I’m getting tired of reading and listening to so-called libertarian or conservative people saying that “in theory socialism is beautiful.” No, it’s not. In theory, socialism can be summed up as “the end of private property.” This is how Karl Marx summed it up. The genius of Ludwig von Mises is precisely in the fact that he did not have to wait until 1989, when the Berlin Wall fell, to realize that this does not make sense. When the Soviet Union was still a young country sweeping intellectuals around the world, von Mises made the following remark: without private property, there is no supply and demand. Without supply and demand, there is no price formation. Without prices the economic calculation is impossible. And that is precisely what happened in the USSR and happens in countries that follow the path of socialism: without the compass of free market prices, governors can not make decisions about allocating resources. Socialism is the death of rationality in economics. Socialism is rubbish in practice because before that it’s rubbish in theory. Please stop talking nonsense. The free market, on the other hand, is beautiful in practice because first of all, it is beautiful in theory.
Ludwig von Mises
On the Difference between Hayek’s Road to Serfdom and Increasing Central Planning
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.
Human Action, Ch. 1
Well, I finally started reading Human Action. One connection stood out to me from the first chapter.
First, there’s much more attention paid to fundamental philosophy than I expect from economic treatises. This is understandable given that Mises felt he had to set the stage — sparring, as he says, with the irrationalists, polylogists, historicists, positivists, behaviorists, and other economists within the youngest science. Every undergrad, cracking open Hobbes’ Leviathan, is startled to find lengthy remarks on human cognition in what they thought was only a work of political philosophy; this was a similar experience.
There are noticeable allusions between von Mises and pre- and post-Tractatus Wittgenstein. Both Austrians and both Ludwigs, the economist writes that “It is impossible for the human mind to conceive logical relations at variance with the logical structure of our mind. It is impossible for the human mind to conceive a mode of action whose categories would differ from the categories which determine our own actions” (p. 25). Similarly, for the philosopher, the logical structure of thought (and language) was a central theme of Tractatus Logico-Philosophicus; one of the young Wittgenstein’s conclusions was that some (ethical, aesthetic, metaphysical) postulates go beyond the limits of language and, when crunched into such human linguistic straightjackets, create sheer nonsense (leading to such maxims like, “What can be said at all can be said clearly…”) (TLP, §7).
Each Ludwig, of course, limited their inquiry to the human mind, discovering, like Kant, universal conditions of rational beings (or so I garner so far from Mises).
Another methodological point in common. Ludwig von Mises, in section The Alter Ego, remarks on “the ultimate given,” an idea which, I believe, is unpopular in contemporary epistemology. The empirical sciences must reach final points of inquiry, upon which their tools fail to produce deeper insight. This is so because, to Mises, there are only “two principles available for a mental grasp of reality, namely, those of teleology and causality” (p. 25): teleology belonging to purposeful behavior, and causality to non-purposive objects of study. The former, applied ad infinitum, must stop at the unmoved mover, and the latter can only invoke an infinite regress. This point is important for deploying praxeology as a deductive science.
This doesn’t seem like a new insight, but it’s also one that Wittgenstein touches upon in a different way in Philosophical Investigations, writing in the first segment “Explanations come to an end somewhere.” The use of language in daily life does not imply ultimate, elucidated concepts between speakers; we never ask for these and likewise we do not need them to communicate. Reaching deeper into shared insight also leads to confusion; we talk of objects and ideas as ‘wholes’ and ‘composites,’ but these categories are not unambiguous. Wittgenstein situates the sense of concept-analysis only within a language game: “The question ‘Is what you see composite?’ makes good sense if it is already established what kind of complexity — that is, which particular use of the word — is in question. If it had been laid down that the visual image of a tree was to be called ‘composite’ if one saw not just a single trunk, but also branches, then the question ‘Is the visual image of this tree simple or composite?’, and the question ‘What are its simple component parts?’, would have a clear sense — a clear use.” So therefore, “To the philosophical question: ‘Is the visual image of this tree composite, and what are its component parts?’ the correct answer is: ‘That depends on what you understand by “composite”.’ (And that is of course not an answer but a rejection of the question.)” (PI, §47).
In the future I might post on Mises’ short use of terms like “being,” “change,”and “becoming,” which he uses in a sense reminiscent of Parmenides.
Wittgenstein, Philosophical Investigations. G. E. M. Anscombe trans.
von Mises, Human Action. Scholar’s Edition. Ludwig von Mises Institute.
Military Dictatorship in Brazil: Was it worth it?
The title of this text can already cause controversy since many understand that there was no dictatorship in Brazil, but a series of military governments that could not be classified as dictatorial. But the fact is that, in 1964, Castelo Branco became president in place of João Goulart, being succeeded by Costa e Silva, Medici, Geisel and João Figueiredo. Calling this dictatorship or not, the fact is that João Goulart was deposed and Castelo Branco occupied the presidency to avoid that the country was taken by groups sympathetic to the communism, making Brazil a “Big Cuba”. And it is against this fact that I ask if it was worth it: was it worth having 21 years of military governments to prevent a socialist government from being implanted in Brazil?
A socialist government was implemented in Brazil in 2003 by popular vote. Although political propaganda in 2002 had proclaimed an inclination towards the center of the political spectrum, the fact is that the PT never completely abandoned its socialist inclinations. It could even be said that FHC is worthy of the same comment: although less inclined to the left, the PSDB does not carry “democratic socialism” in the name for nothing. In light of this, I ask if it was worth having 21 years of military governments in Brazil. In 1988, just three years after João Figueiredo left the presidency of the country, a Constitution was promulgated with a strong Progressive character. In 1994, less than 10 years after the last military president stepped down, Brazil elected a “Third Way” president. In 2002 a president with a past of explicit connections with socialism came to power, and in 2011 the country happened to be governed by a former guerrilla warrior. If the objective of placing the military in power has been to avoid the implantation of socialist governments in Brazil, it can be said that this goal was not achieved. It was only postponed for just over 21 years.
What is socialism? Why is it so bad? Even without any empirical research, I am quite sure that most of the Brazilian population would not know how to answer these questions. In a similar vein, I am quite convinced that most of the country’s “literate class” (artists, academics, and intellectuals of all kinds) is sympathetic to socialism. Many of the political parties in Brazil carry “socialism” or “communism” in the name.
What did the military governments offer in exchange for socialism? Although they had varied characteristics, most of the governments between 1964 and 1985 tended to be a modernized version of Positivism. Positivism states that all knowledge (tradition, common sense, religion) will be superseded by positive scientific knowledge. Another way of defining it is to say that only what is empirically proven is true. Positivism, however, presents some problems. First, it is self-defeating, that is, it does not stand up to its own validation criteria: “Only what is empirically proven is true.” Is this empirically proven? Is it empirically proven that “only that which is empirically proven is true”? No. And it could not even be. Another difficulty is to carry out the empirical tests. It is possible, even with constraints, to conduct empirical tests in a controlled environment (in laboratories) to test theories and hypotheses. But it is not possible to declare the universality of the results, even if the tests are performed a very large number of times.
This “problem of induction” (to draw universal conclusions from particular, albeit many, observations) was famously answered by Karl Popper: in Popper’s definition, the aim of science is not to prove universal truths, but to affirm with confidence a set of information. In other words, nothing is “scientifically proven,” but many things are scientifically falsified by the lack of favorable evidence. Ludwig von Mises answered the problem of induction in another way: not everything has to be empirically tested to be considered true. There are truths that are self-evident, even without any empirical test. Despite the differences, both Popper and Mises offered possibilities of non-positivistic sciences (in the sense of systematic knowledge), especially valid for the study of human beings living in society.
Positivism and Marxism are sister doctrines. Both emerged in the 19th century in response to liberalism. The origin of liberalism lies in Christianity, if not in the affirmation of the existence of the Christian God in all the details presented by the Bible, at least in elements such as Natural Law and an anthropology similar to that of Christian teaching. Positivism and Marxism have moved away from Christianity by adopting a materialist view of reality (it only exists, or at least it only matters what we can experience empirically) and by denying the natural limitations of the human being.
Following von Mises, the Austrian School rejects the positivist methodology, and therefore is classified as heterodox. Although we should avoid anachronisms, the tendency of classical economists was the same: from introspection and axioms, rather than from empirical tests. It is not a matter of despising the scientific method altogether, quite the opposite! The scientific method is excellent for taking the man to the moon and discovering the cure of diseases. It just is not fit for a human “science.” To believe so is to fall into a “fatal conceit”. The military that governed Brazil between 1964 and 1985 can be accused of this fatal conceit. They generally believed that they could rule the country as if it were a barracks.
In conclusion: was it worth it? Certainly avoiding Socialism is a great and necessary goal. But combating it with Positivism is not the right path. Two mistakes do not make a hit. Was there the possibility of combating socialism with liberalism? I think not. Brazil didn’t have the liberal tradition necessary to confront socialism and other forms of authoritarianism or totalitarianism (and maybe it still hasn’t). Looking back, we can only regret that the options were so bad. Looking forward, we can try to improve our options by building a true liberalism in Brazil.
Where the state came from
One of the questions that led me to libertarianism was “what is the state?” More than that: Where did it come from? How it works? What’s the use? Analogous questions would be “what is politics?” and “what is economics?” If my classroom experience serves as a yardstick for anything, the overwhelming majority of people never ask these questions and never run after answers. I do not blame them. Most of us are very busy trying to make ends meet to worry about this kind of stuff. I even sought an academic training in politics just to seek answers to these questions. For me it’s nothing to have answers, after all, I’m paid (albeit very poorly paid) to know these matters. Still, I wish more people were asking these types of question. I suspect that it would be part of the process to review the political and economic situation in which we find ourselves.
Many times when I ask in the classroom “what is the state?” I receive in response that Brazil is a state. In general I correct the student explaining that this is an example, not a definition. The modern state, as we have it today, is mainly the combination of three factors: government, population, and territory. The modern state, as we have it today, can be defined as a population inhabiting a specific territory, organized by a centralized government that recognizes no instance of power superior to itself. Often, in the academic and popular vocabulary, state and government are confused, and there is no specific problem in this. In fact, the two words may appear as synonyms, although this is not a necessity. It is possible to distinguish between state and government thinking that the state remains and governments go through.
The state as we know it today is a product of the transition from the Middle Ages to the Modern Age. I believe that this information alone should draw our attention enough: people have lived in modern states only in the last 500 years or so. Throughout the rest of human history other forms of political organization have been used. I am not saying (not here) that these other forms of organization were better than the modern state. I am simply saying that the modern state is far from being natural, spontaneous, or necessary. Even after 1500 the modern state took time to be universally accepted. First, this model of organization spread throughout Europe at the beginning of the Modern Era. It was only in the late 18th century and early 19th century that this model came to be used in the American continent. The modern state spread globally only after the decolonization movement that followed World War II. That is: the vast majority of modern states are not even 70 years old!
What is the purpose of the state? At least in my experience, many people respond by “providing rights” or “securing rights.” People think about health, education, sanitation, culture, security, etc. as duties of the state towards society. It is clear that many people think about health, education, housing, etc. as rights, which in itself is already questionable, but I will leave this discussion for another time. The point I want to put here is that empirically states have only cared about issues like health and public education very recently. In the classic definition of Max Weber (late 19th century), the state has a monopoly on the legitimate use of violence. In other words, virtually anyone can use violence, but only the state can do it legally. That is: the primordial function of the state is to use violence within a legal order. Other functions, such as providing health and education, came very late and only became commonplace with the welfare state that strengthened after World War II.
I find it always interesting to see how we live in a young world. Basically the entire world population today lives in some state and expects from this state a minimum level of well-being. However, this reality is only about 70 years old. The idea that we need to live in states that provide us with a minimum of well being is not natural and far from obvious. To understand that the modern state is a historical institution, which has not always existed, it is fundamental to question its validity. Moreover, to note that the functions of the state that seem obvious to us today did not exist 70 years ago leads us to question whether it is valid to expect things such as health and education from the state.
My personal perception is that the modern state (defined by territory, population, and government) is better than any alternative that has already been proposed. However, the state of social well-being is only a sugar-watered socialism. Socialism, by definition, does not work, as Ludwig von Mises very well shows. Partial socialism is as likely to function as full socialism. Expecting the state to use violence within legal parameters is valid and even fundamental. But to expect that this same state may successfully diversify its activities entering the branches of health, education, culture, etc. is a fatal conceit.
On Capitalism and Slavery : Pêle-Mêle Comments
Last week, a debate was initiated via an article in the Chronicle of Higher Education that relates to the clash between historians and economists over the topic of slavery. The debate seems acrimonious given the article and at the reading of a special issue of the Journal of Economic History regarding the Half has never been told by Edward Baptist, its hard to conclude otherwise. Pseudoerasmus published comments on the issue in a series of posts and a Trumpian twitterstorm (although the quality is far from being Trumpian). I find myself largely in agreement with him in response to the historians, but there are some pêle-mêle points that I felt I needed to add.
On Historians Versus Economists
To be honest, when I took my first classes in economic history, it seemed clear that there were important points that were agreed upon in the literature on slavery. The first was that the accounting profitability of slavery was not the same as the economic profitability (think opportunity cost here) of slavery. Thus, it was possible that (concentrating on the US here) the peculiar institution could more or less thrive regardless of the social costs it imposed (i.e. slavery is a tax on leisure which also increases the expropriation rate from slaves, and non-slaveowners often had to shoulder the cost of enforcing the institution). This argument is not at all new; in fact it is basically a public choice argument that Gordon Tullock and Anne Krueger could have signed on to without skipping a heartbeat (see Sheilagh Ogilvie – one of my favorite economist who does history in equality with Jane Humphries). The second point of agreement is that no one agreed on how to measure the productivity of slavery in the United States and the distribution of its costs and gains. The second point has been a very deep methodological debate which related to the method of measuring productivity (CES vs Translog TFP – stuff that would make your head blow and which also lead to the self-invitation of the Cambridge Capital Controversy to the debate). The quality of the data has been at the centre-stage as well, and datasets on slave prices, attributes, tasks and many other variables are still being collected (see notably the breathtaking work of Rhode and Olmsted here and here).
Thus, I will admit to being unimpressed by the use of oral histories to contest that literature. In addition, the absence of theory in Baptist’s work yields an underwhelming argument. Oral histories are super-duper important. The work of Jane Humphries on child labor is a case in point of the need to use oral histories. She very carefully used the tales told by children who worked during the industrial revolution to document how labor markets for children worked. The story she told was nuanced, carefully argued and supported by other primary evidence. This is economic history at its best – a merger of cliometrician and historian. In fact, while this is an evaluation that is subjective, the best economists are also historians and vice-versa. The reason for that is the mix of theory with multiple forms of evidence. But they key is to have a theory to guide the analysis.
Unexpectedly for some, the best exposition of this argument comes from Ludwig von Mises in his unknown book Theory and History. I was made aware of that book in a discussion with Chris Coyne of George Mason University and I proceeded to reading it. I was surprised how many similarities there were between the Mises who wrote that book and the Douglass Norths and the Robert Fogels of this world. The core argument of Theory and History is that axiomatic statements can be applied to historical events. The goal of historians and economic historians is to sort which theory applies. For example, the theory of signaling and the theory of asymmetric information are both axiomatically true. Without the need for evidence, we know that they must exist. The question of an economic historian becomes to ask “did it matter”? Both theories can compete to offset each other: if signaling is cheap, then asymmetric information can be solved; if it is not, asymmetric information is a problem. Or both may be irrelevant to a given historical development. To explain which two axiomatic statements apply to the event (and in what dosage), you need data (quantitative and qualitative). Thus, Theory and History actually proposes the use of econometrics and statistical methods because it does not try to predict as much as it tries to a) sort which axiomatic statements applied; b) the relative strengths of competing forces; c) the counterfactual scenario.
Without theory, all you have is Baptist’s descriptions which tell us very little and can, incidentally, be distorted by he who recounts the tales he read.
On the Culture of Peasants/Slaves/Slaveowners
When I started my PhD dissertation Canadian economic history, the most annoying thing I saw was the claim that the French-Canadians had “different mentalities” or “more conservative outlooks”. This was basically the way of calling them stupid. This has recently evolved to say that they “maximized goals other than wealth”. Regardless, this was basically: the French-Canadian was not culturally suited for economic development.
But culture is not a fixed variable, it is not an exogenous variable. Culture is basically the coherent framework built by individuals who share certain features to “cut out” the noise. Everyday, we are bombarded with tons of pieces of information and there is no way that the human brain can process them all. Thus, we have a framework – culture (ideology does the same thing) – which tells us what is relevant and what is irrelevant and what interpretation to give to relevant information.
People can cling to old beliefs for a long time, but only if there is no cost to them. I can persist in terrible farming practices if I am not made aware of the proper valuation of the opportunity I am foregoing. For example, British farmers who arrived in Quebec in the 19th century tended to use oxen as they did in England for tilling the soil. They had probably been taught to do that by their parents who learnt it from their grandparents because it was part of the farming culture of England. The behavior was culturally inherited. However, when they saw that the French-Canadians were using horses and that horses – in the Canadian hinterland – got the job done better, they shifted. The culture changed at the sight of how important was the foregone opportunity by continuing to use oxen. Where the British and the French co-existed, both were equally good farmers. Where they could not observe each other, they were all sub-optimal farmers. Seeing the other methods forced changes in culture.
The same applies to slaveowners and slaves! Slaveowners were a more or less tightly knit group that frequented similar circles and were constantly on the lookout to increase productivity. If some master had noticed that he could increase production by whipping more slaves, why would he not adopt this method? Why would he leave 100$ bill on the street? Why did the masters growing cotton in South Carolina not adopt the method of whipping adopted by growers in Louisiana? Without a theory of how culture changes (and what purposes it serves beyond the simplistic Marxist power structure argument), there is no answer to this question. With the work of Rhode and Olmstead, there is an answer: the type of cotton that had higher yields was not suited for growing everywhere! In this case, we are applying my comment from the section above on Historians versus Economists. There are competing theories of explaining increasing output: either some slave masters were unable to observe the other slave masters and adopt the torture methods they had (which would need to be the case for Baptist to be right) or there were biological limitations to growing the better crops in some areas (Rhode and Olmstead).
Two competing theories (they are not mutually exclusive though) that can be tested with data and they set a counterfactual. That is why you need theory to make good history.
One last thing: slave owners were not capitalists
This is probably the most childish thing to come out of works like those of Baptist: to assert that because slaves were capital assets, that the owners were capitalists. That is true if you want to adhere to the inconsistent (and self-contradicting) Marxist approach to capital. In fact, as Phil Magness pointed out to me, slave owners were not free market types. They were very much anti-capitalists. Slavery apologists like Fitzhugh and Carlyle were even more anti-capitalists than that. It’s not because you own capital that you are a capitalist unless you adhere to Marxist theory.
But, capital is just a production input. Its value depends on what it can produce. As Jeffrey Hummel pointed out, there is a deadweight loss from slavery: enforcement costs, the overproduction of cotton because slavery is basically a tax on leisure and the implicit taxation of the output produced by slaves. All three of these factors would have slowed down economic growth in the south. Thus, as capital assets, slaves were relatively inefficient.
Does socialism need to be corrupt?
Brazil is going through a deep crisis right now. It is tempting to say that this is the greatest crisis in the country’s history, but I am quite afraid to make this comment. Unlike England and the United States, which have experienced significant institutional stability in the past 200 or 300 years, Brazil has gone through several political breakdowns in its history, and the current economic crisis is far from the hyperinflation of the 1980s. But there is a characteristic that links the present crisis to the previous ones: the presence of a tendentially authoritarian state.
Although Brazil was governed by an openly socialist party only between 2003 and 2016, this does not mean that socialist characteristics were not present in the country much earlier. One of the central theses of F.A. Hayek in the Road to Serfdom is that the democratic socialist parties of Western Europe (notably the Labor Party in England) had more features in common with the Nazis and fascists than they would have liked to admit. In other words, the differences between left (even a moderate left) and extreme right were illusory: they both had the fundamental characteristic of trying to plan society centrally.
The opposition between spontaneous order and central planning was one of the central theses in Hayek’s career. In Fatal Conceit he develops this theme a lot, showing how the opposition between central planning and lack of planning is a fallacy: society will forcibly be planned. The question is by whom: for a small group of people on behalf of all the others, or for a large group of individuals, each with limited responsibilities? According to Hayek, this distinction between central planning and individual planning is one of the central separations between an authoritarian society (left or right) and a truly free society.
It is difficult to say if the PT (“worker’s party”) government between 2003 and 2016 was the most corrupt in Brazilian history. Homesick people can always claim that corruption was also present in previous governments (it was just not investigated), and possibly they would be right. Before becoming a country ruled by a socialist party, Brazil has always been a patrimonialist country. And this is a fundamental point that adherents of socialism cannot understand: Brazil has never been a capitalist country, at least not in the sense that the liberal tradition employs.
Starting from Hayek, we conclude that central planning is impossible. Planners do not have the information they need to make their plans. As Mises taught, without private property there is no price formation, and without price formation the economic calculation is impossible. This opens space for what Hayek calls a fatal conceit: the assumption that it is possible to run a country from a central body, a presupposition that not only fails to achieve its goals, but also leaves piles of corpses on the way.
The PT government was probably the most corrupt in Brazilian history because it was what most rejected capitalism. The opposite of the free market is the attempt to centrally plan the economy. To centrally plan the economy, an army of administrators is needed. To watch over these administrators, a host of supervisors is needed, and so on. Corruption is inevitable.
Socialist governments are always among the most corrupt, and the reason is simple: the more government, the more corruption. A simpler, more decentralized government is not perfect. But it’s the best we can wish for. It would certainly be a government with less control over money, and thus less likely to steal.
Classical Liberalism and the Nation State
Barry’s response to my earlier post is another interesting read, yet it is also rather broad brush historical. I think he is erroneous if he claims that ‘it did not occur to classical liberals, on the whole, to question the state system as they knew it’. In fact the founding fathers of classical liberalism, David Hume and Adam Smith, were very much aware of other, often cosmopolitan ideals of world order. Yet they argued that the nation was attached to individual emotion, which could not be the case for entities beyond the nation state. This was also the position of later classical liberals such as Von Mises and Hayek, as I show in Classical Liberalism and International Relations Theory (Palgrave, 2009). Let me elaborate a little, also in the wider context of international political theory.
Liberalism is the political expression of individualism, yet cooperation of individuals in groups is valued positively. For classical liberals the nation, or the country, is the largest group in society which is the object of human passion, both positive in the sense of national pride and negative in the sense of shame and humiliation. Hume noted that there are few men entirely indifferent to their country, and both he and Adam Smith underlined that humans sympathise more with people to whom they are close than with strangers or foreigners. Feelings for the nation are strong, natural motivational forces for individuals.[i]
This also applies in the age of modern states and nationalism. Despite the atrocities committed in the name of national glory throughout the twentieth century, Mises and Hayek never predicted nor called for the end of the nation state. Mises thought that language was the essence of nationality, and with the fragmentation of the polyglot Austro-Hungarian Empire in mind he argued that multi-language countries were doomed to failure. His solution was an increase in possibilities for individual self-determination and group secession, but not in the expectation that this would lead to a world without sovereign states.[ii] Hayek saw the nation as a prime source of human bonding and individual loyalty, but recognised the negative aspects of nationalism. He valued the nation, but nationalism was a poison,[iii] not least because he saw a strong relation between nationalism and imperialism. After all, it is a small step from thinking good about one’s country to trying to rule and civilise allegedly inferior others. Often, although certainly not in all cases, the nation as a group is politically organised as a sovereign state. In the classical liberal view, states are the most important actors in international relations.
To maximise individual freedom the state should only have a limited number of tasks. The state is an important protector of natural rights, but history has shown that it is also the biggest abuser of these rights. The principle of the rule of law intends to protect the negative liberty of individuals. Classical liberals think the state can best be bound by a combination of constitutions; separation of the legislative, executive and judicial powers; and the limitation of positive law.
In international affairs this means that states should be cautious about concluding and ratifying treaties and other forms of positive law. These are often binding commitments that are very hard to change or to get rid of, with a large possible negative impact on individual freedom. Some international agreements may be useful to smooth the working of the international society of states, or to settle practical matters. But the dangers of overregulation are just as real in world politics as they are in national politics. Besides some specific cross-border issues, the classical liberal rule of thumb is that there is no need for international state action if there is no domestic state task.
Consequently, attempts to build a better world by establishing international organisations and regimes are rejected. Mises and Hayek were strong critics of the League of Nations and its successor the United Nations, and Hayek was a fierce critic of the International Labour Organization. Their main concern was that these and other organisations were taking up tasks they should not perform, just like overactive states in national circumstances. Social constructivism is bad, no matter at what level it is performed.[iv]
In Degrees of Freedom (Transaction, 2015) I have tried to illuiminate the differences between the different forms of liberalism (and conservatism, also see my earlier post on the differences between them entitled “Let’s clear up the liberal mess”), including their views in international relations. In summary it looks like this:
Liberalism, Conservatism and International Relations
| Classical liberalism | Social liberalism | Libertarianism | Conserva
tism. |
|
| Nation as limit of individual sympathy | Yes | No | No | Yes |
| State as prime actor in world politics | Yes | No | No | Yes |
| International governmental
institutions/regimes |
No | Yes | No | No |
| Can war be eliminated | No | Yes | Yes | No |
| Does trade foster peace? | No | Yes | Yes | No |
Source: Edwin van de Haar, Degrees of Freedom. Liberal Political Philosophy and Ideology (Transaction Publishers, 2015).
That also explain partly why Barrry can rightly argue that the ideas of Kant, Mill and to a lesser extent Montesquieu differ from those of Hume, Smith, Mises and Hayek: they are not classical liberals but social liberals.
Notes:
[i] Hume, Treatise,79, 317; Adam Smith, The Theory of Moral Sentiments (Indianapolis: Liberty Fund, 1982), 299; also Edwin van de Haar, ‘David Hume and International Political Theory: A Reappraisal,’ Review of International Studies, 34:2 (April 2008), 225–242.
[ii] Ludwig von Mises, Nation, State, and Economy. Contributions to the Politics and History of Our Time (New York and London: Institute for Humane Studies & New York University Press, 1983), 39–40, 82.
[iii] Friedrich Hayek, Studies in Philosophy, Politics and Economics (New York: Simon and Schuster, 1967), 143.
[iv] Mises, Nation, State and Economy, 90–91; Ludwig von Mises, Omnipotent Government. The Rise of the Total State and Total War (Grove City: Libertarian Pres, 1985), 292–294; Friedrich Hayek, The Road to Serfdom (London: Routledge, 1997), 176.
Where did Homo Economicus come from?
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.
The Cruel, Conceited Follies of Trump’s Colonialist Foreign Policy
I typically prefer to abstain from writing too extensively on electoral politics. For one, it’s not my area of expertise and I simply don’t enjoy it that much, but also I think the type of issues that come up in electoral politics are a sensationalist distraction from the meaningful policy debates that actually go on in the back rooms of congress and think tanks, as well as the deeper and more important philosophical, economic, and cultural issues that plague our political situation. Thus, I prefer to write in more detail about public policy or more theoretical economic and philosophical issues rather than the day-to-day drudgery of superficial political news. However, the recent discussion on foreign policy on the campaign trail surprisingly has the potential to become at least mildly substantive, so it is in my mind worth analyzing in greater depth. It should be noted that I am far from an expert in foreign policy, so apologies in advance for any errors and if this article as a whole is a farce.
The purpose of this article is to lay out and critically assess Donald Trump’s foreign policy. It is my contention that Trump does have some fairly consistent underlying instincts, if not principles, on foreign policy that may be inferred from his public comments on the issue. This may be characterized by a concerning belief that the ultimate end of foreign policy should be to aggressively promote America’s interests abroad, akin to a radical, new type of Jacksonian colonialism. If I am right about Trump’s underlying views on foreign policy, a Trump presidency would result in disaster. It would mean massive violations of humanitarian rights and would fail to meet the goals even Trump himself is seeking to attain.
Clinton on Trump’s Foreign Policy
Yesterday, Hillary Clinton delivered a major speech ostensibly criticizing Trump’s foreign policy. Unfortunately, most of her speech was more of an attack on the narrative of Trump’s campaign and Trump himself than his actual foreign policy. This is largely because she thinks Trump doesn’t really actually have a foreign policy; his positions, Clinton thinks, are incoherent, ignorant, or just not even positions at all. This is probably the most quoted passage of the speech:
Donald Trump’s ideas aren’t just different — they are dangerously incoherent.
They’re not even really ideas: just a series of bizarre rants, personal feuds, and outright lies. He’s not just unprepared, he’s temperamentally unfit to hold an office that requires knowledge, stability and immense responsibility. This is not someone who should ever have the nuclear codes — because it’s not hard to imagine Donald Trump leading us into a war just because somebody got under his very thin skin.
Clinton’s strongest case against Trump was that he is “temperamentally unfit to hold office.” She makes this case even more persuasively elsewhere in the speech:
Imagine Donald Trump sitting in the Situation Room, making life-or-death decisions on behalf of the United States. Imagine him deciding whether to send your children into battle. Imagine if he had not just his Twitter account at his disposal when he’s angry, but America’s entire arsenal.
Do we want him making those calls – someone thin-skinned and quick to anger, who lashes out at the smallest criticism?
…I’ll leave it to the psychiatrists to explain his affection for tyrants. I just wonder how anyone could be so wrong about who America’s real friends are. But it matters. Because if you don’t know exactly who you’re dealing with, men like Putin will eat your lunch.
I typically don’t find these types of arguments convincing. After all, it doesn’t matter so much the character of public officials as the institutional incentives they face. But in matters of foreign policy problems of temperament and character do matter because the social situation between foreign leaders in diplomacy can often make a huge difference. Bad manners can and have caused wars (eg., there’s an argument to be made that Jefferson’s bad manners towards British diplomat Anthony Merry helped lead to the War of 1812). These points are confirmed by the fact that world leaders are terrified by Trump and how the intelligence community is afraid he could spill security-sensitive confidential information. (Of course, Clinton also has a less-than-optimal track record on the matter of intelligence security).
What is Trump’s Foreign Policy?
However, Clinton is only partially correct in claiming that Trump’s ideas on foreign policy are “incoherent” or that he doesn’t really have a foreign policy at all. It is true that, as with every other issue save immigration and free trade, Trump switches his positions a lot. But underneath the prime facie incoherence is an overarching vision for a foreign policy that is both somewhat coherent and terrifying.
First, a common misconception needs to be clarified about Trump’s foreign policy views. The press commonly treats Trump as if he’s more of a dove on war and foreign intervention than Clinton, citing his recent criticisms of the Iraq War and Libya. This myth is particularly peddled in pro-Trump “libertarian” circles (with an emphasis on the scare quotes). It is widely accepted that Trump’s foreign policy are less interventionist than Clinton’s fairly hawkish views. However, this is decidedly not the case.
Zach Beauchamp has persuasively made the case that Trump is, in fact, more hawkish in some sense than Clinton. The most consistent point that Trump has made for years now is that America should be waging, in Beauchamp’s words, “colonial wars of conquest” for the purpose of taking resources from other countries. Beauchamp notes:
He first debuted this plan in an April 2011 television appearance, amid speculation that he might run for the GOP nomination. In the interview, Trump seemed to suggest the US should seize Iraqi oil fields and just operate them on its own.
“In the old days when you won a war, you won a war. You kept the country,” Trump said. “We go fight a war for 10 years, 12 years, lose thousands of people, spend $1.5 trillion, and then we hand the keys over to people that hate us on some council.” He has repeated this idea for years, saying during one 2013 Fox News appearance, “I’ve said it a thousand times.”
Trump sees this as just compensation for invading Iraq in the first place. “I say we should take it [Iraq’s oil] and pay ourselves back,” he said in one 2013 speech.
As Beauchamp says, “To be clear: Trump’s plan is to use American ground troops to forcibly seize the most valuable resource in two different sovereign countries. The word for that is colonialism.”
This type of colonialism is even more extreme than the colonialism of American imperialism of the early twentieth century, where colonial wars of conquest were typically justified in terms of America’s “manifest destiny” to spread democracy throughout the world that would eventually benefit the conquered, often coaxed in racial terms (as typified by Kipling’s famous poem), rather than explicitly justified by looting natural resources.
Many people alleging Trump’s dovishness point to his recent criticisms of US intervention in Iraq, Syria, and Libya. The idea that Trump is a dove on these issues, however, is largely a myth. The actual record shows that what Trump’s comments over the past decade or so on foreign policy are largely in line with what Beauchamp sees as his colonialism.
As Beauchamp points out, Trump actually supported intervention in Libya at the time and called for even more aggressive intervention than the Obama administration engaged in (which, as a reminder, included Hillary Clinton at that point):
In a March 2011 vlog post uncovered by BuzzFeed’s Andrew Kaczynski and Christopher Massie, Trump full-throatedly endorsed intervening in the country’s civil war — albeit on humanitarian grounds, not for its oil.
“Qaddafi in Libya is killing thousands of people, nobody knows how bad it is, and we’re sitting around,” Trump said. “We should go in, we should stop this guy, which would be very easy and very quick. We could do it surgically, stop him from doing it, and save these lives.” In a later interview, he went further, endorsing outright regime change: “if you don’t get rid of Gaddafi, it’s a major, major black eye for this country.”
Shortly after the US intervention in Libya began in March 2011, Trump criticized the Obama administration’s approach — for not being aggressive enough. Trump warned that the US was too concerned with supporting the rebels and not trying hard enough to — you guessed it — take the oil.
“I would take the oil — and stop this baby stuff,” Trump declared. “I’m only interested in Libya if we take the oil. If we don’t take the oil, I’m not interested.”
What to make, then, of Trump’s more recent comments where he says he “would have stayed out of Libya”? He’s either incoherent, as Clinton claims, or he’s lying. The first possibility has largely been explored and, though plausible, is uninteresting for present purpose. Therefore, I’ll focus here on the latter (and, in my mind, more likely) possibility. I would argue that Trump is engaging in what could be called, in Arthur Melzer’s understanding of Straussian terms, a sort of dishonest perversion of political esotericism. But unlike the political esotericism of early modern political philosophers who sought to make the world more tolerant, Trump seeks the exact opposite ends. He’s recently been hiding his colonialist views in anti-war rhetoric to attract votes from Americans fatigued with perpetual nation-building through the Bush and Obama administrations. In reality, one of the only sincere substantive positions he’s retained throughout the years is a colonialist desire to wage war for oil. He could not be much further from an anti-war candidate.
As for Iraq, Trump has repeated the claim that he opposed the Iraq war from the beginning many times. Just yesterday, in reaction to Clinton’s speech, he repeated this yet again. “Crooked Hillary said, ‘Oh, Donald Trump, his finger on the button,’,” he said. “I’m the one that didn’t want to go into Iraq, folks, and she’s the one that stupidly raised her hand to go into Iraq and destabilize the entire Middle East.”
In reality, Trump himself wanted to stupidly go into Iraq at the time. In a 2002 interview with Howard Stern he said he supported invading Iraq, adding “I wish the first time it was done correctly.” How did he think it should have been done? Though he wasn’t specific in that interview, his later comments suggest he thinks a “correct” invasion of Iraq would be more aggressive and, of course, focus on taking their oil. Despite being sharply critical of the war later in the Bush administration (though note how he critiques the way it was “handled,” not getting involved in the first place), he supported McCain’s position in favor of the Troop Surge when endorsing him in 2008, claiming, though he wanted to pull out as soon as possible, he wanted to pull out with a victory. Even his most recent comments “critical” of the war, when viewed in the context of his overall foreign policy motivations, aren’t really dovish at all. As he said in 2013, “When I heard that we were first going into Iraq, some very smart people told me, ‘Well, we’re actually going for the oil,’ and I said, ‘All right, I get that.’ [But] we didn’t take the oil!”
Recent comments by Trump against the Iraq War, I think, are well explained by his aforementioned dishonest political esotericism. The record shows Trump disagreed with Bush’s Iraq policy because the motivations were too humanitarian and weren’t aggressive enough prior to the surge. Indeed, Trump’s dishonest claim to dovishness on Iraq has been widely proven false in the press (and yes, each different word links to a different source saying the same thing).
Beauchamp points out that Trump’s views on Syria can’t be described as doveish, as he is largely in agreement with Hillary Clinton:
But the two of them support more or less the same military escalation in Syria. Both Clinton and Trump have proposed carving out “safe zones” in the country, which means clearing out a chunk of its territory and protecting it from aggressors.
Trump sees this as the answer to the Syrian refugee crisis — if you can keep the Syrians there, they won’t have to come over here (or to Europe). “What I like is build a safe zone, it’s here, build a big, beautiful safe zone and you have whatever it is so people can live, and they’ll be happier,” he said in a campaign appearance. “I mean, they’re gonna learn German, they’re gonna learn all these different languages. It’s ridiculous.”
Similarly, both candidates have emphasized the need to bomb ISIS in Iraq and Syria — with Trump famously summarizing his policy as “bomb the shit out of” ISIS. But the way in which Trump plans to wage war on ISIS is far more aggressive — and illegal — than anything Clinton proposed.
He goes on to show that Trump endorses killing the families of suspected terrorists and supports torture for detainees, both of which are illegal war crimes. The killing of suspected terrorists’ families, in particular, is far more extreme than anything Clinton’s proposed and a violation of international law.
Trump essentially views other countries in one of two ways, the way he seems to view people: either as enemies to be defeated economically (eg. China and Mexico) and militarily (eg. Lybia and Syria) or assets to be exploited for American interests via colonial conquest (eg. Iraq). Indeed, he combines the worse elements of neoconservative interventionism with the worst elements of isolationism that my fellow Notewriter Brandon Christensen points out. Like isolationists, he opposes international organizations like NATO and the UN, is generally skeptical of alliances, and fiercely opposes trade agreements; but he also supports costly, unnecessary, and unjust foreign wars and efforts to intervene in other countries’ affairs like neoconservatives. He manages to be both an isolationist, thinking the American government should only protect its own interests at the expense of the citizens of other people, and an interventionist, thinking the government should wage unjust wars to that end, at the same time.
Beauchamp notes how Trump’s foreign policy positions can best be described as Jacksonian:
But historically, there are lots of other forms of American hawkishness. Trump fits well with one of those — one that Bard College scholar Walter Russell Mead calls the “Jacksonian tradition,” after President Andrew Jackson.
Jacksonians, according to Mead, are basically focused on the interests and reputation of the United States. They are skeptical of humanitarian interventions and wars to topple dictators, because those are idealistic quests removed from the interests of everyday Americans. But when American interests are in question, or failing to fight will make America look weak, Jacksonians are more aggressive than anyone.
… Unlike neoconservatives or liberal interventionists, who have well-fleshed-out foreign policy doctrines, many Jacksonians think about war and peace more instinctively. “With them it is an instinct rather than an ideology — a culturally shaped set of beliefs and emotions rather than a set of ideas,” Mead writes. Sound familiar?
Of course, Trump is Jacksonian in more ways than just his foreign policy. His general populism and affection for strong-man leadership are very Jacksonian through and through. Indeed, Thomas Jefferson’s criticisms of Andrew Jackson himself could just as easily be leveled against Trump today (and echo Clinton’s words):
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.
A Critique of Trump’s Foreign Policy
Besides the obvious criticism made very persuasively by Clinton that Trump is temperamentally unfit to engage in diplomacy, what is wrong with foreign policy? In a word: everything. But for the purposes of this post, I’ll confine my criticism to three points.
First, Trump’s style of Jacksonian foreign policy is largely responsible for most of the humanitarian atrocities committed by the American government. Second, Trump’s economic foreign policy is antithetical to the entire spirit of the liberal tradition; it undermines the dignity and freedom of the individual and instead treats the highest good as for the all-powerful nation-state (meaning mostly the politicians and their special interests) as the end of foreign policy, rather than peace and liberty. Finally, Trump’s foreign policy fails for the same reasons that socialism fails. If the goals of foreign policy are to represent “national interest,” then the policymaker must know what that “national interest” even is and we have little reason to think that is the case, akin to the knowledge problem in economic coordination.
On the first note, Beauchamp quotes Dr. Mead on how the Jacksonian tradition in America has resulted in some of the most atrocious abuses of human rights in American history:
In the last five months of World War II, American bombing raids claimed the lives of more than 900,000 Japanese civilians—not counting the casualties from the atomic strikes against Hiroshima and Nagasaki. This is more than twice the total number of combat deaths that the United States has suffered in all its foreign wars combined…
Since the Second World War, the United States has continued to employ devastating force against both civilian and military targets. Out of a pre-war population of 9.49 million, an estimated 1 million North Korean civilians are believed to have died as a result of U.S. actions during the 1950-53 conflict. During the same war, 33,870 American soldiers died in combat, meaning that U.S. forces killed approximately thirty North Korean civilians for every American soldier who died in action. The United States dropped almost three times as much explosive tonnage in the Vietnam War as was used in the Second World War, and something on the order of 365,000 Vietnamese civilians are believed to have been killed during the period of American involvement.
This is because the Jacksonian view dictates that we should use full force in war to advance our interests and the reasons for waging war are for selfish rather than humanitarian purposes. We have good reason to think human rights under Trump will be abused to an alarming degree, as his comments that we should “bomb the hell out of” Syria, kill the noncombatant families of suspected terrorists, and torture detainees indicate. Trump is literally calling for the US to commit inhumane war crimes in the campaign, it is daunting to think just how dark his foreign policy could get in practice.
As mentioned earlier, many “libertarians” such as Walter Block seem to be under the delusion that Trump’s foreign policy is somehow compatible with the liberal tradition’s aspirations of individual liberty and peace. As he wrote when he endorsed Trump and created the oxymoronically named group “Libertarians for Trump:”
When put in this way, it is clear that The Donald is the most congruent with our perspective. This is true, mainly because of foreign policy.
…We readily concede Mr. Donald Trump is no Ron Paul on foreign policy or anything else for that matter. However, compared to his Republican alternatives, the Donald stands head and shoulders above them. He has said, time and time again, things like “Look at what we did in Iraq. It’s a mess. Look at what we did in Libya. It’s a mess there too. And we’re going to repeat our mistakes in Syria? Not on my watch.” …Yes, future President Trump wants a strong military, but with only a few exceptions, fewer than the other Republican candidates, only to defend our country.
Ignoring the glaring factual inaccuracy that Trump’s criticisms of Iraq and Libya were that we weren’t fierce enough and the main reason why he wants war is not to defend our country but to loot oil, nothing could be further from the truth that Trump’s foreign policy views are anywhere near to congruent with libertarianism.
To reiterate: Trump’s foreign policy views are just a particularly nasty version of imperialism and colonialism. Mises dedicated two entire sections of his chapter on foreign policy in Liberalism: The Classical Tradition to critiquing colonialism and revealing just how contrary these views are to liberalism’s commitment to peace and liberty. In direct opposition to Trump’s assertions that we should go to war to gain another country’s wealth and resources and that we should expand military spending greatly, Mises argues:
Wealth cannot be won by the annexation of new provinces since the “revenue” deprived from a territory must be used to defray the necessary costs of its administration. For a liberal state, which entertains no aggressive plans, a strengthening of its military power is unimportant.
Mises’ comments on the colonial policy in his time are extremely pertinent considering Trump’s calls to wage ruthlessly violent wars and commit humanitarian crises. “No chapter of history is steeped further in blood than the history of colonialism,” Mises argued. “Blood was shed uselessly and senselessly. Flourishing lands were laid waste; whole peoples destroyed and exterminated. All this can in no way be extenuated or justified.”
Trump says the ends of foreign policy are to aggressively promote “our” national interests, Mises says “[t]he goal of the domestic policy of liberalism is the same as that of its foreign policy: peace.” Trump views the world as nations competing in a zero-sum game and there must be one winner that can only be brought about through military conquest and economic protectionism, Mises says liberalism “aims at the peaceful cooperation between nations as within each nation” and specifically attacks “chauvinistic nationalists” who “maintain that irreconcilable conflicts of interest exist among the various nations[.]” Trump is rabidly opposed to free trade and is horrifically xenophobic on immigration, the cornerstone of Mises’ foreign policy is free movement of capital and labor over borders. There is no “congruence” between Trump and any classically liberal view on foreign policy matters in any sense; to argue otherwise is to argue from a position of ignorance, delusion, or to abandon the very spirit of classical liberalism in the first place.
Mises wasn’t the only classical liberal critical of Trump-style colonialist foreign policy. The classical liberal editor of The Nation Edward Lawrence Godkin was also sharply critical of the imperial foreign policy of the progressives and populists in his time. In a 1900 article entitled “The Eclipse of Liberalism,” in which he lamented the decline of the liberal emphasis on limited government, Godkin wrote:
Nationalism in the sense of national greed has supplanted Liberalism. It is an old foe under a new name. By making the aggrandizement of a particular nation a higher end than the welfare of mankind, it has sophisticated the moral sense of Christendom. Aristotle justified slavery, because Barbarians were “naturally” inferior to Greeks, and we have gone back to his philosophy. We hear no more of natural rights, but of inferior races, whose part it is to submit to the government of those whom God has made their superiors. The old fallacy of divine right has once more asserted its ruinous power, and before it is again repudiated there must be international struggles on a terrific scale. At home all criticism on the foreign policy of our rulers is denounced as unpatriotic. They must not be changed, for the national policy must be continuous. Abroad, the rulers of every country must hasten to every scene of international plunder, that they may secure their share. To succeed in these predatory expeditions the restraints on parliamentary, even of party, government must be cast aside. [Emphasis mine]
Though Godkin’s broader arguments against the “inferior races” argument for imperialism may not apply to Trump himself per se, it certainly does apply to some of Trump’s dangerously backward white nationalist supporters (at least one of whom Trump has publicly appointed) who are helping to drive his rise.
It wasn’t just Godkin in the United States, an entire organization was formed to oppose these policies: The American Anti-Imperialist League, which formed specifically in opposition to the Spanish-American War and the annexation of the Philippians and Cuba. Though it was certainly a diverse collection of anti-imperialists with a wide variety of motives, many of them were classical liberals. Their platform emphasized the incompatibility of small government and imperial conquest:
We hold that the policy known as imperialism is hostile to liberty and tends toward militarism, an evil from which it has been our glory to be free. We regret that it has become necessary in the land of Washington and Lincoln to reaffirm that all men, of whatever race or color, are entitled to life, liberty and the pursuit of happiness. We maintain that governments derive their just powers from the consent of the governed. We insist that the subjugation of any people is “criminal aggression” and open disloyalty to the distinctive principles of our Government.
Trump’s incompatibility with classically liberal goals is not of unique interest to libertarians. In many ways, both neoconservatives and liberal interventionists aim for a similar end of peace among nations in foreign policy for which classical liberals aim (or at least, I hope they share such an aim). The three viewpoints just disagree on the best policy means to reach those ends. Trump decidedly does not take peace as the end of foreign policy. He takes the ruthless promotion of America’s economic interests to be the goal, often at the expense of peace and at the expense of the lives of innocent people.
Additionally, even if we take Trump’s nationalist ends as given, the policy means Trump prefers of violent military intervention likely will not be successful for similar reasons to why socialism fails. Christopher Coyne has argued convincingly that many foreign interventions in general fail for very similar reasons to why attempts at economic intervention fail, complications pertaining to the Hayekian knowledge problem. How can a government ill-equipped to solve the economic problems of domestic policy design and control the political institutions and culture of nations abroad? Coyne mainly has the interventionism of neoconservatives and liberals in mind, but many of his insights apply just as well to Trump’s Jacksonian vision for foreign policy.
The knowledge problem also applies on another level to Trump’s brand of interventionism. Trump assumes that he, in all his wisdom as president, can know what the “national interest” of the American people actually is, just like socialist central planners assume they know the underlying value scales or utility functions of consumers in society. We have little reason to assume this is the case.
Let’s take a more concrete example: Trump seems to think one example of intervention in the name of national interest is to take the resource of another country that our country needs, most commonly oil. However, how is he supposed to know which resources need to be pillaged for the national interest? There’s a fundamental calculation problem here. A government acting without a profit signal cannot know the answer to such a problem and lacks the incentive to properly answer it in the first place as the consequences failure falls upon the taxpayers, not the policy makers. Even if Trump and his advisors could figure out that the US needs a resource, like oil, and successfully loots it from another country, like Libya, there is always the possibility that this artificial influx of resources, this crony capitalist welfare for one resource at the expense of others, is crowding out potentially more efficient substitutes.
For an example, if the government through foreign policy expands the supply of oil, this may stifle entrepreneurial innovations for potentially more efficient resources in certain applications, such as natural gas, solar, wind, or nuclear in energy, for the same reasons artificially subsidizing these industries domestically stifle innovation. They artificially reduce the relative scarcity of the favored resource, reducing the incentive for entrepreneurs to find innovative means of using other resources or more efficient production methods. At the very least, Trump and his advisors would have little clue how to judge the opportunity cost of pillaging various resources and so would not know how much oil to steal from Libya. Even ignoring all those problems, it’s very probable that it would be cheaper and morally superior to simply peaceably trade with another country for oil (or any other resource) rather than waging a costly, violent, inhumane war in the first place.
Of course, I’m probably giving Trump way too much credit in that critique. Chances are, given Trump’s (nonexistent) economic literacy, he is just under the delusion that more resources always mean a better economy no matter what–opportunity costs, resource allocation, and entrepreneurial innovation be damned–and that government policy can be run just like a business.
Not only is it difficult for policy makers to know what the national interest is, as Christensen has argued it is unclear what “national interest” even means to begin with. He defines national interest as “an excuse for a policy or set of policies that should be taken in order to strengthen a state and its citizens (but not necessarily strengthen a state relative to other states…).” He further claims, “There’s no such thing as a national interest.” I’d take it even one step further: the rhetoric of “national interest,” it seems to me, is just an ideology (in the critical theory sense) for the foreign policy elite and their lobbyists to justify using coercive force to advance their arbitrary private interests rather than the (largely indeterminate) interests of the public or the country at large. Even if the “national interest” does have any meaning other than as a rhetorical ideology for the military industrial complex, the only way such a concept could become known is via the spontaneous process of the voluntary interchange of individuals, often time between citizens and non-citizens, and will likely never be known by a single individual mind. At the very least, there’s a public choice problem here: how is Trump realistically to differentiate his personal interests and those of his cronies from those of the general public? Given the fact that Trump likely has narcissistic personality disorder, I don’t have faith that he will.
The only positive potential to foreign policy under a Trump administration is the possibility that he will wisely not intervene in foreign affairs when no argument can be made that such an intervention would be in the national interest or give us oil. But given Trump’s record on the matter, and the arbitrary and elusive nature of the concept of “national interest,” I doubt that this will be a major factor in the way Trump actually implements foreign policy.
Trump vs. Clinton on Foreign Policy: Who is Preferable?
It is clear that underneath the prima facie inconsistencies in Trump’s comments on foreign policy, there is an underlying consistency that he thinks the goal of foreign policy is to quite aggressively promote US interests. This goal is impossible to reach as it represents a naïve understanding of the knowledge public leaders can possess, and generally represents a selfish, reckless, nationalist disregard for human dignity. The means he wants to undertake for this end are unnecessarily cruel and would likely constitute massive human rights violations. They contradict the high (and in my mind correct) aspirations of classical liberals of peace and individual liberty, and they’ll likely fail to accomplish their stated goals.
However, none of this necessarily means that Clinton’s foreign policy will be all that much better. Sure, Clinton’s motives are likely purer, but her record shows that the means she undertakes are uncannily similar to Trump and fail for similar reasons. She’s shown a similar lack of judiciousness in her handling of classified materials, just what the intelligence community fears of Trump. Her record shows her diplomatic skills yield mixed results at best, and she’s widely a progressive interventionist on foreign policy matters whose policies will subvert the liberal goals of peace and individual liberty. It is somewhat ironic that the Democrats have such great opportunity to go after Trump on foreign policy, but have chosen the absolute worst person in their party to make that case as their nominee (akin to Republicans and Romney on ObamaCare in 2012).
Comparing the two candidates point-by-point, therefore, is very difficult. Though there are many underlying consistencies to Trump’s comments on foreign policy and Clinton is still largely right that his stated positions have been somewhat incoherent. Unlike Trump, we have a record of Clinton actually implementing foreign policy and our only knowledge of the Donald’s policies only comes from occasionally off-the-cuff and contradictory remarks about others’ policies. Thus there is a degree of uncertainty as to what Trump’s foreign policies will actually look like and, though I think his comments reveal there is a high probability they will be atrocious, there is a small chance that they could be marginally better than Clinton’s (whose record shows she will implement almost certainly failed foreign policies). Trump’s very concerning comments on foreign policy alone do not make a slam-dunk case that Clinton is preferable on these matters.
Having said that, I’d still argue Clinton’s foreign policy is at least marginally preferable to Trump’s. With Trump we risk not only a fairly high probability of atrocious policies—quite possibly worse than Clinton’s—based off of his comments, we also risk the added problem of regime uncertainty in foreign policy. Also, some of the concrete policies Trump has called for—like torture and the murdering of families—are a cause for serious concern. Further, Clinton is likely to be far more diplomatic and will be less likely to offend other leaders and alienate the US from the world. Her point that Trump is “temperamentally unfit to lead” is very well taken, and was only confirmed by Trump’s response to her speech which in which he largely stuck to the non-substantive screaming of insults in his typical childish fashion. None of this at all means anybody should vote for either candidate as there is a lot more to voting than the issues of foreign policy. For what it’s worth (which is very little), I for one will most likely not be voting in the next election. If I were forced to, it would be for the Johnson/Weld ticket.
Libertarians and Pragmatists on Democracy Part 4: Why Market Anarchism is more Democratic than Democracy
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 2: Classical Liberal and Libertarian Criticisms of Democratic Institutions
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.
Book Review: Hans-Hermann Hoppe – Economic Science and the Austrian Method
I decided to read Hans-Hermann Hoppe’s Economic Science And The Austrian Method (1995) in order to grasp a deeper philosophical understanding of the Austrian School’s methodology of economic inquiry. I was especially interested in Immanuel Kant’s influence on Ludwig von Mises and how Mises had used Kant’s epistemological insights to construct praxeology, the study of human action (economics included) that is purely deductive in nature.
Those who are acquainted with scientific methodologies in the field of economics may have heard of the controversies surrounding praxeology. Living in an empirical age, many people may be inclined to question the validity of a science that claims to arrive at economic laws from pure deduction whose validity can be established independently from observations. Praxeological propositions are indeed much more “like those of logic and mathematics, a priori” (Mises, 1966, p. 32). Such a science may strike the skeptics as being disquietly dogmatic.
In this book review, I will firstly give a brief discussion why it is important at all to discuss the epistemological foundations of economic science. Thereafter, I will discuss Hoppe’s thesis. I will describe the philosophical aspects of praxeology that can be traced back to Kantian epistemology. I will moreover summarize Hoppe’s critique of empiricism and historicism, and why Mises believed that economics is essentially praxeology. Lastly, I will give my personal thoughts on the book.
Why should we discuss the epistemological foundations of economic science?
The most immediate answer to this question is that different epistemological foundations lead to different methodologies and different theories, which can lead to different interpretations of real-life phenomena. Take for example the interpretation of an historical economic event, the Great Depression. Murray Rothbard, because he is working within the context of praxeology makes use of the praxeological Austrian Business Cycle Theory. This theory focuses on the expansion of the money supply as an explanation of the onset of the ‘boom’ in the 1920’s which eventually resulted in the ‘bust’ in 1929. Milton Friedman and Anna Schwartz in A Monetary History Of The United States (1963), while not applying the ABCT, have focused only on the contraction of the money supply and the resulting higher interest rates in 1928 as the main cause of the Great Depression. Their application of different economic methods has led them to look for different possible historical causes of the Great Depression which has effectively resulted in different accounts of the same historical event. It therefore matters what economic methods are employed in economic research.
Now that we have established the importance of inquiring epistemological foundations and methodologies of economic science, I will turn to Hoppe’s thesis.
Kant and synthetic a priori propositions
Working within the rationalist tradition of Leibniz and Kant, Mises attempts to present the proper way through which economic science – a science that according to Mises falls within the broader science of human action, praxeology – should be conducted. He resorts to the Kantian conception of the nature of knowledge and explains praxeology in terms of Kantian terminology. Hence, Hoppe firstly directs the reader to Kantian epistemology.
Kant had developed the idea that all propositions are either analytic or synthetic and either a priori or a posteriori. The difference between analytic and synthetic propositions is that the former is true by virtue of their meaning or as Kant would have phrased it himself, “the predicate B belongs to the subject A as something that is (covertly) contained in this concept A” (Kant, 1781, A:6-7). Take for instance the following proposition: “Bachelors are unmarried.” This proposition is analytic, because the predicate, ‘unmarried’, is part of the concept of a bachelor. Analytic propositions are regarded as tautological propositions; they simply restate the definition or a concept incorporated within a word and therefore they do not tell us anything meaningful about the world. A synthetic proposition on the other hand is a proposition whose predicate concept is not contained in the subject’s concept. It could therefore express something meaningful about the world. An example of a synthetic proposition is: “All bachelors are unhappy.” The concept ‘unhappy’ is not contained within the definition of ‘bachelor’, and expresses something meaningful about ‘bachelors’.
The distinction between a priori and a posteriori is as follows: a priori propositions are propositions whose justification does not rely upon experience, but solely on logical reasoning. The justifications of a posteriori propositions on the other hand, do rely upon experience. Examples of a posteriori propositions are “Some bachelors I have met are unhappy” or “Siddharta Gautama left the palace.”
The big question is: do synthetic a priori propositions exist? Kant certainly believed that they do exist, “and it is because Mises subscribes to this claim that he can be called a Kantian” (Hoppe, 1995, p. 18). In Critique of Pure Reason (1781), Kant contended that synthetic a priori propositions do exist and as an example he took mathematics (Kant, 1781, p. 55). The statement “7 + 5 = 12” is not dependent on experimentation and the concept 12 is not contained in either the definitions of 7 or 5. According to Kant, a priori propositions are derived from self-evident axioms. We can find such axioms by reflecting upon ourselves and understanding ourselves as knowing subjects. However, how can truth claims derived from reflection in our mind have any basis in reality? Is Kant here running into the problem of idealism – a notion that it is the mind that constructs reality and superimposes itself upon reality in such a way that it fits within the mind’s necessary laws?
According to Hoppe, Kant had not given a satisfactory response to this issue and future thinkers would have to take on the challenge of solving this problem. Hoppe believes that Mises had done so successfully when he had averred that action provides the link between mind – body and between mind – external world: “[W]e must recognize that such necessary truths are not simply categories of our mind, but that our mind is one of acting persons. Our mental categories have to be understood as ultimately grounded in categories of action” (Hoppe, 1995, p. 20). It is through action that the mind and reality are related: “[A]cting is a cognitively guided adjustment of a physical body in physical reality” (Hoppe, 1995, p. 70).
Another issue that arises with regards to the possibility of synthetic a priori propositions, and which I have found quite confusing myself is the following: does Hoppe suggest that we can arrive at knowledge without any experience of ourselves or the external world at all? No, according to Hoppe “the truth of a priori synthetic propositions derives ultimately from inner, reflectively produced experience” (Hoppe, 1995, p. 19). This experience is phrased by Stolyarov II as “the mind’s identification of facts about actually existing entities, including the identifier himself” (Stolyarov II, 2007, p. 53). In this sense, the action axiom is experientially-derived, but it is not subjected to the empiricists’ narrow view that all knowledge must be testable, verifiable, or falsifiable.
Empiricism, Historicism, and Praxeology
When Mises systematically constructed the foundations of praxeology, he faced a double-challenge; (A) empiricism which was quickly becoming the main influence in the economics discipline, and (B) historicism which was then a prevailing ideology at German-speaking universities.
(A) Empiricism
Empiricism is the “philosophy which thinks of economics and the social sciences in general as following the same logic of research of that, for instance, of physics” (Hoppe, 1995, p. 28). Hoppe writes that empiricism is governed by the following two related basic propositions:
(1) that empirical knowledge, knowledge about reality, must be subjected to falsifiability and verifiability by observational experience;
(2) and that empiricist research formulates their explanations in terms of causality, i.e. “if A, then B”. (Hoppe, 1995, pp. 28-29)
Hoppe continues to write that the validity of empirical statements
can never be established with certainty… The statement will always be and always remain hypothetical… Should experience confirm a hypothetical causal explanation, this would not prove that the hypothesis was true. Should one observe an instance where B indeed followed A as predicted, it verifies nothing… Later experiences could still possibly falsify it. (Hoppe, 1995, p. 29)
Empirical knowledge is hence contingent on historical facts. Neither confirmation nor falsification by observational experience can prove that a relationship between phenomena does not or does exist. By emphasizing that our knowledge of reality must stem from observational experience, they directly deny a science that avers that a priori knowledge can give us any meaningful explanation of real phenomena. However, as Hoppe and Mises point out, the statement that meaningful synthetic a priori propositions cannot exist is itself a synthetic a priori proposition. Mises has put this empiricist contradiction the following way in The Ultimate Foundation of Economic Science (1962):
The essence of logical positivism [logical empiricism] is to deny the cognitive value of a priori knowledge by pointing out that all a priori propositions are merely analytic. They do not provide new information, but are merely verbal or tautological, asserting what has already been implied in the definitions and premises. Only experience can lead to synthetic propositions. There is an obvious objection against this doctrine, viz., that this proposition that there are no synthetic a priori propositions is in itself a … synthetic a priori proposition, for it can manifestly not be established by experience. (Mises, 1962, p. 5)
Hoppe mentions a second contradiction of empiricism which regards historical events. Empiricists believe that particular events may cause any particular human action. They attempt to find such causal relationships in order to explain historical events. However, in order to do so, empiricists must assume that causality within historical sequences exists through all times. This assumption itself is not based on experiential observations, and must presuppose a priori knowledge that “time-invariantly operating causes with respect to actions exist” (Hoppe, 1995, p. 36). In addition, Hoppe identifies a third contradiction with respect to social phenomena. The empiricists believe that in order to confirm and falsify hypotheses, one must be able to learn from historical and social experience. If one would deny this, then why should one engage in empirical research at all? This however presupposes that “one admittedly cannot know at any given time what one will know at a later time and, accordingly, how one will act on the basis of this knowledge” (Hoppe, 1995, p. 37). Admitting that humans learn from historical and social experience, one cannot deny that empirical causal constants in human action do not exist. “The empiricist-minded social scientists who formulate prediction equations regarding social phenomena are simply doing nonsense” (Hoppe, 1995, p. 38). Predicting human action is not a science according to Hoppe.[1]
The empiricists are mistaken in applying the methodology of the natural sciences into the fields of social science in order to predict human actions. Unlike natural elements, human beings can and do act differently under equal conditions. Thus, social history cannot yield any knowledge that can be employed for predictive purposes. Relating this to the quantity theory of money; if the money supply for instance increases, one can still not predict whether the demand of money will change as this is entirely dependent on human action. Nonetheless, one could assert that if the demand for money stays constant and the money supply increases, then the purchasing power of money will fall (Hoppe, 1995, pp. 44-45).
(B) Historicism
Historicism, the second challenge that Mises had to face, does not take nature as its model but literary texts. Historicists believe that there are no objective laws in economics, and that “historical and economic events are whatever someone expresses or interprets them to be” (Hoppe, 1995, p. 54). Historicism is therefore extremely relativist. However, according to Hoppe also historicism is fundamentally self-contradictory. If there are only interpretations and hence no constant time-invariant relations, then there is also no historicist constant truth about history and economics. If historicism does not give us any reason to believe in its doctrine, why should we adhere to its epistemological philosophy if its proposition implies that they themselves may not be true?
Next to his refutations of empiricism and historicism, Mises had hoped that he could demonstrate the existence of true synthetic a priori propositions. Such propositions would (1) not be derived from experience, and (2) they must yield self-evident axioms so that when one tries to deny it one is involved in self-contradiction. Mises believes that these two requirements are met by the axiom of action – the proposition that human beings act and display intentional behaviour (Hoppe, 1995, pp. 60-61). According to Mises, purposeful human behaviour exhibits a person’s pursuit of an end which he attempts to reach through the employment of particular means (at least time and body). The fact that a person pursues a particular goal with his action reveals that he places a relatively higher value (preference) on the goal than any other goals of action that he could have thought of at the beginning of his action. Human action also happens sequentially, implying that the actor can only pursue one goal at a time in which he has to forego other valuable goals temporally. Action therefore also implies choices and costs. An action furthermore implies loss (and profit), because every action accompanies a certain degree of uncertainty, whether the goal achieved has resulted in the value one has expected can only be known in retrospect. All these categories of action – values, ends, means, choices, preferences, costs, profit, loss, and time – are at the heart of economics (Hoppe, 1995, pp. 61-63). This insight establishes economics as a science of human action. Or as Hoppe asserts more precisely,
all true economic theorems consist of (a) an understanding of the meaning of action, (b) a situation or situational change – assumed to be given or identified as being given – and described in terms of action-categories, and (c) a logical deduction of the consequences – again in terms of such categories – which are to result for an actor from this situation or situational change (Hoppe, 1995, pp. 63-64).
The existence of the categories of action is derived a priori from the axiom of action, and not through observation. Any attempt to disprove it is futile, since “a situation in which the categories of action would cease to have a real existence could itself never be observed or spoken of, since to make an observation and to speak are themselves actions” (Hoppe, 1995, p. 63).
My thoughts on Hoppe’s book
The book serves as an excellent summary of praxeological philosophy and is a must-read for anyone who wants to start learning more about the subject. Reading the book, one feels that it is extremely concise (around 80 pages), but also dense. Hoppe directly discusses the essential philosophical aspects that one must know in order to understand praxeology as developed by Mises, and fortunately he leaves many footnotes for further reading.
I believe that Hoppe has skillfully shown that economics is part of praxeology, and that it indisputably deals with such categories of human action as values, ends, means, choices, preferences, profit, loss, time, and causality. He has furthermore provided a well-reasoned critique of the empiricist and historicist-hermeneutical interpretations of economics by showing that they are necessarily self-contradictory.
Understanding that economics should not be conducted within the methodological framework of the natural sciences has severe implications to the ways we should deal with data of real world phenomena. If, like praxeologists claim, we cannot predict human action then there is also little reason to believe that effective social engineering is possible. The fundamentals of the praxeological methodology are therefore also immediately relevant within discussions on the roles of the state in planning the economy.
Footnotes
[1] Hoppe calls it entrepreneurship.
Bibliography
Friedman, M. & Schwartz, A.J. (1963). A Monetary History of the United States 1867-1960. Princeton: Princeton University Press.
Hoppe, H.H. (1995). Economic Science and the Austrian Method. Auburn: Ludwig von Mises Institute.
Kant, I. (1781). Critique of Pure Reason. (W.S. Pluhar, Trans.) Indianapolis: Hackett Publishing Company, Inc.
Mises von, L. (1942). Social Science and Natural Science. In R.M. Ebeling (Ed.) Money, Methods, and the Market Process (pp. 3-15). Retrieved from http://mises.org
Mises von, L. (1966). The Ultimate Foundation of Economic Science. Retrieved fromhttp://mises.org
Stolyarov II, G. (2007). The Compatibility of Hoppe’s and Rothbard’s Views of the Action Axiom. The Quarterly Journal of Austrian Economics, 10, 2, pp. 45-62.
Liberty or “Security”: An Old Debate, A Familiar Straw Man
Ho hum. Jacques wants his government to do three things in the name of fighting Muslim terrorism (not to be confused with other, more numerous kinds of terrorism): 1) allow for an armed, perpetually-on-alert military to be active on US soil, 2) allow for a surveillance state that can do as it pleases in regards to Muslims only, and 3) initiate ideological quotas for Muslim immigrants.
The entire ‘comments’ thread is well worth reading, too. Dr Amburgey, who came from the same doctoral program as Jacques, brings the quantitative fire; Dr Khawaja, the qualitative. Jacques has responded to each of them.
The absurdity of Delacroix’ argument speaks for itself. I will come back to it shortly, but first I want to address a couple of his points that are simply made in bad faith. Observe:
(Yes, Mohammed did behead every man of a vanquished enemy tribe on the battlefield. Incidentally, they were Jews. The Prophet then “married ” their wives, he raped them, in others words. Bad example? Talk about this genuine part of Muslim tradition?)
Murdering and raping Jews is a “Muslim tradition”? I am sure this is news to Uighurs in China and the Javanese of Indonesia. I think there is a good case to be made for a present-day Arab cultural chauvinism that rests in part on what could be called “Muslim tradition,” but this is not a nuance that Jacques – the retired college professor – cares to address. I wonder why. If we’re going to go back to the 7th century to find cultural defects, can anybody think of something nasty that was going on in what is now France at the time? In what is now the US? What an odd historical anecdote to include in an argument.
Here, too, is another whopper:
One article of faith among literalist Muslims is that government must come from God. That’s why the Supreme Leader of the Shiite Islamic Republic is explicitly a cleric, couldn’t be an elected civilian or a general. This belief also explains the search for a Caliphate among Sunni jihadists, a polity where administrative and religious powers are one and the same.
What is a “literalist Muslim”? Nevermind. The government of Iran, its structure, is based on Plato’s Republic, not the Qur’an. The “Supreme Leader” Jacques identifies is based on the notion of a philosopher-king, not a Shiite cleric. This was done to protect the new dictatorship from its many enemies, including those loyal to the old dictatorship (the one supported by the United States; the one that Washington installed after helping to remove a democratically-elected Leftist government during the Cold War). The rhetoric of the Iranian dictatorship is explicitly religious, but in reality it’s just plain, old-fashioned despotism.
In a similar vein, “Sunni jihadists” (to use Jacques’ term) do not search for a Caliphate because of a belief that government should come from God, but instead look to a mythical Caliphate that they believe existed from the 7th to early 20th centuries as inspiration for creating a society that cannot be pushed around by murderous Western governments. Pretending that Arab Sunnis want to create a Caliphate in order to strengthen the link between government and God can only be described as “dishonest” when it comes from the mouth of a sociologist with a doctorate from Stanford.
At best, it could be argued that Jacques is simply making these types of points because they are pervasive throughout American society, and thus we – as libertarians of all stripes – have our work cut out for us. Now that I think about it, Jacques’ argument is so silly that it has to be an exercise in critical thinking. Nobody of his stature could say something so stupid, right?
Those are just two examples of, uh, the misrepresentation of reality by Jacques. There are many more, and I don’t think he got those myths from an academic journal. He got them from Fox News. That’s not good. That means libertarians are not taking advantage of their right to free speech, like conservatives and Leftists do. Why aren’t you blogging more often?
I’d like to turn back to his policy proposals. Here they are again:
- an armed, perpetually-on-alert military on US soil,
- a surveillance state that can do as it pleases in regards to Muslims only, and
- ideological quotas for Muslim immigrants.
The first two proposals look like they were copied directly from the playbook of the Third Reich (I hope you’ll reprimand me in the ‘comments’ section if you think I am being overly dramatic, or strawmanning Jacques’ argument). Just replace “US” with “Germany” and “Muslims” with “Jews” and voila, you have an answer for your Muslim (“Jewish”) problem. (RE Policy #3: National socialists, of course, don’t like anybody immigrating to their territories, whereas Jacques, in his infinite kindness and wisdom, seeks only to allow those who think like him into his territory.)
Again, Jacques’ argument is silly. It is both vulgar and unintelligent. It is misinformed. And yet I have to ask: Who is winning the PR battle here, conservatives on the one side or left-liberals and libertarians on the other?
Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping toward destruction. Therefore, everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interest of everyone hangs on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.
That’s from Ludwig von Mises, the libertarian Austrian (and Jewish) economist who had to flee his homeland as the Third Reich took power. Speak your mind!
Myths of Sovereignty and British Isolation, VIII. Germany’s post WWII contribution to market liberalism
World War Two was largely won by the United States and the British Empire in alliance with the USSR. The idea of Britain’s place in the world being defined by its relationship with the US, a relationship in which the US is inevitably the leading partner, and is a very popular – even defining – idea for the predominant brand of sovereigntist-Eurosceptism in the UK. There is surely some paradox in holding onto a sovereigntist view, in which national sovereignty is understood in an absolute manner and national life is understood to be highly distinct, and even unique, while giving the dominant role to another country in matters of international relations, diplomacy, foreign policy, defence, intelligence and the unlimited number of areas which these are likely to spill over into, including trade and commerce.
The sovereigntist-Eurosceptic position in Britain tends to portray not only the EU as threatening sovereignty, but Germany as a threat to sovereignty as the strongest country in the EU. However it is clear enough that Germany is less strong than the United States, so what is the problem? The problem might be defined by the Eurosceptics as that the UK has transferred some sovereignty to the EU reducing the role of the British parliament, but if defence and diplomacy policy is dominated by the United States, along with other areas, there is an inevitable loss of effective parliamentary sovereignty. That the loss of sovereignty is not legally defined should not be the issue, and leaves open the possibility of greater loss of sovereignty because it is not defined by laws or treaties.
Returning to the issue of Germany, the standard sovereigntist position in Britain is dominated by those claiming to be small state free market advocates, and claim that an EU which includes Germany is allegedly a mere instrument of German interests, thus posing a threat to the possibility of a less statist Britain in economics and other matters. As the sovereigntist-Eurosceptics are normally for limiting immigration, their claim to superior purity in matters of individual rights and state power is itself lacking in credibility.
Moving back to more strictly economic issues (though of course free market economics requires a free labour market which means open immigration), Germany has not always been seen as more statist than Britain. There was a period in which Britain administered part of Germany, that is during the occupation of Germany by the Allies after World War Two, shared between the UK, USA, France, and the USSR. The occupation zones evolved into the Federal Republic of Germany (FRG) in the west and the socialist-communist Soviet satellite state, the German Democratic Republic in the east.
The FRG famously experienced an economic miracle in the post-war period. The main architect was Ludwig Erhard, who was strongly influenced by the Freiburg School of free market economists, itself heavily influenced by the Austrian School of Friedrich Hayek and Ludwig von Mises. Erhard had a particularly strong connection with the economist Wilhelm Röpke, who was not a member of faculty at Freiburg University, but was close to that school and was linked with it through the journal Ordo.
The economic liberalism of that period is sometimes known as Ordo liberalism, which is one of great moments in the history of market liberalism. It was a moment which came out of struggle with the British and American occupation authorities who enforced price controls, and other statist measures, and were not supportive of Erhard’s moves to liberalise the price mechanism and other aspects of the market. Erdhard had to defy the occupation authorities in announcing the end of price controls in the period in which German self-government was emerging in the period before the FRG was formed.
Erhard and Röpke developed a program in which federal Germany had a ‘social market economy’, meaning a free market economy, accompanied by a social welfare program to establish minimum living standards and the establishment of those institutions and polices thought most likely to promote a functional market economy and social consensus behind the market economy, as an antidote to the economics and politics of totalitarian statism in what had been Nazi Germany and the existing soviet model Germany in the east.
So successful and influential was this, it was a model, at least rhetorically, for the Margaret Thatcher led government elected in Britain in 1979. Thatcher’s major intellectual influence in British politics was Keith Joseph, who promoted the idea of freeing Britain from statism and collectivism by following the German social market economy. This is not something the surviving Thatcherites, and their successors who are prominent in sovereigntist-Eurosceptic circles, like to emphasise at all. This maybe goes back to the time that German unification became a possibility in the late 1980s as the Soviet Union ended its dominance of large parts of central and eastern Europe.
Thatcher as an imperial nostalgia British nationalist was instinctively opposed to a stronger Germany. Ever since Germany has been damned as a malign influence the sovereigntist Europsceptics, eager to bury memories of the long post-war period in which Germany was more of a market liberal country than Britain. They like to portray Germany as such a statist monster in economic decline that many would be surprised to check the tables of national GDP per capita (including tables adjusted for dollar based purchasing power parity) and see that Germany is ahead of Britain by a significant margin. The comparison should also take into account the issue that despite Margaret Thatcher’s nationalist reservations, the German people exercised their right to unify peacefully and democratically, so that the current Federal Republic of Germany carries the weight of eastern regions, which used to be socialist-communist and have yet to overcome the negative consequences for prosperity and enterprise culture. There are certainly some measures by which Germany has a more statist economy now than Britain, including the levels of public spending and the role of banks linked to regional governments, which suggests an inherently robust market economy, stronger than Britain’s in some ways, able to survive the less market liberal aspects of German political economy.
The period in which Margaret Thatcher did introduce more market based economics and public policy in Britain, an admirable achievement despite her less admirable inclinations towards national, social, and cultural conservatism, began with a centre-left government in the FRG, which had been far more market oriented than the centre-left government which preceded Thatcher in Britain. The FRG under Helmut Schmidt, at least towards the end of his term made cuts to public spending and the public deficit, which mean that it made a contribution, if a very moderate one, to the general shift of industrial democracies towards market liberalisation associated with the 1970s in its beginnings and with the 1980s in its strongest phase.
Notes On Liberty 