberals) and extension of the suffrage beyond the property owning classes, who restricted the rights of Irish and Scottish landowners when he saw how they were treating their tenants against natural justice. These measures led him to be condemned as a dangerous socialist at the time, which is of course nonsense. He had an understanding that traditional property rights could become abusive and oppressive over time and that it was the legitimate role of the representative state to use its law making capacity to to challenge such abuse despite the protests of traditional landowners. Though he was influenced by Acton in his view of the US Civil War, he took a rather more national-republican leaning view of the Risorgimento (Italian movement of unification), and his later policies certainly suggest a less Burke-Macaualy-Acton oriented approach.

Hayek’s views of 18th and 19th century liberalism show a strong inclination towards the conservative end of liberalism (even if we assume that we are only concerned with individualistic market based liberalism here) and a very strong reaction against any national-republican elements of liberalism, while evading the issue of conservative-nationalist affinities.

To be continued

Why Hayek was Wrong about American and European Conservatism II

Barry Stocker Liberty, Politics , , , , , , , , , , , ,

The first post in this series concentrates on the more radical authoritarian populist side of conservatism in Europe. Before getting on to American conservatism and other aspects of European conservatism, I will respond to requests in the comments for definitions of what I mean by liberalism and conservatism. The shortest class definition I am aware of is that of David Hume in his essay ‘Of the Parties of Great Britain’ where he suggests that Whigs (liberals) favour liberty with a monarchy and that Tories (conservatives) favour monarchy with liberty. This can be expanded with little, if any controversy, to be taken as: liberals advocate liberty with order; conservatives favour order with liberty.

I will move from Hume to Benjamin Constant in Principles of Politics Applicable to all Governments. Constant is surely an unimpeachable source on what it is to be a classical liberal and it is important to note that Constant thinks there is something different in a politics based on principles of freedom than the thought of Edmund Burke. The distinction Constant makes is key to thinking about the relation between classical liberalism and conservatism, so is key to the claim that I make that (classical) liberalism are very distinct.

To increase the force of collective authority is never other than giving more power to some individuals. If the wickedness of men [an emphasis on this is a mark of conservative thinking], it is an even stronger one against power. For despotism is only the freedom of one or a few against the rest. Burke says that freedom is power. One can likewise say that power is freedom.(Book XV, Chapter 2)

This thought flows right into this thought from a later chapter:

Freedom is a power only in the sense that a shield is a weapon. So that when one speaks of possible abuses of the principle of freedom, such an expression is inaccurate. The principles of freedom would have prevented anything under the heading of abuses of freedom. These abuses, whoever their author, taking place always at the expense of another’s freedom, have never been the consequence of these principles, but rather their reversal.  (Book XVII. Chapter 1)

In my summary of the above: conservatism defines freedom as limited because of a dangerous power in excess, so requiring tradition, hierarchy, and the aggressive use of state sovereignty to to curb it, while liberalism suggests that more freedom is the answer to abuses of power.

Since Burke is a key figure for those advocating some kind of kind of intimate alliance, or even identity, between (classical) liberalism and conservatism or libertarian conservative fusionism, Constant’s criticism of Burke is important. I won’t get into the detail of Reflections on the Revolution in France, Burke’s central text on politics here, I will just note that the reader of this classic of conservatism will find many passages on the absolute sovereignty of the state, the virtues of rigid social hierarchy and of traditions supporting such hierarchy, along with the perfection of the British constitution of the time.

These passages, it seems to me, should raise concern to the advocate of liberty, which I believe derives its energy from the criticism of tradition, hierarchy, and existing institutions. As Constant recognises, we should not be quick to replace institutions that have grown over centuries with a perfect new design, but we should certainly not be afraid to innovate either, as we should not be slow to notice the growing faults of institutions over time as they come into conflict with new circumstances.

Burke was perhaps a bit more liberty-minded and a bit more innovation-friendly than the other famous critics of liberalism and Jacobinism – de Maistre, de Bonald and Donoso Cortés, but the understanding of liberty as particular Liberties inherited from tradition, upheld by a state that insists on its own absolute authority is something he has in common with them. For Constant, the excesses of the French Revolution are a reason to argue for more liberty, for Burke they are a reason to uphold hierarchy, tradition, and royal authority along with endless war against the French.

While addressing comments to the last post, I should refer to my fellow Notewriter, Edwin van de Haar, though thinking just as much of a previous social media conversation as his recent comment. As far as I understand, he advocates a definition of conservative liberalism that corresponds with F.A. Hayek’s views in The Constitution of Liberty and a share of GDP devoted to public spending substantially below the the average in advanced industrial countries. I’m not aware of anywhere in which Hayek used such a term, though he was certainly more sympathetic to Burke than I am here.

My argument is that there is nothing inherent to conservatism that makes it opposed to expanding the state in terms of welfare intervention or in terms of the police power of the state. Otto von Bismarck is just one particularly notable conservative from history who had a great belief in an intrusive state in various ways, including measures designed to take voters away from the strong Marxist-socialist current of the time, through incorporating socialist-friendly policies. Conservatism is a doctrine of order, state power (where national or imperial), and tradition.

Where conservatives have favoured market-friendly and relatively small state polices, they have done so in order to preserve order, the core of state power and tradition. Economically liberal conservatives like Margaret Thatcher and Ronald Reagan were also great believers in narratives of restored national grandeur, the security state, ‘law and order’ and ‘war on drugs’ polices expanding state power, while sucking an increasing number of people into the extreme state-socialist institution of prison.

As far as I can see Thatcher and Reagan are the heroes of ‘liberal conservatism’. With all due respect to their valuable economic reforms, the liberalism seems to me to be very subordinate to the conservatism. As I pointed out in the last post, ideas of aggressive populism are growing in the conservative world, ideas which have deep precedents in the ways that Bismarck figures have mobilised nationalism, statism, and reactionary identity politics against liberals.

The promise and peril of blockchain distributed governance

Nick Cowen Liberty, Politics , , , , ,

neoliberalthoughtcollective

I was very fortunate to learn that my essay ‘Markets for rules‘ has won the Mont Pelerin Society’s 2018 Hayek essay competition for young scholars (one of the perks of academia is being defined as young well until your 30s). I am now looking forward to presenting at MPS’s famous conference, originally organised by F.A. Hayek to build the post-war intellectual case for liberalism.

The essay is an attempt to explain the governance possibilities of blockchain technology through the lens of new institutional economics and more specifically private governance. Blockchains allow people to develop rules that can then be enforced autonomously by the participants that use them without further central direction. This could allow communities to rely more on common rules and less on formal coercive authorities to achieve widespread social cooperation. I am cautiously optimistic about the technology (it could also turn into a dystopian nightmare) though not any particular currently existing blockchain.

Here is the abstract: Classical liberals seek the paradoxical: government powerful enough to protect individuals from preying off each other, but limited enough to prevent it becoming a fierce predator itself. The emergence of blockchain technology heralds a potential revolution in our collective capacity to implement limited government. Blockchains offer a more secure and transparent way of implementing rules while permitting individual choice between rulesets that can co-exist at the same time and place. What this could ultimately mean is that a great deal of what we have traditionally conceived to be governance might be disintermediated from the territorially defined monopolistic coercive authorities that classically define states.

What is the proper role of government?

Bruno Gonçalves Rosi Current Events, Politics , , , , , , , ,

Former Brazil’s president Dilma Rousseff publicly lied by saying that she had a M.A. and a Ph.D. in Economics. The lie was discovered in 2009, when she still wasn’t Brazil’s president. Maybe that’s the problem with Dilma: she would even lie to say she was highly competent in economics.

Nobody in the 19th century believed that the role of government was to control the economy. This notion only became strong in the 20th century and to a great degree thanks to Keynesianism. It was Keynes who popularized the notion that the free market is inherently unstable, and that government should exercise some oversight on it.

Jair Bolsonaro, the Brazilian presidential candidate ahead in the opinion polls, has no problem admitting he doesn’t know enough about economics. For me, this is one of his main strengths. In the past, Bolsonaro was more statist. Today he shows signs of becoming more inclined towards free markets. He is clearly willing to delegate the economic policy of his government to people who are strongly favorable to the free market. In other words, Bolsonaro doesn’t know a lot about economics and he is not ashamed of admitting it. But he knows that too much government control ruins a country’s economy.

Dilma is arrogant. Part of her arrogance is to believe that she would be able to control the economy politically. Bolsonaro seems to be humble enough to admit that’s impossible. Keynes believed that the economy is inherently unstable. Contradictorily he advised governments to try to control it. Hayek’s answer to Keynes was that economics is not a science you can master in college. There are simply way too many variables for any human to control.

Bolsonaro’s focus is on public security. Criminality is on the rise in Brazil. People are afraid of walking on the streets, especially in big cities like Rio de Janeiro and São Paulo. That should be the role of government: to guarantee we can go out for work, come back, and not get killed or robbed on the way. If the government is doing that, it is already doing a lot. People freely and willingly interacting with one another can do the rest. Guarantee that evildoers will be punished, and watch the economy fly. And before I forget: contrary to cultural Marxism (and Rousseau), criminals are not victims of the society. Society is the victim of criminals.

Cities in capitalism are more beautiful

Bruno Gonçalves Rosi Culture, History , , , , , , , , ,

The other day I wrote about some of the reasons why I love capitalism. One of them is that cities in capitalism are more beautiful. I am convinced of this when I think about some cities I am more familiar with, including their geography and history.

Most foreigners I know have difficulty to answering correctly, when asked, “What is Brazil’s national capital?”. Most people answer Rio de Janeiro, but it is actually Brasilia. Many people say that beauty is in the eyes of the beholder, but I am very inclined to say that this is not so. I am still not 100% sure about this, but I believe that there is something objective about beauty. Maybe it is not something so strict, like a point. Maybe it is something broader, like an area. But still, I am inclined to say that there is something objective about it. At least for me, Brasilia is one of the ugliest cities conceivable. I am really glad to say that. Its architecture was designed by Oscar Niemeyer and Lucio Costa. Growing up in Brazil, questioning that Niemeyer was a genius is almost anathema, almost like saying that Maradona was better than Pelé or that Ayrton Senna was not the best Formula One pilot ever. Because of that, I was always happy to say that Niemeyer’s buildings are among the ugliest things on the surface of this planet. It was like shouting that the king is naked.

Brasilia is very beautiful from the sky. Its shape resembles an airplane or a cross. But that is the problem: the city is beautiful from heaven, but not for the people walking in it. It was made for God to see from up there. But, as Niemeyer was a convinced atheist, I am not sure who is watching his creation. My guess is that Niemeyer thought that he was a god. A very mean god, who didn’t care about people having to spend lots of time in cars driving long distances.

Niemeyer was also related, with Lucio Costa, to Barra da Tijuca, a neighborhood in Rio de Janeiro where I spent lots of time growing up. Lucio Costa, as far as I’m concerned, was not a communist. I believe he was closely connected to the Brazilian version of positivism. Because positivism and communism are basically the same, it doesn’t make much of a difference. Barra da Tijuca is very similar to Brasilia: very beautiful if looked at from the sky, but very unpleasant for the pedestrian. Very long distances to walk. Cars are mandatory.

The most pleasant neighborhoods in Rio de Janeiro are the result of spontaneous order. As Hayek noticed, spontaneous order is one of the central features of capitalism. People usually contrasted between planned economies (such as the USSR) and unplanned economies (such as the US in some moment of its history). But Hayek observed that all economies are planned. Some are centrally planned. Others are planned by several individuals who are not following a specific central plan.

I am convinced that cities that follow no plan, or a very simple plan, are more beautiful than cities that follow a very specific central plan. New York, as far as I know, followed a simple plan, a grid. But other than that, there was a lot of freedom in the use of the space for much of its history. It’s a city that I just love. I am more comfortable talking about Rio de Janeiro. It is a city that was at its best before modern architecture, positivism, socialism, Developmentalism, and other isms. It was better when Brazil had a little more classical liberalism.

Nightcap

Brandon Christensen Links , , ,
  1. So you want my opinion (as an economist)? Scott Sumner, EconLog
  2. Don’t Let Doubts About Blockchains Close Your Mind Tyler Cowen, Bloomberg View
  3. Hayek, Radner, and Rational-Expectations Equilibrium David Glasner, Uneasy Money
  4. Beautiful art from the Armenian diaspora Avedis Hadjian, Le Monde Diplomatique

Nightcap

Brandon Christensen Links , , ,
  1. The socialism of moralizing fools Chris Dillow, Stumbling and Mumbling
  2. Friedrich Hayek’s devotion to the free market Linda Yueh, Times Literary Supplement
  3. The art of the Big Lie Phil Tinline, New Statesman
  4. Revolutionary Terrorism and Russian Literary Culture Chelsea Gibson, LA Review of Books

Deep Learning and Abstract Orders

Federico Sosa Valle Law , , , , , , ,

It is well known that Friedrich Hayek once rejoiced at Noam Chomsky’s evolutionary theory of language, which stated that the faculty of speaking depends upon a biological device which human beings are enabled with. There is no blank slate and our experience of the world relies on structures that come from the experience in itself.

Hayek would be now delighted if he were told about the recent discoveries on the importance of background knowledge in the arms race between human beings and Artificial Intelligence. When decisions are to be taken by trial and error at the inside of a feedback system, humans are still ahead because they apply a framework of abstract patterns to interpret the connections among the different elements of the system. These patterns are acquired from previous experiences in other closed systems and provide with a semantic meaning to the new one. Thus, humans outperform machines, which work as blank slates, since they take information only from the closed system.

The report of the cited study finishes with the common place of asking what would happen if some day machines learn to handle with abstract patterns of a higher degree of complexity and, then, keep up with that human relative advantage.

As we stated in another place, those abstract machines already exist and they are the legal codes and law systems that enable their users with a set of patterns to interpret controversies concerning human behaviour.

What is worth being asked is not whether Artificial Intelligence eventually will surpass human beings, but what group of individuals will overcome the other: the one which uses technology or the one which refuses to do so.

The answer seems quite obvious when the term “technology” is related to concrete machines, but it is not so clear when we apply it to abstract devices. I tried to ponder the latter problem when I outlined an imaginary arms race between policy wonks and lawyers.

Now, we can extend these concepts to whole populations. Which of these nations will prevail over the other ones: the countries whose citizens are enabled with a set of abstract rules to based their decisions on (the rule of law) or the despotic countries, ruled by the whim of men?

The conclusion to be drawn is quite obvious when we are confronted with a so polarised question. Nevertheless, the problem becomes more subtle when the disjunction concerns on rule of law vs deliberate central planning.

The rule of law is the supplementary set of abstract patterns of conduct that gives sense to the events of the social reality in order to interpret human social action, including the political authority.

In the case of central planning, those abstract patterns are replaced by a concrete model of society whose elements are defined by the authority (after all, that is the main function of Thomas Hobbes’ Leviathan).

Superficially considered, the former – the rule of law as an abstract machine – is irrational while the latter – the Leviathan’s central planning – seems to respond to a rational construction of the society. Our approach states that, paradoxically, the more abstract is the order of a society, the more rational are the decisions and plans that the individuals undertake, since they are based on the supplementary and general patterns provided by the law, whereas central planning offers to the individuals a poorer set of concrete information, which limits the scope of the decisions to those to be based on expediency.

That is why we like to state that law is spontaneous. Not because nobody had created it -in fact, someone did – but because law stands by itself the test of time as the result of an evolutionary process in which populations following the rule of law outperform the rival ones.

Underrated & overrated libertarian thinkers

Edwin van de Haar Current Events , , , , , , , , ,

Here is my take on Tyler Cowen’s views on libertarian thinkers who are either overrated or underrated in shaping the libertarian tradition. Please be aware that I think libertarianism and classical liberalism are two different strands of liberal thought, as argued in more detail in an earlier post here at NOL and in my latest book. Please also note that my judgement will be particularly informed by their views on international relations.

Overrated:

  1. Hans-Hermann Hoppe – completely esoteric ideas about international relations, especially his erroneous and ill-thought idea about private defence through private insurance companies.
  2. Deepak Lal – no complaints about his general work, but his praise for empires was deeply disturbing, even though he meant well. Liberalism and globalization do not need empires, no matter how civilized – in the Oakeshottian meaning – they are meant to be.
  3. Ron Paul – I admire Ron Paul in many ways, but his ideas for ‘a foreign Policy of freedom’ are not much better than Hoppe’s. ‘peace, commerce, and honest friendship’: nice Jeffersonian goals, bad underlying analysis, not least about human nature.

Underrated:

  1. Friedrich Hayek – a far more sophisticated thinker on international relations than he is ever given credit for.
  2. Adam Smith – nowadays erroneously equated with ‘trade leads to peace’ fairly tales. Yet any reader of the complete two volumes of the Wealth of Nations recognizes that the book is also a lot about war and foreign policy, as are his Lectures on Jurisprudence and even a bit in The Theory of Moral Sentiments. Together these make for a full and sophisticated position on international affairs.
  3. David Hume – basically the same as Smith.
  4. Robert Jackson – ok, I am taking liberties here. I do not think Jackson would consider himself a classical liberal or libertarian. But his writings on international relations are important and often have a classical liberal leaning, especially The Global Covenant.

2018 Hayek Essay Contest

Edwin van de Haar Books, Current Events, Economics, History, Law, Liberty, Philosophy, Religion , , ,

The 2018 General Meeting of the Mont Pelerin Society will take place from September 30 – October 6, 2018 at ExpoMeloneras and Lopesan Hotels in Meloneras, Gran Canaria, Canary Islands. As with past general meetings, the Mont Pelerin Society is currently soliciting submissions for Friedrich A. Hayek Fellowships. The fellowships will be awarded through the Hayek Essay Contest.

The Hayek Essay Contest is open to all individuals 36 years old or younger. Entrants should write a 5,000 word (maximum) essay that addresses the quotation(s) and question(s) detailed on the contest announcement (available at the above link). The deadline for submissions is May 31, 2018. The winners will be announced on July 31, 2018. Essays must be submitted in English only. Electronic submissions should be sent in PDF format to this email address (mps.youngscholars@ttu.edu). Authors of winning essays must present their papers at the General Meeting to receive their award. The essays will be judged by an international panel of three members of the Society.

Please feel free to share this announcement with any individuals who may have an interest in submitting an essay for consideration of a fellowship award. All questions may be directed to the MPS Young Scholars Program Committee by email at mps.youngscholars@ttu.edu or phone at +1.806.742.7138.

MPS Young Scholars Program Committee

In the Search for an Optimal Level of Inequality

Federico Sosa Valle Economics, Philosophy , , , , , , , ,

Recently, the blog ThinkMarkets published a post by Gunther Schnabl about how Friedrich Hayek’s works helped to understand the link between Quantitative Easing and political unrest. The piece of writing summarized with praiseworthy precision three different stages of Friedrich Hayek’s economic and political ideas and, among the many topics it addressed, it was mentioned the increasing level of income and wealth inequality that a policy of low rates of interest might bring about.

It is well-known that Friedrich Hayek owes the Swedish School as much as he does the Austrian School on his ideas about money and capital. In fact, he borrows the distinction between natural and market interest rates from Knut Wicksell. The early writings of F.A. Hayek state that disequilibrium and crisis are caused by a market interest rate that is below the natural interest rate. There is no necessity of a Central Bank to arrive at such a situation: the credit creation of the banking system or a sudden change of the expectancies of the public could set the market interest rate well below the natural interest rate and, thus, lead to what Hayek and Nicholas Kaldor called “the Concertina Effect.”

At this point we must formulate a disclaimer: Friedrich Hayek’s theory of money and capital was so controversial and subject to so many regrets by his early supporters – like said Kaldor, Ronald Coase, or Lionel Robbins – that we can hardly carry on without reaching a previous theoretical settlement over the apportations of his works. Until then, the readings on Hayek’s economics will have mostly a heuristic and inspirational value. They will be an starting point from where to spring new insights, but hardly a single conclusive statement. Hayekian economics is a whole realm to be conquered, but precisely, the most of this quest still remains undone.

For example, if we assume – as it does the said post – that ultra-loose monetary policy enlarges inequality and engenders political instability, then we are bound to find a monetary policy that delivers, or at least does not avoid, an optimal level of inequality. As it is explained in the linked lecture, the definition of such a concept might differ whether it depends on an economic or a political or a moral perspective.

Here is where I think the works of F.A. Hayek have still so much to give to our inquiries: the matter is not where to place an optimal level of inequality, but to discover the conditions under which a certain level of inequality appears to us as legitimate, or at least tolerable. This is not a subject about quantities, but about qualities. Our mission is to discover the mechanism by which the notions of fairness, justice, or even order are formed in our beliefs.

Perhaps that is the deep meaning of the order or equilibrium that it is reach when, to use the terminology of Wicksell and Hayek’s early writings, both natural and market interest rates are the same: a state of affairs in which the most of the expectancies of the agents could prove correct. The solution does not depend upon a particular public policy, but on providing an abstract institutional structure in which each individual decision could profit the most from the spontaneous order of human interaction.

BC’s weekend reads

Brandon Christensen Links , , , , , , , , , , , , , , , ,
  1. Holy shit! (great news)
  2. Hayek’s rapid rise to stardom | misunderstanding Hayek
  3. great write-up on Catalonia | a philosophical case for secession
  4. if colonialism was the apocalypse, what comes next? | should UNM replace its seal?
  5. do trees fall in cyberspace? | how to use Facebook better
  6. a pretty shallow deep throat | vulvæ in pornography and culture

What if we have already been ruled by an Intelligent Machine – and we are better off being so?

Federico Sosa Valle Philosophy , , , , , , ,

Common people and even reputed scientists, such as Stephen Hawking, have been worrying about the very menace of machines provided with Artificial Intelligence that could rule the whole human genre in detriment of our liberty and welfare. This fear has two inner components: the first one, that the Artificial Intelligence will outshine human intellectual capabilities; and the second one, that the Intelligent Machines will be endowed with their own volition.

Obviously, it would be an evil volition or, at least, a very egotistic one. Or maybe the Intelligent Machines will not necessarily be evil or egotistic, but only as fearful of humans as they are of machines – although more powerful. Moreover, depending on their morality on a multiplicity of reasonings we cannot grasp, we could not ascertain whether their superior intelligence (as we suppose the feared machines would be enabled with) is good or evil, or just more complex than ours.

Nevertheless, there is still a additional third assumption which accompanies all the warnings about the perils of thinking machines: that they are a physical shell inhabited by an Artificial Intelligence. Inspired by Gilbert Ryle’s critique of Cartesian Dualism, we can state that the belief of Intelligent Machines provided with an autonomous volition rests upon the said assumption of an intelligence independent from its physical body: a self-conscious being whose thoughts are fully independent from the sensory apparatus of its body and whose sensations are fully independent from the abstract classification which its mind operates by.

The word “machine” evokes a physical device. However, a machine might as well be an abstract one. Abstract Machines are thought experiments compounded by algorithms which delivers an output from an input of information which, in turn, could be used as an input for another circuit. Theses algorithms can emulate a decision making process, providing a set of consequences for a given set of antecedents.

In fact, all recent cybernetic innovations are the result of the merging of abstract machines with physical ones: machines that play chess, drive cars, recognize faces, etc.. Since they do not have an autonomous will and the sensory data they produce are determined by their algorithms, whose output, in turn, depends on the limitation of their hardware, people are reluctant to call their capabilities “real intelligence.” Perhaps the reason of that reluctance is that people are expecting automata which accomplish the Cartesian Dualism paradigm of a thinking being.

But what if an automaton enabled with an intelligence superior to ours has already existed and is ruling at least part of our lives? We do not know of any being of that kind, if for a ruling intelligent machine we regard a self-conscious and will-driven one. But the ones who are acquainted with the notion of law as a spontaneous and abstract order will not find any major difficulty to grasp the analogy between the algorithms that form an abstract machine and general and abstract laws that compound a legal system.

The first volume of Law, Legislation, and Liberty by Friedrich A. Hayek, subtitled “Norms [Rules] and Order” (1973), is until today the most complete account of the law seen as an autonomous system, which adapts itself to the changes in its environment through a process of negative feedback that brings about marginal changes in its structure. Abstract and general notions of rights and duties are well-known by the agents of the system and that allows to everyone to form expectations about the behaviour of each other. When a conflict between two agents arises, a judge establishes the correct content of the law to be applied to the given case.

Notwithstanding our human intelligence -using its knowledge about the law- is capable of determining the right decision to each concrete controversy between two given agents, the system of the law as whole achieves a higher degree of complexity than any human mind might reach. Whereas our knowledge of a given case depends on acquiring more and more concrete data, our knowledge of the law as a whole is related to more and more abstract degrees of classifications. Thus, we cannot fully predict the complete chain of consequences of a singular decision upon the legal system as a whole. This last characteristic of the law does not mean its power of coercion is arbitrary. As individuals, we are enabled with enough information about the legal system to design our own plans and to form correct expectations about other people’s behaviour. Thus, legal constraints do not interfere with individual liberty.

On the other hand, the absolute boundary to the knowledge of the legal system as a whole works as a limitation to the political power over the law and, thence, over individuals. But, after all, that is what the concept of rule of law is about: we are much better off being ruled by an abstract and impersonal entity, more complex than the human mind, than by the self-conscious -but discretional- rule of man. Perhaps, law is not at all an automaton which rules our lives, but we can ascertain that law -as a spontaneous order- prevents other men from doing so.

On the Difference between Hayek’s Road to Serfdom and Increasing Central Planning

Federico Sosa Valle Books , , , ,

Once, in another place, I had pointed out the misunderstandings of the common interpretation of Hayek’s road to serfdom thesis. This was not an unintended process by which government intervention on markets inevitably leads to further and increasing interventions. That might be Ludwig v. Mises’ thesis, but not Hayek’s.

What Hayek stated in The Road to Serfdom was that the checks- and-balances system of modern constitutionalism appears as an obstacle to the quick achievement of the concrete ends that an interventionist policy aims for. Thus, the road to serfdom is an unintended process by which legal constitutional processes are eroded by decisions based on expediency.

On that occasion it was left pending to solve the question of where the confusion on the central thesis of “The Road to Serfdom” came from.

The source of the answer to this question is yet Ludwig v. Mises. The Road to Serfdom was first published in 1944, but, previously, in essays published in 1935, we find Hayek, still heavily influenced by L. v. Mises, stating opinions that are very similar to the common confusion about the meaning of the road to serfdom: “In fact, however, if by planning is meant the actual direction of productive activity by authoritative prescription to be used, or the prices to be fixed, it can be easily shown, not that such a thing is impossible, but that any isolated measure of this sort will cause reactions which will defeat its own end, and that any attempt to act consistently will necessitate further and further measures of control until all economic activity is brought under one central authority” (“Socialist Calculation I: The Nature and History of the Problem”, first published in Collectivist Economic Planning, London,  1935, and reprinted in Individualism and Economic Order, Chicago, 1948).

F. A. Hayek did not change his opinions of 1935 in The Road to Serfdom (1944), he just shifted the realm of his inquiry from economics to political philosophy. Nevertheless, it would be a crass error to judge Hayek’s political and legal theory -for good or for bad- using his former opinions as an economist.